<PAGE>
SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(a) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )
Filed by the Registrant |X|
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Check the appropriate box:
| | Preliminary Proxy Statement
| | Confidential, for Use of the Commission Only (as permitted by
Rule 14a-6(e)(2))
|X| Definitive Proxy Statement
| | Definitive Additional Materials
| | Soliciting Material Pursuant to Rule 14a-11(c) or Rule 14(a)-12
ABIOMED, INC.
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
|X| No fee required.
| | Fee computed on table below per Exchange Act Rules 14a-6(i)(4) and
0-11.
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| | Fee paid previously with preliminary materials.
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Rule 0-11(a)(2) and identify the filing for which the offsetting fee
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<PAGE>
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS OF
ABIOMED, INC.
TO BE HELD ON AUGUST 9, 2000
The Annual Meeting of Stockholders of ABIOMED, Inc. will be held on
August 9, 2000 at 8:00 a.m. at the Fleet Bank Auditorium, Fleet Bank, 100
Federal Street, Boston, Massachusetts 02110, for the following purposes:
1. To elect two Class II directors, each to hold office until the 2003 Annual
Meeting of Stockholders and until their respective successors are elected
and qualified;
2. To consider and vote upon a proposal to amend the Company's Restated
Certificate of Incorporation to increase the number of authorized shares of
common stock from 25,000,000 to 100,000,000.
3. To consider and vote upon a proposal to approve the ABIOMED, Inc. 2000 Stock
Incentive Plan;
4. To consider and act upon any other matter which may properly come before the
Annual Meeting or any adjourned session thereof.
The Board of Directors has fixed the close of business on June 12, 2000 as
the record date for determining the stockholders entitled to notice of, and to
vote at, the Meeting. Accordingly, only stockholders of record at the close of
business on June 12, 2000 will be entitled to vote at the Meeting or any
adjournments thereof.
By Order Of The Board Of Directors
PETER W. COOGAN, Secretary
Boston, Massachusetts
July 13, 2000
YOUR VOTE IS IMPORTANT
TO ASSURE YOUR REPRESENTATION AT THE MEETING, YOU ARE URGED TO VOTE, SIGN, DATE
AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN THE POSTAGE-PAID
ENVELOPE ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE GIVEN YOUR PROXY, THE PROXY
MAY BE REVOKED AT ANY TIME PRIOR TO EXERCISE BY FILING WITH THE SECRETARY OF THE
COMPANY A WRITTEN REVOCATION, BY EXECUTING A PROXY WITH A LATER DATE, OR BY
ATTENDING AND VOTING AT THE MEETING.
<PAGE>
ABIOMED, INC.
PROXY STATEMENT
FOR THE ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON AUGUST 9, 2000
This proxy statement is furnished in connection with the solicitation of
proxies by and on behalf of the Board of Directors of ABIOMED, Inc., a Delaware
corporation with its principal executive offices at 22 Cherry Hill Drive,
Danvers, Massachusetts 01923 (the "Company"), for use at the Annual Meeting of
Stockholders to be held at the Fleet Bank Auditorium, Fleet Bank, 100 Federal
Street, Boston, Massachusetts 02110, on August 9, 2000 and at any adjournment or
adjournments thereof (the "Meeting").
The cost of the solicitation will be borne by the Company. Certain of
the officers and regular employees of the Company may solicit proxies by
correspondence, telephone or in person, without extra compensation. The
Company will retain Georgeson & Company, Inc. to assist in the solicitation
of proxies at a cost of approximately $6,500, plus out-of-pocket costs. The
Company may also pay to banks, brokers, nominees and other fiduciaries their
reasonable charges and expenses incurred in forwarding proxy material to
their principals. It is expected that this proxy statement and the
accompanying proxy will be mailed to stockholders on or about July 13, 2000.
The Company has fixed the close of business on June 12, 2000 as the
record date ("Record Date") for the Meeting. Only stockholders of record at
the close of business on the Record Date will be entitled to receive notice
of, and to vote at, the Meeting. As of the Record Date, there were
outstanding and entitled to vote 10,234,497 shares of Common Stock, $.01 par
value (the "Common Stock"), of the Company. The Company's by-laws require
that a majority in interest of all stock issued, outstanding and entitled to
vote at a meeting shall constitute a quorum. Abstentions and broker
"non-vote" occurs when a broker or nominee holding shares for a beneficial
owner does not vote on a proposal because the broker or nominee does not have
discretionary voting power and has not received instructions from the
beneficial owner.
Proposal No. 1 (election of Directors) requires the affirmative vote of
a plurality of the votes cast by holders of Common Stock entitled to vote
thereon, provided a quorum is present. Proposal No. 2 (amendment of the
Company's Restated Certificate of Incorporation to increase the number of
authorized shares of Common Stock) requires the affirmative vote of a
majority of shares of Common Stock entitled to vote thereon. Proposal No. 3
(approval of the Company's 2000 Stock Incentive Plan) requires the
affirmative vote of a majority of shares of Common Stock present in person or
by proxy at the Meeting and entitled to vote thereon, provided that a quorum
is present. Abstentions and broker non-votes will not be included in
calculating the number of votes cost on Proposals 1 and 3 and will have the
effect of a vote against Proposal No. 2. Votes will be tabulated by
EquiServe, the Company's transfer agent. The vote on each matter submitted to
stockholders will be tabulated separately.
THE ENCLOSED PROXY, IF EXECUTED AND RETURNED, WILL BE VOTED AS DIRECTED ON
THE PROXY OR, IN THE ABSENCE OF SUCH DIRECTION, FOR THE NOMINEES AS DIRECTORS
(PROPOSAL NO. 1) AND FOR PROPOSAL NOS. 2 AND 3. IF ANY OTHER MATTERS SHALL
PROPERLY COME BEFORE THE MEETING, THEY WILL BE VOTED BY THE PROXIES IN
ACCORDANCE WITH THEIR BEST JUDGMENT. THE PROXY MAY BE REVOKED AT ANY TIME PRIOR
TO EXERCISE BY FILING WITH THE SECRETARY OF THE COMPANY A WRITTEN REVOCATION, BY
EXECUTING A PROXY WITH A LATER DATE, OR BY ATTENDING AND VOTING AT THE MEETING.
The Company's Annual Report to Stockholders and annual report on Form 10-K
for the fiscal year ended March 31, 2000, including financial statements audited
by Arthur Andersen LLP, are being mailed to each of the stockholders
simultaneously with this proxy statement.
1
<PAGE>
PROPOSAL NO. 1
ELECTION OF DIRECTORS
At the Meeting, two Class II directors are to be elected to serve for a
term of three years, until the 2003 Annual Meeting of Stockholders, and until
their respective successors have been elected and qualified. Messrs. John F.
O'Brien and Henri A. Termeer have been nominated by the Board of Directors for
election as directors. Both of these nominees are currently serving as directors
of the Company.
If any nominee at the time of the election is unable or unwilling to serve
or is otherwise unavailable for election, and the Board of Directors designates
another nominee, the persons named as proxies will vote the proxy for such
substitute, if any. The Board of Directors has no reason to believe that any of
the proposed nominees will be unable or unwilling to serve. The proposed
nominees are not being nominated pursuant to any arrangement or understanding
with any person.
INFORMATION ON NOMINEES AND DIRECTORS
Set forth below is certain biographical information with respect to the
nominees, including the year in which the nominee's term would expire, if
elected, and with respect to each of the Class I and Class III directors whose
terms will continue after the Meeting. The nominees for Class II directors are
indicated by an asterisk.
<TABLE>
<CAPTION>
YEAR TERM
DIRECTOR EXPIRES, IF
NAME AGE POSITION SINCE ELECTED, AND CLASS
<S> <C> <C> <C> <C>
David M. Lederman, Ph.D ....... 56 Chairman of the Board of Directors, 1981 2002-Class I
President and Chief Executive Officer
Desmond H. O'Connell, Jr ...... 64 Director 1995 2002-Class I
*John F. O'Brien .............. 57 Director 1989 2003-Class II
*Henri A. Termeer ............. 54 Director 1987 2003-Class II
W. Gerald Austen, M.D ....... 70 Director 1985 2001-Class III
Paul B. Fireman ............. 56 Director 1987 2001-Class III
</TABLE>
DR. DAVID M. LEDERMAN founded the Company in 1981 and has served as
Chairman of the Board and Chief Executive Officer since that time. He has also
served as President of the Company for the majority of the time. Prior to
founding ABIOMED, he was Chairman of the Medical Research Group at the Everett
Subsidiary of Avco Corporation, which he joined in 1972. Dr. Lederman has made
many important contributions in the field of cardiac assist and heart
replacement technology, and originated the design and development of the
Company's AbioCorTM blood pumps and their valves. Dr. Lederman received a Ph.D.
degree in Aerospace Engineering from Cornell University.
MR. DESMOND H. O'CONNELL, JR. has served as Director of the Company since
1995. He is currently the Chairman and a Director of Serologicals Corporation
and is also an independent management consultant. From December 1992 until
December 1993, he served as the Chairman, Management Committee, of Pharmakon
Research International, Inc. During 1991, he briefly served as Chairman of the
Board and Chief Executive Officer of Osteotech, Inc. Mr. O'Connell was with the
BOC Group, PLC in senior management positions from 1983 to 1990. From April 1990
until September 1990, Mr. O'Connell was President and Chief Executive Officer of
BOC Health Care. From 1986 to April 1990, he was Group Managing Director of BOC
Group, PLC. Prior to joining BOC, Mr. O'Connell held various positions at Baxter
Laboratories, Inc., including Chief Executive of the Therapeutic and Diagnostic
Division and Vice President, Corporate Development. Mr. O'Connell had been a
Director of Chryslais International Corporation from 1991 through May 1999.
