<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 30, 1995
------------------
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ____ to ____
Commission file number 1-9585
------
ABIOMED, INC.
-------------
(Exact name of registrant as specified in its charter)
DELAWARE 04-2743260
-------- ----------
(State of incorporation) (I.R.S. Employer No.)
33 CHERRY HILL DRIVE
DANVERS, MASSACHUSETTS 01923
----------------------------
(Address of principal executive offices, including zip code)
(508) 777-5410
---------------
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) or the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes [X] No [_]
As of September 30, 1995, there were 5,513,833 shares outstanding of the
registrant's Common Stock, $.01 par value, and 1,428,000 shares outstanding of
the registrant's Class A Common Stock, $.01 par value.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
Part I - Financial Information:
Item 1. Financial Statements
Consolidated Balance Sheets
September 30, 1995 and March 31, 1995 3-4
Consolidated Statements of Operations
Three and Six Months Ended September 30, 1995
and September 30, 1994 5
Consolidated Statements of Cash Flows
Six Months Ended September 30, 1995
and September 30, 1994 6
Notes to Consolidated Financial Statements 7-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-13
Part II - Other Information 14-15
Signatures 16
</TABLE>
-2-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
---------------------------
ASSETS
------
<TABLE>
<CAPTION>
September 30, 1995 March 31, 1995
------------------- -------------------
(unaudited) (audited)
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 6) $333,775 $614,091
Short-term investments (Note 6) 9,483,593 3,876,943
Accounts receivable, net 2,340,771 1,775,734
Inventories (Note 3) 1,253,351 1,409,280
Prepaid expense and other current asset 239,854 53,830
------------------- -------------------
Total current assets 13,651,344 7,729,878
------------------- -------------------
Investments (Note 6):
Long-term marketable securities 662,536 6,533,490
------------------- -------------------
Property and equipment, at cost
Machinery and equipment 2,254,268 2,189,139
Furniture and fixtures 129,267 122,934
Leasehold improvements 308,178 279,181
------------------- -------------------
2,691,713 2,591,254
Less: Accumulated depreciation
and amortization 2,218,449 2,124,234
473,264 467,020
------------------- -------------------
Other Assets:
Investment in Abiomed Limited
Partnership, net (Note 7) 698,462 -
------------------- -------------------
$15,485,606 $14,730,388
=================== ===================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-3-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED BALANCE SHEETS (CONTINUED)
---------------------------------------
LIABILITIES AND STOCKHOLDERS' INVESTMENT
----------------------------------------
<TABLE>
<CAPTION>
September 30, 1995 March 31, 1995
(unaudited) (audited)
------------------ -----------------
<S> <C> <C>
Current Liabilities:
Accounts payable $702,335 $198,280
Accrued expenses 1,229,556 1,227,379
------------------ -----------------
Total current liabilities 1,931,891 1,425,659
------------------ -----------------
Stockholders' Investment (Note 4):
Class B Preferred Stock, $.01 par value-
Authorized 1,000,000 shares
Issued and outstanding-none - -
Common Stock, $.01 par value-
Authorized 25,000,000 shares at September 30, 1995
Issued and Outstanding-5,513,833 shares at
September 30, 1995 and 4,885,852 shares at
March 31, 1995 55,138 48,859
Class A Common Stock $.01 par value
Authorized - 2,346,000 shares
Issued and Outstanding - 1,428,000 shares at
September 30, 1995 and 2,040,000 shares at
March 31, 1995 14,280 20,400
Additional paid-in capital 36,593,088 36,476,770
Accumulated deficit (23,108,791) (23,241,300)
------------------ -----------------
Total stockholders' investment 13,553,715 13,304,729
------------------ -----------------
$15,485,606 $14,730,388
================== =================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-4-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended Three Months Ended
---------------- ------------------
September 30, 1995 September 30, 1994 September 30, 1995 September 30, 1994
------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C> <C>
Revenues:
Products and services $4,394,792 $2,638,608 $2,270,351 $1,339,629
Contracts 1,455,297 1,162,106 836,248 602,382
------------------- ------------------- ------------------- -------------------
5,850,089 3,800,714 3,106,599 1,942,011
------------------- ------------------- ------------------- -------------------
Costs and expenses:
Cost of products and services 1,822,769 1,056,759 907,876 518,058
Research and development (including
costs related to contracts) 1,519,037 1,141,038 860,178 549,447
Selling, general and administrative 2,631,499 2,125,741 1,414,585 1,078,286
------------------- ------------------- ------------------- -------------------
5,973,305 4,323,538 3,182,639 2,145,791
------------------- ------------------- ------------------- -------------------
Net income (loss) from operations (123,216) (522,824) (76,040) (203,780)
Interest and other income 255,725 216,238 124,488 113,243
------------------- ------------------- ------------------- -------------------
Net income (loss) $ 132,509 ($306,586) $ 48,448 ($90,537)
=================== =================== =================== ===================
Net income (loss) per common share
share (Note 5): $.02 ($.05) $.01 ($.01)
=================== =================== =================== ===================
Weighted average number of common
and dilutive common equivalent shares
outstanding 6,967,191 6,474,016 6,972,429 6,474,183
=================== =================== =================== ===================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-5-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS (continued)
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(unaudited)
-----------
<TABLE>
<CAPTION>
Six Months Ended
----------------
September 30, 1995 September 30, 1994
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $132,509 ($306,586)
Adjustments to reconcile net income (loss) to net cash
(used in) provided by operating activities-
Depreciation and amortization 165,751 151,009
Non cash transactions related to Abiomed
Limited Partnership - (119,794)
Changes in assets and liabilities-
Accounts receivable (565,037) 422,875
Inventories 155,929 (268,886)
Prepaid expenses and other current assets (186,024) (87,715)
Accounts payable 504,055 77,498
Accrued expenses 2,177 (361,789)
------------------ -----------------
Net cash (used in) provided by operating activities 209,360 (493,388)
------------------ -----------------
CASH FLOWS FROM INVESTING ACTIVITIES:
(Purchases) sales of investments, net 264,303 396,238
Purchases and improvements of property and equipment (100,458) (35,494)
Purchases of limited partner units (Note 7) (770,000) -
------------------ -----------------
Net cash (used in) provided by investing activities (606,155) 360,744
------------------ -----------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and stock issued
under employee stock purchase plan 116,479 8,858
------------------ -----------------
Net cash provided by financing activities 116,479 8,858
------------------ -----------------
NET DECREASE IN CASH AND EQUIVALENTS,
EXCLUDING INVESTMENTS (280,316) (123,786)
CASH AND CASH EQUIVALENTS, EXCLUDING INVEST-
MENTS, AT BEGINNING OF PERIOD 614,091 480,058
------------------ -----------------
CASH AND CASH EQUIVALENTS , EXCLUDING INVEST-
MENTS, AT END OF PERIOD $ 333,775 $ 356,272
================== =================
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
-6-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of Preparation
--------------------
The unaudited consolidated financial statements of ABIOMED, Inc. (the
Company), presented herein have been prepared in accordance with the
instructions to Form 10-Q and do not include all of the information and note
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and notes thereto included in the Company's latest audited financial
statements, which are contained in the Company's Form 10-K for the year ended
March 31, 1995, which was filed with the Securities and Exchange Commission. In
the opinion of management, the accompanying consolidated financial statements
include all adjustments (consisting only of normal recurring adjustments)
necessary to summarize fairly the Company's financial position and results of
operations. The results of operations for the six months ended September 30,
1995 may not be indicative of the results that may be expected for the full
fiscal year.
2. Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries, ABIOMED Cardiovascular, Inc., ABIOMED R&D
Inc., ABIODENT, Inc., Abiomed Research and Development, Inc., ABD Holding
Company, Inc., and the accounts of its majority-owned subsidiary Abiomed Limited
Partnership (see Note 7). All significant intercompany accounts and transactions
have been eliminated in consolidation.
3. Inventories
-----------
Inventories include raw materials, work-in-process, and finished goods and
are priced at the lower of cost (first-in, first-out) or market and consist of
the following:
<TABLE>
<CAPTION>
September 30, March 31,
1995 1995
------------- ------------
<S> <C> <C>
Raw Materials $ 457,702 $ 339,686
Work-in-Process 485,534 412,956
Finished goods 310,115 656,638
---------- ----------
TOTAL $1,253,351 $1,409,280
========== ==========
</TABLE>
Finished goods and work-in-process inventories consist of direct material,
labor, and overhead.
-7-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, continued)
4. Stockholders' Investment
------------------------
On August 9, 1995, the Stockholders of the Company voted to increase the
number of authorized shares of Common Stock from 10,000,000 to 25,000,000
shares.
Effective August 10, 1995, in accordance with the rights for the Class A
Common Stock, 612,000 shares of Class A Common Stock $.01 par value were
converted into an equal number of shares of the Company's $.01 par value Common
Stock.
During the second quarter of fiscal 1996, options to purchase 13,500 shares
of Common Stock were granted with an exercise price of $7.50 per share. Options
to purchase 2,000 shares were canceled during the quarter. Options to purchase
15,450 shares were exercised in the second quarter at exercise prices ranging
from $5.75 to $8.50 per share. A total of 531 shares of Common Stock were issued
under the Company's Employee Stock Purchase Plan.
5. Net Income (Loss) Per Common Share
----------------------------------
Net income (loss) per common share has been computed by dividing the net
income (loss) by the weighted average number of common and common equivalent
shares outstanding during the period. Common equivalent shares, such as stock
options, have not been included in the per share calculation where the effect of
their inclusion would be antidilutive. No common equivalent shares are
considered dilutive in periods, such as the three and six month periods ended
September 30, 1994, in which a loss is reported because all such common
equivalent shares are antidilutive.
6. Cash and Cash Equivalents
-------------------------
The Company classifies any marketable security with a maturity date of 90
days or less at the time of acquisition to be a cash equivalent. Securities,
including marketable securities, with original maturities of greater than 90
days are classified as investments. Such investments are classified as long-term
investments when their maturities are greater than one year from the balance
sheet date. The company reports investments at cost plus accrued interest.
7. ABIOMED Limited Partnership
---------------------------
Abiomed Limited Partnership (the Partnership) was formed in March 1985 and
provided initial funding for the design and development of two of the Company's
products, the BVS and SupraCor (the Products). Today, the Partnership is
inactive except for certain royalty rights, described below, on the Company's
sales of the Products.
-8-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 1: FINANCIAL STATEMENTS (continued)
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (unaudited, continued)
7. ABIOMED Limited Partnership (continued)
---------------------------------------
The Partnership consists of a sole general partner, which is the Company's
wholly owned subsidiary, Abiomed Research and Development, Inc.; a special
limited partner, which is the Company's wholly owned subsidiary ABIOMED
Cardiovascular, Inc. (Cardiovascular); and one hundred thirty-five limited
partner units. As of March 31, 1995 the Company held a 10.9% interest in the
Partnership comprised of 1.0% by the general partner and 9.9% by the special
limited partner while each of the limited partner units were owned by third
party investor limited partners. The limited partner units aggregate to hold an
89.1% interest in the Partnership.
In May 1995, the Company made an offer to purchase each of the one hundred
thirty-five limited partner units for $10,000 each. As of September 30, 1995
seventy-seven limited partner units had been tendered to the Company under this
offer. The Company paid $770,000 with respect to these tenders through the six
months ended September 30, 1995. Combined with the Company's initial 10.9%
ownership, the Company now owns 61.7% of the Partnership. The Company's purchase
of these limited partner units has been treated as a long-term asset and is
being amortized over 5 years.
In March 1995, the Company satisfied all of its remaining fixed obligations
to the Partnership. Commencing April 1, 1995 and ending August 3, 2000, the
Company owes a royalty to the Partnership of 5.5% of certain revenues from the
Products made during the period. Because the Company owns 61.7% of the
Partnership, the net royalty to the Company is approximately 2.1%. This royalty
formula is subject to certain maximum amounts and to certain additional
adjustments in the event that the Company sells the technology.
-9-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
- ---------------------
NET INCOME (LOSS)
- -----------------
Net income and income per share for the three months ended September 30,
1995 were approximately $49,000 and $.01 per share, respectively. These earnings
compare to a net loss and loss per share of approximately $91,000 and $.01 per
share, respectively, in the same period of the previous year.
Net income and income per share for the six months ended September 30, 1995
were approximately $133,000 and $.02 per share, respectively. These earnings
compare to a loss of approximately $307,000 and $.05 per share in the same
period of the previous year.
REVENUES
- --------
In the three months ended September 30, 1995, total revenues were
------------
approximately $3,107,000, 60% higher than total revenues of approximately
$1,942,000 in the same period of the previous year.
Product and service revenues were approximately $2,270,000, 69% higher than
product and service revenues of approximately $1,340,000 in the same period of
the previous year. These results primarily reflect increased units sales to new
customers and increased units sales of the disposable cardiovascular product to
the expanded installed customer base. Revenues from dental products, though
growing, represented less than 10% of total revenues for the three months ended
September 30, 1995. More than 90% of total product and service revenues were
derived from domestic sources.
Revenues from Research and Development (R&D) contracts and grants for this
quarter were approximately $836,000, 39% higher than total revenues of
approximately $602,000 reported in the same quarter of the previous year. This
increase primarily reflects timing of scheduled activities under existing
contracts and grants. All such government contracts contain provisions making
them terminable at the convenience of the government.
In the six months ended September 30, 1995, total revenues were
----------
approximately $5,850,000, 54% higher than total revenues of approximately
$3,801,000 in the same period of the previous year.
Product sales for the first six months of fiscal 1996 were $4,395,000
compared with $2,639,000 for the same period of the previous year, an increase
of 67%. This growth primarily reflects increased units sales to new customers
and increased units sales of the disposable
-10-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES (continued)
- --------
cardiovascular product to the expanded installed customer base. Revenues from
dental products continued to grow, however, represented less than 10% of total
revenue for the six month period.
Revenues from Research and Development (R&D) contacts and grants for the
six months ended September 30, 1995 were approximately $1,455,000, 25% higher
than in the same period of the prior year. The increase primarily reflects the
timing of scheduled activities under existing contracts and grants. All
government grants and contracts contain provisions making them terminable at the
convenience of the government.
