<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, 1996
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, 1996, there were 6,972,138 shares outstanding of the
registrant's 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, 1996 and March 31, 1996
3-4
Consolidated Statements of Operations
Three and Six Months Ended September 30, 1996
and September 30, 1995
5
Consolidated Statements of Cash Flows
Six Months Ended September 30, 1996 and
September 30, 1995
6
Notes to Consolidated Financial Statements
7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
9-13
Part II - Other Information
14-15
Signatures
16
</TABLE>
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, 1996
March 31, 1996
(unaudited)
(audited)
<S>
<C>
<C>
Current Assets:
Cash and cash equivalents (Note 6)
$7,304,349
$2,938,332
Short-term marketable securities (Note 6)
3,189,452
7,709,110
Accounts receivable, net
2,943,575
2,606,289
Inventories (Note 3)
1,818,103
1,653,512
Prepaid expenses and other current assets
204,353
92,280
Total current assets
15,459,832
14,999,523
Property and equipment, at cost:
Machinery and equipment
2,598,755
2,378,851
Furniture and fixtures
181,841
156,048
Leasehold improvements
665,174
378,998
3,445,770
2,913,897
Less: Accumulated depreciation
and amortization
2,452,236
2,331,145
993,534
582,752
Other assets, net (Note 7)
556,077
627,154
$17,009,443
$16,209,429
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<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, 1996
March 31, 1996
(unaudited)
(audited)
<S>
<C>
<C>
Current Liabilities:
Accounts payable
$926,875
$777,943
Accrued expenses
1,234,546
1,486,981
Total current liabilities
2,161,421
2,264,924
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, 1996
Issued and Outstanding- 6,972,138 shares at
September 30, 1996 and 5,518,054 shares at
March 31, 1996
69,721
55,180
Class A Common Stock $.01 par value
Authorized - 2,346,000 shares
Issued and Outstanding - 0 shares at September 30, 1996
and 1,428,000 shares at March 31, 1995
- -
14,280
Additional paid-in capital
36,891,361
36,625,221
Accumulated deficit
(22,113,060)
(22,750,176)
Total stockholders' investment
14,848,022
13,944,505
$17,009,443
$16,209,429
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<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, 1996
September 30, 1995
September 30, 1996
September 30, 1995
<S>
<C>
<C>
<C>
<C>
Revenues:
Products
$5,759,555
$4,394,792
$2,891,206
$2,270,351
Contracts
1,753,849
1,455,297
936,926
836,248
7,513,404
5,850,089
3,828,132
3,106,599
Costs and expenses:
Cost of products
2,122,853
1,822,769
1,074,154
907,876
Research and development
1,780,737
1,519,037
916,762
860,178
Selling, general and administrative
3,229,235
2,631,499
1,709,642
1,414,585
7,132,825
5,973,305
3,700,558
3,182,639
Net income (loss) from operations
380,579
(123,216)
127,574
(76,040)
Interest and other income
256,537
255,725
126,313
124,488
Net income
$637,116
$132,509
$253,887
$48,448
Net income per common share (Note 5):
$0.09
$0.02
$0.04
$0.01
Weighted average number of common
and dilutive common equivalent shares
outstanding
7,196,343
6,967,191
7,199,239
6,972,429
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<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, 1996
September 30. 1995
<S>
<C>
<C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income
$637,116
$132,509
Adjustments to reconcile net income to net cash
provided by (used in) operating activities-
Depreciation and amortization
192,168
165,751
Changes in assets and liabilities-
Accounts receivable
(337,286)
(565,037)
Inventories
(164,591)
155,929
Prepaid expenses and other current assets
(112,073)
(186,024)
Accounts payable
148,932
504,055
Accrued expenses
(252,435)
2,177
Net cash provided by operating activities
111,831
209,360
CASH FLOWS FROM INVESTING ACTIVITIES:
Maturities of investments, net
4,519,658
264,303
Purchases of property and equipment and improvements
(531,873)
(100,458)
Purchases of Abiomed Limited Partnership units from
limited partners (Note 7)
- -
(770,000)
Net cash provided by (used in) investing activities
3,987,785
(606,155)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options and stock issued
under employee stock purchase plan
266,401
116,479
Net cash provided by financing activities
266,401
116,479
NET INCREASE (DECREASE) IN CASH AND EQUIVALENTS,
EXCLUDING INVESTMENTS
4,366,017
(280,316)
CASH AND CASH EQUIVALENTS, EXCLUDING INVEST-
MENTS, AT BEGINNING OF PERIOD
2,938,332
614,091
CASH AND CASH EQUIVALENTS , EXCLUDING INVEST-
MENTS, AT END OF PERIOD
$7,304,349
$333,775
</TABLE>
The accompanying notes are an integral part
of these consolidated financial statements.
<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, 1996, 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, 1996 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, 1996
March 31, 1996
<S>
<C>
<C>
Raw Materials
$788,948
$799,548
Work-in-Process
365,595
428,287
Finished Goods
663,560
425,677
TOTAL
$1,818,103
$1,653,512
</TABLE>
Finished goods and work-in-process inventories consist of direct
material, labor and overhead.
<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
Effective July 31, 1996, in accordance with the rights for the Class A
Common Stock, 1,428,000 shares of Class A Common Stock $0.01 par value
were converted into an equal number of shares of the Company's $0.01 par
value Common Stock.
During the second quarter of fiscal 1997, options to purchase 172,485
shares of Common Stock were granted at an exercise price of $12.50 per
share. Options to purchase 2,500 shares were canceled during the quarter.
Options to purchase 6,500 shares were exercised in the second quarter at
exercise prices ranging from $5.75 to $11.25 per share. During the second
quarter of fiscal 1997, 372 shares of Common Stock were issued under the
Employee Stock Purchase Plan.
5. Net Income Per Common Share
Net income per common and common equivalent share is computed by
dividing net income by the weighted average number of common and common
equivalent shares outstanding during the period using the treasury stock
method.
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. As of September 30, 1996, the Company had no long-term
investments.
7. Other Assets
Other assets represent the purchase of the majority interest of the
Abiomed Limited Partnership. This amount is being amortized over five years,
its estimated useful life. Abiomed Limited Partnership (the Partnership) was
formed in March 1985 and provided initial funding for the design and
development of certain of the Company's products.
Through August 3, 2000, the Company owes a royalty to the Partnership
of 5.5% of certain revenues from these products. Because the Company owns
61.7% of the Partnership, the net royalty expense to the Company is
approximately 2.1% of these product revenues. This royalty formula is subject
to certain maximum amounts and to certain additional adjustments in the
event that the Company sells the technology. The Partnership is inactive
except with respect to receiving and distributing proceeds from these royalty
rights.
<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
Net income and income per share for the three months ended September
30, 1996, were approximately $254,000 and $0.04 per share, respectively.
These earnings compare to net income and income per share of approximately
$48,000 and $0.01 per share, respectively, in the same period of the previous
year.
Net income and income per share for the six months ended September
30, 1996, were approximately $637,000 and $0.09 per share, respectively.
These earnings compare to net income and income per share of approximately
$133,000 and $0.02 per share in the same period of the previous year.
REVENUES
In the three months ended September 30, 1996, total revenues were
approximately $3,828,000, 23% higher than total revenues of approximately
$3,107,000 in the same period of the previous year.
Product revenues were approximately $2,891,000, 27% higher than
product revenues of approximately $2,270,000 in the same period of the
previous year. These results primarily reflected increased domestic unit sales
of the disposable BVS blood pump and related accessories to an expanded
installed customer base, increased units sales of the BVS console and
increased average selling prices of these products. More than 90% of total
product revenues in the quarter were derived from domestic sources.
Revenues from Research and Development (R&D) contracts and grants
for this quarter were approximately $937,000, 12% higher than total revenues
of approximately $836,000 reported in the same quarter of the previous year.
This increase primarily reflected timing of scheduled activities under existing
contracts and grants.
In the six months ended September 30, 1996, total revenues were
approximately $7,513,000, 28% higher than total revenues of approximately
$5,850,000 in the same period of the previous year.
Product sales for the first six months of fiscal 1997 were approximately
$5,760,000 compared with approximately $4,395,000 for the same period of
the previous year, an increase of 31%. This growth primarily reflected
increased unit sales of the disposable BVS blood pump and related accessories
to an expanded installed customer base, increased unit sales of the BVS
console and increased average selling prices of these products.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
REVENUES (continued)
Revenues from R&D contracts and grants for the six months ended
September 30, 1996 were approximately $1,754,000, 20% higher than in the
same period of the prior year. The increase primarily reflected the timing of
scheduled activities under existing contracts and grants.
In aggregate, as of September 30, 1996, the Company's backlog of
research and development contracts and grants totaled approximately
$12,600,000 compared to a backlog of approximately $5,500,000 as of March
31, 1996. The majority of this increase was due to a four year cost-plus-fixed-
fee extension of approximately $8,500,000 to the Company's contract from the
National Heart, Lung and Blood Institute (NHLBI) to continue development of
the Company's battery-powered implantable total artificial heart (TAH).
Included in the September 30, 1996 backlog was approximately $8,400,000
from this TAH contract and approximately $3,800,000 for continued research
and development of an implantable Heart Booster. All such contracts contain
provisions making them terminable at the convenience of the government.
Product revenues from the Company's dental subsidiary, ABIODENT,
Inc., represented less than 10% of total revenues. Dental products revenues,
compared to the corresponding periods of the prior fiscal year, were relatively
unchanged for the three months ended September 30, 1996 and increased
approximately 35% for the six months ended September 30, 1996.
COSTS AND EXPENSES
Total costs and expenses for the three months ended September 30,
1996, were approximately $3,701,000, 16% higher than total costs and
expenses of approximately $3,183,000 in the same fiscal quarter of the
previous year. The majority of this increase reflected expenses incurred to
support higher revenues.
Cost of products sold as a percentage of product revenues improved to
approximately 37% in the first three months of fiscal 1997 from approximately
40% in the same quarter of the previous year. This decrease in cost as a
percentage of revenues primarily reflected a change in product mix, increased
production volumes and increased operational efficiencies.