2
<PAGE>
MR. JOHN F. O'BRIEN has served as a Director of the Company since 1989.
Since August 1989 he has been the President and Chief Executive Officer and a
Director of First Allmerica Financial Life Insurance Company (formerly State
Mutual Life Assurance Company of America). Since January 1995 he has been
President, Chief Executive Officer and a Director of Allmerica Financial
Corporation. Mr. O'Brien is also Chairman of the Board and a Director of
Allmerica Property & Casualty Companies, Inc. and a Trustee and Chairman of the
Board of Allmerica Securities Trust and Allmerica Investment Trust. From 1972
until 1989, Mr. O'Brien was employed by Fidelity Investments in various
capacities, including as Group Managing Director of FMR Corp. Mr. O'Brien is
also a Director of Cabot Corporation and TJX Companies, Inc. and a Trustee of
the Worcester Art Museum.
MR. HENRI A. TERMEER has served as a Director of the Company since 1987.
Mr. Termeer has served as President and a Director of Genzyme Corporation since
1983, as its Chief Executive Officer since 1985, and as its Chairman of the
Board since 1988. Mr. Termeer is also a past Chairman and a current Director of
the Board of Genzyme Transgenics Corporation. He is also a Director of
AutoImmune, Inc., GelTex Pharmaceuticals, Inc. and Diacrin, Inc. and serves as a
Trustee of Hambrecht & Quist Healthcare Investors and Hambrecht & Quist Life
Sciences Investors.
DR. W. GERALD AUSTEN, M.D., has served as a Director of the Company since
1985. From 1974 to the present, he has been the Edward D. Churchill Professor of
Surgery at Harvard Medical School. Dr. Austen became President of the
Massachusetts General Physicians Organization in 1994 and since 1999 has served
as Chairman of the Board. From 1969 to 1997, Dr. Austen was Chief of the
Surgical Services at Massachusetts General Hospital. Dr. Austen is the former
President of the American College of Surgeons, the American Association for
Thoracic Surgery, the American Surgical Association and the Massachusetts and
American Heart Associations. Dr. Austen is a member of the Institute of Medicine
of the National Academy of Sciences, a Fellow of the American Academy of Arts
and Sciences and a life member of the corporation of the Massachusetts Institute
of Technology.
MR. PAUL B. FIREMAN has served as a Director of the Company since 1987. Mr.
Fireman has served as Chief Executive Officer and as a Director of Reebok
International Ltd., which he founded, from 1979 to the present. He has served as
Reebok's Chairman of the Board of Directors from 1985 to the present. He has
also served as Reebok's President from 1989 to the present, after initially
serving as President from 1979 to 1987. Mr. Fireman has served as the Chairman
of the Entrepreneurial Advisory Board of Babson College since 1995.
MEETINGS OF THE BOARD OF DIRECTORS
The Board of Directors held five meetings during the fiscal year ended
March 31, 2000 (and acted by unanimous written consent on two occasions). Each
director attended at least 75% of the aggregate number of meetings of the Board
of Directors and committees of which he was a member held during such fiscal
year.
The Board of Directors has an Executive Committee, which is currently
composed of David M. Lederman, Desmond H. O'Connell, Jr. and Paul B. Fireman The
Executive Committee has, and may exercise, all the powers and authority of the
Board of Directors, except those which by law may not be delegated to it by the
Board of Directors. The Executive Committee did not act during the fiscal year
ended March 31, 2000.
The Board of Directors has an Audit Committee, which is currently composed
of W. Gerald Austen, John F. O'Brien and Desmond H. O'Connell, Jr. The functions
performed by this committee include recommending to the Board of Directors the
engagement of the independent auditors, reviewing the scope of internal controls
and reviewing the implementation by management of recommendations made by the
independent auditors. The Audit Committee met one time during the fiscal year
ended March 31, 2000.
The Company has a Compensation Committee, which is currently composed of
Paul B. Fireman, John F. O'Brien and Henri A. Termeer. The functions of the
Compensation Committee include establishing the compensation and bonuses of
executive officers, determining the persons to whom both incentive stock options
and non-qualified stock options will be granted and adopting rules and making
other determinations with respect to the administration of the 1992 Combination
Stock Option Plan (the "Combination Plan"), the Employee Stock Purchase Plan,
the 401(k) Plan and the 1998 Equity Incentive Plan. During the fiscal year ended
March 31, 2000, the Compensation Committee held three meetings.
3
<PAGE>
The Company has a Nominating Committee, which is currently composed of
Henri A. Termeer, W. Gerald Austen and Desmond H. O'Connell, Jr. The nominating
committee is responsible for reviewing the qualifications of potential nominees
for election to the Board of Directors and recommending to the Board of
Directors the election of directors of the Company. Stockholders may make
nominations for the election of directors by delivering notice in writing to the
secretary of the Company not less than 45 days nor more than 60 days prior to
any meeting of the stockholders called for the election of directors. The
Nominating Committee did not meet during the fiscal year ended March 31, 2000.
SECURITIES BENEFICIALLY OWNED BY CERTAIN PERSONS
The following table sets forth certain information as of June 12, 2000
with respect to the beneficial ownership of the Company's Common Stock of each
director and nominee for director, each named executive officer in the Summary
Compensation Table under "Executive Compensation," below, all directors and
current executive officers of the Company as a group, and each person known by
the Company to be the beneficial owner of five percent or more of the Company's
common stock. This information is based upon information received from or on
behalf of the individuals named therein.
<TABLE>
<CAPTION>
SHARES OF STOCK
NAME BENEFICIALLY OWNED (1) PERCENT OF CLASS
<S> <C> <C>
Dr. David M. Lederman (2) .................... 1,271,200 12.4%
c/o ABIOMED, Inc.
22 Cherry Hill Drive
Danvers, MA 01923
Genzyme Corporation .......................... 1,153,846 11.3%
One Kendall Square
Cambridge, MA 02139
Dr. W. Gerald Austen (3) ..................... 34,100 *
Paul B. Fireman (3) .......................... 233,926 2.3%
John F. O'Brien (3) .......................... 86,292 *
Desmond H. O'Connell, Jr. (3) ................ 32,792 *
Henri A. Termeer (3)(4) ...................... 1,187,946 11.6%
Anthony W. Bailey (3) ........................ 17,632 *
Dr. Robert T.V. Kung (3)(5) .................. 238,875 2.3%
Eugene D. Rabe (3) ........................... 57,875 *
John F. Thero (3) ............................ 56,781 *
All Current Executive Officers and Directors.. 3,217,419 30.4%
As a group (10 persons)(2)(3)(4)(5)
</TABLE>
-------------------------
* Less than 1%.
(1) Unless otherwise noted, each person identified possesses sole voting
and investment power over the shares listed.
(2) Includes 675,923 shares held by the wife of Dr. Lederman, as to which
Dr. Lederman disclaims beneficial ownership.
(3) Includes the following shares subject to currently exercisable options
(includes options that will become exercisable within 60 days of June
12, 2000): Dr. Austen--25,000; Mr. Fireman--22,500; Mr.
O'Brien--22,500; Mr. O'Connell--12,500; Mr. Termeer--25,000; Mr.
Bailey--17,500; Dr. Kung--116,875; Mr.
Rabe--57,875; and Mr. Thero--56,000.
(4) Includes 1,153,846 shares held by Genzyme Corporation, as to which Mr.
Termeer disclaims beneficial ownership. Mr. Termeer is the Chief
Executive Officer of Genzyme.
(5) Includes 55,400 shares held by the wife of Dr. Kung and 16,600 shares
held in trust for the benefit of certain relatives of Dr. Kung, as to
which Dr. Kung disclaims beneficial ownership.
4
<PAGE>
EXECUTIVE COMPENSATION
The following table sets forth the compensation during the last three
fiscal years of (i) the Chief Executive Officer of the Company and (ii) the four
most highly compensated executive officers other than the Chief Executive
Officer who were serving as executive officers at the end of the last fiscal
year, whose annual salary and bonus exceeded $100,000 for services in all
capacities to the Company during the last fiscal year (the "named executive
officers").
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- -------------
SECURITIES
OTHER ANNUAL UNDERLYING ALL OTHER
FISCAL YEAR SALARY BONUS COMPENSATION OPTIONS COMPENSATION
NAME AND PRINCIPAL POSITION ENDED 3/31 ($) ($) ($) (#) ($)(1)
--------------------------- ---------- ------ -------- ------------- ------------- ----------
<S> <C> <C> <C> <C> <C> <C>
Dr. David M. Lederman .......... 2000 $281,250 $200,000 -- 65,000 $35,058
Chairman of the Board, 1999 212,500 50,000 -- -- 41,642
President and Chief 1998 168,750 80,000 -- -- 34,246
Executive Officer
Dr. Robert T.V. Kung ........... 2000 $172,500 $ 87,500 -- 10,000 $ 5,894
Senior Vice President 1999 161,250 20,000 -- 20,000 5,635
Research and Chief Scientific 1998 147,750 40,000 -- 5,000 3,808
Officer
Eugene D. Rabe ................. 2000 $155,000 $ 90,000 -- 15,000 $ 4,145
Senior Vice President 1999 137,500 92,500 -- 17,500 3,973
Global Sales and Services 1998 126,925 80,000 -- 7,500 2,966
John F. Thero .................. 2000 $155,000 $100,000 -- 20,000 $ 3,947
Senior Vice President - 1999 135,625 65,000 -- 20,000 3,363
Finance, Chief Financial 1998 120,925 50,000 -- 5,000 2,676
Officer and Treasurer
Anthony W. Bailey .............. 2000 $145,000 $ 65,000 -- 15,000 $ 3,739
Vice President - Engineering 1999 124,000 25,000 -- 30,000 3,274
and Director AbioCorTM Program 1998 106,000 60,000 -- -- 1,494
</TABLE>
(1) Includes for the fiscal year ended March 31, 2000 (a) the following
matching contributions to the ABIOMED Retirement Savings Plan for fiscal
2000: Dr. Lederman - $650; Dr. Kung - $650; Mr. Rabe - $650;
Mr. Thero - $650; and Mr. Bailey - $650; (b) the following profit sharing
allocations under the ABIOMED Retirement Savings Plan contributions paid
in fiscal 2000, subject to applicable vesting based on years of service:
Dr. Lederman - $2,326; Dr. Kung - $2,326; Mr. Rabe - $2,326;
Mr. Thero - $2,227; and Mr. Bailey - $2,002; (c) the following life
insurance premiums paid for term life insurance in excess of $50,000 in
fiscal 2000: Dr. Lederman - $30,457; Dr. Kung - $1,810; Mr. Rabe - $402;
Mr. Thero - $304; and Mr. Bailey $370; (d) the following long-term
disability insurance premiums for fiscal 2000: Dr. Lederman - $1,375;
Dr. Kung - $858; Mr. Rabe - $767; Mr. Thero - $767; and Mr. Bailey - $717;
and (e) the following awards paid in fiscal 2000 in connection with newly
issued patents: Dr. Lederman - $250 and Dr. Kung - $250.