COSTS AND EXPENSES
- ------------------
Total costs and expenses for the three months ended September 30, 1995 were
------------
approximately $3,183,000, 48% higher than total costs and expenses of
approximately $2,146,000 in the same fiscal quarter of the previous year. The
majority of this increase reflects expenses incurred to support higher revenues.
Cost of products sold as a percentage of product sales (40%) was relatively
unchanged from the same quarter of the previous year (39%) while increasing in
total cost by approximately $390,000. These increased costs reflect higher
product revenue levels attained in the current year's quarter.
Total research and development costs increased during the second fiscal
quarter of 1996 to approximately $860,000, a 56% increase over research and
development costs of approximately $550,000 incurred during the same fiscal
period last year. The increase primarily reflects the timing of scheduled
expenditures under contracts and grants.
Selling, general and administrative expenses for the three months ended
September 30, 1995 increased to $1,415,000, 31% higher than selling, general and
administrative expenses in the same fiscal quarter of the previous year. This
increase primarily reflects increased sales and marketing expenses, particularly
increased personnel and sales commissions, related to the increase in product
and service revenues.
Total costs and expenses for the six month period ended September 30, 1995
---------
increased to $5,973,000, 38% higher than total costs and expenses of
approximately $4,324,000 for the first six months of last year. The increase is
primarily attributable to higher revenue levels attained during the first six
months of fiscal 1996.
Cost of products sold as a percentage of products sales (41%) for the six
---
months ended September 30, 1995 was relatively unchanged from the same six month
- ------
period ended September
-11-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COSTS AND EXPENSES (CONTINUED)
- ------------------------------
30, 1994 (40%) while increasing in total cost by approximately $766,000. These
increased costs primarily reflect higher product revenue levels.
Total research and development costs increased to approximately $1,519,000
for the six months ended September 30, 1995. This represents a 33% increase over
the $1,141,000 reported for the same period in the previous fiscal year. The
increase primarily reflects the timing of scheduled expenditures under contracts
and grants.
Selling, general and administrative expenses for the six months ended
September 30, 1995 increased to approximately $2,632,000, 24% higher than
selling, general and administrative expenses in six month period ended September
30, 1994. This increase primarily reflects increased sales and marketing
expenses, particularly increased personnel and sales commissions, related to the
increase in product and service revenues.
INTEREST AND OTHER
- ------------------
Interest and other income increased to approximately $125,000 in the second
quarter of 1996 compared with approximately $113,000 in the corresponding
quarter of the prior year primarily due to a higher level of cash and
investments.
For the six months ended September 30, 1995, interest and other income was
approximately $256,000 compared to $216,000 for the six months ended September
30, 1994. This increase was primarily due to a higher level of cash and
investments.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
As of September 30, 1995, the Company's balance sheet included $10,480,000
in cash and investments, a decrease of approximately $545,000 from March 31,
1995. This decrease reflects $770,000 in cash used to purchase limited partner
units of the Abiomed Limited Partnership net of approximately $225,000 in cash
generated from operations and other activities. The September 30, 1995 balance
includes approximately $334,000 in cash, $9,484,000 in short-term investments
and $663,000 in investments with various maturities, the latest of which is
October 1996. The Company also has a $3,000,000 line of credit from a bank which
expires on December 1, 1995, and which was entirely available at September 30,
1995.
Net cash provided by operating activities included net income and
depreciation and amortization expenses of approximately $298,000, an increase in
accounts payable of $504,000
-12-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
- -------------------------------------------
and a decrease in inventories of approximately $156,000. These sources of cash
were partially offset by an increase in accounts receivable of $565,000 and an
increase of prepaid and other current assets of approximately $186,000. The
increase in accounts receivable is attributable to increased credit sales and
longer collection periods for certain accounts. The decrease in inventory was
primarily attributable to a decrease in finished goods inventory due to
increased product sales.
Net cash used in investing activities included $770,000 of purchases of
limited partner units of Abiomed Limited Partnership (the Partnership) and
approximately $100,000 of purchases and improvements of property and equipment
which were partially offset by approximately $264,000 of net purchases and
maturities of investments. As set forth in Note 7 of the financial statements
included in this report, the Company had offered to purchase units of the
investor limited partner's interests in the Partnership at a purchase price of
$10,000 per unit. As of September 30, 1995 the Company had acquired and paid for
seventy-seven (77) units of the Partnership.
HEALTH CARE REFORM
- ------------------
Private and government proposals for significant health care reform are
expected to continue to affect healthcare expenditures in the United States as
well as internationally where the company sells or plans to sell its products.
The Company cannot assess at this time the potential impact that healthcare
trends may have on future results because of uncertainties surrounding any
unforseeable changes.
***
-13-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Item 2. Changes in Securities
---------------------
None
Item 3. Defaults upon Senior Securities
-------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
At the Company's annual meeting of shareholders held on August 9,
1995, the stockholders approved the following:
a) Elected six persons to serve as directors as follows:
<TABLE>
<CAPTION>
Votes
Director Votes For Withheld
-------- --------- -------------
<S> <C> <C>
Dr. David Lederman (Class I) 4,234,980 140,443
Dr. Gerald W. Austen (Class III) 4,234,980 140,443
Paul Fireman (Class III) 4,229,549 145,874
John F. O'Brien (Class II) 4,234,980 140,443
Henri A. Termeer (Class II) 4,234,480 140,943
Desmond H. O'Connell, Jr. (Class I) 4,338,080 37,343
</TABLE>
b) A proposal to amend the Company's certificate of
incorporation to provide for the classification of the Board
of Directors into three classes of directors with staggered
terms of office. The proposal received 1,306,723 votes for
and 622,185 against. There were 32,889 abstentions and
2,413,626 non-voting.
c) A proposal to amend the Company's certificate of
incorporation regarding the consideration of all relevant
factors in connection with certain business combinations.
The proposal received 1,383,063 votes for and 594,965
against. There were 47,168 abstentions and 2,350,227 non-
voting.
-14-
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders (Continued)
---------------------------------------------------------------
d) A proposal to amend the Company's certificate of
incorporation to increase the number of shares of the
Company's Common Stock authorized thereunder from 10,000,000
to 25,000,000 shares. The proposal received 3,626,244 votes
for and 623,689 against. There were 30,100 abstentions and
95,380 non-voting.
e) A proposal to amend the Company's 1992 Combination Stock
Option Plan to increase the number of shares that may be
issued under that plan. The proposal received 1,274,114
votes for and 660,475 against. There were 27,558 abstentions
and 2,413,276 non-voting.
f) A proposal to amend the Company's 1989 Non-Qualified Stock.
Option Plan for Non-Employee Directors to increase the
number of shares that may be issued under that plan.
The proposal received 1,702,116 votes for and 288,878
against. There were 35,902 abstentions and 2,348,527
non-voting.
g) A proposal to act upon any matter incidental to the
foregoing purpose and any other matter which may properly
come before the Annual Meeting or any adjourned session
thereof. There were no such matters acted upon during the
Annual Meeting.
Item 5. Other Information
--------------------
a) None
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
a) Exhibits
--------
3.1 Certificate of Amendment of Certificate of
Incorporation of ABIOMED, Inc.
3.2 By-laws of ABIOMED, Inc., amended
10.1 ABIOMED, Inc. 1989 Non-Qualified Stock Option Plan for
Non-Employee Directors, as amended
-15-
<PAGE>
ABIOMED, INC AND SUBSIDIARIES
PART II, OTHER INFORMATION
Item 6. Exhibits and reports on Form 8-k (continued)
-------------------------------------------
10.2 ABIOMED, Inc. 1992 Combination Stock Option Plan, as
amended
b) Reports on Form 8-K
-------------------
Form 8-K dated August 10, 1995.
- --------------------------------------------------------------------------------
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 thereunto duly authorized.
ABIOMED, Inc.
Date: October 26 , 1995 /s/
-------------------------------
David M. Lederman
CEO and President
Date: October 26 , 1995 /s/
-------------------------------
John F. Thero
Vice President Finance and Administration
-16-
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
ABIOMED, Inc.
ABIOMED, Inc., a corporation organized and existing under the laws of the
State of Delaware (the "Corporation"), pursuant to Section 242 of the Delaware
General Corporation Law, hereby certifies as follows:
1. The Board of Directors of the Corporation, at a meeting duly held on
June 15, 1995, at which a quorum was present and acting throughout and in
accordance with the provisions of Section 242 of the Delaware General
Corporation Law, approved the following amendments to the Corporation's
Certificate of Incorporation:
i. To increase the number of authorized shares of Common Stock, $.01 par
value, from 10,000,000 to 25,000,000 shares.
ii. Paragraphs (c), (d) and (g) of Section 4.2.2 of Article 4 shall be
amended to read in their entirety as follows:
(c) Any director elected by the holders of Common Stock voting as a
separate class under paragraph (b) above may only be removed for
cause by the holders of the Common Stock voting as a separate
class. The remaining directors may be removed only for cause by
the stockholders voting in accordance with paragraph (a).
(d) So long as there is any Class A Common Stock outstanding, any
vacancy in the office of a director electable by the holders of
Common Stock voting as a separate class may be filled by a vote
of such holders voting as a separate class, and in the absence of
such a stockholder vote, such vacancy may be filled by the
remaining directors elected by the Common Stock voting as a
separate class, and in the absence of any directors so elected,
by all the remaining directors. So long as there is any Class A
Common Stock outstanding, any vacancy in the office of a director
electable by the holders of both classes of common stock voting
as a single class shall be filled by the remaining directors
elected by both classes, and in the absence of any directors so
elected, by the holders of both classes of common stock voting as
a single class. At such time as there is no longer any Class A
Common Stock outstanding, any vacancy in the office of director
shall be filled by the remaining directors, and in the absence of
any directors, by the stockholders. Unless the conditions set
forth in paragraph (f) exist in respect of the next annual
meeting of stockholders, the Board of Directors may be enlarged
by the Board of Directors only to the extent that twenty-five
percent (25%) of the enlarged Board of Directors consists of
directors either (i) elected by the holders of the Common Stock
or (ii) appointed by directors elected by the holders of Common
Stock voting as a separate class.
(g) This Certificate of Incorporation may be amended to change the
powers, preferences, relative voting power or special rights of
the shares of the Common Stock or the Class A Common Stock so as
to affect either class adversely relative to the other, but any
proposal to do so shall require the approval of a
<PAGE>
majority of the votes entitled to be cast by the holders of the
class adversely affected by the proposed amendment, voting
separately as a class, in addition to the approval of a majority
of the votes entitled to be cast by the holders of the Common
Stock and the Class A Common Stock voting together as a single
class as hereinbefore provided. In addition, this Section 4.2.2
shall not be amended, altered or repealed except by the
affirmative vote of eighty percent (80%) of the votes entitled to
be cast by the stockholders voting in accordance with paragraph
(a).
iii. Article 13 shall be added to read in its entirety as follows:
13. CLASSIFIED BOARD OF DIRECTORS
-----------------------------
(a) The number of directors of the corporation shall be the number,
not less than 3 nor more than 12, fixed from time to time by the
Board of Directors. The Board of Directors may be enlarged only
by vote of a majority of the directors then in office.
(b) Commencing at the annual meeting of the stockholders in 1995, the
directors shall be divided into three classes, designated Class
I, Class II and Class III. Each class shall consist, as nearly
as may be possible, of one third of the number of directors
constituting the entire Board of Directors. At the annual
meeting of the stockholders held in 1995, Class I directors shall
be elected for a one year term, Class I directors shall be
elected for a two year term, and Class III directors shall be
elected for a three year term, and in each case until their
successors are duly elected and qualified. Commencing in 1996,
at each annual meeting of the stockholders successors to the
class of directors whose terms expire at that annual meeting of
stockholders shall be elected by stockholders for a three year
term and until their successors are duly elected and qualified.
If the number of directors constituting the entire Board of
Directors shall be changed as provided in paragraph (a) of this
Article 13, the increase or decrease shall be apportioned among
the classes so as to maintain the number of directors in each
class as nearly equal as possible.
(c) Any director elected to fill a vacancy resulting from an increase
in any class or from the removal from office, death, disability,
resignation or disqualification of a director or other cause
shall hold office for the remaining term of the class to which
such director is elected. No decrease in the size of the Board
of Directors shall have the effect of removing or shortening the
term of any incumbent director.
(d) Whenever the holders of any series of Preferred Stock issued
pursuant to the provisions of Part 4.4 of Article 4 of this
certificate of incorporation shall have the right, voting as a
separate class, to elect directors, the election, term of office,
filling of vacancies and other terms of such directorships shall
be governed by the terms of this certificate of incorporation
applicable to such series or by the resolution or resolutions of
the Board of Directors providing for such series, as the case may
be, and such directorships shall not be divided into classes or
otherwise subject to this Article 13 unless expressly so provided
therein.
(e) This Article 13 shall not be amended, altered or repealed except
by the affirmative vote of eighty percent (80%) of the votes
entitled to be cast by stockholders voting in accordance with
Section 4.2.2(a) of Article 4.
-2-
<PAGE>
iv. Article 14 shall be added to read in its entirety as follows:
14. CONSIDERATION OF RELEVANT FACTORS IN BUSINESS COMBINATIONS.
-----------------------------------------------------------
The Board of Directors of the corporation, when evaluating any
offer of another party to (i) purchase or exchange any securities
or property for any outstanding equity securities of the
corporation, (ii) merge or consolidate the corporation with
another corporation, or (iii) purchase or otherwise acquire all
or substantially all of the properties and assets of the
corporation, shall, in connection with the exercise of its
judgment in determining what is in the best interests of the
corporation and its stockholders, give due consideration to all
relevant factors, including without limitation: (a) not only the
price or other consideration being offered in relation to the
then current market price of the corporation's outstanding shares
of capital stock, but also the Board of Directors' estimate of
the future value of the corporation as an independent going
concern and the unrealized value of its property and assets; (b)
the financial and managerial resources and future prospects of
the other party; and (c) the possible social, legal,
environmental and economic effects of the transaction on the
business of the corporation and its subsidiaries and on the
employees, customers, suppliers and creditors of the corporation
and its subsidiaries and the effects on the communities in which
the corporation's facilities are located. In evaluating any such
offer on the basis of the foregoing factors, the directors shall
be deemed to be performing their duly authorized duties and
acting in good faith and in the best interests of the corporation
within the meaning of Section 145 of the General Corporation Law
of Delaware, as it may be amended from time to time.
