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Delaware
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No. 41-1698056
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(State or other jurisdiction of
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(IRS Employer
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incorporation or organization)
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Identification No.)
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Large accelerated filer
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x
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Accelerated filer
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¨
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Non-accelerated filer
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¨
(Do not check if a smaller reporting company)
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Smaller reporting company
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¨
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PAGE
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|
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Consolidated Balance Sheets as of
March 31, 2015 and June 30, 2014
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|
|
|
ITEM 1.
|
CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
|
|
March 31,
2015 |
|
June 30,
2014 |
||||
ASSETS
|
|
|
|
||||
Current assets
|
|
|
|
||||
Cash and cash equivalents
|
$
|
93,485
|
|
|
$
|
126,592
|
|
Accounts receivable, net
|
31,220
|
|
|
21,383
|
|
||
Inventories
|
13,219
|
|
|
12,890
|
|
||
Prepaid expenses and other current assets
|
3,904
|
|
|
1,846
|
|
||
Total current assets
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141,828
|
|
|
162,711
|
|
||
Property and equipment, net
|
32,359
|
|
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15,297
|
|
||
Patents, net
|
4,399
|
|
|
3,823
|
|
||
Other assets
|
40
|
|
|
70
|
|
||
Total assets
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$
|
178,626
|
|
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$
|
181,901
|
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LIABILITIES AND STOCKHOLDERS’ EQUITY
|
|
|
|
||||
Current liabilities
|
|
|
|
||||
Short-term borrowings
|
$
|
—
|
|
|
$
|
2,400
|
|
Accounts payable
|
17,527
|
|
|
12,699
|
|
||
Accrued expenses
|
16,356
|
|
|
14,630
|
|
||
Total current liabilities
|
33,883
|
|
|
29,729
|
|
||
Long-term liabilities
|
|
|
|
||||
Other liabilities
|
2,004
|
|
|
117
|
|
||
Total liabilities
|
35,887
|
|
|
29,846
|
|
||
Commitments and contingencies
|
—
|
|
|
—
|
|
||
Common stock, $0.001 par value; authorized 100,000,000 common shares at March 31, 2015 and June 30, 2014; issued and outstanding 31,716,032 at March 31, 2015 and 31,084,742 at June 30, 2014, respectively
|
32
|
|
|
31
|
|
||
Additional paid in capital
|
405,320
|
|
|
390,589
|
|
||
Accumulated other comprehensive income
|
105
|
|
|
—
|
|
||
Accumulated deficit
|
(262,718
|
)
|
|
(238,565
|
)
|
||
Total stockholders’ equity
|
142,739
|
|
|
152,055
|
|
||
Total liabilities and stockholders’ equity
|
$
|
178,626
|
|
|
$
|
181,901
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