5
<PAGE>
The following tables sets forth certain information with respect to
option grants and exercises to the named executive officers.
OPTION GRANTS IN LAST FISCAL YEAR
<TABLE>
<CAPTION>
INDIVIDUAL GRANTS POTENTIAL REALIZABLE
---------------------------------------------------
NUMBER OF % OF TOTAL VALUE AT ASSUMED
SECURITIES OPTIONS ANNUAL RATES OF STOCK
UNDERLYING GRANTED TO EXERCISE PRICE APPRECIATION FOR
OPTIONS GRANTED EMPLOYEES IN PRICE EXPIRATION OPTION TERM(2)
----------------------
NAME (#)(1) FISCAL YEAR ($/SH) DATE 5%($) 10%($)
---- --------------- ------------ -------- ---------- ----- ------
<S> <C> <C> <C> <C> <C> <C>
Dr. David M. Lederman.... 65,000 20.2% $14.000 07/12/09 $572,294 $1,450,306
Dr. Robert T.V. Kung..... 10,000 3.1% $13.375 07/01/09 $84,115 $ 213,163
Eugene D. Rabe........... 15,000 4.7% $13.375 07/01/09 $126,172 $ 319,745
John F. Thero............ 20,000 6.2% $13.375 07/01/09 $168,229 $ 426,326
Anthony W. Bailey........ 15,000 4.7% $13.375 07/01/09 $126,172 $ 319,745
----------
</TABLE>
(1) The options granted to Dr. Lederman, Dr. Kung, Mr. Rabe, Mr. Thero
and Mr. Bailey were granted under the 1998 Equity Incentive Plan and become
exercisable in four equal annual installments commencing two years from the
date of grant such that they will be fully exercisable five years after the
date of grant.
(2) The assumed rates are compounded annually for the full term of the options.
AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FISCAL YEAR END OPTION VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
SHARES UNDERLYING UNEXERCISED IN-THE-MONEY
ACQUIRED OPTIONS AT 3/31/00 OPTIONS AT 3/31/00
ON EXERCISE VALUE REALIZED EXERCISABLE/UNERERCISABLE EXERCISABLE/UNEXERCISABLE
<S> <C> <C> <C> <C>
NAME (#) ($) (#) ($)(1)
Dr. David M. Lederman... -- -- 0 /65,000 0 /$1,722,500
Dr. Robert T.V. Kung.... -- -- 110,625/59,375 $3,381,313/$1,658,438
Eugene D. Rabe ......... -- -- 51,625/58,375 $1,595,031/$1,619,031
John F. Thero .......... -- -- 47,250/67,750 $1,473,313/$1,890,438
Anthony W. Bailey ...... -- -- 10,000/55,000 $ 287,500/$1,500,625
-------------------
</TABLE>
(1) Based upon the $40.50 closing price of the Company's Common Stock on
March 31, 2000 on the Nasdaq National Market minus the respective option
exercise price.
COMPENSATION OF DIRECTORS
Directors who are not employees of the Company receive an annual retainer
of 400 shares of Common Stock and an additional $500 for attendance at each
meeting of the Board of Directors or a committee thereof or consultation at
the offices of the Company.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN COMPENSATION
DECISIONS
The Compensation Committee consists of Paul B. Fireman, John F. O'Brien
and Henri A. Termeer. No member of the Compensation Committee is a former or
current officer or employee of the Company. Dr. Lederman, while not a member of
the Compensation Committee, makes recommendations to the Compensation Committee
6
<PAGE>
regarding executive officer compensation, including the awards of stock
options, and often participates in the Committee's deliberations but does not
vote on such matters. None of the Company's executive officers serves as a
member of the board of directors or compensation committee of any entity that
has one or more executive officers serving as members of the Company's Board
of Directors or Compensation Committee.
COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION
The primary objectives of the Compensation Committee in developing
executive compensation policies are to attract and retain superior talent to
enable the Company to achieve its business objectives and to align the financial
interests of its executive officers with the stockholders of the Company. The
compensation of executive officers consists of base compensation, bonus, the
grant of options and participation in benefit plans generally available to
employees.
In setting overall compensation for the last fiscal year, the Compensation
Committee reviewed the recommendations of the Chief Executive Officer and strove
to maintain base compensation for the Company's executive officers at levels
which the Compensation Committee believes are competitive with the compensation
of comparable executive officers in similarly situated companies, while relying
upon the Company's Combination Plan, 1998 Equity Incentive Plan and a bonus
program to provide significant performance incentives.
The Company maintains an informal bonus plan for its executive officers.
Under the bonus plan, a bonus was determined for each executive officer (other
than the Chief Executive Officer) based on achievement of certain objective and
subjective goals and the Chief Executive Officer's evaluation of the
individual's performance. Each executive officer was assigned a maximum bonus
amount which was measured against these goals and the officer's performance
evaluation. The goals established for each executive officer varies depending
upon the responsibilities of the officer, and include goals based upon operating
results, either for a particular operating division or the Company as a whole,
product development milestones and the cost of achieving those milestones, and
the achievement of certain sales objectives. Certain of the executive officers'
goals, including certain of the Chief Executive Officer's goals, have milestones
that do not directly correspond in timing with the Company's fiscal year-end and
certain of the goals are measured in intervals of greater than one year.
Accordingly, bonus amounts for which executive officers are eligible can vary
from fiscal year to fiscal year. In granting these bonuses, the Committee gave
substantial weight to and followed the Chief Executive Officer's
recommendations.
Each of the executives is eligible to receive grants of options under the
Combination Plan and 1998 Equity Incentive Plan. In determining the number of
options to be granted to each executive officer, the Compensation Committee
reviews recommendations provided by the Chief Executive Officer based upon the
officer's position of responsibility and anticipated contribution to the
Company, the number of shares of Common Stock subject to options held or
previously granted to the officer and the individual performance of the officer.
For the fiscal year ended March 31, 2000. Dr. Lederman, the Chief
Executive Officer of the Company, received a base salary of $281,250 and a
bonus of $200,000. Dr. Lederman's base salary was determined by the
Compensation Committee based upon the salary structure that had been
established for the other executive officers of the Company and upon his
recommendation to keep his base salary at that level, notwithstanding the
Compensation Committee's belief that this base salary was low compared to his
responsibilities, importance and contributions to the Company.
Compensation Committee
Paul B. Fireman
John F. O'Brien
Henri A. Termeer
7
<PAGE>
PERFORMANCE GRAPH
The following graph compares the yearly change in the cumulative total
stockholder return for the Company's last five full fiscal years, based upon the
market price of the Company's Common Stock, with the cumulative total return on
the Nasdaq Stock Market (U.S. Companies) and the Nasdaq Stocks-SIC Group Code
384 for that period. The performance graph assumes the investment of $100 on
March 31, 1995 in the Company's Common Stock, the Nasdaq Stock Market (U.S.
Companies) and the Nasdaq Stocks--SIC Group Code 384, and the reinvestment of
any and all dividends.
COMPARISON OF FIVE YEAR - CUMULATIVE TOTAL RETURNS GRAPH APPEARS HERE
8
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PROPOSAL 2 -- INCREASE IN AUTHORIZED SHARES OF COMMON STOCK
The Company's stockholders are being asked to approve an amendment to
the Company's Restated Certificate of Incorporation (the "Charter Amendment") to
increase the authorized Common Stock from 25,000,000 to 100,000,000 shares. At a
meeting on May 24, 2000, the Company's Board of Directors voted to recommend the
proposed increase to the Company's stockholders.
On the Record Date, the Company had 10,234,497 shares of Common Stock
issued and outstanding. It also had 1,307,198 shares reserved for issuance upon
exercise of stock options that have been or may be granted pursuant to the
Company's options plans. In addition, if the stockholders approve the 2000
Stock Incentive Plan (see Proposal 3), an additional 700,000 shares of Common
Stock will be reserved for issuance upon exercise of stock options.