2. The foregoing amendments to the Certificate of Incorporation were duly
adopted by the stockholders at a meeting duly held, at which a quorum was
present and acting throughout and in accordance with the provisions of Section
242 of the General Corporation Law of Delaware, on August 9, 1995.
IN WITNESS WHEREOF, ABIOMED, Inc. has caused this Certificate of Amendment
of its Certificate of Incorporation to be signed by David M. Lederman, its
President, and attested to by Donald E. Paulson, its Secretary, this 25th day of
October, 1995.
ABIOMED, Inc.
By: /s/ David M. Lederman
-------------------------------
David M. Lederman,
President
ATTEST:
By: /s/ Donald E. Paulson
-------------------------------
Donald E. Paulson, Secretary
-3-
<PAGE>
BY-LAWS
of
ABIOMED, Inc.
A Delaware Corporation
Adopted: June 4, 1987
Amended: July 2, 1990 and
June 15, 1995
/s/ Donald E. Paulson
---------------------------
Secretary
<PAGE>
BY-LAWS
-------
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE I. - STOCKHOLDERS......................................................1
Section 1.1. Annual Meeting...................................................1
SECTION 1.2. SPECIAL MEETINGS.................................................1
Section 1.3. Notice of Meeting................................................1
Section 1.4. Quorum...........................................................2
Section 1.5. Voting and Proxies...............................................2
Section 1.6. Action at Meeting................................................2
Section 1.7. Action Without Meeting...........................................2
Section 1.8. Voting of Shares of Certain Holders..............................2
Section 1.9. Stockholder Lists................................................3
ARTICLE II. - BOARD OF DIRECTORS...............................................3
Section 2.1. Powers...........................................................3
Section 2.2. Number of Directors; Qualifications..............................4
Section 2.3. Nomination of Directors..........................................4
Section 2.4 Election of Directors............................................4
Section 2.5. Vacancies; Reduction of the Board................................4
Section 2.6. Enlargement of the Board.........................................4
Section 2.7. Tenure and Resignation...........................................5
Section 2.8. Removal..........................................................5
Section 2.9. Meetings.........................................................5
Section 2.10. Notice of Meeting...............................................5
Section 2.11. Agenda..........................................................5
Section 2.12. Quorum..........................................................6
Section 2.13. Action at Meeting...............................................6
Section 2.14. Action Without Meeting..........................................6
Section 2.15. Committees......................................................6
ARTICLE III. - OFFICERS........................................................6
Section 3.1. Enumeration......................................................6
Section 3.2. Election.........................................................7
Section 3.3. Qualification....................................................7
Section 3.4. Tenure...........................................................7
Section 3.5. Removal..........................................................7
Section 3.6. Resignation......................................................7
Section 3.7. Vacancies........................................................7
Section 3.8. Chairman of the Board............................................7
Section 3.9. President........................................................7
Section 3.10. Executive Vice-President; Vice-President(s).....................8
Section 3.11. Treasurer and Assistant Treasurers..............................8
Section 3.12. Secretary and Assistant Secretaries.............................8
Section 3.13. Other Powers and Duties.........................................8
</TABLE>
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<PAGE>
<TABLE>
<S> <C>
ARTICLE IV. - CAPITAL STOCK....................................................9
Section 4.1. Stock Certificates...............................................9
Section 4.2. Transfer of Shares...............................................9
Section 4.3. Record Holders...................................................9
Section 4.4. Record Date......................................................9
Section 4.5. Transfer Agent and Registrar for Shares of Corporation..........10
Section 4.6. Loss of Certificates............................................10
Section 4.7. Restrictions on Transfer........................................11
Section 4.8. Multiple Classes of Stock.......................................11
ARTICLE V. - DIVIDENDS........................................................11
Section 5.1. Declaration of Dividends........................................11
Section 5.2. Reserves........................................................11
ARTICLE VI. - POWERS OF OFFICERS TO CONTRACT WITH THE CORPORATION.............12
ARTICLE VII. - INDEMNIFICATION................................................12
Section 7.1. Definitions.....................................................12
Section 7.2. Right to Indemnification in General.............................14
Section 7.3. Proceedings Other Than Proceedings by or in the Right of the
Corporation...................................................14
Section 7.4. Proceedings by or in the Right of the Corporation...............14
Section 7.5. Indemnification of a Party Who is Wholly or Partly Successful...15
Section 7.6. Indemnification for Expenses of a Witness.......................15
Section 7.7. Advancement of Expenses.........................................15
Section 7.8. Notification and Defense of Claim...............................16
Section 7.9. Method of Determination.........................................17
Section 7.10. Presumptions and Effect of Certain Proceedings.................17
Section 7.11. Non-Exclusivity................................................18
Section 7.12. Insurance......................................................18
Section 7.13. No Duplicative Payment.........................................18
Section 7.14. Severability...................................................18
ARTICLE VIII. - MISCELLANEOUS PROVISIONS......................................19
Section 8.1. Certificate of Incorporation....................................19
Section 8.2. Fiscal Year.....................................................19
Section 8.3. Corporate Seal..................................................19
Section 8.4. Execution of Instruments........................................19
Section 8.5. Voting of Securities............................................19
Section 8.6. Evidence of Authority...........................................19
Section 8.7. Corporate Records...............................................19
Section 8.8. Charitable Contributions........................................20
ARTICLE IX. - AMENDMENTS......................................................20
Section 9.1. Amendment by Stockholders.......................................20
Section 9.2. Amendment by Board of Directors.................................20
</TABLE>
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<PAGE>
BY-LAWS
OF
ABIOMED, Inc.
-------------
(A Delaware Corporation)
ARTICLE I
---------
Stockholders
------------
Section 1.1. Annual Meeting. The annual meeting of the stockholders of
----------- --------------
the corporation shall be held on the first Wednesday of September in each year,
at such time and place within or without the State of Delaware as may be
designated in the notice of meeting. If the day fixed for the annual meeting
shall fall on a legal holiday, the meeting shall be held on the next succeeding
day not a legal holiday. If the annual meeting is omitted on the day herein
provided, a special meeting may be held in place thereof, and any business
transacted at such special meeting in lieu of annual meeting shall have the same
effect as if transacted or held at the annual meeting.
Section 1.2. Special Meetings. Special meetings of the stockholders may
----------- ----------------
be called at any time by the chairman of the board of directors, the president
or by the board of directors. Special meetings of the stockholders shall be held
at such time, date and place within or outside of the State of Delaware as may
be designated in the notice of such meeting.
Section 1.3. Notice of Meeting. A written notice stating the place,
----------- -----------------
date, and hour of each meeting of the stockholders, and, in the case of a
special meeting, the purposes for which the meeting is called, shall be given to
each stockholder entitled to vote at such meeting, and to each stockholder who,
under the Certificate of Incorporation or these By-laws, is entitled to such
notice, by delivering such notice to such person or leaving it at their
residence or usual place of business, or by mailing it, postage prepaid, and
addressed to such stockholder at his address as it appears upon the books of the
corporation, at least ten (10) days and not more than sixty (60) before the
meeting. Such notice shall be given by the secretary, an assistant secretary, or
any other officer or person designated either by the secretary or by the person
or persons calling the meeting.
The requirement of notice to any stockholder may be waived by a written
waiver of notice, executed before or after the meeting by the stockholder or his
attorney thereunto duly authorized, and filed with the records of the meeting,
or if communication with such stockholder is unlawful, or by attendance at the
meeting without protesting prior thereto or at its commencement the lack of
notice. A waiver of notice of any regular or special meeting of the stockholders
need not specify the purposes of the meeting.
1
<PAGE>
If a meeting is adjourned to another time or place, notice need not be
given of the adjourned meeting if the time and place are announced at the
meeting at which the adjournment is taken, except that if the adjournment is for
more than thirty days, or if after the adjournment a new record date is fixed
for the adjourned meeting, notice of the adjourned meeting shall be given to
each stockholder of record entitled to vote at the meeting.
Section 1.4. Quorum. The holders of a majority in interest of all stock
----------- ------
issued, outstanding and entitled to vote at a meeting shall constitute a quorum.
Any meeting may be adjourned from time to time by a majority of the votes
properly cast upon the question, whether or not a quorum is present.
Section 1.5. Voting and Proxies. Stockholders shall have one vote for
----------- ------------------
each share of stock entitled to vote owned by them of record according to the
books of the corporation, unless otherwise provided by law or by the Certificate
of Incorporation. Stockholders may vote either in person or by written proxy,
but no proxy shall be voted or acted upon after three years from its date,
unless the proxy provides for a longer period. Proxies shall be filed with the
secretary of the meeting, or of any adjournment thereof. Except as otherwise
limited therein, proxies shall entitle the persons authorized thereby to vote at
any adjournment of such meeting. A proxy purporting to be executed by or on
behalf of a stockholder shall be deemed valid unless challenged at or prior to
its exercise and the burden of proving invalidity shall rest on the challenger.
A proxy with respect to stock held in the name of two or more persons shall be
valid if executed by one of them unless at or prior to exercise of the proxy the
corporation receives a specific written notice to the contrary from any one of
them.
Section 1.6. Action at Meeting. When a quorum is present at any
----------- -----------------
meeting, a plurality of the votes properly cast for election to any office shall
elect to such office, and a majority of the votes properly cast upon any
question other than election to an office shall decide such question, except
where a larger vote is required by law, the Certificate of Incorporation or
these by- laws. No ballot shall be required for any election unless requested by
a stockholder present or represented at the meeting and entitled to vote in the
election.
Section 1.7. Action Without Meeting. Any action required or permitted
----------- ----------------------
to be taken at any meeting of the stockholders may be taken without a meeting if
the minimum number of stockholders necessary to authorize or take such action
and entitled to vote on the matter consent to the action in writing and the
consents are filed with the records of the meetings of stockholders. Such
consent shall be treated for all purposes as a vote at a meeting.
Section 1.8. Voting of Shares of Certain Holders. Shares of stock of
----------- -----------------------------------
the corporation standing in the name of another corporation, domestic or
foreign, may be voted by such officer, agent, or proxy as the by-laws of such
corporation may prescribe, or, in the absence of such provision, as the board of
directors of such corporation may determine.
2
<PAGE>
Shares of stock of the corporation standing in the name of a deceased
person, a minor ward or an incompetent person, may be voted by his
administrator, executor, court-appointed guardian or conservator without a
transfer of such shares into the name of such administrator, executor, court
appointed guardian or conservator. Shares of capital stock of the corporation
standing in the name of a trustee may be voted by him.
Shares of stock of the corporation standing in the name of a receiver may
be voted by such receiver, and shares held by or under the control of a receiver
may be voted by such receiver without the transfer thereof into his name if
authority so to do be contained in an appropriate order of the court by which
such receiver was appointed.
A stockholder whose shares are pledged shall be entitled to vote such
shares until the shares have been transferred into the name of the pledgee, and
thereafter the pledgee shall be entitled to vote the shares so transferred.
Shares of its own stock belonging to this corporation shall not be voted,
directly or indirectly, at any meeting and shall not be counted in determining
the total number of outstanding shares at any given time, but shares of its own
stock held by the corporation in a fiduciary capacity may be voted and shall be
counted in determining the total number of outstanding shares.
Section 1.9. Stockholder Lists. The secretary (or the corporation's
----------- -----------------
transfer agent or other person authorized by these By-laws or by law) shall
prepare and make, at least ten days before every meeting of stockholders, a
complete list of the stockholders entitled to vote at the meeting, arranged in
alphabetical order, and showing the address of each stockholder and the number
of shares registered in the name of each stockholder. Such list shall be open to
the examination of any stockholder, for any purpose germane to the meeting,
during ordinary business hours, for a period of at least ten days prior to the
meeting, either at a place within the city where the meeting is to be held,
which place shall be specified in the notice of the meeting, or, if not so
specified, at the place where the meeting is to be held. The list shall also be
produced and kept at the time and place of the meeting during the whole time
thereof, and may be inspected by any stockholder who is present.
ARTICLE II.
-----------
Board of Directors
------------------
Section 2.1. Powers. Except as reserved to the stockholders by law, by
----------- ------
the Certificate of Incorporation or by these By-laws, the business of the
corporation shall be managed under the direction of the board of directors, who
shall have and may exercise all of the powers of the corporation. In particular,
and without limiting the foregoing, the board of directors shall have the power
to issue or reserve for issuance from time to time the whole or any part of the
capital stock of the corporation which may be authorized from time to time to
such person, for such
3
<PAGE>
consideration and upon such terms and conditions as they shall determine,
including the granting of options, warrants or conversion or other rights to
stock.
Section 2.2. Number of Directors; Qualifications. The board of
----------- -----------------------------------
directors shall consist of such number of directors, not less than 3 nor more
than 11, as shall be fixed initially by the incorporator(s) and thereafter by
the board of directors. No director need be a stockholder.
Section 2.3. Nomination of Directors.
----------- -----------------------
(a) Nominations for the election of directors may be made by the board
of directors or by any stockholder entitled to vote for the election of
directors. Nominations by stockholders shall be made by notice in writing,
delivered or mailed by first class United States mail, postage prepaid, to the
secretary of the corporation not less than 45 days nor more than 60 days prior
to any meeting of the stockholders called for the election of directors.
(b) Each notice under subsection (a) shall set forth (i) the name, age,
business address and, if known, residence address of each nominee proposed in
such notice, (ii) the principal occupation or employment of each such nominee,
and (iii) the number of shares of stock of the corporation which are
beneficially owned by each such nominee.
(c) The chairman of the meeting of stockholders may, if the facts
warrant, determine and declare to the meeting that a nomination was not made in
accordance with the foregoing procedure, and if he should so determine, he shall
so declare to the meeting and the defective nomination shall be disregarded.