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2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Revenues
|
$
|
47,004
|
|
|
$
|
34,945
|
|
|
$
|
133,090
|
|
|
$
|
97,048
|
|
Cost of goods sold
|
10,416
|
|
|
7,749
|
|
|
28,647
|
|
|
21,926
|
|
||||
Gross profit
|
36,588
|
|
|
27,196
|
|
|
104,443
|
|
|
75,122
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
||||||||
Selling, general and administrative
|
39,354
|
|
|
31,428
|
|
|
105,414
|
|
|
84,267
|
|
||||
Research and development
|
7,777
|
|
|
5,361
|
|
|
23,014
|
|
|
14,790
|
|
||||
Total expenses
|
47,131
|
|
|
36,789
|
|
|
128,428
|
|
|
99,057
|
|
||||
Loss from operations
|
(10,543
|
)
|
|
(9,593
|
)
|
|
(23,985
|
)
|
|
(23,935
|
)
|
||||
Interest and other, net
|
(113
|
)
|
|
(119
|
)
|
|
(168
|
)
|
|
(1,727
|
)
|
||||
Net loss
|
$
|
(10,656
|
)
|
|
$
|
(9,712
|
)
|
|
$
|
(24,153
|
)
|
|
$
|
(25,662
|
)
|
Net loss per common share:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
$
|
(0.34
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
(0.94
|
)
|
Weighted average common shares used in computation:
|
|
|
|
|
|
|
|
||||||||
Basic and diluted
|
31,644,522
|
|
|
30,368,685
|
|
|
31,479,803
|
|
|
27,411,237
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Net loss
|
$
|
(10,656
|
)
|
|
$
|
(9,712
|
)
|
|
$
|
(24,153
|
)
|
|
$
|
(25,662
|
)
|
Other comprehensive income:
|
|
|
|
|
|
|
|
||||||||
Unrealized gain on available for sale securities
|
105
|
|
|
—
|
|
|
105
|
|
|
—
|
|
||||
Comprehensive loss
|
$
|
(10,551
|
)
|
|
$
|
(9,712
|
)
|
|
$
|
(24,048
|
)
|
|
$
|
(25,662
|
)
|
|
Nine Months Ended
March 31, |
||||||
|
2015
|
|
2014
|
||||
Cash flows from operating activities
|
|
|
|
||||
Net loss
|
$
|
(24,153
|
)
|
|
$
|
(25,662
|
)
|
Adjustments to reconcile net loss to net cash used in operations
|
|
|
|
||||
Depreciation of property and equipment
|
1,292
|
|
|
895
|
|
||
Amortization and write-off of patents
|
146
|
|
|
138
|
|
||
Provision for doubtful accounts
|
1,021
|
|
|
290
|
|
||
Amortization of discount on debt, net
|
—
|
|
|
137
|
|
||
Debt conversion and valuation of conversion options, net
|
—
|
|
|
716
|
|
||
Loss on disposal of property and equipment
|
99
|
|
|
—
|
|
||
Stock-based compensation
|
11,039
|
|
|
7,682
|
|
||
Changes in assets and liabilities
|
|
|
|
||||
Accounts receivable
|
(10,858
|
)
|
|
(5,053
|
)
|
||
Inventories
|
(329
|
)
|
|
(5,646
|
)
|
||
Prepaid expenses and other assets
|
166
|
|
|
264
|
|
||
Accounts payable
|
2,747
|
|
|
3,962
|
|
||
Accrued expenses and other liabilities
|
3,745
|
|
|
3,981
|
|
||
Net cash used in operating activities
|
(15,085
|
)
|
|
(18,296
|
)
|
||
Cash flows from investing activities
|
|
|
|
||||
Expenditures for property and equipment
|
(16,593
|
)
|
|
(1,185
|
)
|
||
Purchases of marketable securities
|
(2,094
|
)
|
|
—
|
|
||
Sales of marketable securities
|
365
|
|
|
—
|
|
||
Costs incurred in connection with patents
|
(634
|
)
|
|
(465
|
)
|
||
Net cash used in investing activities
|
(18,956
|
)
|
|
(1,650
|
)
|
||
Cash flows from financing activities
|
|
|
|
||||
Proceeds from employee stock purchase plan
|
1,360
|
|
|
1,291
|
|
||
Exercise of stock options and warrants
|
1,974
|
|
|
16,218
|
|
||
Proceeds from the issuance of common stock, net of issuance costs