One of the primary reasons why the Board of Directors believes that the
authorized number of shares of Common Stock should be increased is so that a
sufficient number of shares will be available for issuance should the Board
determine that a stock split or a stock dividend is in the best interests of the
Company. For example, if the Board were to authorize a two for one stock split,
the Company would have very few additional shares available for issuance for
other corporate purposes as may be determined by the Board of Directors to be
necessary, appropriate or desirable. Such other corporate purposes may include,
without limitation, raising capital, acquiring other companies through merger,
attracting or retaining executive and other employees through stock options and
issuing stock or rights to acquire shares in accordance with the Company's
by-laws in opposing a takeover bid that the Board determines not to be in the
best interests of the Company and its stockholders.
The Board of Directors does not currently intend to seek stockholder
approval prior to any future issuance of additional shares of Common Stock,
unless stockholder action is required in a specific case by applicable law, the
rules of the Nasdaq Stock Market or any exchange on which the Company's
securities may then be listed, or the charter or by-laws of the Company then in
effect. Frequently, opportunities arise that require prompt action, and the
Company believes that the delay necessitated for stockholder approval of an
increase in authorized shares could be to the detriment of the Company and its
stockholders.
The additional shares of Common Stock authorized for issuance will have
all of the rights and privileges which the currently outstanding shares of
Common Stock possess; the increase in authorized shares would not affect the
terms, or rights of the holders, of existing shares of Common Stock. All
outstanding shares would continue to have one vote per share on all matters to
be voted on by the stockholders, including the election of directors.
The issuance of any additional shares of Common Stock by the Company
may, depending on the circumstances under which those shares are issued, reduce
stockholders' equity per share and may reduce the percentage ownership of Common
Stock of existing stockholders. The Company, however, will receive consideration
for any additional shares of Common Stock issued, thereby reducing or
eliminating the economic effect to each stockholder of such dilution.
The authorized but unissued shares of Common Stock could be used to
make more difficult a change in control of the Company. For example, such shares
or rights to acquire such shares could be issued or sold to purchasers who might
side with the Board of Directors in opposing a takeover bid that the Board
determines not to be in the best interests of the Company and its stockholders.
Such a sale could have the effect of discouraging an attempt by another person
or entity, through the acquisition of a substantial number of shares of the
Company's Common Stock, to acquire control of the Company, since the issuance of
new shares could be used to dilute the stock ownership of the acquirer. The
Company's charter and by-laws now contain certain provisions which could have an
anti-takeover effect; however, the current proposal is not part of a plan by
management to adopt a series of anti-takeover proposals and the Company has no
current plans to propose other anti-takeover measures in future proxy
solicitations. The Company is not aware of any pending or threatened efforts to
obtain control of the Company, and the Board of Directors has no current
intention to use the additional shares of Common Stock to impede a takeover
attempt.
9
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Approval of the Charter Amendment requires the affirmative vote of a
majority of the total votes eligible to be cast at the Annual Meeting. Unless
authority to do so has been limited in a proxy, it is the intention of the
persons named as proxies to vote the shares represented by the proxy FOR
approval of the Charter Amendment.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
OF PROPOSAL 2.
PROPOSAL NO. 3 -- APPROVAL OF THE ABIOMED, INC. 2000 STOCK INCENTIVE
PLAN
The Board of Directors of the Company adopted the 2000 Stock Incentive
Plan on May 24, 2000, subject to approval by the stockholders. The purpose of
the Plan is to encourage and enable officers, directors, and employees of the
Company to acquire a proprietary interest in the Company. It is anticipated that
providing such persons with a direct stake in the Company's welfare will assure
a closer identification of their interests with those of the Company and its
shareholders, thereby stimulating their efforts on the Company's behalf and
strengthening their desire to remain with the Company.
Under the Internal Revenue Code (the "Code"), stockholder approval is
necessary for stock options relating to the shares issuable under the 2000 Stock
Incentive Plan to qualify as incentive stock options under Section 422 of the
Code. In addition, Nasdaq rules (the "Nasdaq Rules") require stockholder
approval of the 2000 Stock Incentive Plan. Approval for purposes of the Code and
the Nasdaq Rules will require the affirmative vote of a majority of the shares
of Common Stock present or represented at the meeting and voting on the 2000
Stock Incentive Plan. The full text of the 2000 Stock Incentive Plan as adopted
by the Board of Directors is printed as Appendix A, beginning on page A-1. The
following is a summary of some of its provisions.
The 2000 Stock Incentive Plan will be administered by a committee
consisting of at least two "outside directors." For purposes of the plan, an
"outside director" is a person who (a) is not an employee of the Company or any
affiliate, (b) is not a former employee of the Company or any affiliate who is
receiving compensation for prior services during the taxable year of the Company
or any affiliate, (c) has not been an officer of the Company or any affiliate,
and (d) does not receive remuneration from the Company or any affiliate in any
capacity other than as a director. The Board of Directors may establish an
additional single-member committee (consisting of an executive officer) that may
grant options under the 2000 Stock Incentive Plan to non-executive officers.
The committee that will administer the 2000 Stock Incentive Plan will
select the individuals who will receive options and will determine the option
exercise price and other terms of each option, subject to the provisions of the
Plan. This committee also has the power to make changes to outstanding options
under the Plan, including the power to reduce the exercise price, accelerate the
vesting schedule and extend the expiration date of any option. The Board of
Directors may act as the committee.
The 2000 Stock Incentive Plan authorizes the grant of options to
purchase Common Stock intended to qualify as incentive stock options, as defined
in Section 422 of the Internal Revenue Code, and options that do not so qualify.
Incentive options may be granted under the Plan to employees of the Company or
any subsidiary, including directors and officers who are employees of the
Company or any subsidiary. Nonqualified options may be granted under the Plan to
employees of the Company or any subsidiary and to directors, consultants and
other persons who render services to the Company or any subsidiary, regardless
of whether they are employees of the Company or any subsidiary.
The exercise price of incentive options granted under the 2000 Stock
Incentive Plan must equal or exceed the fair market value of the Common Stock on
the date of grant. The exercise price of incentive options granted under the
Plan to a person who owns more than 10% of the combined voting power of all
classes of outstanding capital stock of the Company or any subsidiary (a
"greater-than-ten-percent stockholder") must equal or exceed 110% of the fair
market value of the Common Stock on the date of grant. The exercise price of
nonqualified options granted under the Plan may be above or below the fair
market value of the Common Stock.
10
<PAGE>
Each incentive option will expire no later than ten years after the
date of grant or, in the case of an option granted to a greater-than-ten-percent
stockholder, five years after the date of grant. The aggregate fair market value
(at the time of grant) of shares issuable pursuant to incentive options that are
exercisable for the first time in any calendar year may not exceed $100,000,
unless a greater amount is permitted by law. No person may be granted options
under the 2000 Stock Incentive Plan to purchase more than 200,000 shares of
Common Stock in any calendar year, including options that are subsequently
forfeited, canceled or otherwise terminated. For this purpose, the repricing of
any option is deemed the grant of a new option.
Except as otherwise provided by the committee that administers the 2000
Stock Incentive Plan, options are not transferable except by will or by the laws
of descent and distribution, and during the holder's lifetime are exercisable
only by the holder. The committee that administers the Plan will determine, in
its discretion, how and when nonqualified options will terminate. Incentive
stock options will terminate as follows:
- if the option holder is an employee of the Company at the time of his
or her death, his or her incentive option may be exercised, to the
extent exercisable at the date of death, until two years from the
participant's date of death or the expiration of the term of the option
stated in his or her option agreement, whichever is earlier. In such
instances, the option may be exercised by the option holder's legal
representative or legatee.
- if the option holder's employment with the Company terminates because
of disability (as defined in the 2000 Stock Incentive Plan), his or her
incentive option may be exercised, to the extent exercisable at the
time of termination, for a period of one year from the date of
termination of employment, although the committee administering the
2000 Stock Incentive Plan may provide for a different period for the
exercise of such option.
- if the option holder's employment with the Company terminates because
of retirement in accordance with the Company's normal retirement
policies, his or her incentive option is exercisable for a period of 90
days from the date of the termination of the option holder's
employment.
- if the option holder's employment is terminated by the Company for
cause (as defined in the 2000 Stock Incentive Plan), his or her
incentive option will immediately terminate, unless the committee that
administers the Plan allows the option holder to exercise such option
for a period of 30 days from the termination date or the stated
expiration date of the option, whichever is earlier. The committee may
do so in its sole discretion.
- if the option holder's employment with the Company terminates for any
reason other than those listed above, his or her incentive option may
be exercised, to the extent it was exercisable at the time of
termination, for a period of 90 days (or a different period if the
committee that administers the 2000 Stock Incentive Plan so specifies)
from the date of termination of employment or until the stated
expiration date of the option, whichever is earlier.
The holder of an option may pay the purchase price for the shares
subject to the option (a) in cash or by, certified or bank check in an amount
equal to the exercise price for such shares, (b) with the consent of the
committee that administers the 2000 Stock Incentive Plan, in shares of
Company Common Stock having a fair market value equal to the exercise price
for such shares, (c) by delivery of irrevocable instructions to a broker to
deliver to the Company cash or a check payable to the Company for the
purchase price, provided that the holder and the broker enter into an
indemnity agreement or any other agreement that the committee that
administers the 2000 Stock Incentive Plan requires as a prerequisite to this
method of payment, or (d) by any other means that the committee that
administers the 2000 Stock Incentive Plan determines are consistent with the
purposes of the 2000 Stock Incentive Plan and with applicable laws and
regulations.
11
<PAGE>
AMENDMENT OF THE 2000 STOCK INCENTIVE PLAN
The 2000 Stock Incentive Plan does not have a fixed duration;
however incentive options may not be granted more than ten years after the
date the Plan was approved by the Board of Directors. According to the terms
of the 2000 Stock Incentive Plan, the Company's Board of Directors may amend
or discontinue the Plan at any time. However, no amendment which will
disqualify the 2000 Stock Incentive Plan from the Internal Revenue Code's
incentive stock option requirements will be effective without the approval of
the Company's stockholders. In addition, regulations of the Nasdaq National
Market require stockholder approval of certain amendments to the Plan.
