SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549


FORM 10-K
ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 1999 Commission File No. 1-11083


BOSTON SCIENTIFIC CORPORATION
(Exact name of Company as specified in its charter)

           DELAWARE                                   04-2695240
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
incorporation or organization)


ONE BOSTON SCIENTIFIC PLACE, NATICK, MASSACHUSETTS 01760-1537
(Address, including zip code, of principal executive offices)

(508) 650-8000
(Company's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.01 PAR VALUE PER SHARE
(Title of class)

Securities registered pursuant to Section 12(g) of the Act:
NONE


Indicate by check mark whether the Company (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Company was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes X No

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of Company's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to the Form 10-K. [X]


The aggregate market value of Common Stock held by non-affiliates (persons other than directors, executive officers, and related family entities) of the Company was approximately $6.3 billion based on the closing price of the Common Stock on March 17, 2000.

The number of shares outstanding of the Company's Common Stock as of March 17, 2000 was 406,556,829.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Company's 1999 Annual Report to Shareholders which is filed with the Securities and Exchange Commission (the "Commission") as an exhibit hereto and the Proxy Statement to be filed with the Securities and Exchange Commission on or about April 3, 2000 are incorporated by reference into Parts I, II and III.

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PART I

ITEM 1. BUSINESS

THE COMPANY

Boston Scientific Corporation (the "Company") is a worldwide developer, manufacturer and marketer of minimally invasive medical devices. The Company's products are used in a broad range of interventional medical specialties, including cardiology, electrophysiology, gastroenterology, neuro-endovascular therapy, pulmonary medicine, radiology, urology and vascular surgery. The Company's products are generally inserted into the human body through natural openings or small incisions in the skin and can be guided to most areas of the anatomy to diagnose and treat a wide range of medical problems. These products provide effective alternatives to traditional surgery by reducing procedural trauma, complexity, risk to the patient, cost and recovery time.

The Company's history began in the late 1960s when the Company's co-founder, John Abele, acquired an equity interest in Medi-tech, Inc., a development company. Medi-tech's initial products, a family of steerable catheters, were introduced in 1969. They were used in some of the first minimally invasive procedures performed, and versions of these catheters are still being sold today. In 1979, John Abele joined with Pete Nicholas to form the Company, which indirectly acquired Medi-tech, Inc. This acquisition began a period of active, focused marketing, new product development and organizational growth. Since then, the Company's net sales have increased substantially, growing from $1.8 million in 1979 to $2.8 billion in 1999.

The Company's growth in the past few years has been fueled in part by strategic acquisitions and alliances designed to improve the ability of the Company to take advantage of future growth opportunities in less invasive medicine. These acquisitions have helped the Company to achieve a strategic mass which allows it to offer one of the broadest product lines in the world for use in minimally invasive procedures. The Company's strategic mass has also enabled it to compete more effectively in, and better absorb the pressures of, the current healthcare environment of cost containment, managed care, large buying groups and hospital consolidations.

During 1998, the Company established a rationalization plan in conjunction with the consummation of the Schneider acquisition, taking into consideration duplicate capacity as well as opportunities for further leveraging of cost and technology platforms. The Company substantially completed its rationalization plan in 1999, including the closure of five Schneider facilities as well as the transition of manufacturing for selected Boston Scientific product lines to different sites.

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BUSINESS STRATEGY

The Company's mission is to improve the quality of patient care and the productivity of healthcare delivery through the development and advocacy of minimally invasive medical devices and procedures. The Company seeks to accomplish this mission through the continuing refinement of existing products and procedures and the investigation and development, as well as the acquisition, of new technologies which can reduce risk, trauma, cost, procedure time and the need for aftercare. The Company's strategy has been, and will continue to be, to grow by identifying those specific therapeutic and diagnostic areas which satisfy the Company's mission and provide attractive opportunities for long-term growth and by making the investments necessary to capitalize on these opportunities. Key elements of this strategy are as follows:

Product Diversity. The Company offers products in numerous product categories which are used by physicians throughout the world in a broad range of diagnostic and therapeutic vascular and nonvascular procedures. The breadth and diversity of the Company's product lines permit medical specialists to satisfy many of their minimally invasive medical device requirements from a single source. The scope of its products and markets also reduces the Company's vulnerability to change in the competitive, regulatory and technological environments for any single product or market.

Product Innovation. The Company believes that streamlining and coordinating its technology pipeline and new product development is essential to its ability to stimulate growth and maintain leadership positions in its markets. By centralizing platform technology development at the corporate level, the Company is able to pursue technologies that can be leveraged across multiple markets. Simultaneously, the interaction of the Company's product management teams and sales representatives with the worldwide medical community facilitates new product development at the divisional level to address the needs and desires of the Company's physician customers.

Focused Marketing. The Company markets its products through six principal divisions: Scimed, EP Technologies, Medi-tech (formerly operating as Boston Scientific Vascular, Meadox and Schneider), Target Therapeutics, Microvasive Endoscopy and Microvasive Urology. Each of the Company's divisions focuses on physicians who specialize in the diagnosis and treatment of different medical conditions and offers products to satisfy their needs. The Company believes that this focused disease state management enables it to develop highly knowledgeable and dedicated sales representatives and to foster close professional relationships with physicians.

International Presence. Maintaining and expanding its international presence is an important component of the Company's long term growth plan. Currently, the Company operates international manufacturing facilities in Ireland and has direct marketing and sales subsidiaries or distribution arrangements throughout the world. Through its international presence, the Company seeks to increase net sales and market share, accelerate the time within which new products can be brought to market and gain access to worldwide technological developments that may be implemented across its product lines.

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Active Participation in the Medical Community. The Company believes that it has excellent working relationships with physicians and others in the medical industry which enable it to gain a detailed understanding of new therapeutic and diagnostic alternatives, and to respond quickly to the changing needs of physicians and patients. The Company enhances its presence in the medical community through active participation in medical meetings, by conducting comprehensive training and educational activities and through employee-authored articles in medical journals and textbooks. The Company believes that these activities and its advocacy positions contribute to the medical community's understanding and adoption of minimally invasive techniques and the expansion of these techniques into new therapeutic and diagnostic areas.

Corporate Culture. Management believes that success and leadership evolve from a motivating corporate culture which rewards achievement, respects and values individual employees and customers, and has a long-term focus on quality, technology, integrity and service. The Company believes that its success is attributable in large part to the high caliber of its employees and the Company's commitment to respecting the values on which its success has been based.

Strategic Acquisitions and Alliances. In recent years, the Company has sought out strategic acquisitions, alliances and venture opportunities which complement or expand its existing product lines or enhance its technological position. Although the Company did not make any significant acquisitions in 1999, the Company expects that it will continue to seek out and review opportunities for acquisitions and strategic alliances consistent with its corporate mission.

PRODUCTS

The Company's products are broadly categorized as vascular or nonvascular, depending on the anatomical system and procedure in which a product is intended to be used. Generally, vascular products are employed in procedures affecting the heart and systems which carry blood, and nonvascular products are employed in procedures affecting other systems and organs. In 1999, approximately 81% of the Company's net sales were derived from its vascular business, approximately 18% from its nonvascular business and less than 1% from other business. The Company's principal vascular and nonvascular products are offered in the following medical areas:

VASCULAR

Coronary Stents. The Company markets both balloon-expandable and self-expanding coronary stent systems. The Company's most important products in this category incorporate the NIR(R) balloon-expandable coronary stent developed and manufactured by Medinol Ltd., with which the Company has an exclusive worldwide distribution agreement for stent products. The Company hopes to introduce the NIROYAL(TM) ADVANCE(TM), NIROYAL(TM) ELITE(TM) and NIRELITE(TM) coronary stent systems in the United States in 2000, pending approval from the United States Food and Drug Administration ("FDA"). The Company recently introduced the NIR(R) with SOX(TM) over-the-wire coronary stent delivery system in the United States and hopes to introduce a Monorail(TM) system later in 2000, pending

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FDA approval. The Company has already launched or intends to launch in 2000 (pending regulatory approval) these products in selected international markets. Through a strategic alliance with Angiotech Pharmaceuticals, Inc., the Company holds a co-exclusive license for the use of paclitaxel on intraluminal devices to inhibit restenosis as well as other applications. The Company has been granted approval by the Freiburg Ethics Commission International to conduct a clinical trial in Germany of paclitaxel coated coronary stents.

Coronary Revascularization. The Company markets a broad line of products used to treat patients with atherosclerosis. Atherosclerosis, a coronary vessel disease and a principal cause of heart attacks, is characterized by a thickening of the walls of the arteries and a narrowing of arterial lumens (openings) caused by the progressive development of deposits of plaque. Atherosclerosis results in reduced blood flow to the muscle of the heart. The majority of the Company's products in this market are used in percutaneous transluminal coronary angioplasty ("PTCA") and percutaneous transluminal coronary rotational atherectomy. The Company's products in this market include PTCA balloon catheters, the Rotablator(R) and Rotalink(R) rotational atherectomy systems, guide wires, guide catheters, diagnostic catheters and fluid management systems.

Electrophysiology. The Company's electrophysiology product offerings include catheters and systems for use in minimally invasive procedures to diagnose and treat tachyarrhythmias (abnormally fast heart rhythms). The Company markets RF generators and steerable ablation catheters, many of which incorporate proprietary steering, temperature monitoring and control technology, as well as a line of diagnostic catheters and associated accessories.

Peripheral Vascular Intervention and Vascular Access. The Company sells various products designed to treat patients with peripheral vascular disease (disease which appears in blood vessels other than in the heart), including a broad line of catheters used in percutaneous transluminal angioplasty. Additionally, the Company's peripheral vascular product line includes medical devices used in thrombolysis (the catheter-based delivery of clot dissolving agents directly to the site of a blood clot) and thrombectomy catheters. The Company also offers stents to maintain patency of peripheral lumens, including the WALLSTENT(R) endoprosthesis.

Caval Interruption Systems. The Company markets the Greenfield(R) vena cava filter system for use in patients who are at risk of developing a pulmonary embolism due to an existing medical condition or post-surgical complications. Once the filter is implanted, circulating emboli (blood clots) can be captured and held by the lattice design of the filter, allowing the clots to dissolve naturally before they can reach the pulmonary system.

Surgical and Endovascular Grafts. The Company markets vascular grafts and endovascular stent grafts for the treatment of thoracic dissection, abdominal aortic aneurysms and peripheral vascular occlusive diseases.

Intraluminal Ultrasound Imaging. The Company markets a family of intraluminal catheter-directed ultrasound imaging systems for diagnostic use in blood vessels, heart chambers and

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coronary arteries, as well as certain nonvascular systems. The Company hopes to introduce in 2000 the Atlantis(TM) 40 mHz imaging catheter and Galaxy(TM) ultrasound imaging console in both the United States and Japan, pending approvals from the FDA and Japan's Ministry of Health.

Neuro-Endovascular Therapy. The Company markets a line of micro-guidewires, micro-catheters, guiding catheters and embolics to treat diseases of the neurovascular system. The Company also markets the Guglielmi Detachable Coil(TM) system to treat and prevent the rupture of cerebral aneurysms that are otherwise either considered to be inoperable or high risk for surgery.

