SCHEDULE 14A INFORMATION

PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )

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[_] Definitive Additional Materials

[_] Soliciting Material Pursuant to (S)240.14a-11(c) or (S)240.14a-12

Innovasive Devices Inc.
------------------------------------------------
(Name of Registrant as Specified In Its Charter)

Innovasive Devices Inc.
------------------------------------------------
(Name of Person(s) Filing Proxy Statement)

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INNOVASIVE DEVICES, INC.
734 FOREST STREET
MARLBORO, MASSACHUSETTS 01752-3032

May 8, 1998

Dear Stockholder:

You are cordially invited to attend the Annual Meeting of Stockholders of
Innovasive Devices, Inc. (the "Company"), which will be held on June 8, 1998
at 10:00 A.M., at the offices of Choate, Hall & Stewart, 36th Floor, Exchange
Place, 53 State Street, Boston, Massachusetts.

The following Notice of Annual Meeting of Stockholders and Proxy Statement
describe the items to be considered by the stockholders and contain certain
information about the Company and its officers and directors.

Please sign and return the enclosed proxy card as soon as possible in the
envelope provided so that your shares can be voted at the meeting in
accordance with your instructions. Even if you plan to attend the meeting, we
urge you to sign and promptly return the proxy card. You can revoke it at any
time before it is exercised at the meeting or vote your shares personally if
you attend the meeting.

We look forward to seeing you.

Sincerely,

RICHARD D. RANDALL
President and Chief Executive
Officer

INNOVASIVE DEVICES, INC.
734 FOREST STREET
MARLBORO, MASSACHUSETTS 01752-3032

NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON JUNE 8, 1998

The Annual Meeting of Stockholders of Innovasive Devices, Inc. (the
"Company") will be held at the offices of Choate, Hall & Stewart, 36th Floor,
Exchange Place, 53 State Street, Boston, Massachusetts, on June 8, 1998 at
10:00 A.M., for the following purposes:

1. To elect two directors, each to serve for a term of three years;

2. To approve an amendment to the Company's 1996 Omnibus Stock Plan
increasing the maximum number of shares issuable thereunder by 600,000;

3. To ratify the Board of Directors' selection of Price Waterhouse LLP as
the Company's independent auditors for the fiscal year ending December
31, 1998; and

4. To transact such other business as may properly come before the meeting
and any or all adjournments thereof.

Stockholders of record at the close of business on April 10, 1998 will be
entitled to notice of and to vote at the meeting and any adjournments thereof.

By Order of the Board of Directors

ROSLYN G. DAUM
Clerk

Dated: May 8, 1998

WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE AND
SIGN THE ENCLOSED PROXY AND MAIL IT PROMPTLY IN THE ENCLOSED RETURN ENVELOPE
IN ORDER THAT YOUR SHARES MAY BE REPRESENTED.

INNOVASIVE DEVICES, INC.
734 FOREST STREET
MARLBORO, MASSACHUSETTS 01752-3032

PROXY STATEMENT FOR
ANNUAL MEETING OF STOCKHOLDERS

This Proxy Statement is furnished to the holders of common stock of
Innovasive Devices, Inc. (hereinafter referred to as the "Company") in
connection with the solicitation of proxies to be voted at the Annual Meeting
of Stockholders to be held on June 8, 1998 and at any adjournment of that
meeting. The enclosed proxy is solicited on behalf of the Board of Directors
of the Company. Each properly signed proxy will be voted in accordance with
the instructions contained therein, and, if no choice is specified, the proxy
will be voted in favor of the proposals set forth in the Notice of Annual
Meeting.

A person giving the enclosed proxy has the power to revoke it at any time
before it is exercised at the meeting, by written notice to the Clerk of the
Company, by sending a later dated proxy, or by revoking it in person at the
meeting.

The approximate date on which this Proxy Statement and the enclosed proxy
will first be sent to stockholders is May 13, 1998. The Company's Annual
Report to Stockholders for the year ended December 31, 1997 is being mailed
together with this Proxy Statement.

Only holders of common stock of record on the stock transfer books of the
Company at the close of business on April 10, 1998 (the "record date") will be
entitled to vote at the meeting. There were 9,170,899 shares of common stock
outstanding and entitled to vote on the record date.

Each share of common stock is entitled to one vote. The affirmative vote of
the holders of a plurality of the shares represented at the meeting, if a
quorum is present, is required for the election of directors. If a quorum is
present, approval of the other matters which are before the meeting requires
the affirmative vote of the holders of a majority of the shares represented at
the meeting.

For purposes of the matters before the Annual Meeting, under the Company's
By-Laws, a quorum consists of a majority of the issued and outstanding shares
entitled to vote on such matters as of the record date. Shares as to which a
nominee (such as a broker holding shares in street name for a beneficial
owner) has no voting authority in respect of such matter will be deemed
represented for quorum purposes but will not be deemed to be voting on such
matters, and therefore will not be counted as negative votes as to such
matters. Votes will be tabulated by the Company's transfer agent subject to
the supervision of persons designated by the Board of Directors as inspectors.

STOCK OWNERSHIP OF DIRECTORS, NOMINEES, EXECUTIVE OFFICERS
AND PRINCIPAL STOCKHOLDERS

The following table sets forth certain information regarding beneficial
ownership of the Company's common stock as of March 31, 1998 by (a) each
director and nominee for director of the Company, (b) each of the persons
named in the Summary Compensation Table below, (c) each person known by the
Company to own beneficially 5% or more of its Common Stock and (d) all current
directors and executive officers as a group. Except as otherwise indicated,
each person has sole investment and voting power with respect to the shares
shown as being beneficially owned by such person, based on information
provided by such owners.

SHARES PERCENTAGE
BENEFICIALLY OF
EXECUTIVE OFFICERS, DIRECTORS AND NOMINEES OWNED COMMON STOCK
------------------------------------------ ------------ ------------

Richard D. Randall(1)............................. 289,301 3.2%
James E. Nicholson................................ 328,351 3.6
James V. Barrile(2)............................... 189,583 2.1
Joseph A. Ciffolillo(3)........................... 96,372 1.1
Thomas C. McConnell(4)............................ 931,363 10.2
Robert R. Momsen(5)............................... 678,227 7.4
Howard D. Palefsky(6)............................. 5,000 *
Richard B. Caspari(7)............................. 331,489 3.6
Alan Chervitz(8).................................. 275,087 3.0
David J. Foster(9)................................ 843,936 9.2
Eric L. Bannon(10)................................ 22,639 *
John T. Rice(11).................................. 27,340 *

5% STOCKHOLDERS
---------------

Cohesion Technologies, Inc. (a wholly-owned
subsidiary of Collagen Corporation).............. 843,936 9.2%
500 Faber Place,
Palo Alto, CA 94303
Entities affiliated with InterWest Partners(12)... 675,727 7.4
3000 Sand Hill Road,
Building 3, Suite 255
Menlo Park, CA 94025
New Enterprise Associates VI, Limited 928,863 10.1
Partnership......................................
2490 Sand Hill Road,
Menlo Park, CA 94025
Delphi Ventures II, L.P.(13)...................... 587,443 6.4
3000 Sand Hill Road,
Building 1, Suite 135
Menlo Park, CA 9025
E. Marlowe Goble(14).............................. 888,839 9.7
P. O. Box 6698
Jackson, WY 83001
All current executive officers and directors as a
group (11 persons)(15)........................... 3,968,709 43.3

- --------
* Less than 1.0% of the outstanding Common Stock.
(1) Includes 272,917 shares which Mr. Randall may acquire within 60 days of
March 31, 1998 by exercise of options.
(2) Includes 11,805 shares which Mr. Barrile may acquire within 60 days of
March 31, 1998 by exercise of options.