FEDERAL INCOME TAX INFORMATION WITH RESPECT TO THE 2000 STOCK INCENTIVE PLAN
The holder of a nonqualified option recognizes no income for federal
income tax purposes on the grant of the option. On the exercise of a
nonqualified option, the difference between the fair market value of the
underlying shares of Common Stock on the exercise date and the option exercise
price is treated as compensation to the holder of the option taxable as ordinary
income in the year of exercise. Such fair market value becomes the basis for the
underlying shares which will be used in computing any capital gain or loss upon
disposition of such shares.
The holder of an incentive option recognizes no income for federal
income tax purposes on the grant of the option. Except as provided below with
respect to the alternative minimum tax, there is no tax upon exercise of an
incentive option. If the holder does not dispose of the shares acquired upon
exercise of the incentive option within two years from the date of the grant of
the incentive option or within one year after exercise of the incentive option,
any gain realized by the option holder on the subsequent sale of those shares
will be treated for federal income tax purposes as long-term capital gain if the
shares were held for more than 12 months. If the holder sells the shares before
the expiration of such two-year and one-year periods (a "disqualifying
disposition"), the difference between the lesser of the value of the shares at
the date of exercise or at the date of sale and the exercise price of the
incentive option will be treated as compensation to the option holder taxable as
ordinary income and the excess gain, if any, will be treated as capital gain.
That capital gain will be long-term capital gain if the shares were held for
more than 12 months.
The excess of the fair market value of the underlying shares of Common
Stock over the exercise price at the time of exercise of an incentive option
will constitute an item of tax preference for purposes of the alternative
minimum tax. Taxpayers who incur the alternative minimum tax will be allowed a
credit which may be carried forward indefinitely to be used as a credit against
the taxpayer's regular tax liability in a later year; however, the alternative
minimum tax credit can not reduce the regular tax below the alternative minimum
tax for that carryover year.
Generally, subject to certain limitations, the Company may deduct on
its corporate income tax returns, in the year in which an option holder
recognizes ordinary income upon (a) the exercise of a nonqualified option or (b)
a disqualifying disposition of an incentive option, an amount equal to the
amount recognized by the option holder as ordinary income upon the occurrence of
such exercise or disqualifying disposition.
The 2000 Stock Incentive Plan is not subject to the provisions of the
Employee Retirement Income Security Act of 1974, nor is the plan qualified under
Section 401(a) of the Internal Revenue Code.
THE BOARD OF DIRECTORS RECOMMENDS THAT STOCKHOLDERS VOTE FOR APPROVAL
OF PROPOSAL NO. 3.
12
<PAGE>
OTHER MATTERS
INDEPENDENT PUBLIC ACCOUNTANTS
The Board of Directors has not yet selected an independent accountant to
audit the consolidated financial statements of the Company for the fiscal year
ending March 31, 2001. At an upcoming meeting, the Audit Committee will
recommend to the Board the selection of the Company's independent auditor for
the current fiscal year. Arthur Andersen LLP has served as the Company's
auditors since 1983.
A representative of Arthur Andersen LLP will be at the Meeting and will be
given an opportunity to make a statement, if so desired. The representative will
be available to respond to appropriate questions.
REPORTING UNDER SECTION 16(a) OF THE SECURITIES AND EXCHANGE ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's executive officers and directors, and persons who own more than 10%
of the Company's Common Stock, to file reports of ownership and changes of
ownership on Forms 3, 4 and 5 with the Securities and Exchange Commission and
Nasdaq, and furnish the Company with copies of such Forms. During the fiscal
year ended March 31, 2000, the Company made a single grant of options to each
of its five executive officers. Although each such executive officer reported
his option grant on Form 5, such Form 5s were not filed on a timely basis.
OTHER PROPOSED ACTION
The Board of Directors knows of no other business to come before the
Meeting. However, if any other business should properly be presented to the
Meeting, the proxies will be voted in accordance with the judgment of the person
or persons holding the proxies.
STOCKHOLDER PROPOSALS
Proposals which stockholders intend to present at the Company's 2001
Annual Meeting of Stockholders and wish to have included in the Company's proxy
materials must be received by the Company no later than March 16, 2001.
Any stockholder proposal to be considered at the Company's 2001 Annual
Meeting of Stockholders, but not included in the proxy materials, must be
submitted in writing by May 29, 2001, or the persons appointed as proxies may
exercise their discretionary voting authority with respect to that proposal.
INCORPORATION BY REFERENCE
To the extent that this Proxy Statement has been or will be specifically
incorporated by reference into any filing by the Company under the Securities
Act of 1933, as amended, or the Securities Exchange Act of 1934, as amended, the
sections of the Proxy Statement entitled "Compensation Committee Report on
Executive Compensation" and "Performance Graphs" shall not be deemed to be so
incorporated, unless specifically otherwise provided in any such filing.
ANNUAL REPORT AND FORM 10-K
ADDITIONAL COPIES OF THE ANNUAL REPORT TO STOCKHOLDERS FOR THE FISCAL YEAR
ENDED MARCH 31, 2000 AND COPIES OF THE COMPANY'S ANNUAL REPORT ON FORM 10-K FOR
THE FISCAL YEAR ENDED MARCH 31, 2000 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION ARE AVAILABLE TO STOCKHOLDERS WITHOUT CHARGE UPON WRITTEN REQUEST
ADDRESSED TO: INVESTOR RELATIONS, ABIOMED, INC., 22 CHERRY HILL DRIVE, DANVERS,
MASSACHUSETTS 01923.
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IT IS IMPORTANT THAT PROXIES BE RETURNED PROMPTLY. THEREFORE, STOCKHOLDERS ARE
URGED TO FILL IN, SIGN AND RETURN THE ACCOMPANYING FORM OF PROXY IN THE ENCLOSED
ENVELOPE.
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13
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ANNEX A
ABIOMED, INC.
2000 STOCK INCENTIVE PLAN
SECTION 1. GENERAL PURPOSE OF THE PLAN; DEFINITIONS
The name of the plan is the ABIOMED, Inc. 2000 Stock Incentive Plan
(the "Plan"). The purpose of the Plan is to encourage and enable officers,
directors, and employees of ABIOMED, Inc. (the "Company") and its Subsidiaries
and other persons to acquire a proprietary interest in the Company. It is
anticipated that providing such persons with a direct stake in the Company's
welfare will assure a closer identification of their interests with those of the
Company and its shareholders, thereby stimulating their efforts on the Company's
behalf and strengthening their desire to remain with the Company.
The following terms shall be defined as set forth below:
"Award" or "Awards", except where referring to a particular category of
grant under the Plan, shall include Incentive Stock Options, Non-Statutory Stock
Options, Restricted Stock Awards, Unrestricted Stock Awards, Performance Share
Awards and Stock Appreciation Rights.
"Board" means the Board of Directors of the Company.
"Cause" means (i) any material breach by the participant of any
agreement to which the participant and the Company are both parties, and (ii)
any act or omission justifying termination of the participant's employment for
cause, as determined by the Committee.
"Change of Control" shall have the meaning set forth in Section 15.
"Code" means the Internal Revenue Code of 1986, as amended, and any
successor Code, and related rules, regulations and interpretations.
"Conditioned Stock Award" means an Award granted pursuant to Section 6.
"Committee" shall have the meaning set forth in Section 2.
"Disability" means disability as set forth in Section 22(e)(3) of the
Code.
"Effective Date" means the date on which the Plan is approved by
stockholders as set forth in Section 17.
"Eligible Person" shall have the meaning set forth in Section 4.
"Fair Market Value" on any given date means the price per share
of the Stock on such date as reported by a nationally recognized stock exchange,
or, if the Stock is not listed on such an exchange, as reported by NASDAQ, or,
if the Stock is not quoted on NASDAQ, the fair market value of the Stock as
determined by the Committee.
"Incentive Stock Option" means any Stock Option designated and
qualified as an "incentive stock option" as defined in Section 422 of the Code.
"Non-Statutory Stock Option" means any Stock Option that is not an
Incentive Stock Option.
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<PAGE>
"Normal Retirement" means retirement from active employment with the
Company and its Subsidiaries in accordance with the retirement policies of the
Company and its Subsidiaries then in effect.
"Outside Director" means any director who (i) is not an employee of the
Company or of any "affiliated group," as such term is defined in Section 1504(a)
of the Code, which includes the Company (an "Affiliate"), (ii) is not a former
employee of the Company or any Affiliate who is receiving compensation for prior
services (other than benefits under a tax-qualified retirement plan) during the
Company's or any Affiliate's taxable year, (iii) has not been an officer of the
Company or any Affiliate and (iv) does not receive remuneration from the Company
or any Affiliate, either directly or indirectly, in any capacity other than as a
director. "Outside Director" shall be determined in accordance with Section
162(m) of the Code and the Treasury regulations issued thereunder.
"Option" or "Stock Option" means any option to purchase shares of Stock
granted pursuant to Section 5.
"Performance Share Award" means an Award granted pursuant to Section 8.
"Stock" means the Common Stock, $.01 par value per share, of the
Company, subject to adjustments pursuant to Section 3.
"Stock Appreciation Right" means an Award granted pursuant to
Section 9.
"Subsidiary" means a subsidiary as defined in Section 424 of the Code.
"Unrestricted Stock Award" means Awards granted pursuant to Section 7.
SECTION 2. ADMINISTRATION OF PLAN; COMMITTEE AUTHORITY TO SELECT PARTICIPANTS
AND DETERMINE AWARDS.