NONVASCULAR

Esophageal, Gastric and Duodenal Intervention. The Company markets a broad range of products to diagnose, treat and palliate a variety of esophageal, gastric and duodenal diseases, including esophogitis, gastric esophageal reflux disease, portal hypertension, peptic ulcers and esophageal cancer. The Company's products in this area include disposable single and multiple biopsy forceps, balloon dilatation catheters, banding ligation devices and enteral feeding devices. The Company also markets a family of esophogeal stents designed to offer improved dilatation force and greater resistance to tumor in-growth.

Colorectal Intervention. The Company markets a line of hemostatic catheters, polypectomy snares and dilatation catheters for the diagnosis and treatment of polyps, inflammatory bowel disease, diverticulitis and colon cancer.

Pancreatico-Biliary Intervention. The Company sells a variety of products to diagnose, treat and palliate benign and malignant strictures of the pancreatico-biliary system (the gall bladder, common bile duct, hepatic duct, pancreatic duct and the pancreas) and to remove stones found in the common bile and hepatic ducts. The Company's products include diagnostic catheters used with contrast media, balloon dilatation catheters and sphincterotomes. The Company also markets a temporary biliary stent for palliation and drainage of the common bile duct.

Pulmonary Intervention. The Company markets devices to diagnose, treat and palliate chronic bronchitis and lung cancer, including pulmonary biopsy forceps and balloon catheters used to dilate strictures or for tumor management.

Urinary Tract Intervention. The Company sells a variety of products designed primarily to treat patients with urinary stone disease, either via ureteroscopy or percutaneous nephrolithotomy. Products within this category include ureteral dilatation balloons used to dilate strictures or openings for scope access; stone baskets used to manipulate or remove the stone; intracorporeal shock wave lithotripsy devices and holmium laser systems used to disintegrate stones ureteroscopically; ureteral stents implanted temporarily in the urinary tract to provide either short-term or long-term drainage; and a wide variety of guidewires used to gain access to a specific site.

Prostate Intervention. For the treatment of Benign Prostatic Hypertrophy ("BPH"), the Company currently markets electro-surgical resection devices designed to resect large diseased tissue sites

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and reduce the bleeding attributable to the resection procedure (a major cause of patient morbidity in connection with traditional surgical treatments for BPH) and an automatic disposable needle biopsy system, designed to take rapid core prostate biopsies.

Urinary Incontinence and Bladder Disease. The Company markets a line of minimally invasive devices and dermal sling materials to treat stress urinary incontinence. This affliction is commonly treated with various surgical procedures. The Company's Precision(TM) and Vesica(R) systems offer less invasive alternatives for treating incontinence. The Company has also developed other devices to diagnose and treat bladder cancer and bladder obstruction.

INTERNATIONAL OPERATIONS

In 1999, international sales accounted for approximately 39% of the Company's net sales. Net sales, operating income and identifiable assets attributable to significant geographic areas are presented in Note N to the Company's 1999 Consolidated Financial Statements, which is filed with the Securities and Exchange Commission as an exhibit hereto.

As of December 31, 1999, the Company had direct marketing and sales operations in 40 countries. In recent years, the Company has expanded its direct sales presence worldwide so as to be in a position to take advantage of expanding market opportunities. The Company believes that, during 2000, it will continue to leverage its infrastructure and will continue to use distributors in those smaller markets where it is not economical or strategic to establish a direct presence.

The Company has three international manufacturing facilities in Ireland. Presently, approximately 50% of the Company's products sold internationally are manufactured at these facilities. The Company also maintains an international research and development facilities in Ireland and a training center in Miyazaki, Japan.

The Company's international presence exposes it to certain financial and other risks. Principal among these is the potentially negative impact of foreign currency fluctuations on the Company's sales and expenses. Although the Company engages in hedging transactions that may offset the effect of fluctuations in foreign currency exchange rates on foreign currency denominated assets and liabilities, financial exposure may nonetheless result, primarily from the timing of transactions, forecast volatility and the movement of exchange rates. International markets are also being affected by economic pressure to contain reimbursement levels and healthcare costs. The Company's ability to benefit from its international expansion may be limited by risks and uncertainties relating to economic conditions in these regions, competitive offerings, infrastructure development, rights to intellectual property, and the ability of the Company to implement its overall business strategy. Any significant changes in the political, regulatory or economic environment where the Company conducts international operations may have a material impact on revenues and profits.

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MARKETING AND SALES

The Company markets its products through six principal divisions, each focusing upon physicians who specialize in the diagnosis and treatment of different medical conditions and disease states.

Vascular
--------

     Scimed:        markets devices to cardiologists for the nonsurgical
                    diagnosis and treatment of coronary and peripheral vascular
                    disease and other cardiac disorders.

     EP             offers a line of electrophysiology catheters and systems for
     Technologies:  use by interventional electrophysiologists in the diagnosis
                    and treatment of cardiac tachyarrhythmias.

     Medi-tech:     markets therapeutic and diagnostic devices to physicians who
                    perform interventional image-guided procedures primarily in
                    the fields of radiology, pulmonary medicine and vascular
                    surgery, and markets woven, knitted and collagen-sealed
                    vascular and endovascular grafts to vascular, cardiothoracic
                    and general surgeons for use in patients with vessels
                    damaged by atherosclerosis or aneurysms which need to be
                    bypassed or replaced.

     Target:        markets a line of micro-guidewires, micro-catheters, coils,
                    embolics and other medical devices which aid
                    neuroradiologists and neurosurgeons in the treatment of
                    neurovascular diseases.

Nonvascular
-----------

     Microvasive    markets therapeutic and diagnostic devices which aid
     Endoscopy:     gastroenterologist and pulmonologists in performing
                    flexible endoscopic procedures involving the digestive tract
                    and lungs.

     Microvasive    offers a line of therapeutic and diagnostic devices which
     Urology:       aid urologists and urogynecologists in performing
                    ureteroscopic and other minimally invasive endoscopic
                    procedures as well as devices to treat urinary incontinence.

A dedicated sales force of over 1,100 individuals in 40 countries internationally and over 800 in the United States markets the Company's products worldwide. Sales in countries where the Company has direct sales organizations accounted for approximately 99% of the Company's net sales during 1999. A network of distributors and dealers who offer the Company's products in more than 30 countries worldwide accounts for the remaining sales. The Company has also

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established a dedicated U.S. corporate sales organization focused principally on selling to major buying groups and large integrated healthcare networks.

In 1999, the Company sold its products to over 10,000 hospitals, clinics, out-patient facilities and medical offices. The Company is not dependent on any single institution and no single institution accounted for more than 10% of the Company's net sales in 1999. Large group purchasing organizations, hospital networks and other buying groups are, however, becoming increasingly important to the Company's business. The trend toward managed care and economically motivated and more sophisticated buyers in the United States may result in continued pressure on selling prices of certain products and resulting compression on gross margins. These purchasers of medical devices also tend to limit the number of suppliers from whom they purchase medical products. There can be no assurance that these entities will continue to purchase products from the Company.

The Company markets the NIR ON(R) Ranger(TM) and NIR(R) Primo(TM) coronary stent systems which, together with other NIR(R) stent systems, represented approximately 20% of the Company's 1999 worldwide sales. These stent systems include the NIR(R) coronary stent which is developed and manufactured by Medinol Ltd., Israel, and a balloon delivery system which is developed and manufactured by the Company. The Company also distributes several other products for third parties, including RF generators, an introducer sheath and certain guidewires. None of these other products represented more than 10% of the Company's 1999 net sales. Leveraging its sales and marketing strength, the Company expects to continue to seek out new opportunities for distributing complementary products as well as new technologies. Certain of the products distributed by the Company, such as the NIR(R) stent, are very important to the Company strategically. Unforeseen delays, stoppages or interruptions in the supply and/or mix of the NIR(R) stent or certain other distributed products could adversely affect the Company's operating results.

Throughout the world, delays in product approval processes, changes in reimbursement policies and competitive pricing pressures remain unpredictable. The Company cannot predict what future economic, regulatory, reimbursement and pricing environments will exist in domestic and international markets for its healthcare products. It is possible that these environments could adversely affect the Company's product pricing and ability to sell products. The Company believes that these and other factors will continue to impact the rate at which the Company can grow, but management believes that it is well positioned to take advantage of opportunities for growth that exist in the markets it serves.

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MANUFACTURING; RAW MATERIALS

The Company designs and manufactures the majority of its products in 13 manufacturing sites around the world.

Most components used in the manufacture of the Company's products are readily fabricated from commonly available raw materials or off-the-shelf items available from multiple supply sources. The fabricated items are custom made for the Company to meet its specifications. The Company believes that in most cases, redundant capacity exists at the suppliers and that alternative sources of supply are available or could be developed within a reasonable period of time. Generally, the Company has been able to obtain adequate supplies of raw materials and components in a timely manner from established sources. However, the reduction or interruption in supply, an inability to develop alternative sources if required, or a significant increase in the price of raw materials or components, could adversely effect the Company's operations and financial condition.

As a result of multiple acquisitions, the Company's supply chain and manufacturing processes have not yet been fully optimized. During 1998, the Company initiated a program to focus on supply chain optimization, and, during 1999, the program was expanded to include a review of manufacturing processes. In addition to enhancing customer service, the program is designed to lower inventory levels and the cost of manufacturing, improve absorption and minimize inventory write-downs. Also in late 1999, a series of operational excellence initiatives were begun, specifically targeting multiple aspects of plant cost and performance. By continuing to address operational excellence and the optimization of the supply chain, the Company seeks to return gross margins to more acceptable levels and to improve working capital.

COMPETITION

The Company encounters significant competition from various entities across its product lines and in each market in which its products are sold. The Company's primary competitors include C.R. Bard, Inc., Cook, Inc., Guidant Corporation, Johnson & Johnson (including its subsidiary, Cordis Corporation), and Medtronic, Inc. (including its subsidiary, Medtronic AVE, Inc., formerly known as Arterial Vascular Engineering Inc.), as well as a wide range of companies which sell a single or limited number of competitive products.

In addition, the Company faces competition from non-medical device companies, such as pharmaceutical companies, which may offer non-surgical alternative therapies for disease states which are currently treated using the Company's products.

The Company believes that its products compete primarily on the basis of their ability to perform safely and effectively diagnostic and therapeutic procedures in a minimally invasive manner, ease of product use, product reliability and physician familiarity. In the current environment of managed care, economically motivated buyers, consolidation among health care providers,

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increased competition and declining reimbursement rates, the Company has also been increasingly required to compete on the basis of price. The Company believes that its continued competitive success will depend upon its ability to create or acquire scientifically advanced technology, apply its technology cost-effectively across product lines and markets, develop or acquire proprietary products, attract and retain skilled development personnel, obtain patent or other protection for its products, obtain required regulatory approvals, and manufacture and successfully market its products either directly or through outside parties. There can be no assurance that the Company will be able to accomplish these objectives or that it will be able to compete successfully in the future against existing or new competitors.

