SEC FORM 4

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)

KYPHON INC.

1221 CROSSMAN AVENUE

(Street)

SUNNYVALE

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)
11/02/2007

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)
1. Title of Security (Instr. 3)	2. Transaction Date (Month/Day/Year)	2A. Deemed Execution Date, if any (Month/Day/Year)	Code	V	Amount	(A) or (D)	Price		6. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	7. Nature of Indirect Beneficial Ownership (Instr. 4)
Common Stock	11/02/2007		D		8,908	D	⁽¹⁾	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)
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)	Code	V	(A)	(D)	Date Exercisable	Expiration Date	Title	Amount or Number of Shares	8. Price of Derivative Security (Instr. 5)		10. Ownership Form: Direct (D) or Indirect (I) (Instr. 4)	11. Nature of Indirect Beneficial Ownership (Instr. 4)
Employee Stock Option (Right to Buy)	$39.27	11/02/2007		D			30,000	⁽²⁾	09/15/2016	Common Stock	30,000	$31.73⁽²⁾	0	D
Employee Stock Option (Right to Buy)	$37.65	11/02/2007		D			50,000	⁽³⁾	07/21/2015	Common Stock	50,000	$33.35⁽³⁾	0	D
Employee Stock Option (Right to Buy)	$24.06	11/02/2007		D			109,080	⁽⁴⁾	12/01/2014	Common Stock	109,080	$46.94⁽⁴⁾	0	D
Employee Stock Option (Right to Buy)	$24.18	11/02/2007		D			32	⁽⁵⁾	01/09/2014	Common Stock	32	$46.82⁽⁵⁾	0	D
Employee Stock Option (Right to Buy)	$23.57	11/02/2007		D			115	⁽⁶⁾	08/19/2014	Common Stock	115	$47.43⁽⁶⁾	0	D
Employee Stock Option (Right to Buy)	$20.83	11/02/2007		D			875	⁽⁷⁾	03/24/2014	Common Stock	875	$50.17⁽⁷⁾	0	D

Explanation of Responses:

1. Includes 1,908 shares that were disposed of pursuant to the merger agreement among Kyphon Inc., Jets Acquisition Corporation and Medtronic, Inc. in exchange for $71.00 per share in cash on the effective date of the merger. Also includes 7,000 Restricted Stock Units, which originally provided for vesting in three equal annual installments beginning on 8/20/08 and which were assumed in the merger and replaced with 10,478 Medtronic, Inc. Restricted Stock Units.

2. This option provided for vesting of 1/48th of shares per month beginning on 10/15/06. 8,125 shares subject to the option were cancelled in the merger in exchange for a cash payment of $257,806.25, representing the difference between the exercise price of the option and the merger consideration. 21,875 shares subject to the option were assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 32,745 shares of Medtronic, Inc. common stock at an exercise price of $26.24 per share.

3. This option provided for vesting of 1/48th of shares per month beginning on 8/21/05. 28,125 shares subject to the option were cancelled in the merger in exchange for a cash payment of $937,968.75, representing the difference between the exercise price of the option and the merger consideration. 21,875 shares subject to the option were assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 32,745 shares of Medtronic, Inc. common stock at an exercise price of $25.16 per share.

4. This option provided for vesting of 1/48th of shares per month beginning on 1/1/05. 68,455 shares subject to the option were cancelled in the merger in exchange for a cash payment of $3,213,277.70, representing the difference between the exercise price of the option and the merger consideration. 40,625 shares subject to the option were assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 60,813 shares of Medtronic, Inc. common stock at an exercise price of $16.08 per share.

5. This option, which provided for vesting of 1/48th of shares per month beginning on 2/9/04, was assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 47 shares of Medtronic, Inc. common stock at an exercise price of $16.16 per share.

6. This option provided for vesting of 1/48th of shares per month beginning on 9/19/04. 10 shares subject to the option were cancelled in the merger in exchange for a cash payment of $474.30, representing the difference between the exercise price of the option and the merger consideration. 105 shares subject to the option were assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 157 shares of Medtronic, Inc. common stock at an exercise price of $15.75 per share.

7. This option provided for vesting of 1/48th of shares per month beginning on 4/24/04. 145 shares subject to the option were cancelled in the merger in exchange for a cash payment of $7,274.65, representing the difference between the exercise price of the option and the merger consideration. 730 shares subject to the option were assumed by Medtronic, Inc. in the merger and replaced with an option to purchase 1,092 shares of Medtronic, Inc. common stock at an exercise price of $13.92 per share.

	/s/ Arthur T. Taylor, Attorney-in-Fact	11/06/2007
	** Signature of Reporting Person	Date
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