(a) COMMITTEE. The Plan shall be administered by a committee of the Board
(the "Committee") consisting of not less than two (2) Outside Directors, but the
authority and validity of any act taken or not taken by the Committee shall not
be affected if any person administering the Plan is not an "Outside Director."
The Board of Directors may act as the Committee at any time. Except as
specifically reserved to the Board under the terms of the Plan, the Committee
shall have full and final authority to operate, manage and administer the
Plan on behalf of the Company. Action by the Committee shall require the
affirmative vote of a majority of all members thereof. The Board may establish
an additional single-member committee (consisting of an executive officer) that
shall have the power and authority to grant Awards to non-executive officers
and to make all other determinations under the Plan with respect thereto.
(b) POWERS OF COMMITTEE. The Committee shall have the power and authority
to grant and modify Awards consistent with the terms of the Plan, including the
power and authority:
(i) to select the persons to whom Awards may from time to time be
granted;
(ii) to determine the time or times of grant, and the extent, if any,
of Incentive Stock Options, Non-Statutory Stock Options, Restricted Stock,
Unrestricted Stock, Performance Shares and Stock Appreciation Rights, or
any combination of the foregoing, granted to any one or more participants;
(iii) to determine the number of shares to be covered by any Award;
(iv) to determine and modify the terms and conditions, including
restrictions, not inconsistent with the terms of the Plan, of any Award,
which terms and conditions may differ among individual Awards and
participants, and to approve the form of written instruments evidencing the
Awards; provided, however, that no such action shall adversely affect
rights under any outstanding Award without the participant's consent;
(v) to accelerate the exercisability or vesting of all or any portion
of any Award;
A-2
<PAGE>
(vi) subject to the provisions of Section 5(a)(ii), to extend the
period in which any outstanding Stock Option or Stock Appreciation Right
may be exercised;
(vii) to determine whether, to what extent, and under what
circumstances Stock and other amounts payable with respect to an Award
shall be deferred either automatically or at the election of the
participant and whether and to what extent the Company shall pay or
credit amounts equal to interest (at rates determined by the Committee)
or dividends or deemed dividends on such deferrals; and
(viii) to adopt, alter and repeal such rules, guidelines and
practices for administration of the Plan and for its own acts and
proceedings as it shall deem advisable; to interpret the terms and
provisions of the Plan and any Award (including related written
instruments); to make all determinations it deems advisable for the
administration of the Plan; to decide all disputes arising in connection
with the Plan; and to otherwise supervise the administration of the Plan.
All decisions and interpretations of the Committee shall be binding on
all persons, including the Company and Plan participants.
SECTION 3. SHARES ISSUABLE UNDER THE PLAN; MERGERS; SUBSTITUTION.
(a) SHARES ISSUABLE. The maximum number of shares of Stock with respect to
which Awards (including Stock Appreciation Rights) may be granted under the Plan
shall be seven hundred thousand (700,000). For purposes of this limitation, the
shares of Stock underlying any Awards which are forfeited, cancelled, reacquired
by the Company or otherwise terminated (other than by exercise) shall be added
back to the shares of Stock with respect to which Awards may be granted under
the Plan so long as the participants to whom such Awards had been previously
granted received no benefits of ownership of the underlying shares of Stock to
which the Award related. Subject to such overall limitation, any type or types
of Award may be granted with respect to shares, including Incentive Stock
Options. Shares issued under the Plan may be authorized but unissued shares or
shares reacquired by the Company.
(b) LIMITATION ON AWARDS. In no event may any Plan participant be granted
Awards under the Plan (including Stock Appreciation Rights) with respect to
more than two hundred thousand (200,000) shares of Stock in any calendar year.
The number of shares of Stock relating to an Award granted to a Plan
participant in a calendar year that is subsequently forfeited, cancelled or
otherwise terminated shall continue to count toward the foregoing limitation
in such calendar year. In addition, if the exercise price of an Award is
subsequently reduced, the transaction shall be deemed a cancellation of the
original Award and the grant of a new one so that both transactions shall
count toward the maximum shares issuable in the calendar year of each
respective transaction.
(c) STOCK DIVIDENDS, MERGERS, ETC. In the event that after approval of the
Plan by the stockholders of the Company in accordance with Section 17, the
Company effects a stock dividend, stock split or similar change in
capitalization affecting the Stock, the Committee shall make appropriate
adjustments in (i) the number and kind of shares of stock or securities with
respect to which Awards may thereafter be granted (including without limitation
the limitations set forth in Sections 3(a) and (b) above), (ii) the number and
kind of shares remaining subject to outstanding Awards, and (iii) the option or
purchase price in respect of such shares. In the event of any merger,
consolidation, dissolution or liquidation of the Company, the Committee in its
sole discretion may, as to any outstanding Awards, make such substitution or
adjustment in the aggregate number of shares reserved for issuance under the
Plan and in the number and purchase price (if any) of shares subject to such
Awards as it may determine and as may be permitted by the terms of such
transaction, or accelerate, amend or terminate such Awards upon such terms and
conditions as it shall provide (which, in the case of the termination of the
vested portion of any Award, shall require payment or other
A-3
<PAGE>
consideration which the Committee deems equitable in the circumstances),
subject, however, to the provisions of Section 15.
(d) SUBSTITUTE AWARDS. The Committee may grant Awards under the Plan in
substitution for stock and stock based awards held by employees of another
corporation who concurrently become employees of the Company or a Subsidiary as
the result of a merger or consolidation of the employing corporation with the
Company or a Subsidiary or the acquisition by the Company or a Subsidiary of
property or stock of the employing corporation. The Committee may direct that
the substitute awards be granted on such terms and conditions as the Committee
considers appropriate in the circumstances. Shares which may be delivered under
such substitute awards may be in addition to the maximum number of shares
provided for in Section 3(a).
SECTION 4. ELIGIBILITY.
Awards may be granted to officers, directors, and employees of
and consultants and advisers to the Company or its Subsidiaries
("Eligible Persons").
SECTION 5. STOCK OPTIONS.
The Committee may grant to Eligible Persons options to purchase stock.
Any Stock Option granted under the Plan shall be in such form as the
Committee may from time to time approve.
Stock Options granted under the Plan may be either Incentive Stock
Options (subject to compliance with applicable law) or Non-Statutory Stock
Options. Unless otherwise so designated, an Option shall be a Non-Statutory
Stock Option. To the extent that any option does not qualify as an Incentive
Stock Option, it shall constitute a Non-Statutory Stock Option.
No Incentive Stock Option shall be granted under the Plan after the
tenth anniversary of the earlier of (i) the date of adoption of the Plan by the
Board, or (ii) the date on which the Plan is approved by the stockholders as set
forth in Section 17.
The Committee in its discretion may determine the effective date of
Stock Options, provided, however, that grants of Incentive Stock Options shall
be made only to persons who are, on the effective date of the grant, employees
of the Company or any Subsidiary. Stock Options granted pursuant to this Section
5(a) shall be subject to the following terms and conditions and the terms and
conditions of Section 13 and shall contain such additional terms and conditions,
not inconsistent with the terms of the Plan, as the Committee shall deem
desirable.
(a) EXERCISE PRICE. The exercise price per share for the Stock
covered by a Stock Option granted pursuant to this Section 5(a) shall
be determined by the Committee at the time of grant but shall be, in
the case of Incentive Stock Options, not less than one hundred percent
(100%) of Fair Market Value on the date of grant. If an employee owns
or is deemed to own (by reason of the attribution rules applicable
under Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the option price shall be not less than one
hundred ten percent (110%) of Fair Market Value on the grant date.
(b) OPTION TERM. The term of each Stock Option shall be fixed
by the Committee, but no Incentive Stock Option shall be exercisable
more than ten (10) years after the date the option is granted. If an
employee owns or is deemed to own (by reason of the attribution rules
of Section 424(d) of the Code) more than ten percent (10%) of the
combined voting power of all classes of stock of the Company or any
Subsidiary or parent corporation and an Incentive Stock Option is
granted to such employee, the term of such option shall be no more than
five (5) years from the date of grant.
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(c) EXERCISABILITY; RIGHTS OF A SHAREHOLDER. Stock Options
shall become vested and exercisable at such time or times, whether or
not in installments, as shall be determined by the Committee at or
after the grant date. The Committee may at any time accelerate the
exercisability of all or any portion of any Stock Option. An optionee
shall have the rights of a shareholder only as to shares acquired upon
the exercise of a Stock Option and not as to unexercised Stock Options.
(d) METHOD OF EXERCISE. Stock Options may be exercised in
whole or in part, by delivering written notice of exercise to the
Company, specifying the number of shares to be purchased. Payment of
the purchase price may be made by one or more of the following methods:
(i) In cash or by certified or bank check or other
instrument acceptable to the Committee;
(ii) If permitted by the Committee, in its
discretion, in the form of shares of Stock that are not then
subject to restrictions and that have been owned by the
optionee for a period of at least six months. Such
surrendered shares shall be valued at Fair Market Value on
the exercise date; or
(iii) By the optionee delivering to the Company a
properly executed exercise notice together with irrevocable
instructions to a broker to promptly deliver to the Company
cash or a check payable and acceptable to the Company to pay
the purchase price; provided that in the event the optionee
chooses to pay the purchase price as so provided, the optionee
and the broker shall comply with such procedures and enter
into such agreements of indemnity and other agreements as the
Committee shall prescribe as a condition of such payment
procedure. The Company need not act upon such exercise notice
until the Company receives full payment of the exercise price;
or
(iv) By any other means (including, without
limitation, by delivery of a promissory note of the optionee
payable on such terms as are specified by the Committee) which
the Committee determines are consistent with the purpose of
the Plan and with applicable laws and regulations.