Total research and development costs increased during the second fiscal
quarter of 1997 to approximately $917,000, a 6% increase over research and
development costs of approximately $860,000 incurred during the same fiscal
period of the previous year. The increase primarily reflected the timing of
scheduled expenditures under cost-plus fixed-fee contracts and grants. The
Company anticipates that its research and development costs will increase,
particularly in connection with the TAH.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
COSTS AND EXPENSES (continued)
Selling, general and administrative expenses for the three months ended
September 30, 1996, increased to approximately $1,710,000, 21% higher than
selling, general and administrative expenses in the same fiscal quarter of the
previous year. This increase primarily reflected increased sales and marketing
expenses, particularly increased personnel and sales commissions, related to
the increase in product revenues.
Total costs and expenses for the six months ended September 30, 1996
increased to $7,133,000, 19% higher than total costs and expenses of
approximately $5,973,000 for the first six months of last year. The increase
was primarily attributable to higher revenue levels attained during the first
six months of fiscal 1997.
Cost of products sold as a percentage of product revenues improved to
approximately 37% in the first six months of fiscal 1997 from approximately
41% in the same six month period of the previous fiscal year. This decrease in
cost as a percentage of revenues primarily reflected a change in product mix,
increased production volumes and increased operational efficiencies.
Total research and development costs increased to approximately
$1,781,000 for the six months ended September 30, 1996. This represents a
17% increase over the $1,519,000 reported for the same period in the previous
fiscal year. The increase primarily reflected the timing of scheduled
expenditures under cost-plus fixed-fee contracts and grants.
Selling, general and administrative expenses for the six months ended
September 30, 1996 increased to approximately $3,229,000, 23% higher than
selling, general and administrative expenses in the six month period ended
September 30, 1995. This increase primarily reflected increased sales and
marketing expenses, particularly increased personnel and sales commissions,
related to the increase in product revenues.
INTEREST AND OTHER
For the three months ended September 30, 1996, interest and other
income was approximately $126,000 and approximately even with interest and
other income in the corresponding quarter of the prior year.
For the six months ended September 30, 1996, interest and other income
was approximately $256,000 and approximately even with interest and other
income in the corresponding quarter of the prior year.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
INTEREST AND OTHER (continued)
Income taxes incurred during these periods were not material and the
Company continues to have significant net tax operating loss carryforwards
and tax credit carryforwards.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company's balance sheet included
$10,494,000 in cash and short-term investments, a decrease of approximately
$154,000 from March 31, 1996. This decrease primarily reflected
approximately $532,000 of cash used for equipment purchases and leasehold
improvements partially offset by approximately $112,000 in positive cash flow
from operations and approximately $266,000 in proceeds from the exercise of
employee stock options and stock purchased under the Employee Stock
Purchase Plan. The September 30, 1996 balance included approximately
$7,304,000 in cash, and $3,189,000 in short-term investments. The Company
also has a $3,000,000 line of credit from a bank that expires on December 1,
1996, and which was entirely available at September 30, 1996.
For the six months ended September 30, 1996, net cash provided by
operating activities included net income of approximately $637,000, including
depreciation and amortization expenses of $192,000, and an increase in
accounts payable of approximately $149,000. These sources of cash were
partially offset by an increase in accounts receivable of $337,000, an increase
in inventory of $165,000, an increase in prepaid expenses of $112,000 and a
decrease in accrued expenses of approximately $252,000.
Net cash provided by investing activities included approximately
$4,520,000 of net maturities of short-term investments offset by
approximately $532,000 of purchases and improvements of property and
equipment. During the first six months of fiscal 1997, the Company received
proceeds of approximately $262,000 from the exercise of stock options under
the 1992 Combination Stock Option Plan and proceeds of approximately
$4,000 from stock purchased under the Employee Stock Purchase Plan.
Although the Company does not currently have significant capital
commitments, the Company believes that it will continue to make significant
investments in the coming years to support the development and
commercialization of its products under development. The Company believes
that its revenues and existing resources are sufficient to meet its current
needs but that additional funding will be necessary to accelerate development
and potential commercialization of such products under development,
particularly the TAH.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART 1. FINANCIAL INFORMATION (continued)
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS(continued)
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.
***
<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
14, 1996, the stockholders approved the following:
a) Elected two persons to serve as Class I directors as follows:
<TABLE>
<CAPTION>
Director
Votes For
Votes
Withheld
<S>
<C>
<C>
Dr. David M. Lederman
19,112,995
43,049
Desmond H. O'Connell, Jr.
4,816,226
59,808
</TABLE>
b) A proposal to amend of certificate of incorporation and by-
laws to provide that stockholders may not take action by
written consent. The proposal received 15,531,669 votes for
and 665,823 votes against. There were 56,235 abstentions and
2,902,307 non-voting.
c) 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 by 250,000 shares. The proposal
received 18,284,522 votes for and 600,175 votes against.
There were 35,357 abstentions and 235,980 non-voting.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
3.01 Certificate of Incorporation, as amended
3.02 By-laws of ABIOMED, Inc., as amended and restated.
10.01 NHLBI Implantable Total Artificial Contract
Extension.
b) Reports on Form 8-K
Form 8-K dated July 31, 1996.
<PAGE>
ABIOMED, INC. AND SUBSIDIARIES
PART II. OTHER INFORMATION
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 24, 1996 /s/ David M. Lederman
David M. Lederman
CEO and President
Date: October 24 ,1996 /s/ John F. Thero
John F. Thero
Vice President Finance and
Administration; and Treasurer
Chief Financial Officer
Principal Accounting Officer
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Income Statement, Consolidated Balance Sheet and Consolidated
Statement of Cash Flows and is qualified in its entirety by reference to Form
10-Q for the period ended September 30, 1996.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-END> SEP-30-1996
<CASH> 7304349
<SECURITIES> 3189452
<RECEIVABLES> 2943575
<ALLOWANCES> 119000
<INVENTORY> 1818103
<CURRENT-ASSETS> 15459832
<PP&E> 3445770
<DEPRECIATION> 2452236
<TOTAL-ASSETS> 17009443
<CURRENT-LIABILITIES> 2161421
<BONDS> 0
0
0
<COMMON> 69721
<OTHER-SE> 14778301
<TOTAL-LIABILITY-AND-EQUITY> 17009443
<SALES> 7513404
<TOTAL-REVENUES> 7513404
<CGS> 3903590
<TOTAL-COSTS> 3903590
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (256537)
<INCOME-PRETAX> 0
<INCOME-TAX> 0
<INCOME-CONTINUING> 637116
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 637116
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
<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 May 22, 1996, 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 amendment to the
Corporation's Certificate of Incorporation:
To add to the end of paragraph (a) of
Section 4.2.2 of Article 4 of the Corporation's Certificate
of Incorporation the following provision:
"No action required to be taken or which may
be taken at any annual or special meeting of stockholders of
the Corporation may be taken by stockholders without a
meeting, and the power of stockholders to consent in
writing, without a meeting, to the taking of any action is
specifically denied."
2. The foregoing amendment to the Certificate
of Incorporation was 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
14, 1996.
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 Philip J. Flink, its Secretary, this 17th day
of August, 1996.
ABIOMED, Inc.
By: /s/ David M. Lederman
David M. Lederman,
President
ATTEST:
By: /s/ Philip J. Flink
Philip J. Flink, Secretary
<PAGE>
CERTIFICATE OF INCORPORATION
OF
ABIOMED, Inc.
The undersigned, a natural person, for the purposes of
organizing a
corporation for conducting the business and promoting the purposes
hereinafter stated, under the provisions and subject to the
requirements of the laws of the State of Delaware (particularly
Chapter 1, Title 8 of the Delaware Code and the acts
amendatory thereof and supplemental hereto, and generally
known as the "Delaware General Corporation Law"), hereby certifies
that:
1. NAME. The name of the corporation is ABIOMED, Inc.
2. REGISTERED OFFICE. The address, including street,
number, city, and county, of the registered office of the
corporation in the State of Delaware is c/o The Prentice-Hall
Corporation System, Inc., 229 South State Street, Dover, Kent
County, Delaware 19901; and the name of the registered agent of the
corporation in the State of Delaware at such address is The
PrenticeHall Corporation System, Inc.
3. PURPOSE. The nature of the business and the purposes to
be
conducted and promoted by the corporation shall be (a) to engage
in the research, development, manufacturing, marketing and sale of
medical and biomedical devices and instrumentation and medical
products, and (b) any lawful business, to promote any lawful
purpose, and to engage in any lawful act or activity for which
corporations may be organized under the Delaware General
Corporation Law.
4. CAPITAL STOCK. A statement of the designations and powers,
preferences and rights, and the qualifications, limitations or
restrictions of the classes of capital stock of the corporation
shall be as follows:
PART 4.1 - DESIGNATION AND NUMBERS.
The total number of shares of capital stock which the
corporation shall have authority to issue shall be divided
into four classes as follows:
(i) 10,000,000 shares of Common Stock, par value $.01
per
share;
(ii) 2,346,000 shares of Class A Common Stock, par value
$.01 per share;
(iii) 150,000 shares of Class A Preferred Stock, par
value $.01 per share; and
(iv) 1,000,000 shares of Class B Preferred Stock, par
value $.01 per share.
PART 4.2 - COMMON STOCK AND CLASS A COMMON STOCK
Except as otherwise provided in this Part 2 of Article 4, the
Common Stock and the Class A Common Stock shall have the same
rights and privileges and shall rank equally, share ratably
and be identical in all respects as to all matters.
4.2.1. Dividends and Other Distributions. Subject to
the limitations, if any, prescribed in the provisions of any
class or series of stock having a preference over the Common
Stock and Class A Common Stock, holders of shares of Common
Stock and holders of shares of Class
<PAGE>
A Common Stock shall be entitled to receive, when and as
declared by the board of directors out of the assets or funds
of the corporation which are by law available therefor,
dividends payable in cash or in property (other than shares of
Common Stock or shares of Class A Common Stock) or
in any combination thereof, and such dividends shall be paid
at the same time on both such classes, and not on either one
of them without the other, but the dividend rate on each share
of the Common Stock shall always be 105% of the dividend rate
per share on Class A Common Stock, except in the case of a
stock dividend. Holders of shares of Common Stock and holders
of shares of Class A Common Stock shall be entitled to
receive, when and as declared by the Board of Directors out of
the assets or funds of the corporation which are by law
available therefor, dividends payable in shares of Common
Stock and shares of Class A Common Stock; provided, however,
that any such dividend payable in
respect of the Common Stock shall be payable only in shares of
Common Stock and any such dividend payable with respect to
shares of Class A Common Stock shall be payable only in shares
of Class A Common Stock; and provided, further, that no such
dividend shall be paid on either class unless (i) there shall
be declared and paid at the same time a dividend at the same
rate on the other class or (ii) the relative rights and
privileges of the two classes are adjusted in accordance with
Section 4.2.6.