|
—
|
|
|
84,369
|
|
||
Proceeds from line of credit
|
—
|
|
|
4,800
|
|
||
Payments on debt
|
(2,400
|
)
|
|
(8,650
|
)
|
||
Net cash provided by financing activities
|
934
|
|
|
98,028
|
|
||
Net change in cash and cash equivalents
|
(33,107
|
)
|
|
78,082
|
|
||
Cash and cash equivalents
|
|
|
|
||||
Beginning of period
|
126,592
|
|
|
67,897
|
|
||
End of period
|
$
|
93,485
|
|
|
$
|
145,979
|
|
|
|
|
|
||||
Noncash investing activities
|
|
|
|
||||
Property and equipment included in accounts payable
|
$
|
1,860
|
|
|
$
|
273
|
|
|
March 31,
|
|
June 30,
|
||||
|
2015
|
|
2014
|
||||
Accounts receivable
|
$
|
32,599
|
|
|
$
|
21,834
|
|
Less: Allowance for doubtful accounts
|
(1,379
|
)
|
|
(451
|
)
|
||
Total accounts receivable
|
$
|
31,220
|
|
|
$
|
21,383
|
|
|
March 31,
|
|
June 30,
|
||||
|
2015
|
|
2014
|
||||
Raw materials
|
$
|
7,231
|
|
|
$
|
5,879
|
|
Work in process
|
943
|
|
|
855
|
|
||
Finished goods
|
5,045
|
|
|
6,156
|
|
||
Total inventories
|
$
|
13,219
|
|
|
$
|
12,890
|
|
|
March 31,
|
|
June 30,
|
||||
|
2015
|
|
2014
|
||||
Land
|
$
|
500
|
|
|
$
|
500
|
|
Building
|
22,902
|
|
|
—
|
|
||
Equipment
|
10,914
|
|
|
6,436
|
|
||
Furniture
|
2,570
|
|
|
626
|
|
||
Leasehold improvements
|
233
|
|
|
233
|
|
||
Construction in progress
|
458
|
|
|
11,499
|
|
||
|
37,577
|
|
|
19,294
|
|
||
Less: Accumulated depreciation
|
(5,218
|
)
|
|
(3,997
|
)
|
||
Total property and equipment, net
|
$
|
32,359
|
|
|
$
|
15,297
|
|
|
March 31,
|
|
June 30,
|
||||
|
2015
|
|
2014
|
||||
Salaries and bonus
|
$
|
4,895
|
|
|
$
|
5,244
|
|
Commissions
|
6,197
|
|
|
6,069
|
|
||
Accrued vacation
|
3,544
|
|
|
2,843
|
|
||
Other
|
1,720
|
|
|
474
|
|
||
Total accrued expenses
|
$
|
16,356
|
|
|
$
|
14,630
|
|
|
|
Amortized Cost
|
|
Unrealized Gains
|
|
Unrealized Losses
|
|
Fair Value
|
||||
Mutual funds
|
|
1,768
|
|
|
105
|
|
|
—
|
|
|
1,873
|
|
Total short-term investments
|
|
1,768
|
|
|
105
|
|
|
—
|
|
|
1,873
|
|
|
|
|
|
Fair Value Measurements Using Inputs Considered as
|
||||||||
|
|
Fair Value
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
||||
Mutual funds
|
|
1,873
|
|
|
1,278
|
|
|
595
|
|
|
—
|
|
Total short-term investments
|
|
1,873
|
|
|
1,278
|
|
|
595
|
|
|
—
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Interest expense, net of premium amortization
|
$
|
(1
|
)
|
|
$
|
(103
|
)
|
|
$
|
(23
|
)
|
|
$
|
(948
|
)
|
Change in fair value of conversion options
|
—
|
|
|
—
|
|
|
—
|
|
|
(61
|
)
|
||||
Net write-offs upon conversion (option and premium amortization)
|
—
|
|
|
—
|
|
|
—
|
|
|
(655
|
)
|
||||
Other
|
(112
|
)
|
|
(16
|
)
|
|
(145
|
)
|
|
(63
|
)
|
||||
Total Interest and other, net
|
$
|
(113
|
)
|
|
$
|
(119
|
)
|
|
$
|
(168
|
)
|
|
$
|
(1,727
|
)
|
|
Number of
Shares
|
|
Weighted
Average Fair
Value
|
|||
Restricted stock awards outstanding at June 30, 2014
|
1,276,403
|
|
|
$
|
17.37
|
|
Restricted stock awards granted
(1)
|
475,827
|
|
|
$
|
30.06
|
|
Restricted stock awards forfeited
|
(100,269
|
)
|
|
$
|
20.33
|
|
Restricted stock awards vested
|
(574,195
|
)
|
|
$
|
17.69
|
|
Restricted stock awards outstanding at March 31, 2015
|
1,077,766
|
|
|
$
|
20.55
|
|
(1) Includes both time-based and performance-based restricted stock awards.
