SEC Form 4
FORM 4 UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934
or Section 30(h) of the Investment Company Act of 1940
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 Check this box if no longer subject to Section 16. Form 4 or Form 5 obligations may continue. See Instruction 1(b).
1. Name and Address of Reporting Person*
Paddock Bradley W
(Last) (First) (Middle)
C/O KYPHON INC.
1221 CROSSMAN AVENUE
(Street)
SUNNYVALE CA 94089
(City) (State) (Zip)
2. Issuer Name and Ticker or Trading Symbol
KYPHON INC [ KYPH ] 		5. Relationship of Reporting Person(s) to Issuer
(Check all applicable)
Director 10% Owner
X Officer (give title below) Other (specify below)
VP, US Sales
3. Date of Earliest Transaction (Month/Day/Year)
01/03/2006
4. If Amendment, Date of Original Filed (Month/Day/Year)
 6. Individual or Joint/Group Filing (Check Applicable Line)
X Form filed by One Reporting Person
Form filed by More than One Reporting Person
Table I - Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned
1. Title of Security (Instr. 3) 2. Transaction Date (Month/Day/Year) 2A. Deemed Execution Date, if any (Month/Day/Year) 3. Transaction Code (Instr. 8) 4. Securities Acquired (A) or Disposed Of (D) (Instr. 3, 4 and 5) 5. Amount of Securities Beneficially Owned Following Reported Transaction(s) (Instr. 3 and 4) 6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 7. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V Amount (A) or (D) Price
Common Stock 01/03/2006 M 2,574 A $24.06 2,574 D
Common Stock 01/03/2006 S(1) 2,574 D $41 0 D
Common Stock 01/03/2006 M 10 A $23.57 10 D
Common Stock 01/03/2006 S(1) 10 D $41 0 D
Common Stock 01/03/2006 M 146 A $20.83 146 D
Common Stock 01/03/2006 S(1) 146 D $41 0 D
Common Stock 01/03/2006 M 10 A $24.18 10 D
Common Stock 01/03/2006 S(1) 10 D $41 0 D
Common Stock 01/03/2006 M 104 A $9.29 104 D
Common Stock 01/03/2006 S(1) 104 D $41 0 D
Common Stock 01/03/2006 M 156 A $6.95 156 D
Common Stock 01/03/2006 S(1) 156 D $41 0 D
Table II - Derivative Securities Acquired, Disposed of, or Beneficially Owned
(e.g., puts, calls, warrants, options, convertible securities)
1. Title of Derivative Security (Instr. 3) 2. Conversion or Exercise Price of Derivative Security 3. Transaction Date (Month/Day/Year) 3A. Deemed Execution Date, if any (Month/Day/Year) 4. Transaction Code (Instr. 8) 5. Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5) 6. Date Exercisable and Expiration Date (Month/Day/Year) 7. Title and Amount of Securities Underlying Derivative Security (Instr. 3 and 4) 8. Price of Derivative Security (Instr. 5) 9. Number of derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4) 10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4) 11. Nature of Indirect Beneficial Ownership (Instr. 4)
Code V (A) (D) Date Exercisable Expiration Date Title Amount or Number of Shares
Employee Stock Option (Right To Buy) $24.06 01/03/2006 M 2,574 01/01/2005(2) 12/01/2014 Common Stock 2,574 $0 198,049(3) D
Employee Stock Option (Right To Buy) $23.57 01/03/2006 M 10 09/19/2004(2) 08/19/2014 Common Stock 10 $0 198,039(4) D
Employee Stock Option (Right To Buy) $20.83 01/03/2006 M 146 04/24/2004(2) 03/24/2014 Common Stock 146 $0 197,893(5) D
Employee Stock Option (Right To Buy) $24.18 01/03/2006 M 10 02/09/2004(2) 01/09/2014 Common Stock 10 $0 197,883(6) D
Employee Stock Option (Right To Buy) $9.29 01/03/2006 M 104 06/01/2003(2) 05/01/2013 Common Stock 104 $0 197,779(7) D
Employee Stock Option (Right To Buy) $6.95 01/03/2006 M 156 10/01/2003(8) 11/12/2012 Common Stock 156 $0 197,623(9) D
Explanation of Responses:
1. Sale made pursuant to a 10b5-1 trading plan.
2. This option vests according to the following schedule: 1/48th per month beginning on the date exercisable.
3. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 344 options exercisable at $23.57 per share, granted on 8/19/04; 4,084 options exercisable at $20.83 per share, granted on 3/24/04; 271 options exercisable at $24.18 per share, granted on 1/9/04; 1,771 options exercisable at $9.29 per share, granted on 5/1/03, and 1,563 options exercisable at $6.95 per share, granted on 11/12/02.
4. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 334 options exercisable at $23.57 per share, granted on 8/19/04; 4,084 options exercisable at $20.83 per share, granted on 3/24/04; 271 options exercisable at $24.18 per share, granted on 1/9/04; 1,771 options exercisable at $9.29 per share, granted on 5/1/03, and 1,563 options exercisable at $6.95 per share, granted on 11/12/02.
5. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 334 options exercisable at $23.57 per share, granted on 8/19/04; 3,938 options exercisable at $20.83 per share, granted on 3/24/04; 271 options exercisable at $24.18 per share, granted on 1/9/04; 1,771 options exercisable at $9.29 per share, granted on 5/1/03, and 1,563 options exercisable at $6.95 per share, granted on 11/12/02.
6. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 334 options exercisable at $23.57 per share, granted on 8/19/04; 3,938 options exercisable at $20.83 per share, granted on 3/24/04; 261 options exercisable at $24.18 per share, granted on 1/9/04; 1,771 options exercisable at $9.29 per share, granted on 5/1/03, and 1,563 options exercisable at $6.95 per share, granted on 11/12/02.
7. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 334 options exercisable at $23.57 per share, granted on 8/19/04; 3,938 options exercisable at $20.83 per share, granted on 3/24/04; 261 options exercisable at $24.18 per share, granted on 1/9/04; 1,667 options exercisable at $9.29 per share, granted on 5/1/03, and 1,563 options exercisable at $6.95 per share, granted on 11/12/02.
8. This option vests according to the following schedule: 1/4th upon the date exercisable and 1/36th of the remainder per month thereafter.
9. Includes 50,000 options exercisable at $37.65 per share, granted 7/21/05; 140,016 options exercisable at $24.06 per share, granted on 12/1/04; 334 options exercisable at $23.57 per share, granted on 8/19/04; 3,938 options exercisable at $20.83 per share, granted on 3/24/04; 261 options exercisable at $24.18 per share, granted on 1/9/04; 1,667 options exercisable at $9.29 per share, granted on 5/1/03, and 1,407 options exercisable at $6.95 per share, granted on 11/12/02.
Robert A. Koenig, Attorney-in-Fact 01/05/2006
** Signature of Reporting Person Date
Reminder: Report on a separate line for each class of securities beneficially owned directly or indirectly.
* If the form is filed by more than one reporting person, see Instruction 4 (b)(v).
** Intentional misstatements or omissions of facts constitute Federal Criminal Violations See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
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