4.2.2. Voting Rights and Powers.
(a) Except as specified hereafter, and except as
otherwise required by law, with respect to all matters upon
which stockholders are entitled to vote or give consent, the
holders of the outstanding shares of the Common Stock and the
holders of the outstanding shares of the Class A Common Stock
shall vote together as a single class, and every holder of the
outstanding shares of the Common Stock shall be entitled to
cast thereon one (1) vote in person or by proxy for each share
of the Common Stock standing in his or her name, and every
holder of outstanding shares of the Class A Common Stock shall
be entitled to cast thereon ten (10) votes in person or by
proxy for each share of Class A Common Stock standing in his
or her name.
(b) Subject to paragraph (f) below, the holders of
the Common Stock, voting as aseparate class, shall be entitled
to elect that number of directors which constitutes 25% of the
total number of the directors, and if such 25% is not a whole
number, then the holders of Common Stock will be entitled to
elect the nearest higher whole number of directors which
constitutes 25% of such membership. The remaining directors
will be elected in accordance with paragraph (a).
(c) The holders of the Common Stock will be
entitled to vote as a separate class on the removal, with or
without cause, of any director elected by the holders of
Common Stock voting as a separate class. The remaining
directors may be removed with or without cause by the
stockholders voting in accordance with paragraph (a). Any
director may be removed for cause by the Board of Directors.
(d) Any vacancy in the office of a director who
was elected 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. In the absence of a stockholder
vote, in the case of a vacancy in the office of a director
such vacancy may be filled by the remaining directors elected
by the same class or classes as the vacant directorship, and
in the absence of any directors so elected, by all the
remaining directors. Any director elected by the Board of
Directors to fill a vacancy shall serve until the next annual
meeting of stockholders, and until his or her successor has
been chosen and has been qualified. If permitted by the By-
Laws, the Board of Directors may increase the number of
directors and any vacancy so created may be filled by the
Board of Directors; provided, however, that unless the
conditions set forth in this paragraph (d) exist in respect of
the next annual meeting of stockholders, the Board of
Directors may be so enlarged by the Board of Directors only to
the extent that twenty-five percent (25%) of the enlarged
Board of Directors consists of the directors elected by the
holders of the Common Stock or by persons appoointed to fill
vacancies created by the death, resignation or removal of
persons elected by the holders of the Common Stock
<PAGE>
(e) The holders of Common Stock shall be entitled to vote
as a
separate class on such other matters as may be required by law
to be voted upon by them as a separate class.
(f) The holders of the Common Stock shall not be entitled
to separately vote as set forth in paragraphs (b) - (d) above
if on the date for taking a record for any stockholder meeting
at which directors are to be elected, the number of issued and
outstanding shares of Common Stock (exclusive of any shares
held in the corporations's treasury) is less than ten percent
(10%) of the aggregate number of issued and outstanding shares
of both Common Stock and Class A Common
Stock (exclusive of shares held in the Corporation's
treasury).
In such case, all directors to be elected shall be elected by
holders of Common Stock and Class A Common Stock voting
together as a single class in accordance with paragraph (a)
above.
(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 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.
4.2.3. Conversion of Class A Common Stock into Common Stock.
(a) Each share of Class A Common Stock may at any time at the option of
the holder be converted into one fully paid and nonassessable share of
Common Stock. Such right shall be exercised by the surrender to the
corporation of the certificate representing such share of Class A Common
Stock to be converted at the principal executive offices of the
corporation, or if an agent for the registration of transfer of shares of
Class A Common Stock is then duly appointed and acting (said agent being
hereinafter referred to as the "Transfer Agent"), then at
the office of the Transfer Agent, accompanied by a written notice of
election by the holder thereof to convert and (if so required by the
corporation or the Transfer Agent) by instruments of transfer, in form
satisfactory to the corporation and the Transfer Agent, duly executed
by such holder or his duly authorized attorney, and by transfer tax
stamps or funds therefor, if required pursuant to paragraph (e) below.
(b) As promptly as practicable after any such exercise of a
holder's election to convert, the corporation will deliver, or cause to
be delivered at the office of the Transfer Agent, to or upon the
written order of the holder of such certificate, a certificate or
certificates representing the number of full shares of Common Stock
issuable upon such conversion, issued in such name or names as such
holder may direct. Such conversion shall be deemed to have been made
immediately prior to the close of business on the date of the surrender
of the certificate representing shares of Class A Common Stock, and all
rights of the holder of such shares as such holder shall cease at such
time and the person in whose name a certificate representing the shares
of Common Stock are to be issued shall be treated for all purposes as
having become the record holder of such shares of Common Stock at such
time.
(c) Upon the conversion of any share of Class A Common Stock, no
adjustment shall be made with respect to any dividends on Common Stock
the record date for which preceded the date of conversion specified in
paragraph (b) above. However, exercise of the election to convert
shall not deprive a holder of Class A Common Stock of the right to
receive any dividend or distribution in the respect of such stock
payable to holders of record prior to the effective date of conversion.
(d) The corporation will at all times reserve and keep available from
authorized but unissued shares or from treasury shares or from any
combination thereof, solely for the purpose of
<PAGE>
issuance upon conversion of the outstanding shares of Class A Common
Stock, such number of shares of Common Stock as shall be issuable upon
the conversion of all such outstanding shares.
(e) The issuance of a certificate for shares of Common Stock upon
conversion of shares of Class A Common Stock shall be made without
charge for any stamp or other similar tax in respect of such issuance
except that if any such certificate is to be issued in a name other
than that of the holder of the shares of Class A Common Stock
converted, the person requesting the issuance thereof shall pay to the
corporation the amount of any tax which may be payable in respect of
any transfer involved in such issuance or shall establish to the
satisfaction of the corporation that such tax has been paid.
(f) All shares of Class A Common Stock which shall have been
surrendered for conversion as herein provided shall no longer be deemed
to be outstanding and all
rights with respect to such shares, including the rights, if any, to
receive notices and to vote, shall forthwith cease and terminate except
only the right of the holders thereof to receive shares of Common Stock in
exchange therefor and payment of any accrued and unpaid dividends
thereon. Any shares of Class A Common Stock so converted shall be retired
and cancelled, and shall not be reissued, and the corporation may from
time to time take such appropriate action as may be necessary to reduce
the authorized Class A Common Stock accordingly.
(g) The holders of Class A Common Stock, voting as a separate class,
by the vote of a two-thirds majority of the votes entitled to be cast, may
at any time vote to convert all of the outstanding Class A Common Stock
into Common Stock.
4.2.4. Limitations on Transfer of Class A Common Stock.
(a) For purposes of this Section 4.2.4, a transfer includes any
conveyance of Class A Common Stock, whether by sale, assignment, gift,
devise, bequest, appointment, operation of law or otherwise. All
transfers of Class A Common Stock shall be classified as either (i)
involuntary transfers by reason of death, disability, legal incapacity,
involuntary petition in bankruptcy, or order or decree of court
(collectively an "Involuntary Transfer"), or (ii) any transfer which is
not involuntary (a "Voluntary Transfer").
(b) No holder of shares of Class A Common Stock may make any transfer,
whether a Voluntary Transfer or Involuntary Transfer, except to the extent
expressly permitted by paragraph (c). Any purported transfer, other than
one expressly permitted by paragraph (c), shall constitute the irrevocable
election by the holder to convert such shares into Common Stock and to
transfer to the transferee such shares of Common Stock. The sole right of
the transferee upon presentation of certificates representing such Class
A Common Stock for registration of transfer shall be to receive
certificates representing the requisite number of shares of Common Stock
upon delivery to the corporation or the Transfer Agent of the
documentation and payment (if any) called for by paragraph (a) of Section
4.2.3 hereof. Until such delivery to the corporation or the Transfer
Agent, neither the shares of Class A Common Stock represented by such
certificates surrendered for registration of transfer nor the shares of
Common Stock into which such shares are to be converted shall carry any
voting right, and dividends or other distributions with respect thereto
shall be withheld until such delivery has been completed.
(c) The present holders of the Class A Common Stock are David M.
Lederman("Lederman"), Param I. Singh ("Singh") and Eli Lilly and Company
("Lilly"). The consequences of any purported transfer of any Class A
Common Stock by a present holder shall be as follows:
(i) Involuntary Transfers.
<PAGE>
(A) In the case of an Involuntary Transfer
by Singh or Lilly, the shares subject to the Involuntary Transfer shall
be converted into Common Stock in accordance with paragraph (b) of this
Section 4.2.4, but such conversion shall have no effect on any other
shares of Class A Common Stock outstanding.
(B) In the case of an Involuntary Transfer
by Lederman, other than as provided in the next sentence, all
outstanding Class A Common Stock, regardless of by whom held, shall
automatically be converted into Common Stock as of the time of such
Involuntary Transfer. If the transferee in any Involuntary Transfer by
Lederman is Singh or a trust controlled by Singh (regardless of who the
beneficiaries of such trust are), the transfer is permitted, but any
subsequent transfer of the shares of Class A Common Stock so transferred
shall be deemed a voluntary transfer subject to paragraph (ii)(A).
(ii) Voluntary Transfers.
(A) Lederman may make a Voluntary Transfer
only to a trust controlled by one or both of Lederman and Singh. If
Lederman makes a Voluntary Transfer to any person other than such a trust,
all Class A Common Stock outstanding, regardless of by whom held, shall be
automatically converted into Common
Stock as of the time of such Voluntary Transfer.
(B) Singh may make a Voluntary Transfer to
a trust controlled by one or both of Lederman and Singh and Lilly may
make a Voluntary Transfer to any corporation controlled by it. If
Singh or Lilly makes a transfer to any person other than those
permitted by the preceding sentence, then the shares subject to the
Voluntary Transfer shall be converted into Common Stock in accordance
with paragraph (b), but such conversion shall have no effect on any
other shares of Class A Common Stock outstanding.