|
|
|
|
Three months ended June 30, 2015
|
$
|
263
|
|
Fiscal 2016
|
766
|
|
|
Fiscal 2017
|
544
|
|
|
Fiscal 2018
|
513
|
|
|
Fiscal 2019
|
462
|
|
|
Thereafter
|
345
|
|
|
|
$
|
2,893
|
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||
|
2015
|
|
2014
|
|
2015
|
|
2014
|
||||||||
Numerator
|
|
|
|
|
|
|
|
||||||||
Net loss
|
$
|
(10,656
|
)
|
|
$
|
(9,712
|
)
|
|
$
|
(24,153
|
)
|
|
$
|
(25,662
|
)
|
Denominator
|
|
|
|
|
|
|
|
||||||||
Weighted average common shares – basic
|
31,644,522
|
|
|
30,368,685
|
|
|
31,479,803
|
|
|
27,411,237
|
|
||||
Effect of dilutive stock options and warrants
(a)
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Weighted average common shares outstanding – diluted
|
31,644,522
|
|
|
30,368,685
|
|
|
31,479,803
|
|
|
27,411,237
|
|
||||
Net loss per common share — basic and diluted
|
$
|
(0.34
|
)
|
|
$
|
(0.32
|
)
|
|
$
|
(0.77
|
)
|
|
$
|
(0.94
|
)
|
(a)
|
At
March 31, 2015
and
2014
,
720,233
and
927,809
stock options, respectively, were outstanding. The effect of the shares that would be issued upon exercise of these options has been excluded from the calculation of diluted loss per share because those shares are anti-dilutive.
|
ITEM 2.
|
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
|
|
Three Months Ended
March 31, |
|
Nine Months Ended
March 31, |
||||||||||||||||||
|
2015
|
|
2014
|
|
Percent
Change
|
|
2015
|
|
2014
|
|
Percent
Change
|
||||||||||
Revenues
|
$
|
47,004
|
|
|
$
|
34,945
|
|
|
34.5
|
%
|
|
$
|
133,090
|
|
|
$
|
97,048
|
|
|
37.1
|
%
|
Cost of goods sold
|
10,416
|
|
|
7,749
|
|
|
34.4
|
|
|
28,647
|
|
|
21,926
|
|
|
30.7
|
|
||||
Gross profit
|
36,588
|
|
|
27,196
|
|
|
34.5
|
|
|
104,443
|
|
|
75,122
|
|
|
39.0
|
|
||||
Expenses:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Selling, general and administrative
|
39,354
|
|
|
31,428
|
|
|
25.2
|
|
|
105,414
|
|
|
84,267
|
|
|
25.1
|
|
||||
Research and development
|
7,777
|
|
|
5,361
|
|
|
45.1
|
|
|
23,014
|
|
|
14,790
|
|
|
55.6
|
|
||||
Total expenses
|
47,131
|
|
|
36,789
|
|
|
28.1
|
|
|
128,428
|
|
|
99,057
|
|
|
29.7
|
|
||||
Loss from operations
|
(10,543
|
)
|
|
(9,593
|
)
|
|
9.9
|
|
|
(23,985
|
)
|
|
(23,935
|
)
|
|
0.2
|
|
||||
Interest and other, net
|
(113
|
)
|
|
(119
|
)
|
|
(5.0
|
)
|
|
(168
|
)
|
|
(1,727
|
)
|
|
(90.3
|
)
|
||||
Net loss
|
$
|
(10,656
|
)
|
|
$
|
(9,712
|
)
|
|
9.7
|
|
|
$
|
(24,153
|
)
|
|
$
|
(25,662
|
)
|
|
(5.9
|
)
|
•
|
Cash used in accounts receivable of
$10.9 million
and
$5.1 million
during the
nine
months ended
March 31, 2015
and
2014
, respectively, was primarily due to the amount and timing of revenue during the
nine
months ended
March 31, 2015
and
2014
.
|
•
|
Cash used in inventories was
$329,000
and
$5.6 million
during the
nine
months ended
March 31, 2015
and
2014
, respectively. For the
nine
months ended
March 31, 2015
, the amount of cash used in inventories was primarily due to higher levels of raw materials for the manufacture of products. For the
nine
months ended
March 31, 2014
, cash used in inventories was primarily due to higher levels of finished goods for future sales, including the CAD System commercial launch, and timing of inventory purchases and sales.