RESEARCH AND DEVELOPMENT

The Company believes that streamlining and coordinating its technology pipeline and new product development is essential to its ability to stimulate growth and maintain leadership positions in its markets. By centralizing platform technology development at the corporate level, the Company is able to pursue technologies that can be leveraged across multiple markets. Simultaneously, the interaction of the Company's product management teams and sales representatives with the worldwide medical community facilitates new product development at the divisional level to address the needs and desires of the Company's physician customers.

In 1999, the Company expended approximately $200 million on research and development, representing approximately 7% of the Company's 1999 net sales. These expenditures funded clinical research, licensed technology, regulatory compliance and a variety of product development programs, including, among others, carotid stenting, molecular intervention technology (using paclitaxel, radiation, angiogenesis technology and gene therapy) and stent grafting.

Enhancements of existing products or expansions of existing product lines, which are typically developed within the Company's manufacturing and marketing operations, account for a significant portion of each year's sales growth. In addition to internal development, the Company works with hundreds of leading research institutions, universities and clinicians around the world in developing, evaluating and clinically testing its products.

The Company believes its future success will depend upon the strength of its development efforts. There can be no assurance that the Company will realize financial benefit from its development programs, will continue to be successful in identifying, developing and marketing new products or enhancing its existing products, or that products or technologies developed by others will not render the Company's products or technologies non-competitive or obsolete.

REGULATION

The medical devices manufactured and marketed by the Company are subject to regulation by numerous regulatory bodies, including the FDA and comparable international regulatory agencies. These agencies require manufacturers of medical devices to comply with applicable laws and

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regulations governing the development, testing, manufacturing, labeling, marketing and distribution of medical devices. Devices are generally subject to varying levels of regulatory control, the most comprehensive of which requires that a clinical evaluation program be conducted before a device receives approval for commercial distribution.

In the United States, permission to distribute a new device generally can be met in one of two ways. The first, less rigorous, process applies to any new device that is substantially equivalent to a device first marketed prior to May 1976 and does not require pre-market approval ("PMA"). In this case, FDA permission to distribute the device can be accomplished by submission of a pre-market notification submission (a "510(k) Submission"), and issuance by the FDA of an order permitting commercial distribution. A 510(k) Submission must provide information supporting its claim of substantial equivalence. If clinical data from human experience is required to support a 510(k) Submission, this data must be gathered in compliance with investigational device exemption ("IDE") regulations for investigations performed in the United States. The FDA must issue an order finding substantial equivalence before commercial distribution can occur. Changes to existing devices which do not significantly affect safety or effectiveness can generally be made by the Company without additional 510(k) Submissions.

The second, more comprehensive, approval process applies to a new device that is not substantially equivalent to a pre-1976 product. In this case, two steps of FDA approval are generally required before marketing in the United States can begin. First, the Company must comply with IDE regulations in connection with any clinical investigation of the device in the United States. Second, the FDA must review the Company's PMA application which contains, among other things, clinical information acquired under the IDE. The FDA will approve the PMA application if it finds that there is a reasonable assurance that the device is safe and effective for its intended purpose.

The FDA can ban certain medical devices, detain or seize adulterated or misbranded medical devices, order repair, replacement or refund of these devices, and require notification of health professionals and others with regard to medical devices that present unreasonable risks of substantial harm to the public health. The FDA may also enjoin and restrain certain violations of the Food, Drug and Cosmetic Act and the Safe Medical Devices Act pertaining to medical devices, or initiate action for criminal prosecution of such violations.

International sales of medical devices manufactured in the United States that are not approved by the FDA for use in the United States, or are banned or deviate from lawful performance standards, are subject to FDA export requirements. The Export Reform Act of 1996 has simplified the process of exporting devices which have not been approved for sale in the United States. Exported devices are subject to the regulatory requirements of each country to which the device is exported. In many foreign countries, all regulated medical products are treated as drugs and the majority of the Company's products are expected to be so regulated in these countries. Frequently, regulatory approval may first be obtained in a foreign country prior to application in the United States to take advantage of differing regulatory requirements. The Company has achieved International Standards Organization or European Union certification for its Irish and

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United States manufacturing facilities. In addition, the Company has completed CE Mark registrations for substantially all of its products in accordance with the implementation of various medical device directives in the European Union.

The process of obtaining clearance to market products is costly and time-consuming in virtually all of the major markets in which the Company sells products and can delay the marketing and sale of new products. Countries around the world have recently adopted more stringent regulatory requirements which are expected to add to the delays and uncertainties associated with new product releases, as well as the clinical and regulatory costs of supporting such releases. No assurance can be given that any of the Company's new medical devices will be approved on a timely basis, if at all.

In addition, regulations regarding the development, manufacture and sale of medical devices are subject to future change. The Company cannot predict what impact, if any, such changes might have on its business. Failure to comply with regulatory requirements could have a material adverse effect on the Company's business, financial condition and results of operations.

The Company is also subject to environmental laws and regulations both in the United States and abroad. The operations of the Company, like those of other medical device companies, involve the use of substances regulated under environmental laws, primarily in manufacturing and sterilization processes. The Company believes that compliance with environmental laws will not have a material impact on its financial position, results of operations, or liquidity. Given the scope and nature of these laws, there can, however, be no assurance that environmental laws will not have a material impact on the Company.

THIRD-PARTY COVERAGE AND REIMBURSEMENT

The Company's products are purchased by hospitals, doctors and other health care providers who are reimbursed for the health care services provided to their patients by third-party payors, such as governmental programs (e.g., Medicare and Medicaid), private insurance plans and managed care programs. Third party payors may deny coverage for certain technologies based on assessment criteria as determined by the third-party payor. Also, third-party payors are increasingly challenging the prices charged for medical products and services. There can be no assurance that the Company's products will be automatically covered by third-party payors, that reimbursement will be available or, if available, that the third-party payors' coverage policies will not adversely affect the Company's ability to sell its products profitably.

PROPRIETARY RIGHTS AND PATENT LITIGATION

The Company relies on a combination of patents, trade secrets and non-disclosure agreements to protect its intellectual property. The Company holds more than 1,500 United States patents (plus foreign counterparts) and has pending more than 3,000 patent applications worldwide that cover various aspects of its technology. In addition, the Company holds exclusive and non-exclusive licenses to a variety of third party technologies covered by patents and patent applications. There

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can be no assurance that pending patent applications will result in issued patents, that patents issued to or licensed by the Company will not be challenged or circumvented by competitors, or that such patents will be found to be valid or sufficiently broad to protect the Company's technology or to provide the Company with a competitive advantage. The Company relies on non-disclosure and non-competition agreements with employees, consultants and other parties to protect, in part, trade secrets and other proprietary technology. There can be no assurance that these agreements will not be breached, that the Company will have adequate remedies for any breach, that others will not independently develop equivalent proprietary information or that third parties will not otherwise gain access to the Company's trade secrets and proprietary knowledge.

There has been substantial litigation regarding patent and other intellectual property rights in the medical device industry generally, particularly in the areas in which the Company competes. The Company has defended, and will likely continue to defend, itself against claims and legal actions alleging infringement of the patent rights of others. Adverse determinations in any patent litigation could subject the Company to significant liabilities to third parties, could require the Company to seek licenses from third parties and could, if licenses are not available, prevent the Company from manufacturing, selling or using certain of its products, any of which could have a material adverse effect on the Company. Additionally, the Company may find it necessary to initiate litigation to enforce its patent rights, to protect its trade secrets or know-how and to determine the scope and validity of the proprietary rights of others. Patent litigation can be costly and time-consuming, and there can be no assurance that the Company's litigation expenses will not be significant in the future or that the outcome of litigation will be favorable to the Company.

OTHER LITIGATION

The testing, marketing and sale of human health care products entails an inherent risk of product liability claims. The Company is involved in various lawsuits arising in the normal course of business from product liability claims, and product liability claims may be asserted in the future relative to events not known to management at the present time. The Company has insurance coverage which management believes is adequate to protect against product liability losses as could otherwise materially affect the Company's financial position. However, there can be no assurance that product liability claims will not exceed such insurance coverage limits or that such insurance will be available in the future on commercially reasonable terms, if at all. The Company is aware that the U.S. Department of Justice is conducting an investigation of matters that include the Company's decision to voluntarily recall the NIR ON(R) Ranger(TM) with Sox(TM) coronary stent system in the U.S. The Company is cooperating fully in the investigation. In addition to a suit filed by Hewlett-Packard Company (HP), the U.S. Federal Trade Commission (FTC) is investigating the Company's compliance with a Consent Order dated May 5, 1995, pursuant to which the Company licensed certain intravascular ultrasound technology to HP.

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EMPLOYEES

As of December 31, 1999, the Company had 12,615 employees, including approximately 7,654 in operations, 925 in administration, 1,294 in research and development and 2,742 in selling, marketing, distribution and related administrative support. Of these employees, approximately 3,616 were employed in the Company's international operations. The Company believes that the continued success of its business will depend, in part, on its ability to attract and retain qualified personnel. Competition for qualified, skilled personnel is intense in the medical device industry. There can be no assurance that the Company will be able in the future to attract and retain such personnel.

SEASONALITY

Worldwide sales do not reflect any significant degree of seasonality, however customer purchases have been lighter in the third quarter of prior years than in other quarters. This reflects, among other factors, lower demand during summer months, particularly in European countries.

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Cautionary Statement for Purposes of the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995 appearing on page 10 of the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) is incorporated herein by reference.

ITEM 2. PROPERTIES

The Company's world headquarters are located in Natick, Massachusetts. It maintains regional headquarters in Tokyo, Japan; Paris, France; Singapore and Buenos Aires, Argentina. As of December 31, 1999, the Company's worldwide facilities (including administration, research, manufacturing, distribution and sales and marketing space) totaled approximately 5.1 million square feet, of which approximately 85% was owned by the Company and the balance was leased. As of December 31, 1999, the Company's principal technology centers were located in Massachusetts, Indiana, Minnesota, New Jersey, Florida, California, Washington, New York and Ireland, and its major distribution centers were located in Massachusetts, The Netherlands, Japan and Singapore. As of December 31, 1999, the Company maintained thirteen manufacturing facilities, ten in the United States and three in Ireland. Many of these manufacturing facilities produce and manufacture products for more than one of the Company's divisions and include research facilities. The Company believes that its facilities are adequate to meet its current needs and continues to assess its plant network strategy.

16

ITEM 3. LEGAL PROCEEDINGS

Note K to the Company's 1999 Consolidated Financial Statements, appearing on pages 24 through 27 thereto (Exhibit 13.1 filed herewith), is incorporated herein by reference. The following paragraphs update the disclosure appearing in Note K.