(d) For purposes of paragraph (c) above, control shall
mean in the case of a trust the ability, as trustee or by contract, to
control decisions to vote or dispose of the shares of Class A Common
Stock held by such trust, and shall mean in the case of a corporation
the power to elect a majority of the board of directors of such
corporation. If any transfer is permitted under paragraph (c) above
by virtue of the fact that it is to a controlled person or entity, at
such time as the person(s) required to have control cease to have
control, then a new transfer will be deemed to have occurred at the
time of such loss of control and such transfer shall be deemed a
Voluntary Transfer by the person last controlling the person or
entity, and shall be governed by the provisions of paragraph (c)(ii)
above.
(e) Notwithstanding anything to the contrary set forth
herein, any of Lederman, Singh or Lilly may pledge such holder's
shares of Class A Common Stock to a pledgee pursuant to a bona
fide pledge of such shares as collateral security for indebtedness due
to the pledgee; provided, however, that such shares shall not be
transferred to, or registered in the name of, the pledgee and shall
remain subject to the provisions of this Section 4.2.4. In the event
of foreclosure or other similar action by the pledgee, such pledged
shares of Class A Common Stock may not be transferred to the pledgee
and may only be converted into shares of Common Stock for transfer to
the pledgee.
(f) Each certificate representing shares of Class A Common Stock
Stock shall be registered in the actual name of the owner thereof and not
in the "street name" or in any nominee name.
<PAGE>
(g) The corporation shall note on the certificates representing the
shares of Class A Common Stock the restrictions on transfer and
registration of transfer imposed by this Section 4.2.4.
4.2.5. Liquidation. In the event the corporation shall be
liquidated, dissolved or wound up, whether voluntarily or involuntarily,
after there shall have been paid or set aside the full preferential
amounts to which the holder of any class or series having a preference
over the Common Stock and Class A Common Stock are entitled, the holders
of the Class A Common Stock and the holders of Common Stock shall be
entitled to share in the remaining net assets of the corporation, with the
holders of Common Stock receiving an amount per share which shall be 105%
of the amount per share received by the holders of Class A Common Stock.
A merger or consolidation of the corporation with or into any other
corporation or a sale or conveyance of all or any part of the assets of
the corporation which shall not in fact result in the liquidation of the
corporation and the distribution of assets to stockholders shall not be
deemed to be a voluntary or involuntary liquidation or dissolution or
winding up of the corporation within the meaning of this Section 4.2.5.
4.2.6 Certain Adjustments. In the event that the corporation at
any time or from time to time after the date of first issuance of Class A
Common Stock shall declare or pay any dividend on Common Stock payable in
Common Stock, or effect a stock split or other subdivision, or a reverse
stock split, of the Common Stock without declaring and paying a dividend
of Class A Common Stock payable in Class A Common Stock or engaging in a
stock subdivision or reverse split or combination at the same rate, then
concurrently with the payment date of such dividend division, or
combination, (i) the number of votes per share of the Class A Common Stock
shall be proportionately adjusted, (ii) the amount of any dividend, other
than a stock dividend, payable per share on the Class A Common Stock in
relation to dividends payable per share on the Common Stock shall be
proportionately adjusted, (iii) the amount payable per share on Class A
Common Stock upon liquidation in relation to the amount payable per share
on Common Stock on liquidation shall be proportionately adjusted, and (iv)
the number of shares of Common Stock into which each share of Class A
Common Stock is convertible under Section 4.2.3 shall be proportionately
adjusted, (increased in each case in the case of a stock dividend or
subdivision, and decreased in each case in the case of a reverse stock
split or stock combination) so that the relative voting, dividend,
liquidation and conversion rights of the Class A Common Stock as compared
to the Common Stock are not adversely affected by the payment of such
stock dividend or such stock subdivision or combination.
PART 4.3 - CLASS A PREFERRED STOCK
4.3.1. Definitions.
(a) For the purposes of this Part 3 of Article 4, the
following definitions shall apply:
(i) "Additional Shares of Common Stock" shall mean all
shares of Common Stock issued (or, pursuant to Section 4.3.5(e),
deemed to be issued) by the corporation
after the Original Issue Date, other than shares of Common Stock
issued or issuable:
(A) upon conversion of shares of Class A Preferred
Stock;
(B) as a dividend or distribution on Preferred
Stock;
(C) by way of a dividend or other distribution
on shares of Common Stock excluded from the definition of
Additional Shares of Common Stock by the foregoing clauses (A),
(B) or this clause (C); or
<PAGE>
(D) to employees, advisors or consultants to
the corporation or to directors pursuant to (1) a stock option
plan, whether or not qualified as an incentive stock option plan,
(2) a stock purchase plan or plans, or (3) by grant or sale, up to
a maximum of 450,000 shares.
(ii) "Board of Directors" shall mean the Board of
Directors of
this corporation.
(iii) "Common Stock" for purposes of this Part 4.3 only,
shall except as otherwise expressly provided, mean both the Common
Stock, $.01 par value, and the Class A Common Stock, $0.1 par
value, of this corporation.
(iv) "Conversion Price" shall mean the amount set forth
in Section 4.3.4(a), as adjusted pursuant to Section 4.3.5.
(v) "Convertible Securities" shall mean any
evidences of indebtedness, shares (other than Common Stock or
the Preferred Stock) or other securities convertible into or
exchangeable for Common Stock.
(vi) "Junior Shares" shall mean all shares of Common
Stock of this corporation or any other stock ranking junior to
the Class A Preferred Stock in dividends or liquidation rights.
(vii) "Options" shall mean rights, options or warrants
to subscribe for, purchase or otherwise acquire either Common
Stock or Convertible Securities.
(viii) "Original Issue Date" shall mean the date on
which a share of Class A Preferred Stock was first issued.
(ix) "Subsidiary" shall mean any corporation at least
50% of whose outstanding voting shares shall at the time be
owned directly or indirectly by this corporation or by one or
more subsidiaries, or by this corporation and one or more
subsidiaries.
4.3.2. Dividend Rights.
(a) Dividend Amount. Commencing October 1, 1987,
the holders of the Class A Preferred Stock shall be entitled to
receive dividends, out of any funds
legally available therefor, at the rate of $1.60 per share (adjusted
to reflect any stock split stock dividend, combination,
recapitalization or reorganization), in each fiscal year of the
corporation and no more, payable annually on October 1, in preference
and priority to any payment of any dividend on the shares of
the Junior Shares.
(b) Dividends Cumulative. Dividends on the Class A Preferred
Stock shall be cumulative, i.e., as long as any shares of the Class A
Preferred Stock are outstanding, the corporation shall not declare of pay
any dividend or make any other distribution upon any Junior Shares
(except dividends or distributions payable in stock of the corporation
ranking junior to the Class A Preferred Stock as to dividends and ranking
junior to the Class A Preferred Stock in liquidation), and, except with
the written consent of the holders of 60% of the outstanding Class A
Preferred Stock, voting as a single class, the corporation shall not
directly or indirectly purchase or redeem or otherwise acquire for value,
or set apart any amount for a sinking fund for the purchase
or redemption of, any Junior Shares unless in each instance all dividends
for a previous dividend period shall have been paid or (if payment is not
required) reserved on all outstanding shares of the Class A Preferred
Stock and the dividend for the then current annual dividend period on the
Class A Preferred Stock shall have been declared and set aside. In the
event that the corporation shall declare and pay less than the aggregate
dividends at any time required to be paid by paragraph
<PAGE>
4.3.2(a) above on shares of Class A Preferred Stock, dividends actually
paid will be paid first on Class A Preferred Stock to each holder thereof
in proportion to the total dividends at the time payable to each.
Subject to the provisions of the preceding sentences, the corporation may
declare and pay, out of funds legally available for the purpose,
dividends on Junior Shares.
4.3.3. Liquidation Preference.
(a) Preference. In the event of any liquidation, dissolution
or winding up of the affairs of the corporation, voluntarily or
involuntarily, the holders of each share of Class A Preferred Stock,
prior to any distribution to the holders of Junior Shares, shall be
entitled to receive pro rata a preferential amount equal to $20.00 per
share plus declared but unpaid dividends (adjusted to reflect any stock
split, stock dividend, combination, recapitalization or reorganization)
of Class A Preferred Stock held by them (the "Class A Preferred Stock
Liquidation Preference"). After payment or setting apart for payment of
the Class A Preferred Stock Liquidation Preference, the remaining assets
of the corporation, if any, shall be distributed among the holders of the
Junior Shares. If upon such liquidation, dissolution or winding up, the
assets of the corporation are insufficient (after payment of the
liquidation preference of any class of preferred stock ranking senior on
liquidation to the Class A Preferred Stock) to provide for the payment of
the Class A Preferred Stock Liquidation Preference for each share of
Class A Preferred Stock outstanding, such assets as are available shall
be paid out pro rata among the shares of Class A Preferred Stock.
(b) Merger or Acquisition. A consolidation or merger of the
corporation with or into any other corporation or corporations, or a sale
of all or substantially all of the assets of the corporation, shall not
be deemed to be a liquidation, dissolution or winding up within the
meaning of this Section 4.3.3.
4.3.4. Conversion of Class A Preferred Stock. The holders of
the Class A Preferred Stock shall have conversion rights in accordance
with the following provisions:
(a) Right to Convert and Conversion Price. Each share of
Class A Preferred Stock shall be convertible, at the option of the holder
thereof, at any time after the date of issuance of such share, at the
office of the corporation or any transfer agent for the Class A Preferred
Stock, into such number of fully paid and non-assessable shares of Common
Stock as is determined by dividing $20.00 by the Conversion Price,
determined and adjusted as hereafter provided, in effect at the time of
conversion. The initial Conversion Price shall be $6.667, and it shall
be subject to adjustment as provided in Section 4.3.5. Sixty-eight (68)
percent of the share(s) of Common Stock to be issued upon conversion of a
share of Class A Preferred Stock shall be Class A Common Stock and 32
percent of the share(s) to be issued upon conversion of a share of Class
A Preferred Stock shall be of the class of common stock designated as
Common Stock; provided, however, that any shares of Common Stock issuable
as a result of an adjustment in the Conversion Price required under
Section 4.3.5(e) or (f) hereof shall be of the class of common stock
designated as Common Stock.