|
•
|
Cash provided by prepaid expenses and other current assets was
$166,000
and
$264,000
during the
nine
months ended
March 31, 2015
and
2014
, respectively, primarily due to payment timing of vendor deposits and other expenditures.
|
•
|
Cash provided by accounts payable of
$2.7 million
and
$4.0 million
during the
nine
months ended
March 31, 2015
and
2014
, respectively, was due to the amount and timing of purchases and vendor payments and overall increased levels of spending. Costs related to the construction of our new headquarters are included in the cash provided by accounts payable during the nine months ended March 31, 2015.
|
•
|
Cash provided by accrued expenses and other liabilities of
$3.7 million
and
$4.0 million
during the
nine
months ended
March 31, 2015
and
2014
, respectively, was primarily due to the amount and timing of compensation payments.
|
|
Nine Months Ended
March 31, |
||||||
|
2015
|
|
2014
|
||||
Loss from operations
|
$
|
(23,985
|
)
|
|
$
|
(23,935
|
)
|
Add: Stock-based compensation
|
11,039
|
|
|
7,682
|
|
||
Add: Depreciation and amortization
|
1,417
|
|
|
982
|
|
||
Adjusted EBITDA
|
$
|
(11,529
|
)
|
|
$
|
(15,271
|
)
|
•
|
Stock-based compensation.
We exclude stock-based compensation expense from our non-GAAP financial measures primarily because such expense, while constituting an ongoing and recurring expense, is not an expense that requires cash settlement. Our management also believes that excluding this item from our non-GAAP results is useful to investors to understand the application of stock-based compensation guidance and its impact on our operational performance, liquidity and ability to make additional investments in the Company, and it allows for greater transparency to certain line items in our financial statements.
|
•
|
Depreciation and amortization expense.
We exclude depreciation and amortization expense from our non-GAAP financial measures primarily because such expenses, while constituting ongoing and recurring expenses, are not expenses that require cash settlement and are not used by our management to assess the core profitability of our business operations. Our management also believes that excluding these items from our non-GAAP results is useful to investors to understand our operational performance, liquidity and ability to make additional investments in the company.
|
•
|
Items such as stock-based compensation do not directly affect our cash flow position; however, such items reflect economic costs to us and are not reflected in our Adjusted EBITDA, and therefore these non-GAAP measures do not reflect the full economic effect of these items.
|
•
|
Non-GAAP financial measures are not based on any comprehensive set of accounting rules or principles and therefore other companies may calculate similarly titled non-GAAP financial measures differently than we do, limiting the usefulness of those measures for comparative purposes.
|
•
|
Our management exercises judgment in determining which types of charges or other items should be excluded from the non-GAAP financial measures we use.
|
Dated: May 8, 2015
|
|
|
CARDIOVASCULAR SYSTEMS, INC.
|
|
|
|
|
|
By
|
|
/s/ David L. Martin
|
|
|
|
David L. Martin
|
|
|
|
President and Chief Executive Officer
|
|
|
|
(Principal Executive Officer)
|
|
|
|
|
|
By
|
|
/s/ Laurence L. Betterley
|
|
|
|
Laurence L. Betterley
|
|
|
|
Chief Financial Officer
|
|
|
|
(Principal Financial and Accounting Officer)
|
Exhibit No.
|
|
Description
|
|
|
|
10.1*
|
|
Amendment No. 2 to Employment Agreement, dated February 4, 2015, by and between the Company and Kevin J. Kenny.
|
|
|
|
10.2*
|
|
Cardiovascular Systems, Inc. Amended Executive Officer Severance Plan.
|
|
|
|
10.3*
|
|
Form of Restricted Stock Unit Agreement for Directors under the 2014 Equity Incentive Plan.
|
|
|
|
10.4*
|
|
Form of Restricted Stock Agreement with Immediate Vesting under the 2014 Equity Incentive Plan.