(3) Includes 53,872 shares held by an investment company of which Mr.
Ciffolillo is the president and 24,722 shares which Mr. Ciffolillo may
acquire within 60 days of March 31, 1998 by exercise of options. Mr.
Ciffolillo may be deemed to share voting and investment power with
respect to the shares held by the investment company. He disclaims
beneficial ownership of such shares except to the extent of his
proportionate interest therein.
(4) Includes 928,863 shares held by New Enterprise Associates VI, Limited
Partnership with respect to which Mr. McConnell may be deemed to share
voting and investment power by virtue of his status as a general partner
of NEA Partners VI, Limited Partnership, the general partner of New
Enterprises Associates VI, Limited Partnership. Mr. McConnell disclaims
beneficial ownership of the shares held by such entities except to the
extent of his proportionate partnership interest therein. Also includes
2,500 shares Mr. McConnell may acquire within 60 days of March 31, 1998
by exercise of options.
(5) Includes 671,363 shares held by InterWest Partners V, L.P. ("IWP") and
4,364 shares held by InterWest Investors V, L.P. ("IWI"). Mr. Momsen is a
general partner of InterWest Management Partners V, L.P., the general
partner of IWP, and a general partner of IWI and accordingly may be
deemed to share voting and investment power with respect to these shares.
Mr. Momsen disclaims beneficial ownership of the shares held by such
entities except to the extent of his proportionate partnership interest
therein. Also includes 2,500 shares Mr. Momsen may acquire within 60 days
of March 31, 1998 by exercise of options.
(6) Includes 2,500 shares which Mr. Palefsky may acquire within 60 days of
March 31, 1998 by exercise of options.
(7) Includes 37,340 shares held by Dr. Caspari's wife, Judith Caspari, and
33,098 shares held in escrow to be used to indemnify the Company for
certain claims, if any, related to the transaction with Medicine Lodge,
Inc.
(8) Includes 27,509 shares held in escrow to be used to indemnify the Company
for certain claims, if any, related to the transaction with Medicine
Lodge, Inc.
(9) Consists of shares held by Cohesion Technologies, Inc. Mr. Foster is
Chief Executive Officer of Cohesion Technologies, Inc. and accordingly
may be deemed to share voting and investment power with respect to such
shares. Mr. Foster disclaims beneficial ownership of these shares.
(10) Consists of shares which Mr. Bannon may acquire within 60 days of March
31, 1998 by exercise of options.
(11) Includes 27,083 shares which Mr. Rice may acquire within 60 days of March
31, 1998 by exercise of options.
(12) Consists of 671,363 shares held by IWP and 4,364 shares held by IWI.
(13) Consists of 584,452 shares held by Delphi Ventures II, L.P. and 2,991
shares held by Delphi BioInvestments II, L.P.
(14) Includes 88,884 shares held in escrow to be used to indemnify the Company
for certain claims, if any, related to the transaction with Medicine
Lodge, Inc.
(15) Includes 2,502,398 shares beneficially owned by entities affiliated with
Messrs. Ciffolillo, McConnell, Momsen and Foster, for which they disclaim
beneficial ownership except to the extent of their proportionate interest
therein. Also includes 316,944 shares which the executive officers and
directors may acquire within 60 days of March 31, 1998 by exercise of
options.

ELECTION OF DIRECTORS

(ITEM 1 OF NOTICE)

There are currently nine members of the Board of Directors. The Board has
fixed the number of directors for the ensuing year at seven and has nominated
Joseph A. Ciffolillo and David J. Foster for re-election to the Board of
Directors. Each of Messrs. Ciffolillo and Foster have consented to serve, if
elected at the meeting, for a three-year term expiring at the time of the
Annual Meeting in 2001 and when his successor is elected and qualified.(1) The
shares represented by the enclosed proxy will be voted to elect the nominees
unless such authority is withheld by marking the proxy to that effect. The
nominees have agreed to serve, but in the event any becomes unavailable for
any reason, the proxy, unless authority has been withheld as to such nominee,
may be voted for the election of a substitute. The Board of Directors of the
Company unanimously recommends that stockholders of the Company vote FOR the
election of the foregoing nominees.

The following information is furnished with respect to each nominee for
election as a director.

NAME AND AGE PRINCIPAL OCCUPATION AND BUSINESS EXPERIENCE
AS OF FEBRUARY 14, 1998 DURING LAST FIVE YEARS; DIRECTORSHIPS OF PUBLIC COMPANIES
----------------------- ---------------------------------------------------------

Joseph A. Ciffolillo, 59.. Mr. Ciffolillo has been a director of the Company since
February 1994. Now retired, from 1987 to March 1995, he was
Chief Operating Officer of Boston Scientific Corporation
("Boston Scientific"), a manufacturer and marketer of
minimally invasive medical devices. From March 1995 until his
retirement in April 1996, he was Executive Vice President-
Office of the Chairman, for Boston Scientific Venture Group,
the venture capital division of Boston Scientific. He is also
a director of CompDent Corporation, a dental health
maintenance organization.
David J. Foster(1), 40.... Mr. Foster has been a director of the Company since June 1997.
In February 1997 he was named Senior Vice President of
Collagen Corporation and in December 1997 he was appointed
Chief Executive Office of Cohesion Technologies, Inc. (a
wholly-owned subsidiary of Collagen Corporation). Previously
Mr. Foster served as Chief Financial Officer of Collagen
Corporation from 1992 until February 1997. He has been
associated with Collagen Corporation since November 1984. Mr.
Foster serves as a director of Pharming Holding, N.V. and
CollOptics, Inc. and previously served as a director of
Prograft Medical, Inc.

- --------
(1) Mr. Foster serves as the designated director of Cohesion Technologies,
Inc. which has the right, pursuant to a Stockholders' Voting Agreement, to
designate one director of the Company for so long as Cohesion
Technologies, Inc. owns at least 5% of the outstanding common stock of the
Company.

The following table contains similar information about the other directors
of the Company, whose terms do not expire at the 1998 Annual Meeting and who
consequently are not nominees for election in 1998:

Richard D. Randall, 46.. Mr. Randall has been President, Chief Executive Officer and a
director of the Company since February 1994. He was employed
by Target Therapeutics, Inc. from June 1989 to January 1994,
during which time he served as President, Chief Executive
Officer and Chairman. Mr. Randall currently serves as a
director of Conceptus, Inc. ("Conceptus"), a company focusing
on products for the gynecology market. He was also acting
President and acting Chief Executive Officer of Conceptus from
December 1992 to July, 1993.

Robert R. Momsen, 51.......... Mr. Momsen has been a director of the Company since February
1994. He joined InterWest Partners, a venture capital firm, in
1981 and has been a general partner since 1982. He is also a
director of ArthroCare Corporation, a manufacturer of
arthroscopic surgical equipment, COR Therapeutics, Inc., a
developer of cardiovascular pharmaceuticals, Integ, a
developer of blood free fructose monitoring, Coulter
Pharmaceutical, a developer of cancer pharmaceuticals,
Urologix, a medical device company treating Benign Prostatic
Hyperplasia, and ProGenitor, Inc., a biotechnology company in
the field of genomics.
Howard D. Palefsky, 51........ Mr. Palefsky has been a director of the Company since
September 1995. He was Chief Executive Officer of Collagen
Corporation from 1978 through 1996 and formerly served as
Chairman of Collagen Corporation's Board. He was a director of
Target Therapeutics, Inc., and is currently Chairman of the
Board of Conceptus, Inc., a company focusing on products for
the gynecology market.
Richard B. Caspari, M.D., 56.. Dr. Caspari has been a director of the Company since June
1997. He has been a partner of Tuckahoe Orthopaedic Associates
since 1973, and the president and a member of the Board of
Directors of Orthopaedic Research of Virginia since 1981. He
is a founding member of the Arthroscopy Association of North
America and served as its president in 1991. From 1984 to 1986
Dr. Caspari was president of Precision Surgical Instruments
Inc., a developer and manufacturer of arthroscopic devices. He
served on the Board of Directors of Arthrotek, a subsidiary of
Biomet from 1991 to 1996, and currently serves on the Board of
Directors of Lifenet, Inc., an organ and tissue
transplantation non-profit organization, and Heloair, Inc., a
helicopter charter company. Dr. Caspari joined the Board of
Directors of Medicine Lodge, Inc. in 1996.
Alan Chervitz, 36............. Mr. Chervitz has been Executive Vice President, Chief
Operating Officer and a director of the Company since June
1997. He served as President and Chief Executive Officer of
Medicine Lodge, Inc. ("Medicine Lodge") since January 1996 and
as a director since January 1994. He also served as Executive
VP/General Manager of Medicine Lodge from 1993 to January
1996. Prior to joining Medicine Lodge, he served as President
and Chief Executive Officer of Ortho Dynamics, Inc. from
August 1989 through December 1993. Mr. Chervitz also served as
a director of Medisys Technologies, Inc. from January 1992
through 1996. Mr. Chervitz is a manager of GCL, L.C., a
Wyoming limited liability company.

BOARD OF DIRECTORS AND COMMITTEE MEETINGS

The Board of Directors has Audit and Compensation Committees. It does not
have a nominating or similar committee.

The Audit Committee, which periodically meets with management and the
Company's independent accountants, reviews the results and scope of the audit
and other services provided by the Company's independent accountants, the need
for internal auditing procedures and the adequacy of internal controls. The
directors currently serving on the Audit Committee are Messrs. McConnell and
Palefsky. The Audit Committee met once during fiscal 1997.

The Compensation Committee establishes salaries for officers and incentives
and other forms of compensation for officers and other key employees;
administers the various incentive compensation and benefit

plans; and recommends policies relating to such plans. The directors currently
serving on the Compensation Committee are Messrs. Ciffolillo and Momsen. The
Compensation Committee met three times during fiscal 1997.

During fiscal 1997, the Board of Directors of the Company held five
meetings. Each incumbent director attended at least 75% of the aggregate
number of the meetings of the Board and the meetings of the committees of the
Board on which he served.

DIRECTOR COMPENSATION

The Company's directors may be reimbursed for certain expenses in connection
with attendance at Board and committee meetings. Under the Company's 1996 Non-
Employee Director Stock Option Plan each non-employee director serving as such
on the date of the Annual Meeting of the Board of Directors is entitled to
receive on such date an option to purchase 2,500 shares of Common Stock
(subject to vesting over four annual periods), exercisable at a price per
share equal to fair market value on the date of grant. Any non-employee
director, upon his or her first election to the Board of Directors, is
entitled to receive an option to purchase 10,000 shares of Common Stock
(likewise subject to vesting over four annual periods).

COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION

This report, prepared by the Compensation Committee of the Company's Board
of Directors (the "Committee"), addresses the Company's executive compensation
policies and the basis on which fiscal 1997 executive officer compensation
determinations were made. The Committee designs and approves all components of
executive pay.

To ensure that executive compensation is designed and administered in an
objective manner, the Committee's members are all non-employee directors.
During fiscal 1997, the Committee members were Messrs. Ciffolillo and Momsen.

Compensation Philosophy

The Company's executive compensation policies are intended to attract,
retain, motivate and reward executives who can lead the Company in achieving
its long-term growth and earnings goals. The objective of the Committee is to
implement a compensation program that will provide appropriate incentives
while, at the same time, encouraging executive officers to increase their
equity ownership in the Company and thereby align their interests with those
of the Company's stockholders. The compensation program consists primarily of
three components, namely (a) base salary, (b) bonus and (c) stock options.
Each of these factors are further described below. In addition, executive
officers are eligible to participate, on a non-discriminatory basis, in
various benefit programs provided to all full-time employees, including the
Company's stock purchase plan, 401(k) plan and group medical, disability and
life insurance programs. The Committee believes that executive compensation
packages should be viewed as a whole in order to assess properly their
appropriateness.

In establishing total compensation packages for the Company's executive
officers, the Committee takes into account the compensation packages offered
to executives of other medical device design and manufacturing companies of
similar stature. The Committee uses this comparative data primarily as
benchmarks to ensure that the Company's executive compensation packages are
competitive. The Committee seeks to maintain total compensation within the
broad middle range of comparative pay. The Committee generally meets quarterly
and at other times that it deems are necessary and, from time to time, confers
with outside advisors concerning acceptable industry practices. Individual
amounts are based not only on comparative data, but also on such factors as
length of service with the Company and the Committee's judgment as to
individual contributions. These factors are not assigned specific mathematical
weights.

Salary

Base salaries are reviewed annually. It is the Committee's intention to pay
slightly below-market base salary but provide a significant equity ownership
opportunity to create incentives for the Company's executive officers to
maximize the Company's growth and success while increasing stockholders' value
over the long term. Changes in base salary from year to year depend upon such
factors as individual performance, cost of living changes and the economic and
business conditions affecting the Company.

Richard D. Randall's base salary was increased from $175,000 to $200,000 on
January 5, 1998, an increase of 14.3%. This increase was largely based on his
contributions to the Company's meeting its growth and profit objectives.

Bonus

Executive bonuses are determined in accordance with achievement of the
Company's goals for the most recent fiscal year. The amounts are intended to
reward management for achieving certain milestones set out at the beginning of
the fiscal year. Among these are growth in operating profit, sales and
earnings. The cash bonus for the Chief Executive Officer is also influenced by
his ability to execute strategic plans determined by the Board of Directors,
including merger and acquisition programs.

Stock Options

As noted above, stock options are an important component of total executive
compensation. Stock options are considered long-term incentives that link the
long-term interests of management with those of the Company's stockholders.
Stock options that the Committee has granted to executive employees generally
vest over a four year period from the date of grant at the rate of 25% per
fiscal year, commencing at the end of the year in which they are granted.
Option exercise prices are set at 100% of the fair market value of the stock
at the date of the grant and expire after ten years. The Committee has
absolute discretion to determine the recipients and the number of options to
be awarded. Each award is at the Committee's discretion and is not subject to
any specific formula or criteria. The Committee generally awards options on an
annual basis. The number of shares for which options were granted to executive
officers in fiscal 1997 was determined by the Committee based upon several
factors, including the executive's position, his or her past and future
expected performance, the comparative data described above, and the number of
shares under options previously granted. These factors were evaluated in a
qualitative manner and were not assigned predetermined weights.

Section 162(m)

Section 162(m) of the Internal Revenue Code which became effective January
1, 1994, generally limits the deductibility of annual compensation for certain
officers to $1 million. It is the general intention of the Committee to assure
that officer compensation will meet the Section 162(m) requirements for
deductibility. However, the Committee reserves the right to use its judgment
to authorize compensation payments which may be in excess of the limit when
the Committee believes such payment is appropriate, after taking into
consideration changing business conditions or the officer's performance, and
is in the best interest of the shareholders. The Committee will review its
policy concerning Section 162(m) on a year-by-year basis.

Compensation Committee

Joseph A. Ciffolillo
Robert R. Momsen

COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN

The following performance graph assumes an investment of $100 on June 7,
1996 (the day following the date the Company's common stock was first
registered under Section 12 of the Securities Exchange Act of 1934) and
compares the changes thereafter in the market price of the Company's common
stock with a broad market index (Standard & Poor's SmallCap 600) and an
industry index (Standard & Poor's Health Care--Medical Products). The Company
paid no dividends during the periods shown; the performance of the indexes is
shown on a total return (dividend reinvestment) basis. The graph lines merely
connect the initial public offering date and the fiscal year-end dates and do
not reflect fluctuations between those dates.

[COMPARISON OF 19 MONTH CUMULATIVE TOTAL RETURN CHART APPEARS HERE]

06/07/96 12/31/97
-------- --------
INNOVASIVE DEVICES, INC. 100 73
S&P SMALL CAP 600 100 132
S&P HEALTH CARE 100 141

THE COMPENSATION COMMITTEE REPORT ON EXECUTIVE COMPENSATION AND THE
COMPARISON OF CUMULATIVE TOTAL STOCKHOLDER RETURN INFORMATION ABOVE SHALL NOT
BE DEEMED "SOLICITING MATERIAL" OR INCORPORATED BY REFERENCE INTO ANY OF THE
COMPANY'S FILINGS WITH THE SECURITIES AND EXCHANGE COMMISSION BY IMPLICATION
OR BY ANY REFERENCE IN ANY SUCH FILING TO THIS PROXY STATEMENT.

EXECUTIVE OFFICER COMPENSATION

The following summary compensation table sets forth the compensation paid or
accrued for services rendered in fiscal 1997, 1996 and 1995 to the chief
executive officer and the other four most highly compensated persons and
executive officers of the Company (the "Named Executive Officers").

SUMMARY COMPENSATION TABLE

LONG-TERM
COMPENSATION
ANNUAL COMPENSATION AWARDS
---------------------------------- ------------
OTHER ANNUAL SECURITIES ALL OTHER
NAME AND FISCAL BONUS(S) COMPENSATION UNDERLYING COMPENSATION
PRINCIPAL POSITION YEAR SALARY ($) ($) ($) OPTIONS (#) ($)(2)
------------------ ------ ---------- --------- ------------- ------------ -------------

Richard D. Randall...... 1997 174,807 35,000 61,000 193
President and Chief 1996 170,096 35,000 -- 44,444 195
Executive Officer 1995 150,000 -- -- -- 244
James E. Nicholson...... 1997 42,500 -- 97,500(1) -- --
former Chief Technical 1996 131,000 -- -- -- --
Officer 1995 130,000 -- -- -- --

James V. Barrile........ 1997 133,615 25,000 51,000 193
Executive Vice President, 1996 122,212 25,000 -- 11,111 167
and Chief Financial 1995 110,000 -- -- -- 209
Officer
Eric L. Bannon.......... 1997 98,708 25,000 -- 31,000 138
Vice President, Quality 1996 95,909 -- -- -- 53
Assurance and Regulatory 1995 81,915 -- -- -- 66
Affairs
John T. Rice............ 1997 99,862 20,000 21,000 138
Vice President, Research 1996 97,210 -- -- -- 97
and Development 1995 86,859 -- -- -- 122

- --------
(1) Mr. Nicholson is no longer an employee of the Company. The amount
indicated under "Other Annual Compensation" is compensation received
pursuant to a separation agreement between the Company and Mr. Nicholson
effective as of April 18, 1997.
(2) The amounts indicated under "All Other Compensation" indicate annual
contributions by the Company towards group term life insurance for the
Named Executive Officers. These amounts are included as reportable income
in each individual's Form W-2.

OPTIONS GRANTS IN LAST FISCAL YEAR

The following table shows all stock option grants to the Named Executive
Officers during fiscal 1997.