Section 2.4. Election of Directors. The initial board of directors
----------- ---------------------
shall be elected by the incorporator(s) at the first meeting thereof and
thereafter by the stockholders at their annual meeting or at any special meeting
the notice of which specifies the election of directors as an item of business
for such meeting.
Section 2.5. Vacancies; Reduction of the Board. Any vacancy in the
----------- ---------------------------------
board of directors, however occurring, including a vacancy resulting from the
enlargement of the board of directors, may be filled by the stockholders or by
the directors then in office or by a sole remaining director. In lieu of filling
any such vacancy the stockholders or board of directors may reduce the number of
directors, but not to a number less than 3. When one or more directors shall
resign from the board of directors, effective at a future date, a majority of
the directors then in office, including those who have so resigned, shall have
power to fill such vacancy or vacancies, the vote thereon to take effect when
such resignation or resignations shall become effective.
Section 2.6. Enlargement of the Board. The board of directors may be
----------- ------------------------
enlarged by the stockholders at any meeting or by vote of a majority of the
directors then in office.
4
<PAGE>
Section 2.7. Tenure and Resignation. Except as otherwise provided by
----------- ----------------------
law, by the Certificate of Incorporation or by these By-laws, directors shall
hold office until the next annual meeting of stockholders and thereafter until
their successors are chosen and qualified. Any director may resign by delivering
or mailing postage prepaid a written resignation to the corporation at its
principal office or to the chairman of the board of directors, president,
secretary or assistant secretary, if any. Such resignation shall be effective
upon receipt unless it is specified to be effective at some other time or upon
the happening of some other event.
Section 2.8. Removal. A director, whether elected by the stockholders
----------- -------
or directors, may be removed from office only for cause, either at any annual or
any special meeting of stockholders, by vote of a majority of the stockholders
entitled to vote in the election of such directors, or to the extent permitted
by law, by a vote of a majority of the directors then in office; provided,
however, that a director may be removed for cause only after reasonable notice
and opportunity to be heard before the body proposing to remove him.
Section 2.9. Meetings. Regular meetings of the board of directors may
----------- --------
be held without call or notice at such times and such places within or without
the State of Delaware as the Board may, from time to time, determine, provided
that notice of the first regular meeting following any such determination shall
be given to directors absent from such determination. A regular meeting of the
board of directors shall be held without notice immediately after, and at the
same place as, the annual meeting of the stockholders or the special meeting of
the stockholders held in place of such annual meeting, unless a quorum of the
directors is not then present. Special meetings of the board of directors may be
held at any time and at any place designated in the call of the meeting when
called by the president, treasurer, or one or more directors. Members of the
board of directors or any committee elected thereby may participate in a meeting
of such board or committee by means of a conference telephone or similar
communications equipment by means of which all persons participating in the
meeting can hear each other at the same time, and participation by such means
shall constitute presence in person at the meeting.
Section 2.10. Notice of Meeting. It shall be sufficient notice to a
------------ -----------------
director to send notice by mail at least seventy-two (72) hours before the
meeting addressed to such person at his usual or last known business or
residence address or to give notice to such person in person or by telephone at
least twenty-four (24) hours before the meeting. Notice shall be given by the
secretary, assistant secretary, if any, or by the officer or directors calling
the meeting. The requirement of notice to any director may be waived by a
written waiver of notice, executed by such person before or after the meeting or
meetings, and filed with the records of the meeting, or by attendance at the
meeting without protesting prior thereto or at its commencement the lack of
notice. A notice or waiver of notice of a directors' meeting need not specify
the purposes of the meeting.
Section 2.11. Agenda. Any lawful business may be transacted at a
------------ ------
meeting of the board of directors, notwithstanding the fact that the nature of
the business may not have been specified in the notice or waiver of notice of
the meeting.
5
<PAGE>
Section 2.12. Quorum. At any meeting of the board of directors, a
------------ ------
majority of the directors then in office shall constitute a quorum for the
transaction of business. Any meeting may be adjourned by a majority of the votes
cast upon the question, whether or not a quorum is present, and the meeting may
be held as adjourned without further notice.
Section 2.13. Action at Meeting. Any motion adopted by vote of the
------------ -----------------
majority of the directors present at a meeting at which a quorum is present
shall be the act of the board of directors, except where a different vote is
required by law, by the Certificate of Incorporation or by these By-laws. The
assent in writing of any director to any vote or action of the directors taken
at any meeting, whether or not a quorum was present and whether or not the
director had or waived notice of the meeting, shall have the same effect as if
the director so assenting was present at such meeting and voted in favor of such
vote or action.
Section 2.14. Action Without Meeting. Any action by the directors may
------------ ----------------------
be taken without a meeting if all of the directors consent to the action in
writing and the consents are filed with the records of the directors' meetings.
Such consent shall be treated for all purposes as a vote of the directors at a
meeting.
Section 2.15. Committees. The board of directors may, by the
------------ ----------
affirmative vote of a majority of the directors then in office, appoint an
executive committee or other committees consisting of one or more directors and
may by vote delegate to any such committee some or all of their powers except
those which by law, the Certificate of Incorporation or these By-laws they may
not delegate. Unless the board of directors shall otherwise provide, any such
committee may make rules for the conduct of its business, but unless otherwise
provided by the board of directors or such rules, its meetings shall be called,
notice given or waived, its business conducted or its action taken as nearly as
may be in the same manner as is provided in these By-laws with respect to
meetings or for the conduct of business or the taking of actions by the board of
directors. The board of directors shall have power at any time to fill vacancies
in, change the membership of, or discharge any such committee at any time. The
board of directors shall have power to rescind any action of any committee, but
no such rescission shall have retroactive effect.
ARTICLE III.
------------
Officers
--------
Section 3.1. Enumeration. The officers shall consist of a chairman of
----------- -----------
the board of directors, president, executive vice-president, a treasurer, a
secretary and such other officers and agents (including one or more additional
vice-presidents, assistant treasurers and assistant secretaries), as the board
of directors may, in their discretion, determine.
6
<PAGE>
Section 3.2. Election. The chairman of the board of directors,
----------- --------
president, executive vice-president, treasurer and secretary shall be elected
annually by the directors at their first meeting following the annual meeting of
the stockholders or any special meeting held in lieu of the annual meeting.
Other officers may be chosen by the directors at such meeting or at any other
meeting.
Section 3.3. Qualification. An officer may, but need not, be a director
----------- -------------
or stockholder. Any two or more offices may be held by the same person. Any
officer may be required by the directors to give bond for the faithful
performance of his duties to the corporation in such amount and with such
sureties as the directors may determine. The premiums for such bonds may be paid
by the corporation.
Section 3.4. Tenure. Except as otherwise provided by the Certificate of
----------- ------
Incorporation or these By-laws, the term of office of each officer shall be for
one year or until his successor is elected and qualified or until his earlier
resignation or removal.
Section 3.5. Removal. Any officer may be removed from office, with or
----------- -------
without cause, by the affirmative vote of a majority of the directors then in
office; provided, however, that an officer may be removed for cause only after
reasonable notice and opportunity to be heard by the board of directors prior to
action thereon.
Section 3.6. Resignation. Any officer may resign by delivering or
----------- -----------
mailing postage prepaid a written resignation to the corporation at its
principal office or to the chairman of the board of directors, president,
secretary, or assistant secretary, if any, and such resignation shall be
effective upon receipt unless it is specified to be effective at some other time
or upon the happening of some event.
Section 3.7. Vacancies. A vacancy in any office arising from any cause
----------- ---------
may be filled for the unexpired portion of the term by the board of directors.
Section 3.8. Chairman of the Board. The chairman of the board of
----------- ---------------------
directors shall be the chief executive officer of the corporation and shall have
such duties and powers as are commonly incident to such office, and shall have
such other duties and powers as the board of directors may from time to time
determine. He shall preside at all meetings of the board of directors.
Section 3.9. President. The president shall be the chief operating
----------- ---------
officer of the corporation. Except as otherwise voted by the board of directors,
the president shall preside at all meetings of the stockholders, and at meetings
of the board of directors in the absence of the chairman of the board. The
president shall have such duties and powers as are commonly incident to the
office of chief operating officer and such duties and powers as the board of
directors shall from time to time designate.
7
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Section 3.10. Executive Vice-President; Vice-President(s). In the
------------ -------------------------------------------
absence of either the chairman of the board of directors or the president, the
executive vice-president shall have and may exercise all of the powers of the
officer who is absent. The executive vice-president and any additional vice-
presidents, shall have such other powers and perform such duties as the board of
directors may from time to time determine.
Section 3.11. Treasurer and Assistant Treasurers. The treasurer, subject
------------ ----------------------------------
to the direction and under the supervision and control of the board of
directors, shall have general charge of the financial affairs of the
corporation. The treasurer shall have custody of all funds, securities and
valuable papers of the corporation, except as the board of directors may
otherwise provide. The treasurer shall keep or cause to be kept full and
accurate records of account which shall be the property of the corporation, and
which shall be always open to the inspection of each elected officer and
director of the corporation. The treasurer shall deposit or cause to be
deposited all funds of the corporation in such depository or depositories as may
be authorized by the board of directors. The treasurer shall have the power to
endorse for deposit or collection all notes, checks, drafts, and other
negotiable instruments payable to the corporation. The treasurer shall perform
such other duties as are incidental to the office, and such other duties as may
be assigned by the board of directors.
Assistant treasurers, if any, shall have such powers and perform such
duties as the board of directors may from time to time determine.
Section 3.12. Secretary and Assistant Secretaries. The secretary shall
------------ -----------------------------------
record, or cause to be recorded, all proceedings of the meetings of the
stockholders and directors (including committees thereof) in the book of records
of this corporation. The record books shall be open at reasonable times to the
inspection of any stockholder, director, or officer. The secretary shall notify
the stockholders and directors, when required by law or by these By-laws, of
their respective meetings, and shall perform such other duties as the directors
and stockholders may from time to time prescribe. The secretary shall have the
custody and charge of the corporate seal, and shall affix the seal of the
corporation to all instruments requiring such seal, and shall certify under the
corporate seal the proceedings of the directors and of the stockholders, when
required. In the absence of the secretary at any such meeting, a temporary
secretary shall be chosen who shall record the proceedings of the meeting in the
aforesaid books.
Assistant secretaries, if any, shall have such powers and perform such
duties as the board of directors may from time to time designate.
Section 3.13. Other Powers and Duties. Subject to these By-laws and to
------------ -----------------------
such limitations as the board of directors may from time to time prescribe, the
officers of the corporation shall each have such powers and duties as generally
pertain to their respective offices, as well as such powers and duties as from
time to time may be conferred by the board of directors.
8
<PAGE>
ARTICLE IV.
-----------
Capital Stock
-------------
Section 4.1. Stock Certificates. Each stockholder shall be entitled to
----------- ------------------
a certificate representing the number of shares of the capital stock of the
corporation owned by such person in such form as shall, in conformity to law, be
prescribed from time to time by the board of directors. Each certificate shall
be signed by the chairman of the board of directors, the president or any vice-
president and by the secretary, assistant secretary or treasurer or assistant
treasurer, or such other officers designated by the board of directors from time
to time as permitted by law, shall bear the seal of the corporation, and shall
express on its face its number, date of issue, class, the number of shares for
which, and the name of the person to whom, it is issued. The corporate seal and
any or all of the signatures of corporation officers may be facsimile if the
stock certificate is manually counter-signed by an authorized person on behalf
of a transfer agent or registrar other than the corporation or its employee.
If an officer, transfer agent or registrar who has signed, or whose
facsimile signature has been placed on, a certificate shall have ceased to be
such before the certificate is issued, it may be issued by the corporation with
the same effect as if he were such officer, transfer agent or registrar at the
time of its issue.
Section 4.2. Transfer of Shares. Title to a certificate of stock and to
----------- ------------------
the shares represented thereby shall be transferred only on the books of the
corporation by delivery to the corporation or its transfer agent of the
certificate properly endorsed, or by delivery of the certificate accompanied by
a written assignment of the same, or a properly executed written power of
attorney to sell, assign or transfer the same or the shares represented thereby.
Upon surrender of a certificate for the shares being transferred, a new
certificate or certificates shall be issued according to the interests of the
parties.
Section 4.3. Record Holders. Except as otherwise may be required by
----------- --------------
law, by the Certificate of Incorporation or by these By-laws, the corporation
shall be entitled to treat the record holder of stock as shown on its books as
the owner of such stock for all purposes, including the payment of dividends and
the right to vote with respect thereto, regardless of any transfer, pledge or
other disposition of such stock, until the shares have been transferred on the
books of the corporation in accordance with the requirements of these By-laws.
It shall be the duty of each stockholder to notify the corporation of his
post office address.
Section 4.4. Record Date. In order that the corporation may determine
----------- -----------
the stockholders entitled to receive notice of or to vote at any meeting of
stockholders or any adjournments thereof, or to express consent to corporate
action in writing without a meeting, or entitled to receive payment of any
dividend or other distribution or allotment of any rights, or entitled to
exercise any rights in respect of any change, conversion or exchange of stock or
for the purpose
9
<PAGE>
of any other lawful action, the board of directors may fix, in advance, a record
date, which shall not be more than sixty days prior to any other action. In such
case only stockholders of record on such record date shall be so entitled
notwithstanding any transfer of stock on the books of the corporation after the
record date.
If no record date is fixed: (i) the record date for determining
stockholders entitled to receive notice of or to vote at a meeting of
stockholders shall be at the close of business on the day next preceding the day
on which notice is given, or, if notice is waived, at the close of business on
the day next preceding the day on which the meeting is held; (ii) the record
date for determining stockholders entitled to express consent to corporate
action in writing without a meeting, when no prior action by the board of
directors is necessary, shall be the day on which the first written consent is
expressed; and (iii) the record date for determining stockholders for any other
purpose shall be at the close of business on the day on which the board of
directors adopts the resolution relating thereto.
Section 4.5. Transfer Agent and Registrar for Shares of Corporation.