RECENT PATENT LITIGATION ACTIVITY

On March 24, 2000, the Company (through its subsidiaries) and Medinol Ltd. (Medinol) filed a cross-border suit against Johnson & Johnson Company, Cordis Corporation (Cordis) and certain of their foreign subsidiaries in The Netherlands alleging Cordis' BX Velocity(TM) stent delivery system infringes one of Medinol's European patents. In this action, the Company and Medinol requested monetary and injunctive relief covering The Netherlands, Austria, Belgium, Switzerland, Germany, Denmark, Spain, France, Greece, Ireland, Italy, Litchtenstein, Luxembourg, Monaco, Portugal and Sweden.

On March 30, 2000, the Company through its subsidiary filed suit for patent infringement against two subsidiaries of Cordis alleging that Cordis' BX Velocity stent delivery system infringes a published utility model owned by Medinol and exclusively licensed to the Company. The complaint was filed in the District Court of Dusseldorf, Germany seeking monetary and injunctive relief.

On December 29, 1998, the Company and SCIMED filed a cross-border suit against Advanced Cardiovascular Systems, Inc. (ACS), Guidant Corporation (Guidant) and various foreign subsidiaries in The Netherlands alleging ACS's MULTILINK(TM), RX ELIPSE, RX MULTILINK HP(TM) and RX DUET(TM) catheters and stent delivery systems infringe one of the Company's European patents. In this action, the Company requested relief covering The Netherlands, the United Kingdom, France, Germany and Italy. A hearing on the merits was held on November 5, 1999. The court has delayed its decision pending advice from the Dutch Patent Office.

On August 12, 1998, ACS and an affiliate of ACS filed suit for patent infringement against the Company and SCIMED alleging that the Company's NIR(R) stent infringes five patents owned by ACS. The suit was filed in the U.S. District Court for the Southern District of Indiana seeking injunctive and monetary relief. The Company and SCIMED have answered, denying the allegations of the complaint. The trial, which had been set for February 22, 2000, has been postponed pending the court's consideration of the Company's motion to dismiss.

On December 15, 1998, the Company and SCIMED filed a cross-border suit against Arterial Vascular Engineering, Inc., now named Medtronic AVE, Inc. (AVE), in The Netherlands alleging that AVE's AVE GFX(TM), AVE GFX 2(TM), AVE LTX(TM) and USCI CALYPSO(TM) rapid exchange catheters and stent delivery systems infringe one of the Company's European patents. In this action, the Company requested relief covering The Netherlands, the United Kingdom, France, Germany and Italy. A hearing on the merits was held on October 22, 1999. The court has delayed its decision pending advice from the Dutch Patent Office.

On March 2, 1999, AVE filed a cross-border suit in The Netherlands against the Company and various subsidiaries of the Company including SCIMED, alleging that the Company's MAXXUM(TM), MAXXUM(TM) ENERGY, MAXXUM(TM) 29 MM, NIR(R) Primo(TM), VIVA!(TM), EXPRESS PLUS and EXPRESS PLUS II balloon dilatation catheters infringe one of AVE's European patents. In this action, AVE requested preliminary relief covering The

17

Netherlands, Germany, the United Kingdom, France and Spain. The Company has answered, denying the allegations of the complaint. On February 16, 2000, the court denied AVE's request for preliminary relief.

On March 10, 1999, the Company through its subsidiary Schneider (Europe) AG filed suit against AVE alleging that AVE's AVE GFX, AVE GFX2, AVE LTX, CALYPSO RELY(TM), PRONTO SAMBA(TM) and SAMBA RELY(TM) rapid-exchange catheters and stent delivery systems infringe one of the Company's German patents. The suit was filed in the District Court of Dusseldorf, Germany seeking injunctive and monetary relief. A hearing was held on January 27, 2000 and the Company is awaiting a decision.

On May 14, 1999, Medtronic, Inc. (Medtronic) filed suit against the Company and SCIMED alleging that a variety of the Company's NIR(R) stent products infringe a Medtronic patent. The suit was filed in the U.S. District Court for the District of Minnesota seeking injunctive and monetary relief. In February, the court found that the NIR(R) stent products do not infringe Medtronic's patent and the suit was dismissed. Medtronic has appealed the decision.

On March 28, 2000, the Company, and certain subsidiaries filed suit for patent infringement against AVE alleging that AVE's S670 rapid exchange coronary stent system infringes a patent licensed to the Company. The suit was filed in the U.S. District Court for the Northern District of California seeking monetary and injunctive relief.

On March 27, 2000, American Medical Systems, Inc. (AMS) filed suit against the Company alleging that the Company's Precision Tack(TM) and Precision Twist(TM) urinary incontinence products infringe a patent owned by AMS. The complaint also alleges misappropriation of trade secrets and breach of contract. The suit was filed in the U.S. District Court for the District of Minnesota seeking monetary and injunctive relief. The Company intends to answer, denying the allegations of the complaint.

The Company is involved in various lawsuits from time to time. In management's opinion, the Company is not currently involved in any legal proceedings other than those specifically identified above or in Note K to the Company's 1999 Consolidated Financial Statements which, individually or in the aggregate, could have a material effect on the financial condition, operations or cash flows of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.

18

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The Directors and executive officers of the Company as of December 31, 1999 were as follows:

Name                          Age                   Position
----                          ---                   --------
John E. Abele                  62    Director, Founder Chairman
Michael Berman                 42    Senior Vice President and Group President--Cardiology
                                     Businesses, and President--SCIMED Life Systems, Inc.
Lawrence C. Best               50    Senior Vice President--Finance & Administration
                                     and Chief Financial Officer
Joseph A. Ciffolillo           61    Director, Private Investor
Joel L. Fleishman              65    Director, President of The Atlantic Philanthropic Service
                                     Company, Inc. and Professor of Law and Public Policy,
                                     Duke University
Ray J. Groves                  64    Director, Chairman of Legg Mason Merchant Banking Inc.
Lawrence L. Horsch             65    Director, Chairman of Eagle Management & Financial Corp.
Paul A. LaViolette             42    Senior Vice President and President, Boston Scientific
                                     International, and Group President
Philip P. Le Goff              49    Senior Vice President and Group President--Vascular and
                                     Nonvascular Businesses
Robert G. MacLean              56    Senior Vice President--Human Resources
N.J. Nicholas, Jr.             60    Director, Private Investor
Pete Nicholas                  58    Director, Founder and Chairman of the Board
John E. Pepper                 61    Director, Chairman of the Executive Committee of the Board of
                                     Directors, The Procter and Gamble Company
Arthur L. Rosenthal            53    Senior Vice President and Chief Development Officer
Warren B. Rudman               69    Director, Former U.S. Senator, Partner, Paul, Weiss, Rifkind,
                                     Wharton & Garrison
Paul W. Sandman                52    Senior Vice President, Secretary and General Counsel
James H. Taylor, Jr.           60    Senior Vice President - Corporate Operations
James R. Tobin                 55    Director, President and Chief Executive Officer

As of February 2000, Messrs. Berman and Le Goff no longer served as executive officers of the Company. In March 2000, the Company announced that Paul Donovan and Dr. Kshitij Mohan would be joining the executive committee of the Company as Vice President, Corporate Communications and Senior Vice President and Chief Technology Officer, respectively.

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COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company has standing Audit, Executive Compensation and Human Resources, and Corporate Governance Committees. Mr. Fleishman, Mr. Horsch and Mr. Pepper currently serve on the Audit Committee. Mr. Fleishman, Mr. Groves, Mr. Horsch, and Senator Rudman currently serve on the Executive Compensation and Human Resources Committee. Mr. Fleishman, Mr. Groves, Mr. Pete Nicholas, Mr. Pepper and Senator Rudman currently serve on the Corporate Governance Committee. A description of the committees of the Board of Directors of the Company is set forth in the Company's definitive Proxy Statement to be filed with the Commission on or about April 3, 2000 and is incorporated herein by reference.

BIOGRAPHICAL SUMMARIES

John E. Abele, a co-founder of the Company, has been a Director of the Company since 1979, Founder Chairman since 1995 and Co-Chairman from 1979 to 1995. Mr. Abele held the position of Treasurer from 1979 to 1992 and Vice Chairman and Founder, Office of the Chairman from February 1995 to March 1996. He was President of Medi-tech, Inc. from 1970 to 1983, and prior to that served in sales, technical and general management positions for Advanced Instruments, Inc. Mr. Abele received a B.A. degree from Amherst College.

Michael Berman joined the Company as Vice President of Sales and Marketing of SCIMED in February 1995, and from May 1997 to February 2000 served as Senior Vice President and Group President - Cardiology Businesses. Mr. Berman remains a Senior Vice President of the Company. In June 1995, Mr. Berman became President of SCIMED and in December 1996, he was elected to the position of Group President--Cardiology Businesses. Mr. Berman served as SCIMED's Vice President of Sales and Marketing, from January 1995 to June 1995, Vice President and Business Manager of New Modalities, from July 1993 to January 1995, and Vice President of Marketing, from July 1989 to June 1993. Mr. Berman received B.S. and M.B.A. degrees from Cornell University.

Lawrence C. Best joined the Company in August 1992 as Senior Vice President--Finance & Administration and Chief Financial Officer. Previously, Mr. Best had been a partner at Ernst & Young, certified public accountants, since 1981. From 1979 to 1981, Mr. Best served a two year term as a Professional Accounting Fellow in the Office of Chief Accountant at the Securities and Exchange Commission in Washington, D.C. Mr. Best received a B.B.A. degree from Kent State University.

Joseph A. Ciffolillo joined the Company in 1983 as President of Medi-tech, Inc. During his tenure at the Company, he also served as President of Microvasive, Inc. and as Executive Vice President and Chief Operating Officer from 1989 until his retirement in 1996. In 1992, Mr. Ciffolillo became a director of the Company. Previously, Mr. Ciffolillo spent twenty years with Johnson & Johnson where he held a number of management positions including President, Johnson & Johnson Orthopedic Company. Mr. Ciffolillo is a member of the Spray Venture Fund Investment Committee and serves on a number of private company boards as well. Mr. Ciffolillo also serves as Chairman of the Advisory Board of the Health Science Technology Division of Harvard University and the Massachusetts Institute of Technology. Mr. Ciffolillo received his B.A. from Bucknell University where he also serves as a Member of the Board of Trustees.

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Paul Donovan joined the Company in March 2000 as Vice President, Corporate Communications. Most recently, Mr. Donovan was the Executive Director of External Affairs at Georgetown University Medical Center, where he directed media, government and community relations as well as employee communications since 1998. From 1997 to 1998, Mr. Donovan was Chief of Staff at the United States Department of Commerce. From 1993 to 1997, Mr. Donovan served as Chief of Staff and from 1989 to 1993 as Press Secretary to Senator Edward M. Kennedy. Mr. Donovan received a B.A. degree from Dartmouth College.