POTENTIAL REALIZABLE
VALUE AT ASSUMED
ANNUAL RATE OF STOCK
PRICE APPRECIATION FOR
NUMBER OF SHARES PERCENT OF TOTAL OPTIONS OPTION TERM (1)
UNDERLYING OPTIONS GRANTED TO EMPLOYEES EXERCISE PRICE EXPIRATION -----------------------
NAME GRANTED (#) IN FISCAL YEAR PER SHARE DATE 5% 10%
---- ------------------ ------------------------ --------------- ---------- ----------- -----------

Richard D. Randall...... 25,000(2) 10% $10.13 2/4/07 $ 159,268 $ 403,615
36,000(3) $ 8.75 12/10/07 198,102 502,029
James E. Nicholson...... -- -- -- -- -- --
James V. Barrile........ 25,000(2) 8% 10.13 2/4/07 159,268 403,615
26,000(3) 8.75 12/10/07 143,074 362,576
Eric L. Bannon.......... 15,000(2) 5% 10.13 2/4/07 95,561 242,169
16,000(3) 8.75 12/10/07 88,045 223,124
John T. Rice............ 15,000(2) 3% 10.13 2/4/07 95,561 242,169
6,000(3) 8.75 12/10/07 33,017 83,671

- --------
(1) As required by the rules of the Securities and Exchange Commission,
potential values stated are based on the prescribed assumption that the
Company's common stock will appreciate in value from the date of grant to
the end of the option term at rates (compounded annually) of 5% and 10%,
respectively, and therefore are not intended to forecast possible future
appreciation, if any, in the price of the Company's common stock.
(2) These options vest in four (4) equal annual installments, commencing on
February 4, 1998, the first anniversary of the date of grant, subject to
continuing employment.
(3) These options vest in four (4) equal annual installments, commencing on
December 10, 1998, the first anniversary of the date of grant, subject to
continuing employment.

FISCAL YEAR-END OPTION VALUES

The following table sets forth information regarding the number of options
exercised in fiscal 1997 and the number of vested and unvested options and the
unrealized value or spread (the difference between the exercise price and the
market value) of the unexercised options issued by the Company and held by the
Named Executive Officers on December 31, 1997.

NUMBER OF SHARES VALUE OF UNEXERCISED
UNDERLYING IN-THE-MONEY
SHARES UNEXERCISED OPTIONS(#) OPTIONS($)
ACQUIRED ON VALUE ------------------------ -----------------------
NAME EXERCISE (#) REALIZED VESTED UNVESTED VESTED UNVESTED
---- ------------ -------- ----------- ------------ ----------- -----------

Richard D. Randall...... -- -- 204,667 145,222 $ 1,466,501 $ 712,292
James E. Nicholson...... -- -- -- -- -- --
James V. Barrile........ -- -- 2,777 59,334 6,609 29,715
Eric L. Bannon.......... -- -- 15,555 39,890 107,299 46,917
John T. Rice............ -- -- 19,443 30,446 136,226 47,253

AMENDMENT TO 1996 OMNIBUS STOCK PLAN

(ITEM 2 OF NOTICE)

On May 5, 1998, the Board of Directors of the Company adopted an amendment
to the 1996 Omnibus Stock Plan (the "Omnibus Plan") increasing the maximum
aggregate number of shares available for issuance thereunder from 800,000 to
1,400,000 shares. The purpose of the increase in the maximum aggregate number
of shares available for issuance is to permit the continuing availability of
stock options and Common Stock for grant in order to continue to attract and
retain key employees and officers of, and consultants to, the Company. A copy
of the Omnibus Plan as amended is attached hereto as Annex I.

Approval by stockholders of the Omnibus Plan and the amendment increasing
the number of shares issuable under the Omnibus Plan is sought in order to
meet the stockholder approval requirements of (i) Section 422 of the Internal
Revenue Code of 1986, as amended (the "Code"), which requires stockholder
approval of any increase in the number of shares that may be issued under an
incentive stock option plan and (ii) Section 162(m) of the Code, which among
other qualifications requires stockholder approval of any option plan to
exempt the spread (the difference between the exercise price and the market
value at the time of exercise) of options from the limitation on deductibility
under that section. The executive officers of the Company are eligible to
receive options under the Omnibus Plan and will therefore benefit from
approval of this amendment. The Board of Directors recommends approval of this
amendment because it believes that the continuing availability of grants under
the Omnibus Plan is an important factor in the Company's ability to attract
and retain key employees, officers and consultants.

DESCRIPTION OF THE 1996 OMNIBUS STOCK PLAN

The Omnibus Plan was originally adopted by the Board of Directors on April
2, 1996 and approved by the stockholders on April 23, 1996 prior to the
Company's initial public offering. The Omnibus Plan, as amended by the Board,
currently provides for the issuance of a maximum of 1,400,000 shares of Common
Stock, plus such additional number of shares that become available due to the
forfeiture of options granted under the 1992 Stock Option Plan, (619,000 of
which are currently available for grant) pursuant to the grant of incentive
stock options to employees and non-qualified stock options or restricted stock
to employees, consultants, directors and officers of the Company. The Omnibus
Plan will remain in effect until April 1, 2006, subject to the Board's right
to terminate it earlier.

The Omnibus Plan is administered by the Compensation Committee of the Board
of Directors, which consists of two (2) or more members of the Board who are
"non-employee directors" and "outside directors" within the meaning of the
1934 Act and the Code, respectively. Current members are Messrs. Ciffolillo
and Momsen. Subject to the provisions of the Omnibus Plan, the Compensation
Committee has the authority to select the optionees or restricted stock
recipients and determine the terms of the options or restricted stock granted,
including: (i) the number of shares; (ii) the option exercise terms; (iii) the
exercise or purchase price (which in the case of an incentive stock option
cannot be less than the market price of the Common Stock as of the date of
grant); (iv) the type and duration of transfer or other restrictions; and (v)
the time and form of payment for restricted stock and upon exercise of
options.

Generally, an option is not transferable by the option holder except by will
or by the laws of descent and distribution. No incentive stock option may be
exercised more than 90 days following termination of employment unless the
termination is due to death or disability, in which case the option is
exercisable for a maximum of one year after such termination.

At April 10, 1998, there were outstanding under the Omnibus Plan options
held by participants to purchase an aggregate of 791,000 shares of Common
Stock. The exercise prices of options granted to date range from $8.75 to
$12.00 per share, and such options expire between April 2006 and December
2007. Approximately 125 employees, consultants, directors and officers are
eligible to receive options under the Omnibus Plan. The last sale price of the
Common Stock on April 10, 1998 as reported by the Nasdaq National Market was
$10.125 per share.

The following table sets forth the number of shares for which options were
granted during 1997 under the Omnibus Plan to each Named Executive Officer,
the current executive officers as a group, the non-employee directors and the
non-executive officer employees. For additional information as to options
granted to the Named Executive Officers during 1997, see the Option Grants
Table above.

OMNIBUS PLAN
------------

Richard D. Randall.............................................. 61,000
James E. Nicholson.............................................. 0
James V. Barrile................................................ 51,000
Eric L. Bannon.................................................. 31,000
John T. Rice.................................................... 21,000
Current executive officers as a group (4 persons)............... 233,000
Non-employee directors (7 persons).............................. 40,000
Non-executive officer employees (113 persons)................... 370,100

FEDERAL INCOME TAX INFORMATION

Set forth below is a general summary of the federal income tax consequences
to the Company and to recipients of options under the Omnibus Plan. The
following summary is not intended to be exhaustive, does not address certain
special federal tax provisions, does not address state, municipal or foreign
tax laws, and does not address the circumstances of special classes or
individual circumstances of option holders, including, without limitation,
foreign persons. ACCORDINGLY, EACH RECIPIENT OF OPTIONS UNDER THE OMNIBUS PLAN
SHOULD CONSULT A TAX ADVISER REGARDING THE TAX CONSEQUENCES OF THE GRANT OR
EXERCISE OF SUCH OPTIONS AND OF THE DISPOSITION OF ANY STOCK ACQUIRED UPON
EXERCISE OF SUCH OPTIONS IN LIGHT OF THE RECIPIENT'S OWN SITUATION, INCLUDING
THE APPLICATION OF ANY FEDERAL, STATE, LOCAL OR FOREIGN INCOME AND OTHER TAX
LAWS.

Tax Treatment of Incentive Stock Options. Under Section 422 of the Code, an
option holder incurs no federal income tax liability (other than alternative
minimum tax, as described below) on either the grant or exercise of an
incentive stock option ("ISO"). Provided that the stock is held until the
later of one year after the date of exercise of the option and two years after
its date of grant, any gain realized on the subsequent sale of stock will be
taxed as long-term capital gain, provided that the stock was held as a capital
asset at the time of the sale, and will generally be subject to a maximum tax
rate of 28% if the stock was held for a period not exceeding 18 months after
the exercise date, and to a maximum rate of 20% if the stock was held for a
period exceeding 18 months after the exercise date. If the stock is disposed
of within a shorter period, the option holder will be taxed, with respect to
the gain realized, as if he or she had then received ordinary compensation
income in an amount equal to the difference between the fair market value of
the stock on the date of exercise of the option and the option exercise price.
The balance of the gain realized will be taxed as capital gain provided the
stock was held as a capital asset. The tax rate applied to such gain will
depend on the holding period since the date of exercise. Unless an option
holder disposes of stock received on exercise of an ISO within the year in
which exercise occurred, the excess of the value of the stock at exercise over
the option price will increase the option holder's alternative minimum taxable
income ("AMTI"). After a deductible, AMTI is subject to tax rates ranging from
26 to 28%. The tax on AMTI is payable only to the extent that such tax exceeds
the option holder's "regular" federal income tax liability, and any portion of
the excess attributable to the exercise of an ISO is generally creditable
against the option holder's regular federal income tax liability for future
years.