----------- ------------------------------------------------------
The board of directors may appoint a transfer agent and a registrar of the
certificates of stock of the corporation. Any transfer agent so appointed shall
maintain, among other records, a stockholders' ledger, setting forth the names
and addresses of the holders of all issued shares of stock of the corporation,
the number of shares held by each, the certificate numbers representing such
shares, and the date of issue of the certificates representing such shares. Any
registrar so appointed shall maintain, among other records, a share register,
setting forth the total number of shares of each class of shares which the
corporation is authorized to issue and the total number of shares actually
issued. The stockholders' ledger and the share register are hereby identified as
the stock transfer books of the corporation; but as between the stockholders'
ledger and the share register, the names and addresses of stockholders, as they
appear on the stockholders' ledger maintained by the transfer agent shall be the
official list of stockholders of record of the corporation. The name and address
of each stockholder of record, as they appear upon the stockholders' ledger,
shall be conclusive evidence of who are the stockholders entitled to receive
notice of the meetings of stockholders, to vote at such meetings, to examine a
complete list of the stockholders entitled to vote at meetings, and to own,
enjoy and exercise any other property or rights deriving from such shares
against the corporation. Stockholders, but not the corporation, its directors,
officers, agents or attorneys, shall be responsible for notifying the transfer
agent, in writing, of any changes in their names or addresses from time to time,
and failure to do so will relieve the corporation, its other stockholders,
directors, officers, agents and attorneys, and its transfer agent and registrar,
of liability for failure to direct notices or other documents, or pay over or
transfer dividends or other property or rights, to a name or address other than
the name and address appearing in the stockholders' ledger maintained by the
transfer agent.
Section 4.6. Loss of Certificates. In case of the loss, destruction or
----------- --------------------
mutilation of a certificate of stock, a replacement certificate may be issued in
place thereof upon such terms as the board of directors may prescribe,
including, in the discretion of the board of directors, a requirement of bond
and indemnity to the corporation.
10
<PAGE>
Section 4.7. Restrictions on Transfer. Every certificate for shares of
----------- ------------------------
stock which are subject to any restriction on transfer, whether pursuant to the
Certificate of Incorporation, the By-laws or any agreement to which the
corporation is a party, shall have the fact of the restriction noted
conspicuously on the certificate and shall also set forth on the face or back
either the full text of the restriction or a statement that the corporation will
furnish a copy to the holder of such certificate upon written request and
without charge.
Section 4.8. Multiple Classes of Stock. The amount and classes of the
----------- -------------------------
capital stock and the par value, if any, of the shares, shall be as fixed in the
Certificate of Incorporation. At all times when there are two or more classes of
stock, the several classes of stock shall conform to the description and the
terms and have the respective preferences, voting powers, restrictions and
qualifications set forth in the Certificate of Incorporation and these By-laws.
Every certificate issued when the corporation is authorized to issue more than
one class or series of stock shall set forth on its face or back either (i) the
full text of the preferences, voting powers, qualifications and special and
relative rights of the shares of each class and series authorized to be issued,
or (ii) a statement of the existence of such preferences, powers, qualifications
and rights, and a statement that the corporation will furnish a copy thereof to
the holder of such certificate upon written request and without charge.
ARTICLE V.
----------
Dividends
---------
Section 5.1. Declaration of Dividends. Except as otherwise required by
----------- ------------------------
law or by the Certificate of Incorporation, the board of directors may, in its
discretion, declare what, if any, dividends shall be paid from the surplus or
from the net profits of the corporation upon the stock of the corporation;
provided, however, that no dividend shall be declared or paid the payment of
which would diminish the amount of the paid-in capital of the corporation.
Dividends may be paid in cash, in property, in shares of the corporation's
stock, or in any combination thereof. Dividends shall be payable upon such dates
as the board of directors may designate.
Section 5.2. Reserves. Before the payment of any dividend and before
----------- --------
making any distribution of profits, the board of directors, from time to time
and in its absolute discretion, shall have power to set aside out of the surplus
or net profits of the corporation such sum or sums as the board of directors
deems proper and sufficient as a reserve fund to meet contingencies or for such
other purpose as the board of directors shall deem to be in the best interests
of the corporation, and the board of directors may modify or abolish any such
reserve.
11
<PAGE>
ARTICLE VI.
-----------
Powers of Officers to Contract
------------------------------
With the Corporation
--------------------
Any and all of the directors and officers of the corporation,
notwithstanding their official relations to it, may enter into and perform any
contract or agreement of any nature between the corporation and themselves, or
any and all of the individuals from time to time constituting the board of
directors of the corporation, or any firm or corporation in which any such
director may be interested, directly or indirectly, whether such individual,
firm or corporation thus contracting with the corporation shall thereby derive
personal or corporate profits or benefits or otherwise; provided, that (i) the
material facts of such interest are disclosed or are known to the board of
directors or committee thereof which authorizes such contract or agreement; (ii)
if the material facts as to such person's relationship or interest are disclosed
or are known to the stockholders entitled to vote thereon, and the contract is
specifically approved in good faith by a vote or the stockholders; or (iii) the
contract or agreement is fair as to the corporation as of the time it is
authorized, approved or ratified by the board of directors, a committee thereof,
or the stockholders. Any director of the corporation who is interested in any
transaction as aforesaid may nevertheless be counted in determining the
existence of a quorum at any meeting of the board of directors which shall
authorize or ratify any such transaction. This Article shall not be construed to
invalidate any contract or other transaction which would otherwise be valid
under the common or statutory law applicable thereto.
ARTICLE VII
-----------
Indemnification
---------------
Section 7.1. Definitions. For purposes of this Article VII the
----------- -----------
following terms shall have the meanings indicated:
(a) "Code of Conduct" means the corporation's Code of Conduct for
Directors, Officers and Employees as in effect from time to time.
(b) "Corporate Status" describes the status of a person who is or was a
director, officer, employee, agent, trustee or fiduciary of the Corporation or
of any other corporation, partnership, joint venture, trust, employee benefit
plan or other Enterprise which such person is or was serving at the express
written request of the corporation.
(c) "Court" means the Court of Chancery of the State of Delaware, the
court in which the Proceeding in respect of which indemnification is sought by a
Covered Person shall have been brought or is pending, or another court having
subject jurisdiction and personal jurisdiction over the parties.
12
<PAGE>
(d) "Covered Person" means a person who is a present or former director
or officer of the corporation and shall include such person's legal
representatives, heirs, executors and administrators.
(e) "Disinterested Director" means a director of the corporation who is
not and was not a party to the Proceeding in respect of which indemnification is
sought by a Covered Person.
(f) "Enterprise" shall mean the corporation and any other corporation,
partnership, joint venture, trust, employee benefit plan or other enterprise of
which a Covered Person is or was serving at the express written request of the
corporation as a director, officer, employee, agent, trustee or fiduciary.
(g) "Expenses" shall include, without limitation, all reasonable
attorneys' fees, retainers, court costs, transcript costs, fees of experts,
witness fees, travel expenses, duplicating costs, printing and binding costs,
telephone charges, postage, delivery service fees, and all other disbursements
or expenses of the types customarily incurred in connection with prosecuting,
defending, preparing to prosecute or defend, investigating or being or preparing
to be a witness in a Proceeding.
(h) "Good Faith" shall mean a Covered Person having acted in good faith
and in a manner such Covered Person reasonably believed to be in or not opposed
to the best interests of the corporation or, in the case of an Enterprise which
is an employee benefit plan, the best interests of the participants or
beneficiaries of said plan, as the case may be, and, with respect to any
Proceeding which is criminal in nature, having had no reasonable cause to
believe such Covered Person's conduct was unlawful.
(i) "Independent Counsel" means a law firm, or a member of a law firm,
that is experienced in matters of corporation law and may include law firms or
members thereof that are regularly retained by the corporation but not any other
party to the Proceeding giving rise to a claim for indemnification hereunder.
Notwithstanding the foregoing, the term "Independent Counsel" shall not include
any person who, under the standards of professional conduct then prevailing and
applicable to such counsel, would have a conflict of interest in representing
either the corporation or Covered Person in an action to determine Covered
Person's rights under this Article.
(j) "Proceeding" includes any action, suit, arbitration, alternate
dispute resolution mechanism, investigation (including any internal corporate
investigation), administrative hearing or any other actual, threatened or
completed proceeding whether civil, criminal, administrative or investigative,
other than one initiated by the Covered Person. For purposes of the foregoing
sentence, a "Proceeding" shall not be deemed to have been initiated by the
Covered Person where such Covered Person seeks to enforce such Covered Person's
rights under this Article.
13
<PAGE>
Section 7.2. Right to Indemnification in General.
----------- -----------------------------------
(a) Covered Persons. In connection with any Proceeding, the corporation
---------------
shall indemnify, and advance Expenses, to each Covered Person as provided in
this Article and to the fullest extent permitted by applicable law in effect on
the date hereof and to such greater extent as applicable law may hereafter from
time to time permit. The indemnification provisions in this Article shall be
deemed to be a contract between the corporation and each Covered Person who
serves in any such Corporate Status at any time while these provisions as well
as the relevant provisions of the Delaware General Corporation Law are in effect
and any repeal or modification thereof shall not affect any right or obligation
then existing with respect to any state of facts then or previously existing or
any Proceeding previously or thereafter brought or threatened based in whole or
in part upon any such state of facts. Such a "contract right" may not be
modified retroactively without the consent of such Covered Person.
(b) Employees and Agents. The corporation may, to the extent authorized
--------------------
from time to time by the board of directors, grant indemnification and the
advancement of Expenses to any employee or agent of the corporation to the
fullest extent of the provisions of this Article with respect to the
indemnification and advancement of Expenses of Covered Person.
Section 7.3. Proceedings Other Than Proceedings by or in the Right of
----------- --------------------------------------------------------
the Corporation. Each Covered Person shall be entitled to the rights of
- ---------------
indemnification provided in this Section 7.3 if, by reason of such Covered
Person's Corporate Status, such Covered Person is, or is threatened to be made,
a party to or is otherwise involved in any Proceeding, other than a Proceeding
by or in the right of the corporation. Each Covered Person shall be indemnified
against Expenses, judgments, penalties, fines and amounts paid in settlements,
actually and reasonably incurred by such Covered Person or on such Covered
Person's behalf in connection with such Proceeding or any claim, issue or matter
therein, if such Covered Person did not violate the corporation's Code of
Conduct and acted in Good Faith. Notwithstanding the foregoing, if such Covered
Person shall have been found to have violated the corporation's Code of Conduct
then in effect, the corporation may, to the extent authorized by the board of
directors, indemnify such Covered Person against Expenses, judgments, penalties,
fines and amounts paid in settlement, actually and reasonably incurred by such
Covered Person or on such Covered Person's behalf.
Section 7.4. Proceedings by or in the Right of the Corporation.
----------- -------------------------------------------------
(a) Each Covered Person shall be entitled to the rights of
indemnification provided in this Section 7.4 if, by reason of such Covered
Person's Corporate Status, such Covered Person is, or is threatened to be made,
a party to or is otherwise involved in any Proceeding brought by or in the right
of the corporation to procure a judgment in its favor. Such Covered Person shall
be indemnified against Expenses, judgments, penalties, and amounts paid in
settlement, actually and reasonably incurred by such Covered Person or on such
Covered Person's behalf in connection with such Proceeding if such Covered
Person acted in Good
14
<PAGE>
Faith. Notwithstanding the foregoing, no such indemnification shall be made in
respect of any claim, issue or matter in such Proceeding as to which such
Covered Person shall have been adjudged to be liable to the corporation if
applicable law prohibits such indemnification; provided, however, that, if
applicable law so permits, indemnification shall nevertheless be made by the
corporation in such event if and only to the extent that the Court which is
considering the matter shall determine.
(b) Notwithstanding any provision to the contrary in this Section, if
the board of directors, Independent Counsel or the stockholders, as the case may
be, making the determination with respect to indemnification as provided under
Section 7.9 hereof, or the Court considering the matter determines that the act
or omission which forms the basis for the claim which is the subject of the
Proceeding violated the corporation's Code of Conduct then in effect, then,
notwithstanding that fact, the corporation may, to the extent authorized by the
board of directors, indemnify such Covered Person against all Expenses,
judgments, penalties and amounts paid in settlement, actually and reasonably
incurred by such Covered Person or on such Covered Person's behalf in connection
with such proceeding if such Covered Person acted in Good Faith.
Section 7.5. Indemnification of a Party Who is Wholly or Partly
----------- --------------------------------------------------
Successful. Notwithstanding any other provision of this Article, to the extent
- ----------
that a Covered Person is, by reason of such Covered Person's Corporate Status, a
party to or is otherwise involved in and is successful, on the merits or
otherwise, in any Proceeding, such Covered Person shall be indemnified to the
maximum extent permitted by law, against all Expenses, judgments, penalties,
fines, and amounts paid in settlement, actually and reasonably incurred by such
Covered Person or on such Covered Person's behalf in connection therewith. If
such Covered Person is not wholly successful in such Proceeding but is
successful, on the merits or otherwise, as to one or more but less than all
claims, issues or matters in such Proceeding, the corporation shall indemnify
such Covered Person to the maximum extent permitted by law, against all
Expenses, judgments, penalties, fines, and amounts paid in settlement, actually
and reasonably incurred by such Covered Person or on such Covered Person's
behalf in connection with each successfully resolved claim, issue or matter. For
purposes of this Section 7.5 and without limitation, the termination of any
claim, issue or matter in such a Proceeding by dismissal, with or without
prejudice, shall be deemed to be a successful result as to such claim, issue or
matter.
Section 7.6. Indemnification for Expenses of a Witness. Notwithstanding
----------- -----------------------------------------
any other provision of this Article, to the extent that a Covered Person is, by
reason of such Covered Person's Corporate Status, a witness in any Proceeding,
such Covered Person shall be indemnified against all Expenses actually and
reasonably incurred by such Covered Person or on such Covered Person's behalf in
connection therewith.