Joel L. Fleishman joined the Company in October 1992 as a Director. Mr. Fleishman became President of The Atlantic Philanthropic Service Company, Inc. in September 1993. He is also Professor of Law and Public Policy and has served in various administrative positions, including First Senior Vice President, at Duke University, since 1971. Mr. Fleishman is a founding member of the governing board of the Duke Center for Health Policy Research and Education and was the founding director of Duke University's Terry Sanford Institute of Public Policy. He is the director of the Samuel and Ronnie Heyman Center for Ethics, Public Policy and the Professions. Mr. Fleishman also serves as Vice-Chairman of the Board of Trustees of the Urban Institute and as a director of Polo Ralph Lauren Corporation. Mr. Fleishman received A.B., M.A. and J.D. degrees from the University of North Carolina at Chapel Hill, and an L.L.M. degree from Yale University.

Ray J. Groves joined the Company as a Director in May 1999. Mr. Groves is Chairman of Legg Mason Merchant Banking, Inc., a subsidiary of Legg Mason, Inc. Mr. Groves served as Chairman and Chief Executive Officer of Ernst & Young for 17 years until his retirement in 1994. Mr. Groves currently serves as a member of the Boards of Directors of Allegheny Technologies Incorporated, American Water Works Company, Inc., Dominion Resources, Inc., Electronic Data Systems Corporation, Marsh & McLennan Companies, Inc., and Nabisco Group Holdings, Inc. Mr. Groves is a managing director, treasurer and secretary of the Metropolitan Opera Association. He is also Chair of the Board of Directors of The Ohio State University Foundation and a member of the Dean's Advisory Council of the Fisher College of Business. Mr. Groves received a B.S. degree from The Ohio State University.

Lawrence L. Horsch joined the Company as a Director in February 1995. Previously, he had been Chairman of the Board of SCIMED Life Systems, Inc. from 1977 to 1994, director from 1977 to 1995 and Acting Chief Financial Officer from 1994 to 1995. Since 1990, Mr. Horsch has served as Chairman of Eagle Management & Financial Corp. a management consulting firm. He was Chairman and Chief Executive Officer of Munsingwear, Inc., from 1987 to 1990. Mr. Horsch received a B.A. degree from the University of St. Thomas and an M.B.A. degree from Northwestern University.

21

Paul A. LaViolette joined the Company in January 1994 as President, Boston Scientific International, and Vice President--International. In February 1995, Mr. LaViolette was elected to the position of Senior Vice President and Group President--Nonvascular Businesses. In October, 1998, Mr. LaViolette was appointed President, Boston Scientific International, and in February 2000 assumed responsibility for the Company's Scimed (excluding Scimed's coronary stent business), EPT and Target businesses as Group President. Prior to joining the Company, he was employed by C.R. Bard, Inc. in various capacities, including President, U.S.C.I. Division, from July 1993 to November 1993, President, U.S.C.I. Angioplasty Division, from January 1993 to July 1993, Vice President and General Manager, U.S.C.I. Angioplasty Division, from August 1991 to January 1993, and Vice President U.S.C.I. Division, from January 1990 to August 1991. Mr. LaViolette received his B.A. degree from Fairfield University and an M.B.A. degree from Boston College.

Philip P. Le Goff joined the Company in November 1997 as Senior Vice President and Group President -- Vascular Businesses. In October, 1998, Dr. LeGoff assumed the additional responsibilities of Group President - - Nonvascular Businesses. He served in these capacities through February 2000. Prior to joining the Company, he was Head of Strategy and External Affairs and Member of the Global Executive Committee at Novartis Phaarma AG of Basel, Switzerland since 1996. Between 1981 and 1993, he held various executive management positions at Sanofi Inc. in Paris, including Director of Research and Development Planning, Director of Corporate Planning and Chief Executive Officer of the Bio-Industries Division. In 1994 he became President and Chief Executive Officer of Sanofi, North America. Before joining Sanofi, Dr. Le Goff held a variety of management and executive positions with Ciba-Geigy Corporation. Dr. Le Goff received a Masters Degree in Organic Chemistry and Pharmacy from the University of Rennes; a Ph.D. in Healthcare Law from the University of Paris; and a Masters Degree in Business Administration from Stanford University.

Robert G. MacLean joined the Company in April 1996 as Senior Vice President--Human Resources. Prior to joining the Company, he was Vice President--Worldwide Human Resources for National Semiconductor Corporation in Santa Clara, California from October 1992 to March 1996. Mr. MacLean has held various human resources management positions in the U.S. and Europe during his career. Prior to his business endeavors, he was Economics Professor at the University of the Pacific. Mr. MacLean received his B.A. and M.A. degrees and completed his doctoral studies in economics from Stanford University.

Dr. Kshitij Mohan will join the Company in April 2000 as Senior Vice President and Chief Technology Officer. He will assume responsibility for the Company's worldwide research and development, regulatory and clinical organizations. Dr. Mohan served most recently as Corporate Vice President, Research and Technical Services at Baxter International, Inc., where he had held a variety of positions since 1988. From 1983 to 1988, Dr. Mohan served in various senior positions in the United States Food and Drug Administration. Prior to that, Dr. Mohan served in the White House Office of Management and Budget from 1979 to 1983. Dr. Mohan currently serves on the Boards of Directors of the Health Industry Manufacturer's Association and KeraVision, Inc., the

22

Advisory Board of Bourne's College of Engineering at the University of California, and the Editorial Advisory Board for the Medical Device and Diagnostic Industry magazine. Dr. Mohan holds a Ph.D. in Physics from Georgetown University.

N.J. Nicholas, Jr. joined the Company as a Director in October 1994. Mr. Nicholas served as President of Time, Inc. from September 1986 to May 1990 and Co-Chief Executive Officer of Time Warner, Inc. from May 1990 until February 1992. N.J. Nicholas, Jr. is a director of Xerox Corporation, DB Capital Partners and Priceline.com. and also serves on the board of several privately-owned media companies. Mr. Nicholas received an A.B. degree from Princeton University and an M.B.A. degree from Harvard Business School. He is also the brother of Pete Nicholas, Chairman of the Board of the Company.

Pete Nicholas, a co-founder of the Company, has been the Chairman of the Board of the Company since 1995. He has been a Director since 1979 and served as the Chief Executive Officer from 1979 to March 1999 and Co-Chairman of the Board from 1979 to 1995. Prior to joining the Company, he was corporate director of marketing and general manager of the Medical Products Division at Millipore Corporation, a medical device company, and served in various sales, marketing and general management positions at Eli Lilly and Company. He is currently a member of the Executive Committee and Board of Trustees of Duke University, the American Academy of Achievement and the National Academy of Arts and Sciences, and in the past has served on several for profit and not-for-profit boards. After college, Mr. Nicholas served as an officer in the U.S. Navy, resigning his commission as lieutenant in 1968. Mr. Nicholas received a B.A. degree from Duke University, and an M.B.A. degree from The Wharton School of the University of Pennsylvania. He is also the brother of N.J. Nicholas, Jr., a Director of the Company.

John E. Pepper joined the Company as a Director in October 1999. Mr. Pepper is Chairman of the Executive Committee of the Board of Directors of Procter & Gamble where he had been Chief Executive Officer and Chairman of the Board from 1995 to 1999, President from 1986 to 1995, director since 1984 and served in various positions since 1963. Mr. Pepper is a member of the Board of Directors of Xerox Corporation and Motorola Inc. Mr. Pepper is a Fellow of The Yale Corporation, an Adjunct Professor at Yale University and a Trustee of the Christ Church Endowment Fund. He serves on the boards of Partnership for a Drug Free America, the National Campaign to Prevent Teen Pregnancy, and the National Advisory Board of the National Underground Railroad Freedom Center. Mr. Pepper graduated from Yale University in 1960 and holds honorary doctorate degrees from Xavier University, Mount St. Joseph College and St. Petersburg University (Russia).

Dr. Arthur L. Rosenthal joined the Company in January 1994 as Senior Vice President and Chief Development Officer and became Chief Scientific Officer in February 2000. Prior to joining the Company, he was Vice President--Research & Development at Johnson & Johnson Medical, Inc., from April 1990 to January 1994. Between 1973 and 1990, Dr. Rosenthal held several executive technical management positions at Pfizer, Inc., 3M and C.R. Bard, Inc., primarily in the fields of device clinical research and biomedical engineering. Dr. Rosenthal received his B.A. in bacteriology from the University of Connecticut, and his Ph.D. in biochemistry from the University of Massachusetts.

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Senator Warren B. Rudman joined the Company as a Director in October 1999. Senator Rudman became a partner in the international law firm Paul, Weiss, Rifkind, Wharton, and Garrison in 1992 after serving two terms as a U.S. Senator from New Hampshire from 1980 to 1992. Senator Rudman serves as Chairman of the President's Foreign Intelligence Advisory Board and serves on the Boards of Trustees of Valley Forge Military Academy, the Brookings Institution, and the Council on Foreign Relations. He is also the founding co-chairman of the Concord Coalition. Senator Rudman received a B.S. from Syracuse University and a LL.B. from Boston College Law School and served in the U.S. Army during the Korean War.

Paul W. Sandman joined the Company in May 1993 as Senior Vice President, Secretary and General Counsel. From March 1992 through April 1993, he was Senior Vice President, General Counsel and Secretary of Wang Laboratories, Inc., where he was responsible for legal affairs. From 1984 to 1992, Mr. Sandman was Vice President and Corporate Counsel of Wang Laboratories, Inc., where he was responsible for corporate and international legal affairs. Mr. Sandman received his A.B. from Boston College, and his J.D. from Harvard Law School.

James H. Taylor, Jr. joined the Company in August 1999 as Senior Vice President of Corporate Operations. Mr. Taylor most recently served as Vice President of Global Technology at Nestle Clinical Nutrition from 1995 to 1997. Prior to joining Nestle, he completed a thirty-year career at Baxter International, where he held a broad range of positions in operations management, including from 1992 to 1995, the position of Corporate Vice President of Manufacturing Operations and Strategy. Mr. Taylor received his B.A. degree from the University of North Carolina.

James R. Tobin joined the Company on March 17, 1999 as Director, President and Chief Executive Officer. Prior to joining the Company, Mr. Tobin served as President and Chief Executive Officer of Biogen, Inc. from 1997 to 1998 and Chief Operating Officer of Biogen from 1994 to 1997. From 1972 to 1994, Mr. Tobin served in a variety of executive positions with Baxter International, including President and Chief Operating Officer from 1992 to 1994. Previously, he served at Baxter as Managing Director in Japan, Managing Director in Spain, President of Baxter's I.V. Systems Group and Executive Vice President. Mr. Tobin currently serves on the Boards of Directors of Beth Israel Deaconess Medical Center, the Carl J. Shapiro Institute for Education and Research, Creative Biomolecules, Inc., CV Therapeutics, Inc., PathoGenesis Corporation, and PE Corporation (formerly Perkin-Elmer Corp.). Mr. Tobin holds an A.B. from Harvard College and an M.B.A. from Harvard Business School. Mr. Tobin also served as a lieutenant in the U.S. Navy from 1968 to 1972.

24

PART II


ITEM 5. MARKET FOR COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The information set forth under the caption "Market for the Company's Common Stock and Related Matters" included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) is incorporated herein by reference.

The closing price of the Company's Common Stock on March 17, 2000 was $23.00.