(b) Mandatory Conversion. Each share of Class A Preferred
Stock shall automatically be converted into shares of Common Stock at the
then effective Conversion Price upon the closing of a public offering
pursuant to an effective registration statement under the Securities Act
of 1933 covering the offer and sale of Common Stock to the public at a
gross sale price not less than fifteen (15) percent above the then
effective Conversion Price, resulting in not less than $5,000,000 of
gross proceeds to the corporation; provided that the provisions of
Section 4.3.5 hereof shall apply with respect to the Common Stock sold in
such
public offering. All holders of record of shares of Class A Preferred
Stock will be given written notice of the effective date of such
registration statement and at least four days' prior written notice of
the proposed date and place designated for mandatory conversion of the
Class A Preferred Stock and the event which will result in the automatic
conversion of the Class A Preferred Stock into Common Stock. Such
notice shall be sent by certified mail, postage prepaid, or by telecopy
with a confirmation by overnight mail such as
<PAGE>
Federal Express, to each record holder of Class A Preferred Stock at
such holder's address appearing on the stock register of the
corporation. On or before the date so fixed for conversion, each holder
of shares of Class A Preferred Stock shall surrender his, her or its
certificate or certificates for all such shares to the corporation at
the place designated for the number of shares of Common Stock to which
such holder is entitled. The mechanics for conversion and other
provisions relating to conversion of Class A Preferred Stock into Common
Stock and payments in lieu of fractions set forth elsewhere in this
Section 4.3.4 shall apply to the mandatory conversion of the Class A
Preferred Stock.
(c) Effect of Merger or Acquisition on Class A Preferred
Stock. In the event of a sale by the corporation of all or substantially
all of its assets or a merger or consolidation of the corporation with or
into another corporation or entity, and in the case of successive such
sales, mergers and consolidations, thereafter the shares of Class A
Preferred Stock then outstanding shall be convertible into the number and
kind of securities of the acquiring or surviving corporation (or such
other entity whose securities are delivered in exchange for the Common
Stock of the corporation) to which the holders of the Class A Preferred
Stock would have been entitled if such holders had converted their Class
A Preferred Stock into Common Stock or the common stock of
any successor to the corporation upon the consummation of such sale,
merger or consolidation; and such shares shall thereafter be subject to
adjustment in the manner and to the extent set forth herein.
(d) Mechanics of Conversion. No fractional shares of Common
Stock shall be issued upon conversion of Class A Preferred Stock. In lieu
of any fractional share to which a holder of Class A Preferred Stock would
otherwise be entitled, the corporation shall pay cash equal to such
fraction multiplied by the then effective Conversion Price. Before any
holder of Preferred Stock shall be entitled to convert the same into full
shares of Common Stock, the holder shall surrender the certificate or
certificates therefor, duly endorsed for transfer, at the office of the
corporation or of any transfer agent for the Class A Preferred Stock, and
shall give written notice to the corporation at such office that he elects
to convert the same. The corporation shall, as soon as practicable
thereafter, issue and deliver at such office to such holder of Class A
Preferred Stock a certificate or certificates for the number of shares of
Common Stock to which he or she shall be entitled as aforesaid and a check
payable to the holder in the amount of any cash amounts payable in order to
avoid a conversion into fractional shares of Common Stock. Except as
provided in paragraphs (b) and (c), such conversion shall be deemed to have
been made immediately prior to the close of business on the date of such
surrender of the shares of Class A Preferred Stock to be converted, and the
person or persons entitled to receive the shares of Common Stock issuable
upon such conversion shall be treated for all purposes as the record holder
or holders of such shares of Common Stock on such date.
(e) No Impairment. The corporation will not, by amendment of its
Certificate of Incorporation or through any reorganization, transfer of
assets, consolidation, merger, dissolution, issue or sale of securities
or any other voluntary action, avoid or seek to avoid the observance or
performance of any of the terms to be observed or performed hereunder by
the corporation, but will at all times in good faith assist in the
carrying out of all the provisions of this Section 4.3.4 and in taking of
all such action as may be necessary or appropriate in order to protect
the conversion rights of the holders of the Class A Preferred Stock
against impairment.
(f) Notices of Record Date, etc. In the event that the
corporation shall propose at any time:
(i) to declare any dividend or distribution upon its Common
Stock, whether in cash, property, stock or other securities, whether or not
a regular cash dividend and whether or not out of earnings or earned
surplus;
<PAGE>
(ii)to offer for subscription pro rata to the holders of any
class of its stock any additional shares of stock of any class or other
rights;
(iii) to subdivide or combine its outstanding Common Stock;
(iv) to effect any reclassification or recapitalization of
its Common Stock outstanding involving a change in the Common Stock; or
(v) to merge or consolidate with or into any other
corporation, or sell, lease or convey all or substantially all of its
property or business, or to liquidate, dissolve or wind up;then, in
connection with each such event, the corporation shall send to the holders
of the Class A Preferred Stock:
(1) at least 20 days' prior written notice of the date on
which a record shall be taken for such dividend, distribution, subscription
rights, subdivision or combination (and specifying the date on which the
holders of Common Stock shall be entitled thereto) or for determining rights
to vote in respect of the matters referred to in clauses (iv) and (v) above;
and
(2) in the case of the matters referred to in clauses
(iv) and (v) above, at least 20 days' prior written notice of the date when
the same shall take place (specifying the date on which
the holders of Common Stock shall be entitled to exchange their Common Stock
for securities or other property deliverable upon the occurrence of such
event).
Each such written notice shall be given by certified mail, postage
prepaid, addressed to the holders of Preferred Stock at the address for each
such holder as shown on the books of the corporation.
(g) Reservation of Common Stock. The corporation shall, at all
times when the Class A Preferred Stock shall be outstanding, reserve and
keep available out of its authorized but unissued stock, for the purpose of
effecting the conversion of the Class A Preferred Stock, such number of
its duly authorized shares of Common Stock as shall from time to
time be sufficient to effect the conversion of all outstanding
Class A Preferred Stock. Before taking any action which would
cause an adjustment reducing the Conversion Price below the then
par value of the shares of Common Stock issuable upon conversion of
the
Class A Preferred Stock, the corporation will take any corporate
action which may, in the opinion of its counsel, be necessary in
order that the corporation may validly and legally issue fully paid
and nonassessable shares of such Common Stock at such adjusted
Conversion Price.
(h) Cancellation of Class A Preferred Stock. All shares
of Class A Preferred Stock which shall have been surrendered for
conversion as herein
provided shall no longer be deemed to be outstanding and all rights with
respect to such shares, including the rights, if any, to receive notices
and to vote, shall forthwith cease and terminate except only the right
of the holders thereof to receive shares of Common Stock in exchange
therefor and payment of any accrued and unpaid dividends thereon. Any
shares of Class A Preferred Stock so converted shall be retired and
cancelled, and shall not be reissued, and the corporation may from time
to time take such appropriate action as may be necessary to reduce the
authorized Class A Preferred Stock accordingly.
4.3.5. Adjustment of Conversion Price on Class A Preferred Stock.
(a) Adjustment of Conversion Price. The Conversion Price on
Class A Preferred Stock shall be adjusted as set forth in this Section
4.3.5 with the intent that the rights of holder of such Class A
Preferred Stock to convert shall not be impaired.
<PAGE>
(b) Situations Where No Adjustment Required. No adjustment
in the Conversion Price of a particular share of Class A Preferred Stock
shall be made in respect of the issuance of Additional Shares of Common
Stock unless the consideration per share for an Additional Share of
Common Stock issued or deemed to be issued by the corporation is less
than the Conversion Price in effect on the date of, and immediately
prior to, such issue.
(c) Adjustments for Combination or Consolidation of Common
Stock. In the event the outstanding shares of Common Stock shall be
combined or consolidated, by reclassification or otherwise, into a
lesser number of shares of Common Stock, the conversion Price in effect
immediately prior to such combination or consolidation shall,
concurrently with the effectiveness of such combination or
consolidation, be proportionately increased.
(d) Adjustment Upon Issuance of Additional Shares of Common
Stock. In the event the corporation shall issue Additional Shares of
Common Stock (including Additional Shares of Common Stock deemed to be
issued pursuant to paragraph (e) of this Section 4.3.5) without
consideration or for a consideration per share less than the Conversion
Price in effect on the date of and immediately prior to such issue, then
and in such event, such Conversion Price shall be reduced, concurrently
with such issue, to a price (calculated to the nearest cent) determined
by multiplying such Conversion Price by a fraction, the numerator of
which shall be the number of shares of Common Stock outstanding
immediately prior to such issue plus the number of
shares of Common Stock which the aggregate consideration received by
the corporation for the total number of Additional Shares of Common
Stock so issued would purchase at such Conversion Price; and the
denominator of which shall be the number of shares of Common Stock
outstanding immediately prior to such issue plus the number
of such Additional Shares of Common Stock so issued. For the
purposes of this paragraph (d), all shares of Common Stock issuable
upon conversion of outstanding Convertible Securities shall be deemed
to be outstanding, and immediately after any Additional Shares of
Common Stock are deemed issued pursuant to paragraph (e), such
Additional Shares of Common Stock shall be deemed to be outstanding.
(e) Deemed Issue of Additional Shares of Common Stock.
(i) Options and Convertible Securities. In the
event the corporation at any time or from time to time after the
Original Issue Date shall issue any Options or Convertible Securities
or shall fix a record date for the determination of holders of any
class of securities entitled to receive any such Options or
Convertible Securities, then the maximum number of shares (as set
forth in the instrument relating thereto without regard to any
provisions contained therein for a subsequent adjustment of such
number) of Common Stock issuable upon the exercise of such Options in
accordance with (B) below or, in the case of Convertible Securities,
the maximum number of shares of Common Stock into which they are
convertible in accordance with (B) below, shall be deemed to be
Additional Shares of Common Stock issued as of the time such issue
or, in case such a record date shall have been fixed, as of the close
of business on such record date, provided that Additional Shares of
Common Stock shall not be deemed to have been issued unless
the consideration per share (determined pursuant to paragraph (f)
hereof) of such Additional Shares of Common Stock would be less than
the Conversion price in effect on the date of and immediately prior
to such issue, or such record date, as the case may be, and provided
further that in any such case in which Additional Shares of Common
Stock are deemed to be issued:
(A) except as provided in (B) below, no further
adjustment in the Conversion Price shall be made upon the subsequent
issue of Convertible Securities or shares of Common Stock upon the
exercise of such Options or conversion or exchange of such
Convertible Securities;
(B) if such Options or Convertible Securities by
their terms provide, with the passage of time or otherwise, for any
increase in the consideration payable to the corporation or for
<PAGE>
any decrease in the number of shares of Common Stock issuable upon
the exercise, conversion or exchange thereof, or for the termination
of the right to exercise or convert such Options or Convertible
Securities, then the Conversion Price computed upon the original
issue thereof (or
upon the occurrence of a record date with respect thereto), and any
subsequent adjustments based thereon, shall, upon any such increase,
decrease or termination becoming effective, be recomputed to reflect
such increase, decrease or termination insofar as it affects such
Options or the rights of conversion or exchange under such Convertible
Securities and upon termination such Options or Convertible Securities
shall no longer be deemed to be outstanding; and
(C) no readjustment pursuant to sub-clause (B)
above shall have the effect of increasing the Conversion Price to an
amount which exceeds the lower of (1) the Conversion Price on the
original adjustment date, or (2) the Conversion Price that would have
resulted from any issuance of Additional Shares of Common Stock between
the original adjustment date and such readjustment date.