The Company receives no tax deduction on the grant or exercise of an ISO,
but is entitled to a tax deduction if the option holder recognizes ordinary
compensation income on account of a premature disposition of ISO stock in the
same amount and at the same time as the option holder's recognition of income.

Tax Treatment of Non-Qualified Stock Options. Under Section 83 of the Code,
option holders realize no taxable income when a non-qualified stock option
("NSO") is granted. Instead, the difference between the fair market value of
the stock and the option price paid is taxed as ordinary compensation income,
on or after the

date on which the option is exercised. The difference is measured and taxed as
of the date of exercise if the stock is not subject at that time to a
"substantial risk of forfeiture," as defined in Section 83. To the extent that
the stock is subject to a substantial risk of forfeiture, the difference is
measured as of the date or dates on which the risk terminates. The Omnibus
Plan permits the Compensation Committee to impose repurchase rights on stock
acquired upon exercise of options that would constitute such a "substantial
risk of forfeiture." If such repurchase rights are imposed, the option holder
would recognize taxable income and incur a tax liability, and the optionee's
holding period for tax purposes would commence, in the year or years that the
substantial risk of forfeiture terminates with respect to the stock.

Alternatively, an option holder holding an NSO may elect, within thirty days
after the option is exercised, in accordance with Section 83(b), to be taxed
on the difference between the option exercise price and the fair market value
of the stock on the date of exercise, even though the stock acquired is
subject to a substantial risk of forfeiture. If the option holder makes this
election, subsequent changes in the value of the Common Stock at the time the
forfeiture provisions lapse will generally result in capital gains or losses,
and will not result in ordinary compensation income to the option holder.

The Company receives no tax deduction on the grant of an NSO, but is
entitled to a tax deduction when the option holder recognizes taxable income
on or after exercise of the option, in the same amount as the income
recognized by the option holder.

RATIFICATION OF SELECTION OF INDEPENDENT AUDITORS

(ITEM 3 OF NOTICE)

On the recommendation of the Audit Committee, the Board of Directors has
selected Price Waterhouse LLP, independent certified public accountants, as
auditors of the Company for the fiscal year ending December 31, 1998. This
firm has audited the accounts and records of the Company since 1991. A
representative of Price Waterhouse LLP will be present at the Annual Meeting
to answer questions from stockholders and will have an opportunity to make a
statement if desired.

The selection of independent auditors is not required to be submitted to a
vote of the stockholders. The Board believes, however, it is appropriate as a
matter of policy to request that the stockholders ratify the appointment. If
the stockholders do not ratify the appointment, the Board will reconsider its
selection.

SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE

Section 16(a) of the Securities Exchange Act of 1934, as amended (the "1934
Act"), requires the Company's officers and directors and persons who own more
than ten percent of its common stock to file reports with the Securities and
Exchange Commission disclosing their ownership of stock in the Company and
changes in such ownership. Copies of such reports are also required to be
furnished to the Company. Based solely on a review of the copies of such
reports received by it, the Company believes that, during fiscal 1997, all
such filing requirements were complied with.

STOCKHOLDER PROPOSALS FOR 1999 MEETING

Proposals of stockholders intended to be presented at the 1999 Annual
Meeting of Stockholders must be presented on or before January 8, 1999 for
inclusion in the proxy materials relating to that meeting. Any such proposals
should be sent to the Company at its principal offices addressed to the Vice
President, Finance and Administration. Other requirements for inclusion are
set forth in Rule 14a-8 under the 1934 Act.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents filed with the Commission by the Company (File No.
0-28492) pursuant to the Exchange Act are incorporated by reference in this
Proxy statement.

1. The Company's Annual Report on Form 10-K for the fiscal year ended
December 31, 1997 (including all audited financial statements contained
therein);

2. The Company's Annual Report to Stockholders for the fiscal year ended
December 31, 1997 (including all audited financial statements contained
therein);

3. The Company's Current Report on Form 8-K dated July 23, 1996; and

4. The Company's Registration Statement on Form S-1 (Registration No.
333-3368) filed with the SEC on May 17, 1996.

This Proxy Statement incorporates documents by reference which are not
presented herein or delivered herewith. Such documents (other than exhibits or
schedules to such documents unless such exhibits or documents are specifically
incorporated herein by reference) are available to any person, including any
beneficial owner, to whom this Proxy Statement is delivered, on written or
oral request, without charge, directed to Innovasive Devices, Inc., 734 Forest
Street, Marlboro, Massachusetts 01752-3032, Attention: Chief Financial Officer
(telephone number: (508) 460-8229).

OTHER MATTERS

The Company has no knowledge of any matters to be presented for action by
the stockholders at the Annual Meeting other than as set forth above. However,
the enclosed proxy gives discretionary authority to the persons named therein
to act in accordance with their best judgment in the event that any additional
matters should be presented.

The Company will bear the cost of the solicitation of proxies by management,
including the charges and expenses of brokerage firms and others for
forwarding solicitation material to beneficial owners of common stock.

By order of the Board of Directors

Roslyn G. Daum
Clerk

May 8, 1998

The Board hopes that stockholders will attend the meeting. WHETHER OR NOT
YOU PLAN TO ATTEND, YOU ARE URGED TO COMPLETE, DATE, SIGN AND RETURN THE
ENCLOSED PROXY IN THE ACCOMPANYING ENVELOPE. A prompt response will greatly
facilitate arrangements for the meeting, and your cooperation will be
appreciated. Stockholders who attend the meeting may vote their stock
personally even though they have sent in their proxies.

ANNEX I

INNOVASIVE DEVICES, INC.

1996 OMNIBUS STOCK PLAN

----------------

1. Purpose. This 1996 Omnibus Stock Plan (the "Plan") of Innovasive Devices,
Inc. (the "Company") is intended to provide incentives (a) to the officers and
other employees of the Company, its parent (if any) and any present or future
subsidiaries of the Company (collectively, "Related Corporations") by
providing them with opportunities to purchase stock in the Company pursuant to
options which qualify as "incentive stock options" under Section 422 of the
Internal Revenue Code of 1986, as amended (the "Code"), granted hereunder
("ISO" or "ISOs"); (b) to directors, officers, employees and consultants of
the Company and Related Corporations by providing them with opportunities to
purchase stock in the Company pursuant to options granted hereunder which do
not qualify as ISOs ("Non-Qualified Option" or "Non-Qualified Options"); and
(c) to directors, officers, employees and consultants of the Company and
Related Corporations by providing them with opportunities to make direct
purchases of restricted stock in the Company ("Restricted Stock"). Both ISOs
and Non-Qualified Options are referred to hereafter individually as an
"Option" and collectively as "Options." As used herein, the terms "parent" and
"subsidiary" mean "parent corporation" and "subsidiary corporation" as those
terms are defined in Section 424 of the Code.

2. Administration of the Plan. (a) The Plan shall be administered by the
Board of Directors of the Company (the "Board"). The Board may appoint a
Compensation Committee (the "Committee") of two or more of its members to
administer this Plan. In the event the Company registers any class of any
equity security pursuant to Section 12 of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), each member of the Committee shall be a "non-
employee director" as defined in Rule 16b-3 under the Exchange Act and each
shall be an "outside director" within the meaning of Section 162(m) of the
Code. Subject to ratification of the grant of each Option or Restricted Stock
by the Board (if so required by applicable state law), and subject to the
terms of the Plan, the Committee, if so appointed, shall have the authority to
(i) determine the employees of the Company and Related Corporations (from
among the class of employees eligible under paragraph 3 to receive ISOs) to
whom ISOs may be granted and to determine (from among the class of individuals
and entities eligible under paragraph 3 to receive Non-Qualified Options and
Restricted Stock) to whom Non-Qualified Options or Restricted Stock may be
granted; (ii) determine the time or times at which Options or Restricted Stock
may be granted; (iii) determine the option price of shares subject to each
Option, which price with respect to ISOs shall not be less than the minimum
specified in paragraph 7, and the purchase price of Restricted Stock; (iv)
determine whether each Option granted shall be an ISO or a Non-Qualified
Option; (v) determine (subject to paragraph 7) the time or times when each
Option shall become exercisable and the duration of the exercise period; (vi)
determine whether restrictions such as repurchase options are to be imposed on
shares subject to Options and to Restricted Stock, and the nature of such
restrictions, if any; (vii) establish, amend and waive the terms and
conditions of individual options and purchase authorizations granted
hereunder, including, without limitation, terms and conditions relating to
vesting, exercisability and effect of termination of employment by the
Company; and (viii) interpret the Plan and prescribe and rescind rules and
regulations relating to it. If the Committee determines to issue a Non-
Qualified Option, it shall take whatever actions it deems necessary, under
Section 422 of the Code and the regulations promulgated thereunder, to ensure
that such Option is not treated as an ISO. The interpretation and construction
by the Committee of any provisions of the Plan or of any Option or
authorization or agreement for Restricted Stock granted under it shall be
final unless otherwise determined by the Board. The Committee may from time to
time adopt such rules and regulations for carrying out the Plan as it may deem
best. No member of the Board or the Committee shall be liable for any action
or determination made in good faith with respect to the Plan or any Option or
Restricted Stock granted under it.