Section 7.7. Advancement of Expenses. Notwithstanding any provision to
----------- -----------------------
the contrary in this Article, the corporation (acting through the chairman of
the board, president, executive vice president or any vice president of the
corporation) shall advance all reasonable Expenses which, by reason of a Covered
Person's Corporate Status, were incurred by or on behalf of such
15
<PAGE>
Covered Person in connection with any Proceeding, within twenty (20) days after
the receipt by the corporation of a statement or statements from such Covered
Person requesting such advance or advances, whether prior to or after final
disposition of such Proceeding. Such statement or statements shall reasonably
evidence the Expenses incurred by the Covered Person and shall include or be
preceded or accompanied by an undertaking by or on behalf of the Covered Person
to repay any Expenses if it shall ultimately be determined that such Covered
Person is not entitled to be indemnified against such Expenses. Any advance and
undertakings to repay pursuant to this Section 7.7 shall be unsecured and
interest free. Advancement of Expenses pursuant to this Section 7.7 shall not
require approval of the board of directors or the stockholders of the
corporation, or of any other person or body. The Secretary of the corporation
shall promptly advise the Board in writing of the request for advancement of
Expenses, of the amount and other details of the advance and of the undertaking
to make repayment pursuant to this Section 7.7.
Section 7.8. Notification and Defense of Claim. Promptly after receipt
----------- ---------------------------------
by an Covered Person of notice of the commencement of any Proceeding, such
Covered Person shall, if a claim is to be made against the corporation under
this Article, notify the corporation of the commencement of the Proceeding. The
omission so to notify the corporation will not relieve it from any liability
which it may have to such Covered Person otherwise than under this Article. With
respect to any such Proceedings to which such Covered Person notifies the
corporation:
(a) The corporation will be entitled to participate in the defense at
its own expense.
(b) Except as otherwise provided below, the corporation jointly with
any other indemnifying party similarly notified will be entitled to assume the
defense with counsel reasonably satisfactory to the Covered Person. After notice
from the corporation to the Covered Person of its election to assume the defense
of a suit, the corporation will not be liable to the Covered Person under this
Article for any legal or other expenses subsequently incurred by the Covered
Person in connection with the defense of the Proceeding other than reasonable
costs of investigation or as otherwise provided below. The Covered Person shall
have the right to employ his own counsel in such Proceeding but the fees and
expenses of such counsel incurred after notice from the corporation of its
assumption of the defense shall be at the expense of the Covered Person unless
(i) the employment of counsel by the Covered Person has been authorized by the
corporation, (ii) the Covered Person shall have concluded reasonably that there
may be a conflict of interest between the corporation and the Covered Person in
the conduct of the defense of such action and such conclusion is confirmed in
writing by the corporation's outside counsel regularly employed by it in
connection with corporate matters, or (iii) the corporation shall not in fact
have employed counsel to assume the defense of such Proceeding, in each of which
cases the fees and expenses of counsel shall be at the expense of the
corporation. The corporation shall not be entitled to assume the defense of any
Proceeding brought by or in the right of the corporation or as to which the
Covered Person shall have made the conclusion provided for in (ii) above and
such conclusion shall have been so confirmed by the corporation's said outside
counsel.
16
<PAGE>
(c) Notwithstanding any provision of this Article to the contrary, the
corporation shall not be liable to indemnify the Covered Person under this
Article for any amounts paid in settlement of any Proceeding or claim effected
without its written consent. The corporation shall not settle any Proceeding or
claim in any manner which would impose any penalty, limitation or
disqualification of the Covered Person for any purpose without such Covered
Person's written consent. Neither the corporation nor the Covered Person will
unreasonably withhold their consent to any proposed settlement.
(d) If it is determined that the Covered Person is entitled to
indemnification not covered by defense of the claim afforded under subparagraph
(b) above, payment to the Covered Person of the additional amounts to be
indemnified shall be made within ten (10) days after determination.
Section 7.9. Method of Determination. A determination (if required by
----------- -----------------------
applicable law in the specific case) with respect to a Covered Person's
entitlement to indemnification shall be made (a) by the board of directors by a
majority vote of a quorum consisting of Disinterested Directors, or (b) in the
event that a quorum of the Board consisting of Disinterested Directors is not
obtainable or, even if obtainable, such quorum of Disinterested Directors so
directs, by Independent Counsel in a written opinion to the board of directors,
a copy of which shall be delivered to the Covered Person seeking
indemnification, or (c) by the holders of a majority of the votes of the
outstanding stock at the time entitled to vote on matters other than the
election or removal of directors, voting as a single class, including the stock
of the Covered Person seeking indemnification.
Section 7.10. Presumptions and Effect of Certain Proceedings.
------------ ----------------------------------------------
(a) Burden of Proof. In making a determination with respect to
---------------
entitlement to indemnification hereunder, the person or persons or entity making
such determination shall presume that the Covered Person is entitled to
indemnification under this Article if such Covered Person has submitted a
request for indemnification including such documentation and information as is
reasonably available to such Covered Person and is reasonably necessary to
determine whether and to what extent such Covered Person is entitled to
indemnification and the corporation shall have the burden of proof to overcome
that presumption in connection with the making by any person, persons or entity
of any determination contrary to that presumption.
(b) Effect of Other Proceedings. The termination of any Proceeding or
---------------------------
of any claim, issue or matter therein, by judgment, order, settlement or
conviction, or upon a plea of guilty or of nolo contendere or its equivalent,
---------------
shall not (except as otherwise expressly provided in this Article) of itself
adversely affect the right of an Covered Person to indemnification or create a
presumption that an Covered Person violated the corporation's Code of Conduct or
did not act in Good Faith.
17
<PAGE>
(c) Actions of Others. The knowledge and/or actions, or failure to act,
-----------------
of any director, officer, employee, agent, trustee or fiduciary of the
Enterprise shall not be imputed to a Covered Person for purposes of determining
the right to indemnification under this Article.
Section 7.11. Non-Exclusivity. The rights of indemnification and to
------------ ---------------
receive advancement of Expenses as provided by this Article shall not be deemed
exclusive of any other rights to which a Covered Person may at any time be
entitled under applicable law, the Certificate of Incorporation, these By-Laws,
any agreement, a vote of stockholders or a resolution of the board of directors,
or otherwise. No amendment, alteration, rescission or replacement of this
Article or any provision hereof shall be effective as to an Covered Person with
respect to any action taken or omitted by such Covered Person in such Covered
Person's Corporate Status prior to such amendment, alteration, rescission or
replacement.
Section 7.12. Insurance. The corporation may maintain, at its expense,
------------ ---------
an insurance policy or policies to protect itself and any Covered Person,
officer, employee or agent of the corporation or another Enterprise against
liability arising out of this Article or otherwise, whether or not the
corporation would have the power to indemnify any such person against such
liability under the Delaware General Corporation Law.
Section 7.13. No Duplicative Payment. The corporation shall not be
------------ ----------------------
liable under this Article to make any payment of amounts otherwise indemnifiable
hereunder if and to the extent that a Covered Person has otherwise actually
received such payment under any insurance policy, contract, agreement or
otherwise.
Section 7.14. Severability. If any provision or provisions of this
------------ ------------
Article shall be held to be invalid, illegal or unenforceable for any reason
whatsoever:
(a) the validity, legality and enforceability of the remaining
provisions of this Article (including without limitation, each
portion of any Section of this Article containing any such
provision held to be invalid, illegal or unenforceable, that is not
itself invalid, illegal or unenforceable) shall not in any way be
affected or impaired thereby; and
(b) to the fullest extent possible, the provisions of this
Article (including, without limitation, each portion of any Section
of this Article containing any such provision held to be invalid,
illegal or unenforceable, that is not itself invalid, illegal or
unenforceable) shall be construed so as to give effect to the
intent manifested by the provision held invalid, illegal or
unenforceable.
18
<PAGE>
ARTICLE VIII.
-------------
Miscellaneous Provisions
------------------------
Section 8.1. Certificate of Incorporation. All references in these By-
----------- ----------------------------
laws to the Certificate of Incorporation shall be deemed to refer to the
Certificate of Incorporation of the corporation, as amended and in effect from
time to time.
Section 8.2. Fiscal Year. Except as from time to time otherwise
----------- -----------
provided by the board of directors, the fiscal year of the corporation shall end
on the 31st day of March of each year.
Section 8.3. Corporate Seal. The board of directors shall have the
----------- --------------
power to adopt and alter the seal of the corporation.
Section 8.4. Execution of Instruments. All deeds, leases, transfers,
----------- ------------------------
contracts, bonds, notes, and other obligations authorized to be executed by an
officer of the corporation on its behalf shall be signed by the chairman of the
board of directors, the president or the treasurer except as the board of
directors may generally or in particular cases otherwise determine.
Section 8.5. Voting of Securities. Unless the board of directors
----------- --------------------
otherwise provides, the chairman of the board of directors, the president or the
treasurer may waive notice of and act on behalf of this corporation, or appoint
another person or persons to act as proxy or attorney in fact for this
corporation with or without discretionary power and/or power of substitution, at
any meeting of stockholders or shareholders of any other corporation or
organization, any of whose securities are held by this corporation.
Section 8.6. Evidence of Authority. A certificate by the secretary or
----------- ---------------------
any assistant secretary as to any action taken by the stockholders, directors or
any officer or representative of the corporation shall, as to all persons who
rely thereon in good faith, be conclusive evidence of such action. The exercise
of any power which by law, by the Certificate of Incorporation, or by these By-
laws, or under any vote of the stockholders or the board of directors, may be
exercised by an officer of the corporation only in the event of absence of
another officer or any other contingency shall bind the corporation in favor of
anyone relying thereon in good faith, whether or not such absence or contingency
existed.
Section 8.7. Corporate Records. The original, or attested copies, of
----------- -----------------
the Certificate of Incorporation, By-laws, records of all meetings of the
incorporators and stockholders, and the stock transfer books (which shall
contain the names of all stockholders and the record address and the amount of
stock held by each) shall be kept in Delaware at the principal office of the
corporation, or at an office of the corporation, or at an office of its transfer
agent or of the secretary or of the assistant secretary, if any. Said copies and
records need not all be kept in the same office. They shall be available at all
reasonable times to inspection of any stockholder for any purpose but not to
secure a list of stockholders for the purpose of selling said list or copies
19
<PAGE>
thereof or for using the same for a purpose other than in the interest of the
applicant, as a stockholder, relative to the affairs of the corporation.
Section 8.8. Charitable Contributions. The board of directors from time
----------- ------------------------
to time may authorize contributions to be made by the corporation in such
amounts as it may determine to be reasonable to corporations, trusts, funds or
foundations organized and operated exclusively for charitable, scientific or
educational purposes, no part of the net earning of which inures to the private
benefit of any stockholder or individual.
ARTICLE IX.
-----------
Amendments
----------
Section 9.1. Amendment by Stockholders. Prior to the issuance of stock,
----------- -------------------------
these By-laws may be amended, altered or repealed by the incorporator(s) by
majority vote. After stock has been issued, these By-laws may be amended altered
or repealed by the stockholders at any annual or special meeting by vote or a
majority of all shares outstanding and entitled to vote, except that where the
effect of the amendment would be to reduce any voting requirement otherwise
required by law, the Certificate of Incorporation or these By-laws, such
amendment shall require the vote that would have been required by such
provision. Notice and a copy of any proposal to amend these By-laws must be
included in the notice of meeting of stockholders at which action is taken upon
such amendment.
Section 9.2. Amendment by Board of Directors. These By-laws may be
----------- -------------------------------
amended or altered by the board of directors at a meeting duly called for the
purpose by majority vote of the directors then in office, except that directors
shall not amend the By-laws in a manner which:
(a) changes the stockholder voting requirements for any action;
(b) alters or abolishes any preferential right or right of redemption
applicable to a class or series of stock with shares already outstanding;
(c) alters the provisions of this Article IX hereof; or
(d) permits the board of directors to take any action which under law,
the Certificate of Incorporation, or these By-laws is required to be taken by
the stockholders.
Any amendment of these By-laws by the board of directors may be altered
or repealed by the stockholders at any annual or special meeting of
stockholders.
20
<PAGE>
ABIOMED, INC.
1989 NON-QUALIFIED STOCK OPTION PLAN
FOR NON-EMPLOYEE DIRECTORS
As Amended July 2, 1990 ,August 17, 1992 and June 15, 1995
1. Purpose. The purpose of this 1989 Non-Qualified Stock Option Plan for
-------
Non-Employee Directors is to attract and retain the services of experienced and
knowledgeable independent directors of the Corporation for the benefit of the
Corporation and its stockholders and to provide additional incentives for such
independent directors to continue to work for the best interests of the
Corporation and its stockholders through continuing ownership of its common
stock.
2. Definitions. As used herein, each of the following terms has the
-----------
indicated meaning:
"Corporation" means ABIOMED, Inc.
"Fair Market Value" means the last sale price of the Shares as reported on
the American Stock Exchange or such other national securities exchange or the
National Association of Securities Dealers Automated Quotation System ("NASDAQ")
on which the Shares may be traded on the date of the granting of the Option or
if that day is not a business day on the last business date preceding the date
of grant.
"Option" means the contractual right to purchase Shares upon the specific
terms set forth in this Plan.
"Option Exercise Period" means the period commencing on the date of grant of
an Option pursuant to this Plan and ending ten years from the date of grant.
"Plan" means this ABIOMED, Inc. 1989 Non-Qualified Stock Option Plan for
Non-Employee Directors.
"Shares" means the Common Stock, $.01 par value, of the Corporation.
3. Stock Subject to the Plan. The aggregate number of Shares that may be
-------------------------
issued and sold under the Plan shall be 200,000 shares. The Shares to be issued
upon exercise of Options granted under this Plan shall be made available, at the
discretion of the Board of Directors, from (i) treasury Shares and/or Shares
reacquired by the Corporation for such purposes, including Shares purchased in
the open market, (ii) authorized but unissued Shares, and (iii) Shares
previously reserved for issuance upon exercise of Options which have expired or
been terminated. If any Option granted under this Plan shall expire or
terminate for any reason without having been exercised in full, the unpurchased
Shares covered thereby shall become available for grant under additional Options
under the Plan so long as it shall remain in effect.
4. Administration of the Plan. The Plan shall be administered by the
--------------------------
Board of Directors of the Corporation (the "Board"). The Board shall, subject
to the provisions of the
<PAGE>
Plan, grant options under the Plan and shall have the power to construe the
Plan, to determine all questions as to eligibility, and to adopt and amend such
rules and regulations for the administration of the Plan as it may deem
desirable. The Board may delegate any and all of its authority hereunder to one
or more Committees of the Board.