(f) Determination of Consideration. For purposes of this
Section 4.3.5, the consideration received by the corporation for the
issue of any Additional Shares of Common Stock shall be computed as
follows:
(i) Cash and Property. Such consideration shall:
(A) insofar as it consists of cash, be computed
at the aggregate amount of cash received by the corporation, excluding
amounts paid or payable for accrued interest or accrued dividends;
(B) insofar as it consists of property other
than cash, be computed at the fair value thereof at the time of such
issue, as determined in good faith by the Board of Directors; and
(C) in the event Additional Shares of Common
Stock are issued together with other shares of securities or other
assets of the corporation for consideration which covers both, be the
proportion of such consideration so received, computed as provided in
clauses (A) and (B) above, as determined in good faith by the Board of
Directors.
(ii) Options and Convertible Securities. The
consideration per share received by the corporation for Additional
Shares of Common Stock deemed to have been issued pursuant to paragraph
(e)(i), relating to Options and Convertible Securities, shall be
determined by dividing
(A) the total amount, if any, received or
receivable by the corporation as consideration for the issue of such
Options or Convertible Securities, plus the minimum aggregate amount of
additional consideration (as set forth in the instruments relating
thereto, without regard to any provision contained therein for a
subsequent adjustment of such consideration) payable to the corporation
upon the exercise of such Options or the conversion or exchange of such
Convertible Securities, or in the case of Options for Convertible
Securities, the exercise of such Options for Convertible Securities and
the conversion or exchange of such Convertible Securities, by
(B) the maximum number of shares of Common
Stock (as set forth in the instruments relating thereto, without regard
to any provision contained therein for a subsequent adjustment of such
number) issuable upon the exercise of such Options or the conversion or
exchange of such Convertible Securities.
(iii) Stock Dividends and Stock Subdivisions. Any
Additional Shares of Common Stock deemed to have been issued, relating
to stock dividends and stock subdivisions, shall be deemed to have been
issued for no consideration.
<PAGE>
(g) Certificate as to Adjustments. Upon the occurrence of
each adjustment or readjustment of the Conversion Price pursuant to this
Section 4.3.5, the corporation at its expense shall promptly computed
such adjustment or readjustment in accordance with the terms hereof and
furnish to each holder of Class A Preferred Stock a certificate setting
forth such adjustment or readjustment and showing in detail the facts
upon which such adjustment or readjustment is based. The corporation
shall, upon the written request at any time of any holder of Class A
Preferred Stock, furnish or cause to be furnished to such holder a like
certificate setting forth (i) such adjustments and readjustments, (ii)
the Conversion Price at the time in effect, and (iii) the number of
shares of Common Stock and the amount, if any, of other property which
at the time would be received upon the conversion of Class A Preferred
Stock.
4.3.6. Voting Rights of Class A Preferred Stock.
(a) General. The Class A Preferred Stock shall vote as a
separate class on all matters affecting Class A Preferred Stock to the
extent required by law and each share of Class A Preferred Stock issued
and outstanding shall have one vote on all such matters.
PART 4.4 - CLASS B PREFERRED STOCK
4.4.1. General. The Class B Preferred Stock may consist of one
or more series. The Board of Directors may, from time to time, establish
and designate the different series and the variations in the preferences
and relative, participating, optional or other special rights, and
qualifications, limitations or restrictions as between the different
series provided in Section 4.4.2 hereof, but in all other respects all
shares of the Class B Preferred Stock shall be identical. In the event
that at any time the Board of Directors shall have established and
designated one or more series of Class B Preferred Stock consisting of a
number of shares less than all of the authorized number of shares of
Class B Preferred Stock, the remaining authorized shares of Class B
Preferred Stock shall be deemed to be shares of an undesignated series of
Class B Preferred Stock until designated by the Board of Directors as
being a part of a series previously established or a new series then
being established by the Board of Directors.
4.4.2. Establishment of a Series. Subject to the provisions of this
Article Fourth, the Board of Directors is authorized to establish one or
more series of Class B Preferred Stock and, to the extent now or
hereafter permitted by the laws of the State of Delaware, to fix and
determine the preferences and relative, participating, optional or other
special rights, and qualifications, limitations or restrictions of each
series, including, but not limited to:
(a) the number of shares to constitute such series and the
distinctive designation such series;
(b) the dividend rate on the shares of such series and
preferences, if
any, and the special and relative rights of such shares of such series as
to dividends;
(c) whether or not the shares of such series shall be
redeemable, and, if redeemable, the price, terms and manner of redemption;
(d) the preferences, if any, and the special and relative
rights of the shares of such series upon liquidation of the corporation;
(e) whether or not the shares of such series shall be subject
to the operation of a sinking or purchase fund and, if so, the terms and
provisions of such fund;
<PAGE>
(f) whether or not the shares of such series shall be
convertible into shares of any other class or of any other series of the
same or any other class of stock of the corporation and, if so, the
conversion price or ratio and other conversion rights;
(g) the conditions under which the shares of such series
shall have separate voting rights or no voting rights; and
(h) such other designations, preferences and relative,
participating, optional or other special rights and qualifications,
limitations or restrictions of such series to the full extent now and
hereafter permitted by the laws of the State of Delaware.
Notwithstanding the fixing of the number of shares constituting a
particular series, the Board of Directors may at any time thereafter by
resolution authorize the increase or decrease in the number of shares of
the same series, subject to the limitations of Section 151(g) of the
Delaware General Corporation Law.
4.4.3. Dividends. Holders of Class B Preferred Stock shall be
entitled to receive, when, if and as declared by the Board of Directors,
but only out of funds legally available for the payment of dividends, and
after payment of any accrued dividend on the Class A Preferred Stock in
accordance with Part III hereof, cash dividends at the rates fixed by the
Board of Directors for the respective series, payable on such dates in
each year as the Board of Directors shall fix for the respective series
as provided in Section 4.4.2 (hereinafter referred to as "dividend
dates"). Until all accrued dividends on each series of Class B Preferred
Stock shall have been paid through the last preceding dividend date of
each such series, no dividend or distribution shall be made to holders of
Common Stock other than a dividend payable in Common Stock of the
corporation. Dividends on shares of any cumulative series of Class B
Preferred Stock shall accumulate from and after the day on which such
shares are issued, but arrearages in the payment thereof shall not bear
interest. Nothing hereincontained shall be deemed to limit the right of
the corporation to purchase or otherwise acquire at any time any shares
of its capital stock.
For purposes of this Part 4.4 the amount of dividends "accrued" on any
shares of any cumulative series of Class B Preferred Stock as at any
dividend date shall be deemed to be the amount of any unpaid dividends
accumulated thereon to and including such dividend date,
whether or not earned or declared. The amount of dividends "accrued" on
any noncumulative series of Class B Preferred Stock shall mean only those
dividends declared by the Board of Directors, unless otherwise specified
for such series by the Board of Directors pursuant to Section 4.2.2.
4.4.4. Liquidation. Upon the voluntary or involuntary
liquidation of the corporation, after payments of the Class A Preferred
Stock Liquidation Preference but before any payment or distribution of
the assets of the corporation shall be made to or set apart for any
other class of stock, the holders of Class B Preferred Stock shall be
entitled to payment of the amount of the preference payable upon such
liquidation of the corporation fixed by the Board of Directors for
the respective series as provided in Section 4.4.2. If, upon any
such liquidation, the assets of the corporation shall be insufficient
to pay in full to the holders of the Class B Preferred Stock the
preferential amount aforesaid, then such assets, or the proceeds
thereof, shall be distributed among the holders of each series of
Class B Preferred Stock
ratably in accordance with the sums which would be payable on such
distribution if all sums payable were discharged in full. The
voluntary sale, conveyance, exchange or transfer of all or
substantially all of the property and assets of the corporation, the
merger or consolidation of the corporation into or with any other
corporation, or the merger of any other corporation into it, shall not
be deemed to be a liquidation of the corporation for the purpose of
this Section 4.4.4.
<PAGE>
4.4.5. Retirement. Any shares of Class B Preferred Stock
which shall at any time have been redeemed, or which shall at any time
have been surrendered for conversion or exchange or for cancellation
pursuant to any sinking or purchase fund provisions with respect to
any series of Class B Preferred Stock, shall be retired and shall
thereafter have the status of authorized and unissued shares of Class
B Preferred Stock undesignated as to series.
4.4.6. Voting Rights. The Board of Directors shall, at the time
any series of Class B Preferred Stock is established, determine
whether or not the shares of such series shall be entitled to vote.
The Board of Directors, in establishing a series of Class B Preferred
Stock and fixing the voting rights thereof, may determine that the
voting power of each share of such series may be greater or less than
the voting power of each share of the Common Stock or of other series
of Class B Preferred Stock notwithstanding that the shares of such
series of Class B Preferred Stock may vote as a single class with the
shares of other series of Class B Preferred Stock and/or with the
shares of Common Stock.
5. INCORPORATOR. The name and the mailing address of the
incorporator is as
follows:
NAME ADDRESS
David M. Lederman
c/o ABIOMED,Inc.
33 Cherry Hill
Drive Danvers, MA
01421
6. DIRECTORS. The name and the mailing address of the directors, each
of whom shall serve until the next annual meeting of shareholders
and until his or her successor is elected and qualified are as follows:
NAME MAILING ADDRESS
David M. Lederman c/o ABIOMED, Inc.