(b) The Committee may select one of its members as its chairman, and shall
hold meetings at such time and places as it may determine. Acts by a majority
of the Committee, or acts reduced to or approved in writing

A1-1

by a majority of the members of the Committee, shall be the valid acts of the
Committee. All references in this Plan to the Committee shall mean the Board
if there is no Committee so appointed. From time to time the Board may
increase the size of the Committee and appoint additional members thereof,
remove members (with or without cause) and appoint new members in substitution
therefor, fill vacancies however caused or remove all members of the Committee
and thereafter directly administer the Plan.

3. Eligible Employees and Others. ISOs may be granted to any officer or
other employee of the Company or any Related Corporation. Those directors of
the Company who are not employees may not be granted ISOs under the Plan. Non-
Qualified Options and Restricted Stock may be granted to any director (whether
or not an employee), officer, employee or consultant of the Company or any
Related Corporation. The Committee may take into consideration an optionee's
individual circumstances in determining whether to grant an ISO or a Non-
Qualified Option or Restricted Stock. Granting of any Option or Restricted
Stock to any individual or entity shall neither entitle that individual or
entity to, nor disqualify him from, participation in any other grant of
Options or Restricted Stock.

4. Stock. The stock subject to Options and Restricted Stock shall be
authorized but unissued shares of Common Stock of the Company, par value
$.0001 per share (the "Common Stock"), or shares of Common Stock re-acquired
by the Company in any manner. The aggregate number of shares which may be
issued pursuant to the Plan is 1,400,000 plus such additional number of shares
as may become available due to the forfeiture of options granted under the
1992 MinVasive Devices Stock Option Plan, subject to adjustment as provided in
paragraph 14. Any such shares may be issued as ISOs, Non-Qualified Options or
Restricted Stock so long as the aggregate number of shares so issued does not
exceed such number, as adjusted. If any Option granted under the Plan shall
expire or terminate for any reason without having been exercised in full or
shall cease for any reason to be exercisable in whole or in part, or if any
Restricted Stock shall be reacquired by the Company by exercise of its
repurchase option, the shares subject to such expired or terminated Option and
reacquired shares of Restricted Stock shall again be available for grants of
Options or Restricted Stock under the Plan.

5. Individual Participant Limitation. Any other provision of this Plan
notwithstanding, the number of shares of Common Stock for which options or
purchase authorizations may be granted in any single fiscal year of the
Company to any participant shall not exceed 250,000 shares (the "Individual
Limit"). For purposes of the foregoing limitation, if any option or purchase
authorization is cancelled, the cancelled option or purchase authorization
shall continue to be counted against the Individual Limit; if after grant the
exercise price of an option or purchase authorization is modified, the
transaction shall be treated as the cancellation of the option or purchase
authorization and the grant of a new option or purchase authorization. In any
such case, both the option or purchase authorization that is cancelled and the
option or purchase authorization deemed to be granted shall be counted against
the Individual Limit.

6. Grants Under the Plan. Options or Restricted Stock may be granted under
the Plan at any time on or after April 2, 1996 and prior to April 2, 2006. The
date of grant of an Option under the Plan will be the date specified by the
Committee at the time it awards the Option; provided, however, that such date
shall not be prior to the date of award. The Committee shall have the right,
with the consent of the optionee, to convert an ISO granted under the Plan to
a Non-Qualified Option pursuant to paragraph 16.

7. Minimum Option Price: ISO Limitations. (a) The price per share specified
in the agreement relating to each ISO granted under the Plan shall not be less
than the fair market value per share of Common Stock on the date of such
grant. In the case of an ISO to be granted to an employee owning stock
possessing more than ten percent of the total combined voting power of all
classes of stock of the Company or any Related Corporation, the price per
share specified in the agreement relating to such ISO shall not be less than
110 percent of the fair market value of Common Stock on the date of grant.

(b) In no event shall the aggregate fair market value (determined at the
time the option is granted) of Common Stock for which ISOs granted to any
employee are exercisable for the first time by such employee during any
calendar year (under all stock option plans of the Company and any Related
Corporation) exceed $100,000.

A1-2

(c) If, at the time an Option is granted under the Plan, the Company's
Common Stock is publicly traded, "fair market value" shall be determined as of
the last business day for which the prices or quotes discussed in this
sentence are available prior to the date such Option is granted and shall mean
(i) the average (on that date) of the high and low prices of the Common Stock
on the principal national securities exchange on which the Common Stock is
traded, if such stock is then traded on a national securities exchange; or
(ii) the last reported sale price (on that date) of the Common Stock on the
Nasdaq National Market, if the Common Stock is not then traded on a national
securities exchange; or (iii) the closing bid price (or average of bid prices)
last quoted (on that date) by an established quotation service for over-the-
counter securities, if the Common Stock is not reported on the Nasdaq National
Market or on a national securities exchange. However, if the Common Stock is
not publicly traded at the time an Option is granted under the Plan, "fair
market value" shall be deemed to be the fair value of the Common Stock as
determined by the Committee after taking into consideration all factors which
it deems appropriate, including, without limitation, recent sale and offer
prices of the Common Stock in private transactions negotiated at arm's length.

8. Option Duration. Subject to earlier termination as provided in paragraphs
10 and 11, each Option shall expire on the date specified by the Committee,
but not more than ten years from the date of grant and in the case of ISOs
granted to an employee owning stock possessing more than ten percent of the
total combined voting power of all classes of stock of the Company or any
Related Corporation, not more than five years from date of grant. Subject to
earlier termination as provided in paragraphs 10 and 11, the term of each ISO
shall be the term set forth in the original instrument granting such ISO,
except with respect to any part of such ISO that is converted into a Non-
Qualified Option pursuant to paragraph 16.

9. Exercise of Option. Subject to the provisions of paragraphs 10 through
13, each Option granted under the Plan shall be exercisable as follows:

(a) The Option shall either be fully exercisable on the date of grant or
shall become exercisable thereafter in such installments as the Committee may
specify.

(b) Once an installment becomes exercisable it shall remain exercisable
until expiration or termination of the Option, unless otherwise specified by
the Committee.

(c) Each Option or installment may be exercised at any time or from time to
time, in whole or in part, for up to the total number of shares with respect
to which it is then exercisable.

(d) The Committee shall have the right to accelerate the date of exercise of
any installment; provided that the Committee shall not accelerate the exercise
date of any installment of any Option granted to any employee as an ISO (and
not previously converted into a Non-Qualified Option pursuant to paragraph 16)
if such acceleration would violate the annual vesting limitation contained in
Section 422(d) of the Code, which provides generally that the aggregate fair
market value (determined at the time the option is granted) of the stock with
respect to which ISOs granted to any employee are exercisable for the first
time by such employee during any calendar year (under all plans of the Company
and any Related Corporation) shall not exceed $100,000.

10. Termination of Employment. If an ISO optionee ceases to be employed by
the Company or any Related Corporation other than by reason of death or
disability as provided in paragraph 11, no further installments of his ISOs
shall become exercisable, and his ISOs shall terminate after the passage of 90
days from the date of termination of his employment, but in no event later
than on their specified expiration dates except to the extent that such ISOs
(or unexercised installments thereof) have been converted into Non-Qualified
Options pursuant to paragraph 16. Leave of absence with the written approval
of the Committee shall not be considered an interruption of employment under
the Plan, provided that such written approval contractually obligates the
Company or any Related Corporation to continue the employment of the employee
after the approved period of absence. Employment shall also be considered as
continuing uninterrupted during any other bona fide leave of absence (such as
those attributable to illness, military obligations or governmental service)
provided that the period of such leave does not exceed 90 days or, if longer,
any period during which such optionee's right to

A1-3

reemployment is guaranteed by statute. Nothing in the Plan shall be deemed to
give any grantee of any Option or Restricted Stock the right to be retained in
employment or other service by the Company or any Related Corporation for any
period of time. ISOs granted under the Plan shall not be affected by any
change of employment within or among the Company and Related Corporations, so
long as the optionee continues to be an employee of the Company or any Related
Corporation. In granting any Non-Qualified Option, the Committee may specify
that such Non-Qualified Option shall be subject to the restrictions set forth
herein with respect to ISOs, or to such other termination or cancellation
provisions as the Committee may determine. Notwithstanding the provisions in
this paragraph 10, the Committee may, in its sole discretion, establish
different terms and conditions pertaining to the effect of a participant's
termination of employment by the Company.

11. Death; Disability; Dissolution. If an optionee ceases to be employed by
the Company and all Related Corporations by reason of his death, any Option of
his may be exercised, to the extent of the number of shares with respect to
which he could have exercised it on the date of his death, by his estate,
personal representative or beneficiary who has acquired the Option by will or
by the laws of descent and distribution, at any time prior to the earlier of
the Option's specified expiration date or one year from the date of the
optionee's death.