ITEM 6. SELECTED FINANCIAL DATA

The information set forth under the caption "Five-Year Selected Financial Data" included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The statements and information set forth under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) are incorporated herein by reference.

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth under the subcaption "Market Risk Disclosures" contained under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations" included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) is incorporated herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Company and its subsidiaries included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) are incorporated herein by reference.

The statements and information set forth under the caption "Quarterly Results of Operations" included in the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith) are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

None.

25

PART III


ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The required information concerning directors and executive officers set forth in the Company's definitive Proxy Statement to be filed with the Commission on or about April 3, 2000 is incorporated herein by reference. See also "Directors and Executive Officers of the Company" following Item 4 herein.

ITEM 11. EXECUTIVE COMPENSATION

The required information concerning executive compensation set forth in the Company's definitive Proxy Statement to be filed with the Commission on or about April 3, 2000 is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The required statements concerning security ownership of certain beneficial owners and management set forth in the Company's definitive Proxy Statement to be filed with the Commission on or about April 3, 2000 are incorporated herein by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The required statements concerning certain relationships and related transactions set forth in the Company's definitive Proxy Statement to be filed with the Commission on or about April 3, 2000 are incorporated herein by reference.

26

PART IV


ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements.

The response to this portion of Item 14 is set forth under Item 8.

(a)(2) Financial Schedules.

The response to this portion of Item 14 is filed herewith as a separate attachment to this report.

(a)(3) Exhibits (* documents filed herewith).

Exhibit
  No.                          Title
------                         -----

 3.1     Second Restated Certificate of Incorporation of the Company
         (Exhibit 3.1, Annual Report on Form 10-K for the year ended
         December 31, 1993, File No. 1-11083).

 3.2     Certificate of Amendment of the Second Restated Certificate
         of Incorporation of the Registrant (Exhibit 3.2, Annual
         Report on Form 10-K for the year ended December 31, 1994,
         File No. 1-11083).

 3.3     Certificate of Second Amendment of the Second Restated
         Certificate of Incorporation of the Registrant (Exhibit 3.3,
         Annual Report on Form 10-K for the year ended December 31,
         1998, File No. 1-11083).

 3.4     Restated By-laws of the Company (Exhibit 3.2, Registration
         No. 33-46980).

 4.1     Specimen Certificate for shares of the Company's Common
         Stock (Exhibit 4.1, Registration No. 33-46980).

 4.2     Description of Capital Stock contained in Exhibits 3.1, 3.2,
         3.3 and 3.4.

 4.3     Form of Debt Securities Indenture (Exhibit 4.4, Registration
         Statement on Form S-3 of the Company, BSC Capital Trust, BSC
         Capital Trust II and BSC Capital Trust III, File No.
         333-64887)

10.1     Boston Scientific Corporation 1992 Long-Term Incentive Plan,
         as amended (Exhibit 10.1, Annual Report on Form 10-K for the
         year ended December 31, 1996, File No. 1-11083).

10.2     Boston Scientific Corporation 1992 Non-Employee Directors'
         Stock Option Plan, as amended (Exhibit 10.2, Annual Report
         on Form 10-K for the year ended December 31, 1996, File No.
         1-11083).

27

Exhibit
  No.                                 Title
-------                               -----

 10.3     Boston Scientific Corporation 1995 Long-Term Incentive Plan, as
          amended (Exhibit 10.1, Annual Report on Form 10-K for the year ended
          December 31, 1996, File No. 1-11083).

 10.4     SCIMED Life Systems, Inc. 1987 Non-Qualified Stock Option Plan,
          amended and restated (Exhibit 4.3, Registration No. 33-89772 which was
          incorporated by reference to Exhibit A to SCIMED's Proxy Statement
          dated May 23, 1991 for its 1991 Annual Meeting of Shareholders,
          Commission File No. 0-9301).

 10.5     SCIMED Life Systems, Inc. 1991 Directors Stock Option Plan, as amended
          (Exhibit 4.2, Registration No. 33-89772 which was incorporated by
          reference to Exhibit A to SCIMED's Proxy Statement dated June 8, 1994
          for its 1994 Annual Meeting of Shareholders, Commission File No. 0-
          9301).

 10.6     SCIMED Life Systems, Inc. 1992 Stock Option Plan (Exhibit 4.1,
          Registration No. 33-89772 which was incorporated by reference to
          Exhibit A to SCIMED's Proxy Statement dated May 26, 1992 for its 1992
          Annual Meeting of Shareholders, Commission File No. 0-9301).

 10.7     Heart Technology, Inc. Restated 1989 Stock Option Plan (Exhibit 4.5,
          Registration No. 33-99766 which was incorporated by reference to
          Exhibit 10.4 to the Registration Statement on Form S-1 of Heart
          Technology, Registration No. 33-45203).

 10.8     Heart Technology, Inc. 1992 Stock Option Plan for Non-Employee
          Directors (Exhibit 4.6, Registration No. 33-99766 which was
          incorporated by reference to Exhibit 10.5 to the Registration
          Statement on Form S-1 of Heart Technology, Registration No. 33-45203).

 10.9     Heart Technology, Inc. 1995 Stock and Incentive Plan (Exhibit 4.7,
          Registration No. 33-99766 which was incorporated by reference to
          Exhibit 10.4 to the Quarterly Report on 10-Q/A of Heart Technology for
          its fiscal quarter ended June 30, 1995, filed on August 30, 1995, File
          No. 0-19812).

 10.10    EP Technologies, Inc. 1988 Stock Plan (Exhibit 4.7, Registration No.
          33- 80265 which was incorporated by reference to EPT's Registration
          Statement on Form S-8, File No. 33-67020).

 10.11    EP Technologies, Inc. 1991 Stock Option/Stock Issuance Plan (Exhibit
          4.6, Registration No. 33-80265 which was incorporated by reference to
          EPT's Registration Statement on Form S-8, File No. 33-82140).

 10.12    EP Technologies, Inc. 1993 Stock Option/Stock Issuance Plan, (Exhibit
          4.5, Registration No. 33-80265 which was incorporated by reference to
          EPT's Registration Statement on Form S-8, File No. 33-93196).

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Exhibit
  No.                             Title
-------                           -----

 10.13    Target Therapeutics, Inc. 1988 Stock Option Plan, incorporated by
          reference to Exhibit 10.2 to Target Therapeutics, Inc.'s Quarterly
          Report on Form 10-Q for the quarter ended September 30, 1996 (File No.
          0-19801).

 10.14    Target Therapeutics, Inc. 1988 Stock Option Plan, incorporated by
          reference to Exhibit 10.3 to Target Therapeutics, Inc.'s Quarterly
          Report on Form 10-Q for the quarter ended September 30, 1996 (File No.
          0-19801).

 10.15    Boston Scientific Corporation 401(k) Savings Plan, Amended and
          Restated, Effective January 1, 1997 (Exhibit 10.17, Annual Report on
          Form 10-K for the year ended December 31, 1997, File No. 1-11083).

 10.16    Second Amendment to BSC 401(k) Plan (Exhibit 10.1, Quarterly Report on
          Form 10-Q for the quarter ended March 31, 1999, File No. 1-11083).

 10.17    Third Amendment to BSC 401(k) Plan (Exhibit 10.1, Quarterly Report on
          Form 10-Q for the quarter ended September 30, 1999, File No. 1-11083).

 10.18    Boston Scientific Corporation Global Employee Stock Ownership Plan, as
          Amended and Restated (Exhibit 10.18, Annual Report on Form 10-K for
          the year ended December 31, 1997, File No. 1-11083).

 10.19    Boston Scientific Corporation Deferred Compensation Plan, Effective
          January 1, 1996 (Exhibit 10.17, Annual Report on Form 10-K for the
          year ended December 31, 1996, File No. 1-11083).

*10.20    Boston Scientific Corporation 2000 Long Term Incentive Plan

 10.21    Form of Second Amended and Restated Credit Agreement, dated September
          4, 1998 among the Company, The Several Lenders and certain other
          parties (Exhibit 10.1, Current Report on Form 8-K dated September 25,
          1998, File No. 1-11083).

 10.22    Form of Amendment dated February 23, 1999 to Second Amended and
          Restated Credit Agreement dated September 4, 1998 among the Company,
          The Several Lenders and certain other parties (Exhibit 10.21, Annual
          Report on Form 10-K for the year ended December 31, 1998, File No.
          1-11083).

 10.23    Form of Amended and Restated Credit Agreement dated August 19, 1999
          among BSC, the Several Lenders and the Chase Manhattan Bank (Exhibit
          10.2, Quarterly Report on Form 10-Q for the quarter ended September
          30, 1999).

 10.24    Form of Indemnification Agreement between the Company and certain
          Directors and Officers (Exhibit 10.16, Registration No. 33-46980).

 10.25    Letter Agreement, dated June 22, 1992, between the Company and
          Lawrence C. Best (Exhibit 10.11, Annual Report on Form 10-K for the
          year ended December 31, 1993, File No. 1-11083).

 10.26    Form of Retention Agreement between the Company and certain Executive
          Officers (Exhibit 10.23, Annual Report on Form 10-K for the year ended
          December 31, 1996, File No. 1-11083).

29

Exhibit
  No.                             Title
-------                           -----

 10.27    Letter Agreement dated March 17, 1999, between the Company and James
          R. Tobin (Exhibit 10.34, Annual Report on Form 10-K for the year ended
          December 31, 1998, File No. 1-11083).

 10.28    Agreement Containing Consent Decree, dated as of February 23, 1995,
          between the Company and the Federal Trade Commission (Exhibit 10.16,
          Annual Report on Form 10-K for the year ended December 31, 1994, File
          No. 1-11083).

 10.29    6.625% Promissory Notes due March 15, 2005 issued by the Company in
          the aggregate principal amount of $500 million, each dated as of March
          10, 1998 (Exhibit Nos. 4.1, 4.2 and 4.3 to the Company's Current
          Report on Form 8-K dated March 10, 1998, File No. 1-11083).

*10.30    Letter Agreement dated as of February 18, 2000 between the Company and
          Dr. Kshitij Mohan.

*10.31    Agreement and General Release of All Claims between the Company and
          Philippe P. LeGoff dated as of February 28, 2000.

*10.32    Consulting Agreement between the Company and Philippe P. LeGoff dated
          as of February 28, 2000.

 11.      Statement regarding computation of per share earnings (included in
          Note J to the Company's 1999 Consolidated Financial Statements for
          the year ended December 31, 1999, filed as Exhibit 13.1 hereto).

*12.1     Statement regarding computation of ratios of earnings to fixed
          charges.

*13.1     The Company's 1999 Consolidated Financial Statements for the year
          ended December 31, 1999.

 13.2     Report of Independent Auditors, Ernst & Young LLP (included in the
          Company's 1999 Consolidated Financial Statements for the year ended
          December 31, 1999, filed as Exhibit 13.1 hereto).

*21.      List of the Company's subsidiaries as of March 9, 2000. Each
          subsidiary does business under the corporate name indicated.

*23.1     Consent of Independent Auditors, Ernst & Young LLP.