The delivery of certificates representing shares of Stock to be
purchased pursuant to the exercise of a Stock Option will be contingent
upon receipt from the Optionee (or a purchaser acting in his stead in
accordance with the provisions of the Stock Option) by the Company of
the full purchase price for such shares and the fulfillment of any
other requirements contained in the Stock Option or imposed by
applicable law.
(e) NON-TRANSFERABILITY OF OPTIONS. Except as the Committee
may provide with respect to a Non- Statutory Stock Option, no Stock
Option shall be transferable other than by will or by the laws of
descent and distribution and all Stock Options shall be exercisable,
during the optionee's lifetime, only by the optionee.
(f) ANNUAL LIMIT ON INCENTIVE STOCK OPTIONS. To the extent
required for "incentive stock option" treatment under Section 422 of
the Code, the aggregate Fair Market Value (determined as of the time of
grant) of the Stock with respect to which incentive stock options
granted under this Plan and any other plan of the Company or its
Subsidiaries become exercisable for the first time by an optionee
during any calendar year shall not exceed $100,000.
(g) FORM OF SETTLEMENT. Shares of Stock issued upon exercise
of a Stock Option shall be free of all restrictions under the Plan,
except as otherwise provided in this Plan.
SECTION 6. RESTRICTED STOCK AWARDS.
(a) NATURE OF RESTRICTED STOCK AWARD. The Committee in its discretion may
grant Restricted Stock Awards to any Eligible Person, entitling the recipient to
acquire, for a purchase price determined by the Committee, shares of Stock
subject to such restrictions and conditions as the Committee may determine at
the time of grant ("Restricted Stock"), including continued employment and/or
achievement of pre-established performance goals and objectives.
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(b) ACCEPTANCE OF AWARD. A participant who is granted a Restricted Stock
Award shall have no rights with respect to such Award unless the participant
shall have accepted the Award within sixty (60) days (or such shorter date as
the Committee may specify) following the award date by making payment to the
Company of the specified purchase price, of the shares covered by the Award and
by executing and delivering to the Company a written instrument that sets forth
the terms and conditions applicable to the Restricted Stock in such form as the
Committee shall determine.
(c) RIGHTS AS A SHAREHOLDER. Upon complying with Section 6(b) above, a
participant shall have all the rights of a shareholder with respect to the
Restricted Stock, including voting and dividend rights, subject to
non-transferability restrictions and Company repurchase or forfeiture rights
described in this Section 6 and subject to such other conditions contained in
the written instrument evidencing the Restricted Award. Unless the Committee
shall otherwise determine, certificates evidencing shares of Restricted Stock
shall remain in the possession of the Company until such shares are vested as
provided in Section 6(e) below.
(d) RESTRICTIONS. Shares of Restricted Stock may not be sold, assigned,
transferred, pledged or otherwise encumbered or disposed of except as
specifically provided herein. In the event of termination of employment by the
Company and its Subsidiaries for any reason (including death, Disability, Normal
Retirement and for Cause), the Company shall have the right, at the discretion
of the Committee, to repurchase shares of Restricted Stock with respect to which
conditions have not lapsed at their purchase price, or to require forfeiture of
such shares to the Company if acquired at no cost, from the participant or the
participant's legal representative. The Company must exercise such right of
repurchase or forfeiture within ninety (90) days following such termination of
employment (unless otherwise specified in the written instrument evidencing the
Restricted Stock Award).
(e) VESTING OF RESTRICTED STOCK. The Committee at the time of grant shall
specify the date or dates and/or the attainment of pre-established performance
goals, objectives and other conditions on which the non-transferability of the
Restricted Stock and the Company's right of repurchase or forfeiture shall
lapse. Subsequent to such date or dates and/or the attainment of such
preestablished performance goals, objectives and other conditions, the shares on
which all restrictions have lapsed shall no longer be Restricted Stock and shall
be deemed "vested." The Committee at any time may accelerate such date or dates
and otherwise waive or, subject to Section 13, amend any conditions of the
Award.
(f) WAIVER, DEFERRAL AND REINVESTMENT OF DIVIDENDS. The written instrument
evidencing the Restricted Stock Award may require or permit the immediate
payment, waiver, deferral or investment of dividends paid on the Restricted
Stock.
SECTION 7. UNRESTRICTED STOCK AWARDS.
(a) GRANT OR SALE OF UNRESTRICTED STOCK. The Committee in its discretion
may grant or sell to any Eligible Person shares of Stock free of any
restrictions under the Plan ("Unrestricted Stock") at a purchase price
determined by the Committee. Shares of Unrestricted Stock may be granted or sold
as described in the preceding sentence in respect of past services or other
valid consideration.
(b) RESTRICTIONS ON TRANSFERS. The right to receive unrestricted Stock may
not be sold, assigned, transferred, pledged or otherwise encumbered, other than
by will or the laws of descent and distribution.
SECTION 8. PERFORMANCE SHARE AWARDS.
NATURE OF PERFORMANCE SHARES. A Performance Share Award is an award
entitling the recipient to acquire shares of Stock upon the attainment of
specified performance goals. The Committee may make Performance Share Awards
independent of or in connection with the granting of any other Award under the
Plan. Performance Share Awards may be granted under the Plan to any Eligible
Person. The Committee in its discretion shall determine whether and to whom
Performance Share Awards shall be made, the performance goals applicable under
each such Award, the
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periods during which performance is to be measured, and all other limitations
and conditions applicable to the awarded Performance Shares.
SECTION 9. STOCK APPRECIATION RIGHTS
The Committee in its discretion may grant Stock Appreciation Rights to
any Eligible Person (i) alone, or (ii) simultaneously with the grant of a Stock
Option and in conjunction therewith or in the alternative thereto. A Stock
Appreciation Right shall entitle the participant upon exercise thereof to
receive from the Company, upon written request to the Company at its principal
offices (the "Request"), a number of shares of Stock (with or without
restrictions as to substantial risk of forfeiture and transferability, as
determined by the Committee in its sole discretion), an amount of cash, or any
combination of Stock and cash, as specified in the Request (but subject to the
approval of the Committee in its sole discretion, at any time up to and
including the time of payment, as to the making of any cash payment), having an
aggregate Fair Market Value equal to the product of (i) the excess of Fair
Market Value, on the date of such Request, over the exercise price per share of
Stock specified in such Stock Appreciation Right or its related Option,
multiplied by (ii) the number of shares of Stock for which such Stock
Appreciation Right shall be exercised. Notwithstanding the foregoing, the
Committee may specify at the time of grant of any Stock Appreciation Right that
such Stock Appreciation Right may be exercisable solely for cash and not for
Stock.
SECTION 10. TERMINATION OF STOCK OPTIONS AND STOCK APPRECIATION RIGHTS.
(a) INCENTIVE STOCK OPTIONS:
(i) TERMINATION BY DEATH. If any participant's employment by the
Company and its Subsidiaries terminates by reason of death, any
Incentive Stock Option owned by such participant may thereafter be
exercised to the extent exercisable at the date of death, by the legal
representative or legatee of the participant, for a period of two (2) years
(or such other period as the Committee shall specify at any time) from the
date of death, or until the expiration of the stated term of the Incentive
Stock Option, if earlier.
(ii) TERMINATION BY REASON OF DISABILITY OR NORMAL RETIREMENT.
(A) Any Incentive Stock Option held by a participant whose employment
by the Company and its Subsidiaries has terminated by reason of Disability
may thereafter be exercised, to the extent it was exercisable at the time
of such termination, for a period of one (1) year (or such other period as
the Committee shall specify at any time) from the date of such termination
of employment, or until the expiration of the stated term of the Option, if
earlier.
(B) Any Incentive Stock Option held by a participant whose
employment by the Company and its Subsidiaries has terminated by reason of
Normal Retirement may thereafter be exercised, to the extent it was
exercisable at the time of such termination, for a period of ninety (90)
days (or such other period as the Committee shall specify at any time) from
the date of such termination of employment, or until the expiration of the
stated term of the Option, if earlier.
(C) The Committee shall have sole authority and discretion to
determine whether a participant's employment has been terminated by reason
of Disability or Normal Retirement.
(D) Except as otherwise provided by the Committee at the time
of grant, the death of a participant during a period provided in this
Section 10(a)(ii) for the exercise of an Incentive Stock Option shall
extend such period for two (2) years from the date of death, subject to
termination on the expiration of the stated term of the Option, if earlier.
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(iii) TERMINATION FOR CAUSE. If any participant's employment
by the Company and its Subsidiaries has been terminated for Cause, any
Incentive Stock Option held by such participant shall immediately terminate
and be of no further force and effect; provided, however, that the
Committee may, in its sole discretion, provide that such Option can be
exercised for a period of up to thirty (30) days from the date of
termination of employment or until the expiration of the stated term of the
Option, if earlier.
(iv) OTHER TERMINATION. Unless otherwise determined by the
Committee, if a participant's employment by the Company and its
Subsidiaries terminates for any reason other than death, Disability, Normal
Retirement or for Cause, any Incentive Stock Option held by such
participant may thereafter be exercised, to the extent it was exercisable
on the date of termination of employment, for ninety (90) days (or such
other period as the Committee shall specify at any time) from the date of
termination of employment or until the expiration of the stated term of the
Option, if earlier.
(b) NON-STATUTORY STOCK OPTIONS AND STOCK APPRECIATION RIGHTS. Any
Non-Statutory Stock Option or Stock Appreciation Right granted under the Plan
shall contain such terms and conditions with respect to its termination as the
Committee, in its discretion, may from time to time determine.