33 Cherry Hill Drive
Danvers, MA 01421
Param I. Singh
c/o ABIOMED,Inc.
33 Cherry Hill Drive Danvers, MA 01421
Francis M. Galasso
c/o ABIOMED,Inc.
33 Cherry Hill Drive Danvers, MA 01421
W. Gerald Austen Massachusetts
General Hospital
Boston, MA 01421
William G. Davis 3532 Bay Road,
South Drive
Indianapolis,IN 46240
Paul Fireman c/o Reebok
International,Ltd.
15 Royall Street
Canton,MA 02021
<PAGE>
Henri A. Termeer c/o Genzyme
Corporation
75 Kneeland Street
Boston, MA 02111
7. EXISTENCE. The corporation shall have perpetual existence.
8. CERTAIN SETTLEMENTS. Whenever a compromise or arrangement is
proposed between this corporation and its creditors or any class of them
and/or between this corporation and its stockholders or any class of
them, any court of equitable jurisdiction within the State of Delaware
may, on the application in a summary way of this corporation or of any
creditor or stockholder thereof or on the application of any receiver or
receivers appointed for this corporation under the provisions of Section
291 of Title 8 of the Delaware Code or on the application of trustees in
dissolution or of any receiver or receivers appointed for this
corporation under the provisions of Section 279 of Title 8 of the
Delaware Code order a meeting of the creditors or class of creditors,
and/or of the stockholders or class of stockholders of this corporation,
as the case may be, to be summoned in such manner as the said court
directs. If a majority in number representing threefourths in value of
the creditors or class of creditors, and/or of the creditors or class of
creditors, and/or of the stockholders or class of stockholders of this
corporation, as the case may be, agree to any compromise or arrangement
and to any reorganization of this corporation as a consequence of such
compromise or arrangement, the said compromise or arrangement and the
said reorganization shall, if sanctioned by the court to which the said
application has been made, be binding on all the creditors or class of
creditors, and/or on all the stockholders or class of stockholders, of
this corporation, as the case may be, and also on this corporation.
9. POWERS OF DIRECTORS. For the management of the business and
for the conduct of the affairs of the corporation, and in further
definition, limitation and regulation of the powers of the corporation
and of its directors and of its stockholders or any class thereof, as the
case may be, it is further provided that:
a. The business of the corporation shall be conducted by the
officers of the corporation under the supervision of the Board of
Directors.
b. The number of directors which shall constitute the whole
Board of Directors shall be fixed by, or in the manner provided in, the
ByLaws. No election of Directors need be by written ballot.
c. The Board of Directors of the corporation may adopt,
amend or repeal the By-Laws of the corporation at any time after the
original adoption of the By-Laws according to Section 109 of the Delaware
General Corporation Law; provided, however, that any amendment to provide
for the classification of Directors of the corporation for staggered
terms pursuant to the provisions of subsection (d) of Section 141 of the
Delaware General Corporation Law shall be set forth in an amendment to
this Certificate of Incorporation, in
an initial By-Law, or in a By-Law adopted by the stockholders of
the corporation entitled to vote.
10. LIMITATION OF LIABILITY. No director shall be personally
liable to the corporation or its stockholders for monetary damages
for any breach of fiduciary duty by such director as a director,
notwithstanding any other provision of law to the contrary.
However, a director shall be liable to the extent required by
applicable law (i) for breach of the director's duty of loyalty to
the corporation or its stockholders, (ii) for acts or omissions not
in good faith or which involve intentional misconduct or a knowing
violation of law, (iii) pursuant to Section 174 of the Delaware
General Corporation Law or (iv) for any transaction from which the
director derived an improper personal benefit. No amendment to or
repeal of this Article 10 shall deprive a director of the benefits
hereof with respect to any acts or omissions of such director
occurring prior to such amendment or repeal.
<PAGE>
11. INDEMNIFICATION. The corporation may, to the fullest
extent permitted by Section 145 of the Delaware General Corporation
Law, as the same may be amended and supplemented, indemnify any and
all persons whom it shall have power to indemnify under said
section, to the full extent provided in the corporation's ByLaws,
from and against any and all of the expenses, liabilities or other
matters referred to in or covered by said section, and the
indemnification provided for herein shall not be deemed exclusive
of any other rights to which a person indemnified may be entitled
under any agreement, vote of stockholders or disinterested
Directors or otherwise, both as to action in his official capacity
and as to action in another capacity while holding such office, and
shall continue as to a person who has ceased to be Director,
officer, employee or agent and shall inure to the benefit of the
heirs, executors and administrators of such a person.
12. AMENDMENT. From time to time any of the provisions of
this Certificate of Incorporation may be amended, altered or
repealed, and other provisions authorized by the laws of the State
of Delaware at the time in force may be added or inserted in the
manner and at the time prescribed by said laws, and all rights at
any time conferred upon the stockholders of the corporation by this
Certificate of Incorporation are granted subject to the provisions
of this Article 12.
IN WITNESS WHEREOF, the undersigned has executed this Certificate
of
Incorporation on this 29th day of May, 1987. This Certificate of
Incorporation is to be filed with the Secretary of State of
Delaware and Recorded with the Recorder of Deeds of Kent County,
Delaware,
pursuant to Section 103 and 245 of the Delaware General Corporation
Law.
/s/ David M. Lederman
David M. Lederman, Incorporator
<PAGE>
AGREEMENT OF MERGER
AGREEMENT OF MERGER entered into this 5th day of June,
1987 between Applied Biomedical Corporation, a Massachusetts
corporation ("Parent"), and ABIOMED, Inc., a Delaware corporation
("Subsidiary").
RECITALS:
WHEREAS, the authorized capital stock of Parent consists
of: 1,360,000 shares of Class A Common Stock, $.01 par value per
share ("Parent Class A Common Stock"), 680,000 of
which are issued and outstanding as of the date hereof; 640,000
shares of Class B Common Stock, $.01 par value per share ("Parent
Class B Common Stock"), 320,250 of which are issued
and outstanding as of the date hereof; and 150,000 shares of
Preferred Stock, $.01 par value per share ("Parent Preferred
Stock"), all of which are issued and outstanding as of the date
hereof; and
WHEREAS, the authorized capital stock of Subsidiary
consists of: 10,000,000 shares of Common Stock, $.01 par value
per share ("Subsidiary Common Stock"), 100 of which are issued
and outstanding and held by Parent as of the date hereof;
2,346,000 shares of Class A Common Stock, $.01 par value per
share ("Subsidiary Class A Common Stock"), none of which are
issued and outstanding on the date hereof; 150,000 shares of
Class A Preferred Stock, $.01 par value per share ("Subsidiary A
Preferred Stock"), none of which are issued and outstanding as of
the date hereof; and 1,000,000 shares of Class B Preferred Stock,
$.01 par value per share ("Subsidiary B Preferred Stock"), none
of which are issued and outstanding as of the date hereof; and
WHEREAS, the parties deem it advisable and in the best
interests of such corporations and their stockholders that Parent
be merged with and into Subsidiary (the "Merger") in accordance
with the provisions of the Massachusetts Business Corporation
Law, ("MBCL") and
<PAGE>
the Delaware General Corporation Law ("DGCL") and desire to state
herein the mode of carrying the same into effect and certain
other details and provisions of the Merger;
NOW, THEREFORE, in consideration of the premises and the
agreements herein contained, the parties agree as follows:
1. Constituent Corporations and Merger. The names of
the corporations proposing to merge are Applied Biomedical
Corporation and ABIOMED, Inc., and Applied Biomedical Corporation
shall be merged into ABIOMED, Inc., which shall be the surviving
corporation (the "Surviving Corporation").
2. Surviving Corporation.
(a) The name by which the Surviving
Corporation shall be known is: ABIOMED, Inc.
(b) The corporate purposes of the Surviving
Corporation shall be the purposes set forth in the Certificate of
Incorporation of Subsidiary, as amended to date.
(c) The Certificate of Incorporation and By-Laws of
the Surviving Corporation shall be the Certificate of Incorporation and
By-Laws of Subsidiary, as amended to date.
(d) The officers and directors of the Surviving
Corporation shall be those of Subsidiary on the date hereof, and shall
be set forth in the Articles of Merger filed with the Secretary of
State of the Commonwealth of Massachusetts.
3. Effective Time. The Merger shall be effective on the
date on which both of the following have been accomplished (i) the
Articles of Merger have been filed with the Secretary of State of the
Commonwealth of Massachusetts pursuant to the applicable provisions of
the MBCL, and (ii) this Agreement of Merger has been filed with the
Secretary of State of Delaware pursuant to the applicable provisions of
the DGCL (the "Effective Time").
4. Effect of Merger. From and after the Effective Time,
the effect of the Merger shall be as provided in Section 80 of the MBCL
and Sections 252 and 259 of the DGCL.
<PAGE>
5. Conversion of Shares.
(a) At the Effective Time, by virtue of the Merger
and without any action on the part of the holder thereof, (i) each
share of Parent Class A Common Stock issued and outstanding shall be
converted into and be deemed to become three (3) shares of Subsidiary
Class A Common Stock; (ii) each share of Parent Class B Common Stock
issued and outstanding shall be converted into and be deemed to become
three (3) shares of Subsidiary Common Stock; and (iii) each share of
Parent Preferred Stock issued and outstanding shall be converted into
and be deemed to become one (1) share of Subsidiary A Preferred Stock,
in each case fully paid and nonassessable. In addition, each presently
outstanding option or warrant to purchase Parent Class B Common Stock
shall be converted into an option or warrant to purchase three (3)
shares of Subsidiary Common Stock at an exercise price per share equal
to one-third the exercise price of the option or warrant on Parent
Class B Common Stock and otherwise shall be on the same terms and
conditions.
(b) After the Effective Time, each certificate
theretofore representing shares of issued and outstanding Parent Class
A Common Stock, Class B Common Stock and Preferred Stock (other than
dissenter's shares) shall, upon surrender to Subsidiary, entitle the
holder to receive in exchange therefor a certificate or certificates
representing the number of whole shares of Subsidiary capital stock
into which the stock theretofore represented by the certificate so
surrendered shall have been converted in accordance with the paragraph
above, plus cash in lieu of any fractional share interest. From and
after the Effective Time, until so surrendered, each certificate
theretofore representing Parent capital stock shall be deemed for all
corporate purposes to evidence the number of whole shares of Subsidiary
capital stock into
which such shares shall have been converted, plus cash in lieu of any
fractional share interest.