*27.1     Financial Data Schedule, fiscal year ended December 31, 1999.

(b) Reports on Form 8-K.
None.

30

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Company has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Dated: March 30, 2000

BOSTON SCIENTIFIC CORPORATION

By: /s/ LAWRENCE C. BEST
--------------------------------------------
    Lawrence C. Best
    Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Company and in the capacities and on the dates indicated.

Dated: March 30, 2000               /s/ JOHN E. ABELE
                                    --------------------------------------------
                                    John E. Abele
                                    Director, Founder


Dated: March 30, 2000               /s/ LAWRENCE C. BEST
                                    --------------------------------------------
                                    Lawrence C. Best
                                    Senior Vice President--Finance and
                                    Administration and Chief Financial Officer
                                    (Principal Financial and Accounting Officer)

Dated: March 30, 2000               /s/ JOSEPH A. CIFFOLILLO
                                    --------------------------------------------
                                    Joseph A. Ciffolillo
                                    Director

Dated: March 30, 2000               /s/ JOEL L. FLEISHMAN
                                    --------------------------------------------
                                    Joel L. Fleishman
                                    Director

31

Dated March 30, 2000                /s/ RAY J. GROVES
                                    --------------------------------------------
                                    Ray J. Groves
                                    Director

Dated: March 30, 2000               /s/ LAWRENCE L. HORSCH
                                    --------------------------------------------
                                    Lawrence L. Horsch
                                    Director

Dated: March 30, 2000               /s/ N.J. NICHOLAS, JR.
                                    --------------------------------------------
                                    N.J. Nicholas, Jr.
                                    Director

Dated: March 30, 2000               /s/ PETER M. NICHOLAS
                                    --------------------------------------------
                                    Peter M. Nicholas
                                    Director, Founder, Chairman of the Board

Dated March 30, 2000                /s/ JOHN E. PEPPER
                                    --------------------------------------------
                                    John E. Pepper
                                    Director

Dated March 30, 2000                /s/ WARREN B. RUDMAN
                                    --------------------------------------------
                                    Warren B. Rudman
                                    Director


Dated: March 30, 2000               /s/ JAMES R. TOBIN
                                    --------------------------------------------
                                    James R. Tobin
                                    Director, President and
                                    Chief Executive Officer
                                    (Principal Executive Officer)

32

FINANCIAL STATEMENT SCHEDULE

The following additional consolidated financial statement schedule should be considered in conjunction with the Company's 1999 Consolidated Financial Statements (Exhibit 13.1 filed herewith):

Schedule II - Valuation and Qualifying Accounts

All other schedules have been omitted since the required information is not present or not sufficiently material to require submission of the schedule, or because the information required is included in the consolidated financial statements or the notes thereto.

33

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

                                                             ADDITIONS
                                             -----------------------------------------

                                                BALANCE AT    CHARGED TO    CHARGED TO                BALANCE AT
                                                BEGINNING     COSTS AND       OTHER                     END OF
                                                OF PERIOD     EXPENSES       ACCOUNTS    DEDUCTIONS     PERIOD
                                             --------------------------------------------------------------------
                                                                        (In millions)
DESCRIPTION

YEAR ENDED DECEMBER 31, 1999
Reserves and allowances deducted from
  asset accounts:
  Allowances for uncollectible
    amounts and sales returns and
    allowances...............................      $49           11           13 (1)       10 (2)        $63

YEAR ENDED DECEMBER 31, 1998
Reserves and allowances deducted from
  asset accounts:
  Allowances for uncollectible
    amounts and sales returns and
    allowances...............................      $30           15           16 (1)       12 (2)        $49

YEAR ENDED DECEMBER 31, 1997
Reserves and allowances deducted from
  asset accounts:
  Allowances for uncollectible
    amounts and sales returns and
    allowances...............................      $15           11            7 (1)        3 (2)        $30

(1) Charges for sales returns and allowances, net of actual sales returns

(2) Uncollectible accounts written off.


Exhibit No. Title

*10.20 Boston Scientific Corporation 2000 Long Term Incentive Plan

*10.30 Letter Agreement dated as of February 18, 2000 between the Company and Dr. Kshitij Mohan.

*10.31 Agreement and General Release of All Claims between the Company and Philippe P. LeGoff dated as of February 28, 2000.

*10.32 Consulting Agreement between the Company and Philippe P. LeGoff dated as of February 28, 2000.

*12.1 Statement regarding computation of ratios of earnings to fixed charges.

*13.1 The Company's 1999 Annual Report to Shareholders for the year ended December 31, 1999.

*21. List of the Company's subsidiaries as of March 9, 2000. Each subsidiary does business under the corporate name indicated.

*23.1 Consent of Independent Auditors, Ernst & Young LLP.

*27.1 Financial Data Schedule, fiscal year ended December 31, 1999.


Exhibit 10.20

BOSTON SCIENTIFIC CORPORATION
2000 LONG-TERM INCENTIVE PLAN

1. ADMINISTRATION

Subject to the express provisions of the Plan, the Administrator has the authority to interpret the Plan; determine eligibility for and grant Awards; determine, modify or waive the terms and conditions of any Award; prescribe forms, rules and procedures (which it may modify or waive); and otherwise do all things necessary to implement the Plan. Once a written agreement evidencing an Award hereunder has been provided to a Participant, the Administrator may not, without the Participant's consent, alter the terms of the Award so as to affect adversely the Participant's rights under the Award, unless the Administrator expressly reserved the right to do so in writing at the time of such delivery. In the case of any Award intended to be eligible for the performance-based compensation exception under Section 162(m), the Administrator shall exercise its discretion consistent with qualifying the Award for such exception.

Notwithstanding any provision herein to the contrary, the Administrator may modify the terms of the Plan or may create one or more subplans, in each case on such terms as it deems necessary or appropriate, to provide for awards to non-U.S. participants; provided, that no such action by the Administrator shall increase the total number of shares issuable hereunder.

2. LIMITS ON AWARD UNDER THE PLAN

a. NUMBER OF SHARES. A maximum of 20,000,000 shares of Stock may be delivered in satisfaction of Awards under the Plan. For purposes of the preceding sentence, shares that have been forfeited in accordance with the terms of the applicable Award and shares held back in satisfaction of the exercise price or tax withholding requirements from shares that would otherwise have been delivered pursuant to an Award shall not be considered to have been delivered under the Plan. Also, the number of shares of Stock delivered under an Award shall be determined net of any previously acquired Shares tendered by the Participant in payment of the exercise price or of withholding taxes.

b. TYPE OF SHARES. Stock delivered by the Company under the Plan may be authorized but unissued Stock or previously issued Stock acquired by the Company and held in treasury. No fractional shares of Stock will be delivered under the Plan.

c. STOCK-BASED AWARD LIMITS. The maximum number of shares of Stock for which Stock Options may be granted to any person in any calendar year, the maximum number of shares of Stock subject to SARs granted to any person in any calendar year and the aggregate maximum number of shares of Stock subject to other Awards that may be delivered (or the value of which may be paid) to any person in any calendar year shall each be 5,000,000. For purposes of the preceding sentence, the repricing of a Stock Option or SAR shall be treated as a new grant to the extent required under Section 162(m). Subject to these limitations, each person eligible to participate in the Plan shall be eligible in any year to receive Awards covering up to the full number of shares of Stock then available for Awards under the Plan.

d. OTHER AWARD LIMITS. No more than $10,000,000 may be paid to any individual with respect to any Cash or Other Performance Award (other than an Award expressed in terms of shares of Stock or units representing Stock, which shall instead be subject to the limit set forth in Section 2.c. above). In applying the dollar limitation of the preceding sentence: (A) multiple Cash or Other Performance Awards to the same individual that are determined by reference to performance periods of one year or less ending with or within the same fiscal year of the Company shall be subject in the aggregate to one $10,000,000 limit, and (B) multiple Cash or Other Performance Awards to the same individual that are determined by reference to one or more multi-year performance periods ending in the same fiscal year of the Company shall be subject in the aggregate to separate $10,000,000 limits.


3. ELIGIBILITY AND PARTICIPATION

The Administrator will select Participants from among those key Employees, directors and other individuals or entities providing services to the Company or its Affiliates who, in the opinion of the Administrator, are in a position to make a significant contribution to the success of the Company and its Affiliates. Eligibility for ISOs is further limited to those individuals whose employment status would qualify them for the tax treatment described in Sections 421 and 422 of the Code.

4. RULES APPLICABLE TO AWARDS

a. ALL AWARDS

(1) TERMS OF AWARDS. The Administrator shall determine the terms of all Awards subject to the limitations provided herein.

(2) PERFORMANCE CRITERIA. Where rights under an Award depend in whole or in part on satisfaction of Performance Criteria, actions by the Company that have an effect, however material, on such Performance Criteria or on the likelihood that they will be satisfied will not be deemed an amendment or alteration of the Award.

(3) ALTERNATIVE SETTLEMENT. The Company may at any time extinguish rights under an Award in exchange for payment (subject in each case to the limitations of Section 2) in cash, Stock or other property on such terms as the Administrator determines, provided the holder of the Award consents to such exchange.

(4) TRANSFERABILITY OF AWARDS. Awards may be transferred only as follows: (i) ISOs may not be transferred other than by will or by the laws of descent and distribution and during a Participant's lifetime may be exercised only by the Participant (or in the event of the Participant's incapacity, by the person or persons legally appointed to act on the Participant's behalf); (ii) Stock Options other than ISOs may be transferred by will or by the laws of descent and distribution and, except as otherwise determined by the Administrator, may also be transferred during the Participant's lifetime, without payment of consideration, to one or more Family Members of the Participant; (iii) Awards of Unrestricted Stock shall be subject only to such transfer restrictions under the Plan as are specified by the Administrator; and
(iv) Awards other than Stock Options and other than Unrestricted Stock may not be transferred except as the Administrator otherwise determines. If an Award is claimed or exercised by a person or persons other than the Participant, the Company shall have no obligation to deliver Stock, cash or other property pursuant to such Award or otherwise to recognize the transfer of the Award until the Administrator is satisfied as to the authority of the person or persons claiming or exercising such Award.