If an optionee ceases to be employed by the Company and all Related
Corporations by reason of his disability, he shall have the right to exercise
any Option held by him on the date of termination of employment, to the extent
of the number of shares with respect to which he could have exercised it on
that date, at any time prior to the earlier of the Option's specified
expiration date or one year from the date of the termination of the optionee's
employment. For the purposes of the Plan, the term "disability" shall have the
meaning assigned to it in Section 22(e)(3) of the Code or any successor
statute.

In the case of a partnership, corporation or other entity holding a Non-
Qualified Option, if such entity is dissolved, liquidated, becomes insolvent
or enters into a merger or acquisition with respect to which such optionee is
not the surviving entity, such Option shall terminate immediately.

12. Assignability. Unless otherwise approved by the Board, no Non-Qualified
Option shall be assignable or transferable by the optionee except by will or
by the laws of descent and distribution or pursuant to a qualified domestic
relations order, and during the lifetime of the Optionee each Option shall be
exercisable only by him. No ISO shall be assignable or transferable by the
optionee except by will or by the laws of descent and distribution, and during
the lifetime of the Optionee each Option shall be exercisable only by him.

13. Terms and Conditions of Options. Options shall be evidenced by
instruments (which need not be identical) in such forms as the Committee may
from time to time approve. Such instruments shall conform to the terms and
conditions set forth in paragraphs 6 through 12 hereof and may contain such
other provisions as the Committee deems advisable that are not inconsistent
with the Plan, including transfer and repurchase restrictions applicable to
shares of Common Stock issuable upon exercise of Options. The Committee may
from time to time confer authority and responsibility on one or more of its
own members and/or one or more officers of the Company to execute and deliver
such instruments. The proper officers of the Company are authorized and
directed to take any and all action necessary or advisable from time to time
to carry out the terms of such instruments.

14. Adjustments. Upon the happening of any of the following described
events, an optionee's rights with respect to Options granted to him hereunder
shall be adjusted as hereinafter provided:

(a) In the event the Company is merged into or consolidated with another
corporation under circumstances where the Company is not the surviving
corporation or if the Company is liquidated or sells or otherwise disposes of
all or substantially all of its assets to another corporation while
unexercised options remain outstanding under the Plan, (i) subject to the
provisions of clauses (iii), (iv) and (v) below, after the effective date of
such merger, consolidation or sale, as the case may be, each holder of an
outstanding option shall be entitled, upon exercise of such option, to receive
in lieu of shares of Common Stock, shares of such stock or other securities as
the holders of shares of Common Stock received pursuant to the terms of the
merger, consolidation or sale; or (ii) the Board

A1-4

may waive any discretionary limitations imposed with respect to the exercise
of the option so that all options from and after a date prior to the effective
date of such merger, consolidation, liquidation or sale, as the case may be,
specified by the Board, shall be exercisable in full; or (iii) all outstanding
options may be cancelled by the Board as of the effective date of any such
merger, consolidation, liquidation or sale, provided that notice of such
cancellation shall be given to each holder of an option, and each such holder
thereof shall have the right to exercise such option in full (without regard
to any discretionary limitations imposed with respect to the option) during a
30-day period preceding the effective date of such merger, consolidation,
liquidation or sale; or (iv) all outstanding options may be cancelled by the
Board as of the date of any such merger, consolidation, liquidation or sale,
provided that notice of such cancellation shall be given to each holder of an
option and each such holder thereof shall have the right to exercise such
option but only to the extent exercisable in accordance with any discretionary
limitations imposed with respect to the option prior to the effective date of
such merger, consolidation, liquidation or sale; or (v) the Board may provide
for the cancellation of all outstanding options and for the payment to the
holders thereof of some part or all of the amount by which the value thereof
exceeds the payment, if any, which the holder would have been required to make
to exercise such option.

(b) In the event the Company shall issue any of its shares as a stock
dividend upon or with respect to the shares of stock of the class which shall
at the time be subject to option hereunder, each optionee upon exercising an
Option shall be entitled to receive (for the purchase price paid upon such
exercise) the shares as to which he is exercising his Option and, in addition
thereto (at no additional cost), such number of shares of the class or classes
in which such stock dividend or dividends were declared or paid, and such
amount of cash in lieu of fractional shares, as he would have received if he
had been the holder of the shares as to which he is exercising his Option at
all times between the date of grant of such Option and the date of its
exercise.

(c) Notwithstanding the foregoing, any adjustments made pursuant to
subparagraph (a) or (b) shall be made only after the Committee, after
consulting with counsel for the Company, determines whether such adjustments
with respect to ISOs will constitute a "modification" of such ISOs as that
term is defined in Section 424 of the Code, or cause any adverse tax
consequences for the holders of such ISOs. No adjustments shall be made for
dividends paid in cash or in property other than securities of the Company.

(d) No fractional shares shall actually be issued under the Plan. Any
fractional shares which, but for this subparagraph (d), would have been issued
to an optionee pursuant to an Option, shall be deemed to have been issued and
immediately sold to the Company for their fair market value, and the optionee
shall receive from the Company cash in lieu of such fractional shares.

(e) Upon the happening of any of the foregoing events described in
subparagraphs (a) or (b) above, the class and aggregate number of shares set
forth in paragraph 4 hereof which are subject to Options which previously have
been or subsequently may be granted under the Plan shall also be appropriately
adjusted to reflect the events specified in such subparagraphs. The Committee
shall determine the specific adjustments to be made under this paragraph 14,
and subject to paragraph 2, its determination shall be conclusive.

15. Means of Exercising Options. An Option (or any part or installment
thereof) shall be exercised by giving written notice to the Company at its
principal office address. Such notice shall identify the Option being
exercised and specify the number of shares as to which such Option is being
exercised, accompanied by full payment of the purchase price therefor (i) in
United States dollars in cash or by check, (ii) at the discretion of the
Committee, through delivery of shares of Common Stock having fair market value
equal as of the date of the exercise to the cash exercise price of the Option,
(iii) at the discretion of the Committee, by delivery of the optionee's
personal recourse note bearing interest payable not less than annually at no
less than 100% of the lowest applicable Federal rate, as defined in Section
1274(d) of the Code, (iv) at the discretion of the Committee, by delivery to
the Company of irrevocable instructions to a broker to (a) either sell the
shares subject to the option or purchase authorization being exercised or hold
such shares as collateral for a margin loan and (b) promptly deliver to the
Company the amount of the sale or loan proceeds required to pay the exercise
price or purchase price, as the case may be, or (v) at the discretion of the
Committee, by any combination of (i), (ii), (iii)

A1-5

and (iv) above. If the Committee exercises its discretion to permit payment of
the exercise price of an ISO by means of the methods set forth in clauses
(ii), (iii) or (iv) of the preceding sentence, such discretion shall be
exercised in writing at the time of the grant of the ISO in question. The
holder of an Option shall not have the rights of a shareholder with respect to
the shares covered by his Option until the date of issuance of a stock
certificate to him for such shares. Except as expressly provided above in
paragraph 14 with respect to change in capitalization and stock dividends, no
adjustment shall be made for dividends or similar rights for which the record
date is before the date such stock certificate is issued.

16. Conversion of ISOs into Non-Qualified Options: Termination of ISOs. The
Committee, at the written request of any optionee, may in its discretion take
such actions as may be necessary to convert such optionee's ISOs (or any
installments or portions of installments thereof) that have not been exercised
on the date of conversion into Non-Qualified Options at any time prior to the
expiration of such ISOs, regardless of whether the optionee is an employee of
the Company or a Related Corporation at the time of such conversion. Such
actions may include, but not be limited to, extending the exercise period or
reducing the exercise price of the appropriate installments of such Options.
At the time of such conversion, the Committee (with the consent of the
optionee) may impose such conditions on the exercise of the resulting Non-
Qualified Options as the Committee in its discretion may determine, provided
that such conditions shall not be inconsistent with this Plan. Nothing in the
Plan shall be deemed to give any optionee the right to have such optionee's
ISOs converted into Non-Qualified Options and no such conversion shall occur
until and unless the Committee takes appropriate action. The Committee, with
the consent of the optionee, may also terminate any portion of any ISO that
has not been exercised at the time of such termination.

17. Restricted Stock. Each grant of Restricted Stock under the Plan shall be
evidenced by an instrument (a "Restricted Stock Agreement") in such form as
the Committee shall prescribe from time to time in accordance with the Plan
and shall comply with the following terms and conditions, and with such other
terms and conditions as the Committee, in its discretion, shall establish:

(a) The Committee shall determine the number of shares of Common Stock to be
issued to an eligible person pursuant to the grant of Restricted Stock, and
the extent, if any, to which they shall be issued in exchange for cash, other
consideration, or both.