5. Eligibility; Grant of Options. Options will be granted only to
-----------------------------
directors of the Corporation who are not otherwise employees of the Corporation
and who do not own or are not affiliated with any person who owns, directly or
indirectly, shares of the Corporation's stock having more than five percent of
the vote of the Corporation's outstanding voting stock ("Eligible Directors").
Each Eligible Director shall be granted an option to acquire 12,500 Shares
commencing (i) with respect to each Newly Elected Director on the date he or she
is elected to the Board and (ii) with respect to all other Eligible Directors
August 17, 1992. Thereafter each Eligible Director shall be granted a new
option for 12,500 Shares on July 1 of each successive fifth year following the
grant of his or her initial 12,500 Share Option.
6. Terms of Options and Limitations Thereon.
----------------------------------------
(a) Option Agreement. Each Option granted under this Plan shall be
----------------
evidenced by an option agreement between the Corporation and the Option holder
and shall be upon such terms and conditions not inconsistent with this Plan as
the Board may determine. Each Option shall explicitly state that it is not
intended to be an "incentive stock option" as that term is defined in Section
422A of the Internal Revenue Code.
(b) Price. The price at which any Shares may be purchased pursuant
-----
to the exercise of an Option shall be the Fair Market Value of the Shares on the
date of grant, but in no event shall the price be less than the par value of the
Shares.
(c) Exercise of Options. Subject to Paragraph 7 of this Plan, each
-------------------
Option granted under this Plan may be exercised in full at one time or in part
from time to time only during the Option Exercise Period by the giving of
written notice, signed by the person or persons exercising the Option, to the
Corporation stating the numbers of Shares with respect to which the Option is
being exercised, accompanied by full payment for such Shares pursuant to section
7(b) hereof; provided however, (i) if a person to whom an Option has been
granted is permanently disabled or dies during the Option Exercise Period, the
portion of such Option then exercisable, as provided in Paragraph 7(a) shall be
exercisable by him or her or by the executors, administrators, legatees or
distributees of his or her estate during the 12 months following his or her or
death or permanent disability and, (ii) if a person to whom an Option has been
granted ceases to be an Eligible Director of the Corporation for any cause other
than death or permanent disability, the portion of Option then exercisable shall
be exercisable during the thirty (30) day period following the date such person
ceased to be a non-employee director, but, in any event, only to the extent
vested pursuant to Paragraph 7(a) hereof.
(d) Non-Assignability. No Option or right or interest in an Option
-----------------
shall be assignable or transferable by the holder except by will or the laws of
descent and distribution and during the lifetime of the holder shall be
exercisable only by him or her.
-2-
<PAGE>
7. Vesting; Payment.
----------------
(a) Subject to the right of the Corporation to accelerate the date on
which all or any portion of the Option becomes exercisable and to the provisions
of subsection (b) below, each Option holder's right to exercise any Option
granted hereunder shall vest in five equal cumulative installments of twenty
(20%) percent of the number of shares subject to the Option each, commencing on
the June 30 following the date of grant with an additional twenty (20%) percent
vesting each successive June 30 thereafter. Notwithstanding any provision of
this Agreement to the contrary, in no event may the Option be exercised after
ten years from the date of this Agreement (the "Expiration Date").
(b) If one of the events referred to in clauses (i) and (ii) of
Paragraph 6(c) occurs, the Option shall be exercisable during the specified
period following said permanent disability or death only as to the number of
Shares as to which it was exercisable immediately prior to said permanent
disability or death.
(c) The purchase price of Shares upon exercise of an Option shall be
paid by the Option holder in full upon exercise and may be paid (i) in cash,
(ii) by delivery of Shares having a Fair Market Value on the date of exercise
equal to the purchase price, or (iii) any combination of cash and Shares, as the
Board may determine.
(d) No Shares shall be issued or transferred upon exercise of any
Option under this Plan unless and until all legal requirements applicable to the
issuance or transfer of such shares and such other requirements as are
consistent with the Plan have been complied with to the satisfaction of the
Board, including without limitation those described in Paragraph 10 hereof.
8. Stock Adjustments.
-----------------
(a) If the Corporation is a party to any merger or consolidation, any
purchase or acquisition of property or stock, or any separation, reorganization
or liquidation, the Board (or, if the Corporation is not the surviving
corporation, the Board of Directors of the surviving corporation) shall have the
power to make arrangements, which shall be binding upon the holders of unexpired
Options, for the substitution of new options for, or the assumption by another
corporation of, any unexpired Options then outstanding hereunder.
(b) If by reason of recapitalization, reclassification, stock split-
up, combination of shares, separation (including a spin-off) or dividend on the
Stock payable in Shares, the outstanding Shares of the Corporation are increased
or decreased or changed into or exchanged for a different number or kind of
shares or other securities of the Corporation, the Board shall conclusively
determine the appropriate adjustment in the exercise prices of outstanding
Options and in the number and kind of shares as to which outstanding Options
shall be exercisable.
(c) In the event of a transaction of the type described in Paragraphs
(a) and (b) above, the total number of Shares on which Options may be granted
under this Plan shall be appropriately adjusted by the Board.
9. No Rights Other Than Those Expressly Created. No person affiliated
--------------------------------------------
with the Corporation or other person shall have any claim or right to be granted
an Option hereunder. Neither this Plan nor any action taken hereunder shall be
construed as (i) giving any Option
-3-
<PAGE>
holder any right to continue to be affiliated with the Corporation, (ii) giving
any Option holder any equity or interest of any kind in any assets of the
Corporation, or (iii) creating a trust of any kind or a fiduciary relationship
of any kind between the Corporation and any such person. No Option holder shall
have any of the rights of a stockholder with respect to Shares covered by an
Option until such time as the Option has been exercised and Shares have been
issued to such person.
10. Miscellaneous.
-------------
(a) Withholding of Taxes. Pursuant to applicable federal, state,
--------------------
local or foreign laws, the Corporation may be required to collect income or
other taxes upon the grant of an Option to, or exercise of an Option by, a
holder. The Corporation may require, as a condition to the exercise of an
Option, that the recipient pay the Corporation, at such time as the Board
determines, the amount of any taxes which the Board may determine is required to
be withheld.
(b) Securities Law Compliance. Upon exercise of an Option, the
-------------------------
holder shall be required to make such representations and furnish such
information as may, in the opinion of counsel for the Corporation, be
appropriate to permit the Corporation to issue or transfer the Shares in
compliance with the provisions of applicable federal or state securities laws.
The Corporation, in its discretion, may postpone the issuance and delivery of
Shares upon any exercise of an Option until completion of such registration or
other qualification of such Shares under any federal or state laws, or stock
exchange listing, as the Corporation may consider appropriate. The Corporation
is not obligated to register or qualify the Shares under federal or state
securities laws and may refuse to issue such Shares if neither registration nor
exemption therefrom is practical. The Board may require that prior to the
issuance or transfer of any Shares upon exercise of an Option, the recipient
enter into a written agreement to comply with any restrictions on subsequent
disposition that the Board or the Corporation deems necessary or advisable under
any applicable federal and state securities laws. Certificates representing the
Shares issued hereunder may be legended to reflect such restrictions.
(c) Indemnity. The Board shall not be liable for any act, omission,
---------
interpretation, construction or determination made in good faith in connection
with its responsibilities with respect to the Plan, and the Corporation hereby
agrees to indemnify the members of the Board, in respect of any claim, loss,
damage, or expense (including counsel fees) arising from any such act, omission,
interpretation, construction or determination to the full extent permitted by
law.
11. Effective Date; Amendment; Termination.
--------------------------------------
(a) The effective date of this Plan is September 6, 1989. The
effective date of any amendment of this Plan shall be the date such amendment is
adopted by the Board of Directors, subject to stockholder approval if required
under subsection (b).
(b) The Board, or any Committee who has been delegated the authority
to do so, may at any time, and from time to time, amend, suspend or terminate
this Plan in whole or in part. Provided however, that so long as there is a
requirement under Rule 16b-3 under the Securities Exchange Act of 1934, as
amended, for stockholder approval of a Plan and certain amendments thereto, any
such amendment which (i) materially increases the number of Shares which may be
subject to Options granted under the Plan, (ii) materially increases the
benefits accruing to participants in the Plan, or (iii) materially modifies the
requirement for eligibility to
-4-
<PAGE>
participate in the Plan, shall be subject to stockholder approval, to the extent
so required under said Rule; and provided further that the Plan may not be
modified more often than once every six months to materially modify (i) the
requirements for eligibility under the Plan, (ii) the timing of the grants of
Options under the Plan, (iii) the number of Shares subject to Options to be
granted under the Plan, or (iv) the formula for determining the fair market
value, other than to comport with changes in the Internal Revenue Code, the
Employee Retirement Income Security Act, or the rules thereunder. Except as
provided herein, no amendment, suspension or termination of this Plan may
adversely affect the rights of any person under an Option that has been granted
to such person without such person's consent.
(c) This Plan shall terminate ten years from its effective date, and
no Option shall be granted under this Plan thereafter, but such termination
shall not affect the validity of Options granted prior to the date of
termination.
Date of Board of Director Adoption: July 10, 1989 as amended on July 2, 1990,
August 17, 1992 and June 15, 1995.
-5-
<PAGE>
ABIOMED, Inc.
-------------
1992 COMBINATION STOCK OPTION PLAN, AS AMENDED
----------------------------------------------
Preamble. Combination and Modification of Original Plans.
----------------------------------------------
WHEREAS, the Stockholders and Directors of ABIOMED, Inc. (the
"Corporation") approved (A) the Incentive Stock Option Plan, as amended and
restated on June 22, 1988 and further amended by Amendment No. 1 and Amendment
No. 2 thereto (the "Original Incentive Stock Option Plan"), and (B) the Non-
Qualified Stock Option Plan, as amended and restated June 22, 1988 and further
amended by Amendment No. 1, Amendment No. 2 and Amendment No. 3 thereto (the
"Original Non-Qualified Stock Option Plan") for the purpose of issuing stock
options to purchase the Corporation's stock; and
WHEREAS, pursuant to the Original Incentive Stock Option Plan and the
Original Non-Qualified Plan (collectively, the "Original Plans"), the Board of
Directors now desire to combine and amend and restate the Original Plans as set
forth herein;
NOW THEREFORE, the Corporation hereby combines and amends and restates the
Original Plans to be in the form of this 1992 Combination Stock Option Plan
(hereafter, the term "1992 Plan" includes both this amended and restated plan
and each of the Original Plans, as adopted and originally amended, as
applicable).
Section I. Purpose of the Plan.
-------------------
The purposes of the 1992 Plan are (i) to provide long-term incentives and
rewards to those employees (the "Employee Participants") of ABIOMED, Inc. (the
"Corporation") and its subsidiaries (if any), and any other persons (the "Non-
employee Participants") who are in a position to contribute to the long-term
success and growth of the Corporation and its subsidiaries, (ii) to assist the
Corporation in retaining and attracting executives and employees with requisite
experience and ability, and (iii) to associate more closely the interests of
such executives and key employees with those of the Corporation's stockholders.
Notwithstanding the foregoing, a Director of the Corporation who either (i) is
not an employee of the Corporation or (ii) is, or within the past year was, a
member of a committee designated by the Board of Directors of the Corporation to
administer the 1992 Plan shall not be eligible to receive any options under the
1992 Plan, and shall not be included in the definition of "Non-employee
Participants" or "Employee Participants".
-1-
<PAGE>
Section II. Definitions.
-----------
"Code" is the Internal Revenue Code of 1986, as it may be amended from
----
time to time.
"Common Stock" is the $.01 par value common stock of the Corporation.
------------
"Committee" is defined in Section III, paragraph (a).
---------
"Corporation" is defined in Section I.
-----------
"Corporation ISOs" are all stock options (including 1992 Plan ISOs)
----------------
which (i) are Incentive Stock Options and (ii) are granted under any plans
(including this 1992 Plan and the Original Incentive Stock Option Plan) of
the Corporation, a Parent Corporation and/or a Subsidiary Corporation.
"Employee Participants" are defined in Section I.
---------------------
"Fair Market Value" of any property is the value of the property as
-----------------
reasonably determined by the Committee.
"Incentive Stock Option" is a stock option which is treated as an
----------------------
incentive stock option under Section 422 of the Code.
"1934 Act" means the Securities Exchange Act of 1934, as amended, or
--------
any successor or similar statute.
"1992 Plan" is defined in the Preamble.
---------
"1992 Plan ISOs" are Stock Options which are Incentive Stock Options.
--------------
"Non-employee Participants" are defined in Section I.
-------------------------
"Non-qualified Option" is a Stock Option which does not qualify as an
--------------------
Incentive Stock Option or for which the Committee provides, in the terms of
such option and at the time such option is granted, that the option shall
not be treated as an Incentive Stock Option.
"Original Incentive Stock Option Plan" is defined in the Preamble.
------------------------------------
"Original Non-Qualified Stock Option Plan" is defined in the Preamble.
----------------------------------------
"Parent Corporation" has the meaning provided in Section 425(e) of the
------------------
Code.
-2-
<PAGE>
"Participants" are all persons who are either Employee Participants or
------------
Non-employee Participants.
"Permanent and Total Disability" has the meaning provided in Section
------------------------------
22(e)(3) of the Code.
"Stockholder Approval" means the affirmative vote of at least a
--------------------
majority of the shares of Common Stock present and entitled to vote at a
duly held meeting of the stockholders of the Corporation, unless a greater
vote is required by state law, or the rules under Section 16 of the 1934
Act, if applicable to the Corporation, in which case such greater
requirement shall apply. Stockholder approval may be obtained by written
consent or other means, to the extent permitted by applicable state law.
"Stock Options" are rights granted pursuant to this 1992 Plan to
-------------
purchase shares of Common Stock at a fixed price.
"Subsidiary Corporation" has the meaning provided in Section 425(f) of
----------------------
the Code.