|
|
|
|
31.1*
|
|
Certification of President and Chief Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
31.2*
|
|
Certification of Chief Financial Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.1**
|
|
Certification of President and Chief Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
32.2**
|
|
Certification of Chief Financial Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
|
|
|
|
101
|
|
Financial statements from the quarterly report on Form 10-Q of the Company for the quarter ended March 31, 2015, formatted in XBRL: (i) the Consolidated Balance Sheets, (ii) the Consolidated Statements of Operations, (iii) the Consolidated Statements of Cash Flows, and (iv) the Notes to Financial Statements.
|
*
|
Filed herewith.
|
**
|
Furnished herewith.
|
a.
|
Termination by the Corporation with Cause
. For purposes of this Section 11.3, “Cause” means:
|
(1)
|
Employee’s neglect of any of his material duties or his failure to carry out reasonable directives from the Chief Executive Officer or the Board of Directors or its designees;
|
(2)
|
Any willful or deliberate misconduct that is injurious to the Corporation;
|
(3)
|
Any statement, representation or warranty made to the Chief Executive Officer, the Board or its designees by Employee that Employee knows is false or materially misleading; or
|
(4)
|
Employee’s commission of a felony, whether or not against the Corporation and whether or not committed during Employee’s employment.
|
b.
|
Termination by Employee for Good Reason
. For purposes of this Section 11.3, “Good Reason” means:
|
(1)
|
The assignment to Employee, without Employee’s written consent, of employment responsibilities that are not of comparable responsibility and status to the employment responsibilities described in this Agreement;
|
(2)
|
The Corporation’s reduction of Employee’s base salary without Employee’s written consent, unless pursuant to a cost reduction effort approved by the Board of Directors that also results in the reduction of salaries of other executive officers; or
|
(3)
|
The Corporation’s failure to provide Employee, without Employee’s written consent, those employee benefits specifically required by this Agreement.
|
c.
|
Severance Amount
. Except as set forth in the following sentence with respect to a Change of Control, the “
Severance Amount
” will be the product of (i) 1.5, multiplied by (ii) Employee’s annual base salary at the time of termination of Employee’s employment. If Employee is terminated following a Change of Control (as that phrase is defined in the Corporation’s Executive Officer Severance Plan) and before the second anniversary of the Change of Control, then the Severance Amount will be the product of (i) 1.5, multiplied by (ii) the sum of (A) Employee’s annual base salary at the time of termination of Employee’s employment and (B) the target bonus amount that Employee was eligible to earn in the year of termination under the Corporation’s cash bonus plan at 100% achievement against Corporation budgets. In either case, the Severance Amount will be paid in approximately equal installments, as determined by the Corporation in its sole and absolute discretion, at regular payroll intervals over a period of eighteen (18) months, beginning on the next regularly scheduled payday coinciding with or immediately following the 60
th
day after the termination of the Employee’s employment and continuing until the end of such eighteen (18) month period.
|
(a)
|
A merger or consolidation to which the Company is a party if the individuals and entities who were stockholders of the Company immediately prior to the effective date of such merger or consolidation have, immediately following the effective date of such merger or consolidation, beneficial ownership (as defined in Rule 13d‑3 under the Securities Exchange Act of 1934) of less than fifty percent (50%) of the total combined voting power of all classes of securities issued by the surviving corporation for the election of directors of the surviving corporation;
|
(b)
|
The acquisition of direct or indirect beneficial ownership (as defined in Rule 13d-3 under the Securities Exchange Act of 1934) of securities of the Company by any person or entity or by a group of associated persons or entities acting in concert in one or a series of transactions, which causes the aggregate beneficial ownership of such person, entity or group to equal or exceed twenty percent (20%) or more of the total combined voting power of all classes of the Company’s then issued and outstanding securities;
|
(c)
|
The sale of the properties and assets of the Company substantially as an entirety, to any person or entity that is not a wholly-owned subsidiary of the Company;
|
(d)
|
The stockholders of the Company approve any plan or proposal for the liquidation of the Company;
|
(e)
|
A change in the composition of the Board of the Company at any time during any consecutive twenty-four (24) month period such that the “Continuity Directors” no longer constitute at least a seventy percent (70%) majority of the Board. For purposes of this event, “Continuity Directors” means those members of the Board who were directors at the beginning of such consecutive twenty-four (24) month period and any directors whose election was unanimously approved by the directors serving at the beginning of such 24 month period; or
|
(f)
|
The Company enters into a letter of intent, an agreement in principle or a definitive agreement relating to an event described in Sections (a), (b), (c), (d) or (e) above that ultimately results in such a Change of Control, or a tender or exchange offer or proxy contest is commenced that ultimately results in an event described in Sections (b) or (e) above.
|
Plan Sponsor/Plan Administrator
|
Cardiovascular Systems, Inc.