SECTION 11. TAX WITHHOLDING.
(a) PAYMENT BY PARTICIPANT. Each participant shall, no later than the date
as of which the value of an Award or of any Stock or other amounts received
thereunder first becomes includable in the gross income of the participant for
Federal income tax purposes, pay to the Company, or make arrangements
satisfactory to the Committee regarding payment of any Federal, state, local
and/or payroll taxes of any kind required by law to be withheld with respect to
such income. The Company and its Subsidiaries shall, to the extent permitted
by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the participant.
(b) PAYMENT IN SHARES. A Participant may elect, with the consent of the
Committee, to have such tax withholding obligation satisfied, in whole or in
part, by (i) authorizing the Company to withhold from shares of Stock to be
issued pursuant to an Award a number of shares with an aggregate Fair Market
Value (as of the date the withholding is effected) that would satisfy the
minimum withholding amount due with respect to such Award, or
(ii) transferring to the Company shares of Stock owned by the participant for
a period of at least six months and with an aggregate Fair Market Value
(as of the date the minimum withholding is effected) that would satisfy the
withholding amount due.
SECTION 12. TRANSFER, LEAVE OF ABSENCE, ETC.
For purposes of the Plan, the following events shall not be deemed a
termination of employment:
(a) a transfer to the employment of the Company from a Subsidiary or from
the Company to a Subsidiary, or from one Subsidiary to another;
(b) an approved leave of absence for military service or sickness, or for
any other purpose approved by the Company, if the employee's right to
re-employment is guaranteed either by a statute or by contract or under the
policy pursuant to which the leave of absence was granted or if the Committee
otherwise so provides in writing.
SECTION 13. AMENDMENTS AND TERMINATION.
The Board may at any time amend or discontinue the Plan and the Committee
may at any time amend or cancel any outstanding Award (or provide substitute
Awards at the same or reduced exercise or purchase price or with no exercise or
purchase price, but such price, if any, must satisfy the requirements which
would apply to the substitute or amended Award if it were then initially granted
under this Plan) for the purpose of satisfying changes in law or for any other
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lawful purpose, but no such action shall adversely affect rights under any
outstanding Award without the holder's consent. However, no such amendment,
unless approved by the stockholders of the Company, shall be effective if it
would cause the Plan to fail to satisfy the incentive stock option requirements
of the Code.
SECTION 14. STATUS OF PLAN.
With respect to the portion of any Award which has not been exercised and
any payments in cash, Stock or other consideration not received by a
participant, a participant shall have no rights greater than those of a general
creditor of the Company unless the Committee shall otherwise expressly determine
in connection with any Award or Awards. In its sole discretion, the Committee
may authorize the creation of trusts or other arrangements to meet the Company's
obligations to deliver Stock or make payments with respect to Awards hereunder,
provided that the existence of such trusts or other arrangements is consistent
with the provision of the foregoing sentence.
SECTION 15. CHANGE OF CONTROL PROVISIONS.
(a) Upon the occurrence of a Change of Control as defined in this
Section 15:
(i) subject to the provisions of clause (iii) below, after the
effective date of such Change of Control, each holder of an outstanding
Stock Option, Restricted Stock Award, Performance Share Award or Stock
Appreciation Right shall be entitled, upon exercise of such Award, to
receive, in lieu of shares of Stock (or consideration based upon the Fair
Market Value of Stock), shares of such stock or other securities, cash or
property (or consideration based upon shares of such stock or other
securities, cash or property) as the holders of shares of Stock received in
connection with the Change of Control;
(ii) the Committee may accelerate the time for exercise of, and waive
all conditions and restrictions on, each unexercised and unexpired Stock
Option, Restricted Stock Award, Performance Share Award and Stock
Appreciation Right, effective upon a date prior or subsequent to the
effective date of such Change of Control, specified by the Committee; or
(iii) each outstanding Stock Option, Restricted Stock Award,
Performance Share Award and Stock Appreciation Right may be cancelled by
the Committee as of the effective date of any such Change of Control
provided that (x) notice of such cancellation shall be given to each holder
of such an Award and (y) each holder of such an Award shall have the right
to exercise such Award to the extent that the same is then exercisable or,
in full, if the Committee shall have accelerated the time for exercise of
all such unexercised and unexpired Awards, during the thirty (30) day
period preceding the effective date of such Change of Control.
(b) "Change of Control" shall mean the occurrence of any one of the
following events:
(i) any "person" (as such term is used in Sections 13(d) and 14(d)(2)
of the Act) becomes a "beneficial owner" (as such term is defined in Rule
13d-3 promulgated under the Act) (other than the Company, any trustee or
other fiduciary holding securities under an employee benefit plan of the
Company, or any corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company), directly or indirectly, of securities
of the Company representing fifty percent (50%) or more of the combined
voting power of the Company's then outstanding securities; or
(ii) the stockholders of the Company approve a merger or consolidation
of the Company with any other corporation or other entity, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than sixty-five percent (65%) of
the combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation; or
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(iii) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by
the Company of all or substantially all of the Company's assets.
SECTION 16. GENERAL PROVISIONS.
(a) NO DISTRIBUTION; COMPLIANCE WITH LEGAL REQUIREMENTS. The Committee may
require each person acquiring shares pursuant to an Award to represent to and
agree with the Company in writing that such person is acquiring the shares
without a view to distribution thereof.
No shares of Stock shall be issued pursuant to an Award until all
applicable securities laws and other legal and stock exchange requirements have
been satisfied. The Committee may require the placing of such stop orders and
restrictive legends on certificates for Stock and Awards as it deems
appropriate.
(b) DELIVERY OF STOCK CERTIFICATES. Delivery of stock certificates to
participants under this Plan shall be deemed effected for all purposes when
the Company or a stock transfer agent of the Company shall have delivered such
certificates in the United States mail, addressed to the participant, at the
participant's last known address on file with the Company.
(c) OTHER COMPENSATION ARRANGEMENTS; NO EMPLOYMENT RIGHTS. Nothing
contained in this Plan shall prevent the Board from adopting other or additional
compensation arrangements, including trusts, subject to stockholder approval if
such approval is required; and such arrangements may be either generally
applicable or applicable only in specific cases. The adoption of the Plan or any
Award under the Plan does not confer upon any employee any right to continued
employment with the Company or any Subsidiary.
SECTION 17. EFFECTIVE DATE OF PLAN.
The Plan shall become effective upon approval by the holders of a
majority of the shares of capital stock of the Company present or represented
and entitled to vote at a meeting of stockholders.
SECTION 18. GOVERNING LAW.
This Plan shall be governed by, and construed and enforced in
accordance with, the substantive laws of the State of Delaware without regard to
its principles of conflicts of laws.
* * *
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THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS OF ABIOMED, INC. THE
BOARD OF DIRECTORS RECOMMENDS A VOTE IN FAVOR OF EACH PROPOSAL.
ABIOMED, Inc.
PROXY
The undersigned, revoking all prior proxies, hereby appoints John F.
Thero and Charles B. Haaser, and each of them acting singly, proxies, with full
power of substitution, to vote all shares of capital stock of ABIOMED, Inc.
which the undersigned is entitled to vote at the 2000 Annual Meeting of
Stockholders of ABIOMED, Inc., to be held on August 9, 2000, and at any
adjournments or postponements thereof, upon the matters set forth in the Notice
of Annual Meeting and the related Proxy Statement, copies of which have been
received by the undersigned, and in their discretion upon any business that may
properly come before the meeting or any adjournment or postponement thereof.
Attendance of the undersigned at the Annual Meeting or any adjournment or
postponement thereof will not be deemed to revoke this proxy unless the
undersigned shall affirmatively indicate the intention of the undersigned to
vote the shares represented hereby in person prior to the exercise of this
proxy.
------------ ------------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
SIDE (Please fill in the reverse side and SIDE
mail in enclosed envelope)
------------ ------------
<PAGE>
THE SHARES REPRESENTED BY THIS PROXY WILL BE VOTED AS DIRECTED. IF NO DIRECTION
IS GIVEN WITH RESPECT TO ANY OF THE PROPOSALS, THE SHARES REPRESENTED BY THIS
PROXY WILL BE VOTED FOR EACH PROPOSAL OR OTHERWISE IN ACCORDANCE WITH THE
RECOMMENDATION OF THE BOARD OF DIRECTORS.
/X/ Please mark
vote as in
this example.
<TABLE>
<S> <C>
FOR AGAINST ABSTAIN
1. Election of Class II Directors: 2. Amendment to the Company's / / / / / /
Nominees: (01) John F. O'Brien, (02) Henri A. Termeer Restated Certificate of incorporation
to increase the number of authorized
FOR ALL WITHHOLD shares of common stock.
NOMINEES AUTHORITY
(EXCEPT AS / / / / TO VOTE
MARKED TO THE FOR ALL
CONTRARY) NOMINEES
FOR AGAINST ABSTAIN
/ /____________________________________________________ 3. Approval of the ABIOMED, Inc. / / / / / /
INSTRUCTIONS: To withhold authority to vote for one 2000 Stock Incentive Plan.
individual nominee, write that nominee's name in the
space provided above.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Please promptly date and sign this proxy and mail it in the
enclosed envelope to ensure representation of your shares.
No postage need be affixed if mailed in the United States.
Please sign exactly as name(s) appears on stock certificate.
If shares are held as joint tenants, both should sign. If
stockholder is a corporation, please sign full corporate
name by president or other authorized officer and, if a
partnership, please sign in full partnership name by an
authorized partner or other person. If signing as attorney,
executor, administrator, trustee or guardian, please give
full title as such.
</TABLE>
Signature ______________ Date: ________ Signature ______________ Date: ______