"Ten Percent Stockholder" means, with respect to a 1992 Plan ISO, any
-----------------------
individual who directly or indirectly owns stock possessing more than 10%
of the total combined voting power of all classes of stock of the
Corporation or any Parent Corporation or any Subsidiary Corporation at the
time such 1992 Plan ISO is granted.
Section III. Administration.
--------------
(a) The Committee. The Plan shall be administered by the Board of
-------------
Directors of the Corporation, or if the Board so determines, by a Compensation
Committee designated by the Board of Directors of the Corporation (the
administering body is hereafter referred to as the "Committee"). No person shall
be eligible to be a member of the Committee if that person's membership would
prevent the plan from complying with Section 16 of the 1934 Act or rules adopted
thereunder, if applicable to the Corporation. The Committee shall serve at the
pleasure of the Board of Directors, which may from time to time, and in its sole
discretion, discharge any member, appoint additional new members in substitution
for those previously appointed and/or fill vacancies however caused. A majority
of the Committee shall constitute a quorum and the acts of a majority of the
members present at any meeting at which a quorum is present shall be deemed the
action of the Committee.
(b) Authority and Discretion of the Committee. Subject to the express
-----------------------------------------
provisions of this 1992 Plan and provided that all actions taken shall be
consistent with the purposes of this 1992 Plan, and subject to ratification by
the Board of Directors only if required by applicable law, the Committee shall
have full and complete authority and the sole discretion to: (i) determine
those persons who shall constitute employees eligible to be Employee
Participants; (ii) select the
-3-
<PAGE>
Participants to whom Stock Options shall be granted under this 1992 Plan; (iii)
determine the size and the form of the Stock Options, if any, to be granted to
any Participant; (iv) determine the time or times such Stock Options shall be
granted including the grant of Stock Options in connection with other awards
made, or compensation paid, to the Participant; (v) establish the terms and
conditions upon which such Stock Options may be exercised and/or transferred,
including the exercise of Stock Options in connection with other awards made, or
compensation paid, to the Participant; (vi) make or alter any restrictions and
conditions upon such Stock Options and the Stock received on exercise thereof,
including, but not limited to, providing for limitations on the Participant's
right to keep any Stock received on termination of employment; and (vii) adopt
such rules and regulations, establish, define and/or interpret these and any
other terms and conditions, and make all determinations (which may be on a case-
by-case basis) deemed necessary or desirable for the administration of this 1992
Plan. Notwithstanding any provision of this 1992 Plan to the contrary, only
Employee Participants shall be eligible to receive 1992 Plan ISOs.
(c) Applicable Law. This 1992 Plan, and all Stock Options shall be
--------------
governed by the law of the state in which the Corporation is incorporated.
Section IV. Terms of Stock Options.
----------------------
(a) Agreements. Stock Options shall be evidenced by a written agreement
----------
between the Corporation and the Participant awarded the Stock Option. Said
agreement shall be in such form, and contain such terms and conditions (not
inconsistent with this 1992 Plan) as the Committee may determine. If the Stock
Option described therein is not intended to be an Incentive Stock Option, but
otherwise qualifies as an Incentive Stock Option, such agreement shall include
the following, or a similar, statement: "This stock option is not intended to be
an Incentive Stock Option, as that term is described in Section 422 of the
Internal Revenue Code of 1986, as amended."
(b) Term. Stock Options shall be for such periods as may be determined
----
by the Committee, provided that in the case of 1992 Plan ISOs, the term of any
such 1992 Plan ISO shall not extend beyond three months after the time the
Participant ceases to be an employee of the Corporation. Notwithstanding the
foregoing, the Committee may provide in a 1992 Plan ISO that in the event of the
Permanent and Total Disability or death of the Participant, the 1992 Plan ISO
may be exercised by the Participant or his estate (if applicable) for a period
of up to one year after the date of such Permanent and Total Disability or
Death. In no event may a 1992 Plan ISO be exercisable (including provisions, if
any, for exercise in installments) subsequent to ten years after the date of
grant, or, in the case of 1992 Plan ISOs granted to Ten Percent Stockholders,
more than five years after the date of grant.
(c) Purchase Price. The purchase price of shares purchased pursuant to
--------------
any Stock Option shall be determined by the Committee, and shall be paid by the
Participant or other person permitted to exercise the Stock Option in full upon
exercise, (i) in cash, (ii) by delivery of shares
-4-
<PAGE>
of Common Stock (valued at their Fair Market Value on the date of such
exercise), (iii) any other property (valued at its Fair Market Value on the date
of such exercise), or (iv) any combination of cash, stock and other property,
with any payment made pursuant to subparagraphs (ii), (iii) or (iv) only as
permitted by the Committee, in its sole discretion. In no event will the
purchase price of Common Stock be less than the par value of the Common Stock.
Furthermore the purchase price of Common Stock subject to a 1992 Plan ISO shall
not be less than the Fair Market Value of the Common Stock on the date of the
issuance of the 1992 Plan ISO, provided that in the case of 1992 Plan ISOs
granted to Ten Percent Stockholders, the purchase price shall not be less than
110% of the Fair Market Value of the Common Stock on the date of issuance of the
1992 Plan ISO.
(d) Further Restrictions as to Incentive Stock Options. To the extent
--------------------------------------------------
that the aggregate Fair Market Value of Common Stock with respect to which
Corporation ISOs (determined without regard to this section) are exercisable for
the first time by any Employee Participant during any calendar year exceeds
$100,000, such Corporation ISOs shall be treated as options which are not
Incentive Stock Options. For the purpose of this limitation, options shall be
taken into account in the order granted, and the Committee may designate that
portion of any Corporation ISO that shall be treated as not an Incentive Stock
Option in the event that the provisions of this paragraph apply to a portion of
any option, unless otherwise required by the Code or regulations of the Internal
Revenue Service. The designation described in the preceding sentence may be made
at such time as the Committee considers appropriate, including after the
issuance of the option or at the time of its exercise. For the purpose of this
section, Fair Market Value shall be determined as of the time the option with
respect to such stock is granted.
(e) Restrictions. At the discretion of the Committee, the Common Stock
------------
issued pursuant to the Stock Options granted hereunder may be subject to
restrictions on vesting or transfer ability. For the purposes of this
limitation, options shall be taken into account in the order granted.
(f) Withholding of Taxes. Pursuant to applicable federal, state, local
--------------------
or foreign laws, the Corporation may be required to collect income or other
taxes upon the grant of a Stock Option to, or exercise of a Stock Option by, a
holder. The Corporation may require, as a condition to the exercise of a Stock
Option, or demand, at such other time as it may consider appropriate, that the
Participant pay the Corporation the amount of any taxes which the Corporation
may determine is required to be withheld or collected, and the Participant shall
comply with the requirement or demand of the Corporation. In its discretion, the
Corporation may withhold shares to be received upon exercise of a Stock Option
if it deems this an appropriate method for withholding or collecting taxes.
(g) Securities Law Compliance. Upon exercise (or partial exercise) of a
-------------------------
Stock Option, the Participant or other holder of the Stock Option shall make
such representations and furnish such information as may, in the opinion of
counsel for the Corporation, be appropriate to permit the Corporation to issue
or transfer Stock in compliance with the provisions of applicable federal or
-5-
<PAGE>
state securities laws. The Corporation, in its discretion, may postpone the
issuance and delivery of Stock upon any exercise of this Option until completion
of such registration or other qualification of such shares under any federal or
state laws, or stock exchange listing, as the Corporation may consider
appropriate. Furthermore, the Corporation is not obligated to register or
qualify the shares of Common Stock to be issued upon exercise of a Stock Option
under federal or state securities laws (or to register or qualify them at any
time thereafter), and it may refuse to issue such shares if, in its sole
discretion, registration or exemption from registration is not practical or
available. The Corporation may require that prior to the issuance or transfer
of Stock upon exercise of a Stock Option, the Participant enter into a written
agreement to comply with any restrictions on subsequent disposition that the
Corporation deems necessary or advisable under any applicable federal and state
securities laws. Certificates of Stock issued hereunder may bear a legend
reflecting such restrictions.
(h) Right to Stock Option. No employee of the Corporation or any other
---------------------
person shall have any claim or right to be a participant in this 1992 Plan or to
be granted a Stock Option hereunder. Neither this 1992 Plan nor any action
taken hereunder shall be construed as giving any person any right to be retained
in the employ of the Corporation. Nothing contained hereunder shall be
construed as giving any person any equity or interest of any kind in any assets
of the Corporation or creating a trust of any kind or a fiduciary relationship
of any kind between the Corporation and any such person. As to any claim for
any unpaid amounts under this 1992 Plan, any person having a claim for payments
shall be an unsecured creditor.
(i) Indemnity. Neither the Board of Directors nor the Committee, nor any
---------
members of either, nor any employees of the Corporation or any parent,
subsidiary, or other affiliate, shall be liable for any act, omission,
interpretation, construction or determination made in good faith in connection
with their responsibilities with respect to this 1992 Plan, and the Corporation
hereby agrees to indemnify the members of the Board of Directors, the members of
the Committee, and the employees of the Corporation and its parent or
subsidiaries in respect of any claim, loss, damage, or expense (including
reasonable counsel fees) arising from any such act, omission, interpretation,
construction or determination to the full extent permitted by law.
(j) Participation by Foreigners. Without amending this 1992 Plan,
---------------------------
except to the extent required by the Code in the case of Incentive Stock
Options, the Committee may modify grants made to participants who are foreign
nationals or employed outside the United States so as to recognize differences
in local law, tax policy, or custom.
Section V. Amendment and Termination; Adjustments Upon Changes in Stock.
------------------------------------------- ----------------
(a) Amendment. The Board of Directors of the Corporation may at any
---------
time, and from time to time, amend, suspend or terminate this 1992 Plan in whole
or in part; provided, however, that neither the Board of Directors nor the
Committee may amend or modify the definition of Employee Participants,
materially increase the benefits accruing to Participants, increase the
-6-
<PAGE>
number of shares of Common Stock reserved for purposes of this 1992 Plan, extend
the term of this 1992 Plan, materially modify the requirements to be a
Participant in this 1992 Plan, or otherwise modify the Plan in any way or manner
requiring the approval of the Stockholders under the Code or Section 16 of the
1934 Act, if applicable to the Corporation, or rules and regulations thereunder,
without Stockholder Approval and compliance with any applicable law, rules, or
regulations. Except as provided herein, no amendment, suspension or termination
of this 1992 Plan may affect the rights of a Participant to whom a Stock Option
has been granted without such Participant's consent.
(b) Discretion to Convert ISO's. The Committee is specifically
---------------------------
authorized to convert, in its discretion, the unexercised portion of any 1992
Plan ISO granted to an Employee Participant to a Non-qualified Option at any
time prior to the exercise, in full, of such 1992 Plan ISO.
(c) Adjustments upon Changes in Stock. If there shall be any change in
---------------------------------
the Common Stock or to any Stock Option granted under this 1992 Plan through
merger, consolidation, reorganization, recapitalization, stock dividend, stock
split or other change in the corporate structure of the Corporation, appropriate
adjustments may be made by the Board of Directors of the Corporation or the
Committee (or if the Corporation is not the surviving corporation in any such
transaction, the Board of Directors of the surviving corporation) in the
aggregate number and kind of shares subject to this 1992 Plan, and the number
and kind of shares and the price per share subject to outstanding options,
provided that such adjustment does not affect the qualification of any 1992 Plan
ISO as an Incentive Stock Option. In connection with the foregoing, the Board of
Directors or the Committee may issue new Stock Options in exchange for
outstanding Stock Options.
Section VI. Shares of Stock Subject to the Plan.
-----------------------------------
The number of shares of Common Stock that may be the subject of awards
under this 1992 Plan shall not exceed an aggregate of 1,300,000 shares,
including shares of Common Stock that were the subject of awards under the
Original Incentive Stock Option Plan and the Original Non-Qualified Stock Option
Plan. Shares to be delivered under this 1992 Plan may be either authorized but
unissued shares of Common Stock or treasury shares. Any shares subject to an
Option hereunder which for any reason terminates, is cancelled or otherwise
expires unexercised, shall, at such time, no longer count towards the aggregate
number of shares which have been the subject of Stock Options issued hereunder,
and such number of shares shall be subject to further awards under this 1992
Plan, provided the total number of shares then eligible for award under this
1992 Plan may not exceed the total specified in the first sentence of this
Section VI.
-7-
<PAGE>
Section VII. Effective Date and Term of this Plan.
-------------------------------------
Provided there is Stockholder Approval on or before December 31, 1992, the
effective date of this 1992 Plan is May 1, 1992 (the "Effective Date") and
awards under this 1992 Plan may be made for a period of ten years commencing on
the Effective Date. The period during which a Stock Option may be exercised may
extend beyond that time as provided herein.
-8-
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<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> MAR-31-1996 MAR-31-1996
<PERIOD-START> JUL-01-1995 APR-01-1995
<PERIOD-END> SEP-30-1995 SEP-30-1995
<CASH> 333,775 333,775
<SECURITIES> 9,483,593 9,483,593
<RECEIVABLES> 2,440,415 2,440,415
<ALLOWANCES> (99,644) (99,644)
<INVENTORY> 1,253,351 1,253,351
<CURRENT-ASSETS> 13,651,344 13,651,344
<PP&E> 2,691,713 2,691,713
<DEPRECIATION> 2,218,449 2,218,449
<TOTAL-ASSETS> 15,485,606 15,485,606
<CURRENT-LIABILITIES> 1,931,891 1,931,891
<BONDS> 0 0
<COMMON> 69,418 69,418
0 0
0 0
<OTHER-SE> 13,484,297 13,484,297
<TOTAL-LIABILITY-AND-EQUITY> 15,485,606 15,485,606
<SALES> 3,106,599 5,850,089
<TOTAL-REVENUES> 3,106,599 5,850,089
<CGS> 1,768,054 3,341,806
<TOTAL-COSTS> 1,768,054 3,341,806
<OTHER-EXPENSES> 1,414,585 2,631,499
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 124,488 255,725
<INCOME-PRETAX> 48,448 132,509
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 48,448 132,509
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 48,448 132,509
<EPS-PRIMARY> .007 .019
<EPS-DILUTED> .007 .019
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