1225 Old Highway 8 NW
St. Paul, MN 55112
(651) 259-1600
|
Employer Identification Number
|
41-1698056
|
Plan Number
|
502
|
Plan Year
|
July 1 through June 30
|
Type of Plan
|
Welfare benefit plan providing severance benefits to certain officers
|
Type of Administration
|
The Plan is administered by the Plan Administrator
|
Claims Administrator
|
Cardiovascular Systems, Inc.
|
Agent for Service of Legal Process
|
Cardiovascular Systems, Inc.
|
Funding
|
The Plan is funded through the general assets of the Company
|
Administrator Discretion
|
The Plan Administrator has discretionary authority to interpret, apply and enforce all provisions of the Plan, for example: determining an Executive Officer’s eligibility to participate in the Plan, an Executive Officer’s base pay, whether an Executive Officer is entitled to severance pay and the amount of any such payment.
|
X.
|
Claims Procedures
|
•
|
State the reason(s) why the Executive Officer’s claim for benefits was denied;
|
•
|
Specifically refer to any Plan provisions that formed the basis for the Company’s decision;
|
•
|
Describe any additional material or information necessary for the Executive Officer to perfect his or her claim and why that material or information is necessary; and
|
•
|
Describe the procedures the Executive Officer must follow to have his or her claim reviewed further, including the Executive Officer’s right to bring a civil action under ERISA in the event of an adverse decision.
|
•
|
State the reason(s) why the Executive Officer’s claim for benefits was denied;
|
•
|
Specifically refer to any Plan provisions that formed the basis for the Company’s decision;
|
•
|
Inform the Executive Officer that he or she may have reasonable access to all documents, records and other materials relevant to his or her claim, and may request copies at no charge; and
|
•
|
Inform the Executive Officer of his or her right to bring a civil action under ERISA.
|
(a)
|
Examine, without charge, at the Plan Administrator’s office and at other specified locations, such as worksites, all documents governing this Plan, including insurance contracts and collective bargaining agreements, if any, filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.
|
(b)
|
Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of this Plan, including insurance contracts and collective bargaining agreements, if any, and updated summary plan description. The Administrator may make a reasonable charge for the copies.
|
(c)
|
Receive a summary of the Plan’s annual financial report. The Plan Administrator is required by law to furnish each participant with a copy of this summary annual report.
|
Executive
|
Severance Period
|
Chief Executive Officer
|
24 months
|
Chief Financial Officer/Chief Operating Officer
|
18 months
|
Senior Vice Presidents/Executive Vice Presidents
|
15 months
|
Vice Presidents, Other Corporate Officers and Section 16 Officers, and Other Employees Designated by the Compensation Committee
|
12 months
|
|
|
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
|
By:
|
|
|
Name:
|
|
|
Title:
|
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cardiovascular Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ David L. Martin
|
Dated: May 8, 2015
|
|
David L. Martin
|
|
|
President and Chief Executive Officer
|
1.
|
I have reviewed this quarterly report on Form 10-Q of Cardiovascular Systems, Inc.;
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
c)
|
Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
|
a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
|
b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
|
|
By:
|
/s/ Laurence L. Betterley
|
Dated: May 8, 2015
|
|
Laurence L. Betterley
|
|
|
Chief Financial Officer
|
|
By:
|
/s/ David L. Martin
|
Dated: May 8, 2015
|
|
David L. Martin
|
|
|
President and Chief Executive Officer
|
|
By:
|
/s/ Laurence L. Betterley
|
Dated: May 8, 2015
|
|
Laurence L. Betterley
|
|
|
Chief Financial Officer
|