(c) Each share, if any, of capital stock
held in Parent's treasury at the
Effective Time shall automatically be cancelled.
(d) At the Effective Time, the 100 shares of
Subsidiary Common Stock presently issued and outstanding and held by
Parent shall be cancelled.
<PAGE>
6. Dissenter's Rights. Any holder of record of shares of
Parent's capital stock who shall, at or before the taking of the vote
of Parent stockholders to adopt this Agreement of Merger and the Merger
contemplated hereby, have filed with Seller written objection and not
have voted for the Merger and who shall have, after the taking of such
vote, properly demanded payment for such shares in accordance with
Section 89 of the MBCL, shall not thereafter have any rights as a
stockholder except as provided in Section 96 of MBCL.
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute this Agreement of Merger effective as of
the date first above written.
Applied Biomedical Corporation
By: /s/ David M. Lederman
David M. Lederman, President
A T T E S T:
/s/ Donald E. Paulson
Donald E. Paulson, Clerk
ABIOMED, Inc.
By: /s/ David M. Lederman
David M. Lederman, President
A T T E S T:
/s/ Donald E. Paulson
Donald E. Paulson, Secretary
<PAGE>
CERTIFICATE OF CLERK OF
APPLIED BIOMEDICAL CORPORATION
The undersigned, being the Clerk of Applied Biomedical
Corporation, does hereby certify that
1. The foregoing Agreement of Merger was submitted to the
stockholders entitled to vote of said corporation at a special meeting
thereof for the purpose of acting on the
Agreement of Merger. Due notice of the time, place, and purpose of
said meeting was mailed to each stockholder of said corporation at
least 20 days prior to the date of the meeting. At said meeting, the
Agreement of Merger was considered by the stockholders entitled to vote
of the corporation, and, a vote having been taken for the adoption or
rejection by them of the Agreement of Merger, at least a majority of
the outstanding stock entitled to vote of the corporation was voted for
the adoption of the Agreement of Merger.
Dated: June 5, 1987.
/s/ Donald E. Paulson
Donald E. Paulson, Clerk of
Applied Biomedical
Corporation
<PAGE>
CERTIFICATE OF SECRETARY OF
ABIOMED, Inc.
The undersigned, being the Secretary of ABIOMED, Inc., does hereby
certify that
1. The holder of all of the outstanding stock of said
corporation dispensed with a meeting and vote of stockholders, and the
sole stockholder entitled to vote consented in writing, pursuant to the
provisions of Section 228 of the General Corporation Law of the State
of Delaware, to the adoption of the foregoing Agreement of Merger.
Dated: June 5, 1987.
/s/ Donald E. Paulson
Donald E. Paulson, Secretary of
ABIOMED, Inc.
<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, such that
paragraph (i) of Section 4.1 of Article 4 shall be amended to read as
follows:
The total number of shares of capital stock
which the corporation shall have authority to issue shall be divided
into four classes as follows:
(i) 25,000,000 shares of Common Stock, par value $.01
per share;
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 twentyfive 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.
<PAGE>
(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 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 ofDirectors 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.
<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
<PAGE>
CERTIFICATE OF OWNERSHIP AND MERGER
of
ABIOMED SECURITIES CORPORATION
(A Massachusetts corporation)
into
ABIOMED, INC.
(A Delaware corporation)
It is hereby certified that:
1. ABIOMED, Inc. (hereinafter sometimes referred to as
the "Corporation") is a business corporation of the State of Delaware.
2. The Corporation is the owner of all the outstanding
shares of the Common Stock of Abiomed Securities Corporation, a
Massachusetts corporation (hereinafter sometimes referred to as the
"Subsidiary").
3. The laws of the jurisdiction of organization of the
corporations listed above permit the merger of a business corporation
of that jurisdiction with a business corporation of another
jurisdiction.
4. The Corporation hereby merges the Subsidiary into the
Corporation.
5. The following is a copy of the resolutions adopted on
October 7, 1988, by the Board of Directors of the Corporation to merge
said Subsidiary into the Corporation:
VOTED: That Abiomed Securities Corporation (hereinafter sometimes
referred to as the "Subsidiary") be merged with and into this
Corporation, that the effective date of such merger be the date of
filing of the Certificate of Ownership and Merger with the Delaware
Secretary of State, and the Articles of Merger with the
Massachusetts Secretary of State, and that the President and
Assistant Secretary be, and each of them hereby is, authorized
and directed to execute and deliver the Certificate of Ownership
and Merger and the Articles of Merger and such other documents
and instruments as may be necessary in order to effectuate the
merger of the Subsidiary with and into this Corporation.
VOTED: That this Corporation cause to be executed and filed
and/or recorded the documents prescribed by the laws of the
State of Delaware, by the laws of the jurisdiction of
organization of the Subsidiary, and by the laws of any other
appropriate jurisdiction, and that it cause to be performed all
necessary acts within the jurisdiction of organization of the
Subsidiary and of this Corporation and in any other appropriate
jurisdiction necessary or proper to effect this merger.
<PAGE>
Signed and attested to on October 7 , 1988.
ABIOMED, INC.
By: /s/David M. Lederman
David M. Lederman, President
Attest:
/s/ Robert T.V. Kung
Robert T.V. Kung, Assistant Secretary
<PAGE>
COMMONWEALTH OF MASSACHUSETTS ) )
) SS:
COUNTY OF SUFFOLK )
BE IT REMEMBERED that, on October 7, 1988, before me, a Notary
Public duly authorized by law to take acknowledgement of deeds,
personally came David M. Lederman and Robert T.V. Kung, the President
and Assistant Secretary, respectively, of ABIOMED, Inc., who duly
signed the foregoing instrument before me and acknowledged that such
instrument as executed is the act and deed of said corporation, that
his signing is his act and deed, and that the facts stated therein are
true.
GIVEN my hand on October 7, 1988.
/s/ Bobbie A. O'Brien
Notary Public
[SEAL] My Commission Expires: 12/2/92
- -2-
<PAGE>
AMENDED AND RESTATED
BY-LAWS
of
ABIOMED, Inc.
A Delaware Corporation
Adopted: June 4, 1987
Amended: July 2, 1990,
June 18, 1993 June 15,
1995, August 9, 1995
Amended and Restated:
August 14, 1996
______________________
Secretary
<PAGE>
BY-LAWS
TABLE OF CONTENTS
Page
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 AND TERM OF OFFICE 4
SECTION 2.5. VACANCIES; REDUCTION OF THE BOARD 5
SECTION 2.6. ENLARGEMENT OF THE BOARD 5
SECTION 2.7. RESIGNATION 5
SECTION 2.8. REMOVAL 5
SECTION 2.9. MEETINGS 5
SECTION 2.10. NOTICE OF MEETING 5
SECTION 2.11. AGENDA 6
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 7
SECTION 3.1. ENUMERATION 7
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 8
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 9
<PAGE>
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 10
SECTION 4.5. TRANSFER AGENT AND REGISTRAR FOR
SHARES OF CORPORATION 10
SECTION 4.6. LOSS OF CERTIFICATES 11
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 S
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 16
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
<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 second Wednesday
of August 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.
<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. No action required to be
taken or which may be taken at any annual or special meeting of
stockholders of the Corporation may be taken by stockholders without a
meeting, and the power of stockholders to consent in writing, without a
meeting, to the taking of any action is specifically denied.
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.
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
<PAGE>
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 consideration and upon such terms and conditions as
they shall determine, including the granting of options, warrants or
conversion or other rights to stock.
<PAGE>
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 12, 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.
<PAGE>
(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 and Term of Office .
(a) 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 II 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, 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.
(b) 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.
<PAGE>
(c) Whenever the holders of any series of Preferred Stock
issued pursuant to the provisions of the Certificate of Incorporation
of the Corporation 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 the
Certificate of Incorporation applicable to such series, as the case may
be, and such directorships shall not be divided into classes unless
expressly so provided therein.
Section 2.5. Vacancies . Any vacancy in the board of
directors, however occurring, including a vacancy resulting from the
enlargement of the board of directors, may be filled in the manner
provided in the Certificate of Incorporation of the corporation.
Section 2.6. Enlargement of the Board. The board of directors
may be enlarged in the manner provided in the Certificate of
Incorporation of the corporation.
Section 2.7. Resignation. 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 in the manner
provided in the Certificate of Incorporation of the corporation.
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
<PAGE>
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.
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.
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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.
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.
<PAGE>
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.
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.
<PAGE>
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.
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 vicepresident 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.
<PAGE>
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 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
<PAGE>
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.
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
<PAGE>
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.
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
was a director, officer, employee, agent, trustee or fiduciary of
theCorporation 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.
<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.
<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 Faith. Notwithstanding
<PAGE>
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 Covered Person in
connection with any Proceeding, within twenty (20) days after the
receipt by
<PAGE>
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.
<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.
<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.
<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
<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 of 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 Bylaws
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.
<PAGE>
DEPARTMENT OF HEALTH AND HUMAN SERVICES Public Health Service
National Institutes of Health National Heart, Lung
and Blood Institute
Bethesda, Maryland,20892
September 12, 1996
Dr. Robert Kung
ABIOMED, Inc.
24 Cherry Hill Drive
Danvers, MA 01923
Subject: Contract No. N01-HV-38128
Dear Dr. Kung:
The review of all technical proposals for Phase II of the
Phased Readiness Testing of Implantable Total Artificial Hearts
(TAH) has been completed. The review was conducted by a peer
review committee of experts and by the NHLBI staff members and
was based on the
evaluation criteria that I provided to you in my letter dated
March 4, 1996.
I am pleased to advise you that, as a result of this evaluation,
you will be allotted funds for Phase II as currently scheduled
under Article B.2 of your contract. As required by your contract
this letter documents approval for you to begin Phase II as of
September 30, 1996.
If requested in writing, a written technical debriefing will be
provided to you which will outline your proposals strengths and
weaknesses based on the technical evaluation factors for
continuation into Phase II.
Status of the TAH program has been enclosed to provide your
institution with press release information. If you have any
questions, please call me at (301) 435-0340.
Sincerely yours,
/s/ Sharon M.Kraft
Sharon M. Kraft
Contracting Officer HLVDContracts Section
Enclosure