(b) Shares issued pursuant to a grant of Restricted Stock may not be sold,
assigned, transferred, pledged or otherwise disposed of, except by will or the
laws of descent and distribution or as otherwise determined by the Committee
in the Restricted Stock Agreement, for such period as the Committee shall
determine, from the date on which the Restricted Stock is granted (the
"Restricted Period"). The Company will have the option to repurchase the
Common Stock at such price as the Committee shall have fixed in the Restricted
Stock Agreement, which option will be exercisable (i) if the Participant's
continuous employment or performance of services for the Company and the
Related Corporations shall terminate prior to the expiration of the Restricted
Period, (ii) if, on or prior to the expiration of the Restricted Period or the
earlier lapse of such repurchase option, the Participant has not paid to the
Company an amount equal to any federal, state, local or foreign income or
other taxes which the Company determines is required to be withheld in respect
of such Restricted Stock or (iii) under such other circumstances as determined
by the Committee in its discretion. Such repurchase option shall be
exercisable on such terms, in such manner and during such period as shall be
determined by the Committee in the Restricted Stock Agreement. Each
certificate for shares issued as Restricted Stock shall bear an appropriate
legend referring to the foregoing repurchase option and other restrictions;
shall be deposited by the stockholder with the Company, together with a stock
power endorsed in blank; or shall be evidenced in such other manner permitted
by applicable law as determined by the Committee in its discretion. Any
attempt to dispose of any such shares in contravention of the foregoing
repurchase option and other restrictions shall be null and void and without
effect. If shares issued as Restricted Stock shall be repurchased pursuant to
the repurchase option described above, the stockholder, or in the event of his
death, his personal representative, shall forthwith deliver to the Secretary
of the Company the certificates for the shares, accompanied by such instrument
of transfer, if

A1-6

any, as may reasonably be required by the Secretary of the Company. If the
repurchase option described above is not exercised by the Company, such
repurchase option and the restrictions imposed pursuant to the first sentence
of this subparagraph (b) shall terminate and be of no further force and
effect.

(c) If a person who has been in continuous employment or performance of
services for the Company or a Related Corporation since the date on which
Restricted Stock was granted to him shall, while in such employment or
performance of services, die, or terminate such employment or performance of
services by reason of disability or by reason of early, normal or deferred
retirement under an approved retirement program of the Company or a Related
Corporation (or such other plan or arrangement as may be approved by the
Committee in its discretion, for this purpose) and any of such events shall
occur after the date on which the Restricted Stock was granted to him and
prior to the end of the Restricted Period, the Committee may determine to
cancel the repurchase option (and any and all other restrictions) on any or
all of the shares of Restricted Stock; and the repurchase option shall become
exercisable at such time as to the remaining shares, if any.

18. Term and Amendment of Plan. This Plan was adopted by the Board on April
2, 1996 and approved by the stockholders of the Company on April 23, 1996. The
Plan shall expire on April 1, 2006 (except as to Options and Restricted Stock
outstanding on that date). The Board may terminate or amend the Plan in any
respect at any time, except that any amendment that (a) increases the total
number of shares that may be issued under the Plan (except by adjustment
pursuant to paragraph 14); (b) changes the class of persons eligible to
participate in the Plan, or (c) materially increases the benefits to
participants under the Plan, shall be subject to approval by stockholders
obtained within 12 months before or after the Board adopts a resolution
authorizing any of the foregoing amendments, and shall be null and void if
such approval is not obtained. Termination or any modification or amendment of
the Plan shall not, without consent of a participant, affect his rights under
any Option or Restricted Stock previously granted to him.

19. Application of Funds. The proceeds received by the Company from the sale
of shares pursuant to Options and Restricted Stock authorized under the Plan
shall be used for general corporate purposes.

20. Governmental Regulation. The Company's obligation to sell and deliver
shares of the Common Stock under this Plan is subject to the approval of any
governmental authority required in connection with the authorization, issuance
or sale of such shares.

21. (a) Withholding Taxes; Delivery of Shares. The Company's obligation to
deliver shares of Common Stock upon exercise of an option or purchase
authorization, in whole or in part, shall be subject to the participant's
satisfaction of all applicable federal, state and local income and employment
tax withholding obligations. The participant may satisfy the obligation, in
whole or in part, by electing to (1) have the Company withhold shares of
Common Stock or (2) deliver to the Company already-owned shares of Common
Stock having a value equal to the amount required to be withheld; provided,
however, that participants who are subject to the requirements of Section 16
of the Exchange Act ("Section 16 Persons") shall not have the benefit of the
foregoing election but rather the Company shall, in all cases where tax
withholding is required with respect to such participants, withhold shares of
Common Stock having a value equal to such withholding obligations. The value
of shares to be withheld or delivered shall be based on the fair market value
of the shares on the date the amount of tax to be withheld is to be determined
(the "Tax Date"). The election by a participant who is not a Section 16 Person
to have shares withheld for this purpose will be subject to the following
restrictions: (1) the election must be made prior to the Tax Date, (2) the
election must be irrevocable and (3) the election will be subject to the
disapproval of the Committee.

(b) Withholding of Additional Income Taxes. The Company may, in accordance
with the Code, upon exercise of a Non-Qualified Option or the purchase of
Common Stock for less than its fair market value or the lapse of restrictions
on Restricted Stock or the making of a Disqualifying Disposition (as defined
in paragraph 22), require the employee to pay additional withholding taxes in
respect of the amount that is considered compensation includable in such
person's gross income.

A1-7

22. Notice to Company of Disqualifying Disposition. Each employee who
receives ISOs shall agree to notify the Company in writing immediately after
the employee makes a disqualifying disposition of any Common Stock received
pursuant to the exercise of an ISO (a "Disqualifying Disposition").
Disqualifying Disposition means any disposition (including any sale) of such
stock before the later of (a) two years after the employee was granted the ISO
under which he acquired such stock or (b) one year after the employee acquired
such stock by exercising such ISO. If the employee has died before such stock
is sold, these holding period requirements do not apply and no Disqualifying
Disposition will thereafter occur.

23. Governing Laws; Construction. The validity and construction of the Plan
and the instruments evidencing Options and Restricted Stock shall be governed
by the laws of the Commonwealth of Massachusetts. In construing this Plan, the
singular shall include the plural and the masculine gender shall include the
feminine and neuter, unless the context otherwise requires.

A1-8

PROXY

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

INNOVASIVE DEVICES, INC.

1998 ANNUAL MEETING OF STOCKHOLDERS

The undersigned stockholder of INNOVASIVE DEVICES, INC., a Massachusetts
corporation, hereby acknowledges receipt of the Notice of Annual Meeting of
Stockholders and related Proxy Statement, each dated May 8, 1998, and hereby
appoints Richard D. Randall and James V. Barrile, or any one of them, proxies
and attorneys-in-fact, with full power to each of substitution, on behalf and in
the name of the undersigned, to represent the undersigned at the 1998 Annual
Meeting of Stockholders of INNOVASIVE DEVICES, INC. to be held on Monday, June
8, 1998 at 10:00 a.m., local time, at Choate, Hall & Stewart, Exchange Place, 53
State Street, 36th Floor, Boston, Massachusetts, and at any adjournment(s)
thereof, and to vote all shares of Common Stock which the undersigned would be
entitled to vote if then and there personally present, on the matters set forth
on the reverse side.

THIS PROXY WILL BE VOTED AS DIRECTED OR, IF NO CONTRARY DIRECTION IS INDICATED,
WILL BE VOTED FOR THE ELECTION OF DIRECTORS, FOR APPROVAL OF AMENDMENTS TO THE
1996 OMNIBUS STOCK PLAN, FOR THE RATIFICATION OF THE APPOINTMENT OF PRICE
WATERHOUSE LLP AS INDEPENDENT AUDITORS, AND AS SAID PROXIES SEEM ADVISABLE ON
SUCH MATTERS AS MAY COME BEFORE THE MEETING.

- ----------- -----------
SEE REVERSE CONTINUED AND TO BE SIGNED ON REVERSE SIDE SEE REVERSE
- ----------- -----------

PLEASE MARK
VOTES AS IN _____
[X] THIS EXAMPLE. |
|

1. ELECTION OF DIRECTORS:

NOMINEES: Joseph A. Ciffolillo and David J. Foster

FOR WITHHELD
[_] [_]

[_] ________________________________________
For all nominees except as noted above

FOR AGAINST ABSTAIN
2. PROPOSAL TO APPROVE [_] [_] [_]
AMENDMENTS TO THE COMPANY'S
1996 OMNIBUS STOCK OPTION PLAN:

3. PROPOSAL TO RATIFY THE [_] [_] [_]
APPOINTMENT OF PRICE
WATERHOUSE LLP AS THE
INDEPENDENT AUDITORS OF THE
COMPANY FOR THE 1998 FISCAL
YEAR:

Upon such other matters which may properly come before the
meeting and any adjournment(s) thereof.

MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT [_]

This Proxy should be dated, signed by the stockholder(s) exactly as his
or her name appears hereon, and returned promptly in the enclosed
envelope. Persons signing in a fiduciary capacity should so indicate. If
shares are held by joint tenants or as community property, both should
sign.

Signature:_________________ Date:______ Signature:_________________ Date:______