(5) VESTING, ETC. Without limiting the generality of Section 1, the Administrator may determine the time or times at which an Award will vest (i.e., become free of forfeiture restrictions) or become exercisable and the terms on which an Award requiring exercise will remain exercisable. Unless the Administrator expressly provides otherwise, upon the cessation of the Participant's employment or other service relationship with the Company and its Affiliates (i) all Awards (other than Stock Options, SARs and Restricted Stock) held by the Participant or by a permitted transferee under Section 4.a.(4) immediately prior to such cessation of employment or other service relationship will be immediately forfeited if not then vested and, where exercisability is relevant, will immediately cease to be exercisable, and (ii) Stock Options, SARs and Restricted Stock shall be treated as follows:

(A) immediately upon the cessation of a Participant's employment or other service relationship with the Company and its Affiliates by reason of the Participant's Disability, or with respect to a Participant who is an employee or director of the Company or its Affiliates, by reason of such Participant's Retirement, all Stock Options, SARs and Restricted Stock Awards held by the Participant (or by a permitted transferee under Section 4.a.(4)) immediately prior to such Disability or, as applicable, Retirement, will become vested and, where exercisability is


relevant, will remain exercisable for the lesser of three years or the period ending on the latest date on which such Stock Option or SAR could have been exercised if the Participant's employment or other service relationship with the Company and its Affiliates had continued unchanged, whereupon such Stock Options and SARs shall terminate;

(B) all Stock Options, SARs and Restricted Stock Awards held by a Participant (or by a permitted transferee under Section 4.a.(4)) immediately prior to the Participant's death will become vested and, where exercisability is relevant, will remain exercisable for the lesser of one year or the period ending on the latest date on which such Stock Option or SAR could have been exercised had the Participant not died, whereupon such Stock Options and SARs shall terminate;

(C) except as provided in (D) below, all Stock Options, SARs and Restricted Stock Awards held by a Participant (or by a permitted transferee under Section 4.a.(4)) immediately prior to the cessation (other than by reason of death or Disability, or with respect to a Participant who is an employee or director of the Company or its Affiliates, Retirement) of the Participant's employment or other service relationship with the Company and its Affiliates, to the extent then not vested shall terminate, and to the extent then exercisable, will remain exercisable for the lesser of three months or the period ending on the latest date on which such Stock Option or SAR could have been exercised if the Participant's employment or other service relationship with the Company and its Affiliates had continued unchanged, whereupon such Stock Options and SARs shall terminate;

(D) all Stock Options, SARs and Restricted Stock Awards held by the Participant (or by a permitted transferee under Section 4.a.(4)) whose cessation of employment or other service relationship is determined by the Administrator in its sole discretion to be for cause or to result from reasons which cast such discredit on the Participant as to justify immediate termination of the Award shall immediately terminate upon such cessation. For this purpose, "cause" means a felony conviction of a Participant or the failure of a Participant to contest prosecution for a felony, or a Participant's misconduct or dishonesty which is harmful to the business or reputation of the Company.

Unless the Administrator expressly provides otherwise, a Participant's "employment or other service relationship with the Company and its Affiliates" will be deemed to have ceased when the individual is no longer employed by or in a service relationship with the Company or its Affiliates. Except as the Administrator otherwise determines, with respect to a Participant who is an employee or director of the Company or its Affiliates, such Participant's "employment or other service relationship with the Company and its Affiliates" will not be deemed to have ceased during a military, sick or other bona fide leave of absence if such absence does not exceed 180 days or, if longer, so long as the Participant retains a right by statute or by contract to return to employment or other service relationship with the Company and its Affiliates.

(6) TAXES. The Administrator will make such provision for the withholding of taxes as it deems necessary. The Administrator may, but need not, hold back shares of Stock from an Award or permit a Participant to tender previously-owned shares of Stock in satisfaction of tax withholding requirements. In no event shall shares of Stock be tendered or held back by the Company in excess of the amount required to be withheld for Federal, state, and other taxes.

(7) DIVIDEND EQUIVALENTS, ETC. The Administrator may provide for the payment of amounts in lieu of cash dividends or other cash distributions with respect to Stock subject to an Award if and in such manner as it deems appropriate.

(8) RIGHTS LIMITED. Nothing in the Plan shall be construed as giving any person the right to continued employment or service with the Company or its Affiliates, or any rights as a shareholder


except as to shares of Stock actually issued under the Plan. The loss of existing or potential profit in Awards will not constitute an element of damages in the event of termination of employment or service for any reason, even if the termination is in violation of an obligation of the Company or Affiliate to the Participant.

(9) SECTION 162(M). The Administrator in its discretion may grant Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m) and Performance Awards that are not intended so to qualify. In the case of an Award intended to be eligible for the performance-based compensation exception under Section 162(m), the Plan and such Award shall be construed to the maximum extent permitted by law in a manner consistent with qualifying the Award for such exception. In the case of a Performance Award intended to qualify as performance-based for the purposes of
Section 162(m), the Administrator shall preestablish in writing one or more specific Performance Criteria no later than 90 days after the commencement of the period of service to which the performance relates (or at such earlier time as is required to qualify the Award as performance-based under Section 162(m)). Prior to payment of any Performance Award intended to qualify as performance-based under Section 162(m), the Administrator shall certify whether the Performance Criteria have been attained, and such determination shall be final and conclusive. The provisions of this Section 4.a.(9) shall be construed in a manner that is consistent with the regulations under Section 162(m), and shall be deemed to be automatically modified to take into account any subsequent statutory changes, regulations, rulings or interpretations with respect thereto.

b. AWARDS REQUIRING EXERCISE

(1) TIME AND MANNER OF EXERCISE. Unless the Administrator expressly provides otherwise, (a) an Award requiring exercise by the holder will not be deemed to have been exercised until the Administrator receives a written notice of exercise (in form acceptable to the Administrator) signed by the appropriate person and accompanied by any payment required under the Award; and (b) if the Award is exercised by any person other than the Participant, the Administrator may require satisfactory evidence that the person exercising the Award has the right to do so.

(2) EXERCISE PRICE. The Administrator shall determine the exercise price of each Stock Option; provided, that each Stock Option must have an exercise price that is not less than the fair market value of the Stock subject to the Stock Option, determined as of the date of grant. An ISO granted to an Employee described in Section 422(b)(6) of the Code must have an exercise price that is not less than 110% of such fair market value. Where shares of Stock issued under an Award are part of an original issue of shares, the Award shall require an exercise price equal to at least the par value of such shares.

(3) PAYMENT OF EXERCISE PRICE, IF ANY. Where the exercise of an Award is to be accompanied by payment, the Administrator may determine the required or permitted forms of payment, subject to the following: all payments will be by cash or check acceptable to the Administrator, unless one of the following forms of payment is permitted by the Administrator in its discretion in any specific instance (with the consent of the optionee of an ISO, unless such permitted form of payment is expressly provided for in the grant), (i) through the delivery of shares of Stock which have been outstanding for at least six months (unless the Administrator approves a shorter period) and which have a fair market value equal to the exercise price, (ii) by delivery to the Company of a promissory note of the person exercising the Award, payable on such terms as are specified by the Administrator, (iii) by delivery of an unconditional and irrevocable undertaking by a broker to deliver promptly to the Company sufficient funds to pay the exercise price, or (iv) by any combination of the foregoing permissible forms of payment.

(4) GRANT OF STOCK OPTIONS. Each Stock Option awarded under the Plan shall be deemed to have been awarded as a non-ISO (and to have been so designated by its terms) unless the Administrator expressly provides that the Stock Option is to be treated as an ISO. No ISO may be granted under the Plan after February 28, 2010, but ISOs previously granted may extend beyond that date.


c. AWARDS NOT REQUIRING EXERCISE

Awards of Restricted Stock and Unrestricted Stock may be made in return for either (i) services determined by the Administrator to have a value not less than the par value of the Awarded shares of Stock, or (ii) cash or other property having a value not less than the par value of the Awarded shares of Stock plus such additional amounts (if any) as the Administrator may determine payable in such combination and type of cash, other property (of any kind) or services as the Administrator may determine.

5. EFFECT OF CERTAIN TRANSACTIONS

a. MERGERS, ETC.

(1) CHANGE IN CONTROL. Except as the Administrator may otherwise determine in connection with the grant of an Award, immediately prior to a Change in Control each Award shall vest (and if relevant shall become exercisable), all Performance Criteria and other conditions to an Award shall be deemed satisfied, and all Award deferrals shall be accelerated.

(2) COVERED TRANSACTIONS. In the event of a Covered Transaction (and in addition to the provisions of Section 5(a) if also constituting a Change in Control), all Stock-based Awards (all Stock Options, SARs, Restricted Stock, Deferred Stock, including any Performance Awards consisting of any of the foregoing), except to the extent consisting of outstanding shares of Stock that are then free of any restrictions under the Plan, shall terminate immediately prior to the Covered Transaction unless assumed in accordance with the immediately following sentence. If there is a surviving or acquiring entity, the Administrator may provide for a substitution or assumption of Awards by the acquiring or surviving entity or an affiliate thereof, on such terms as the Administrator determines. If there is no surviving or acquiring entity, or if the Administrator does not provide for a substitution or assumption of an Award, the Award shall vest (and to the extent relevant become exercisable) at least 10 days prior to the effective date of the Covered Transaction.

b. CHANGES IN AND DISTRIBUTIONS WITH RESPECT TO THE STOCK

(1) BASIC ADJUSTMENT PROVISIONS. In the event of a stock dividend, stock split or combination of shares, recapitalization or other change in the Company's capital structure, the Administrator will make appropriate adjustments to the maximum number of shares that may be delivered under the Plan under
Section 2.a. and to the maximum share limits described in Section 2.b., and will also make appropriate adjustments to the number and kind of shares of stock or securities subject to Awards then outstanding or subsequently granted, any exercise prices relating to Awards and any other provision of Awards affected by such change.

(2) CERTAIN OTHER ADJUSTMENTS. The Administrator may also make adjustments of the type described in paragraph (1) above to take into account distributions to common stockholders other than those provided for in Section
5.a. and 5.b.(1), or any other event, if the Administrator determines that adjustments are appropriate to avoid distortion in the operation of the Plan and to preserve the value of Awards made hereunder; provided, that no such adjustment shall be made to the maximum share limits described in Section 2.c. or 2.d., or otherwise to an Award intended to be eligible for the performance-based exception under Section 162(m), except to the extent consistent with that exception, nor shall any change be made to ISOs except to the extent consistent with their continued qualification under Section 422 of the Code.

(3) CONTINUING APPLICATION OF PLAN TERMS. References in the Plan to shares of Stock shall be construed to include any stock or securities resulting from an adjustment pursuant to Section 5.b.(1) or 5.b.(2) above.


6. LEGAL CONDITIONS ON DELIVERY OF STOCK

The Company will not be obligated to deliver any shares of Stock pursuant to the Plan or to remove any restriction from shares of Stock previously delivered under the Plan until the Company's counsel has approved all legal matters in connection with the issuance and delivery of such shares; if the outstanding Stock is at the time of delivery listed on any stock exchange or national market system, the shares to be delivered have been listed or authorized to be listed on such exchange or system upon official notice of issuance; and all conditions of the Award have been satisfied or waived. If the sale of Stock has not been registered under the Securities Act of 1933, as amended, the Company may require, as a condition to exercise of the Award, such representations or agreements as counsel for the Company may consider appropriate to avoid violation of such Act. The Company may require that any certificates evidencing Stock issued under the Plan bear an appropriate legend reflecting any restriction on transfer applicable to such Stock.

7. AMENDMENT AND TERMINATION

Subject to the provisions of Section 1, the Administrator may at any time or times amend the Plan or any outstanding Award for any purpose which may at the time be permitted by law, or may at any time terminate the Plan as to any further grants of Awards; provided, that (except to the extent expressly required or permitted by the Plan) no such amendment will, without the approval of the stockholders of the Company, effectuate a change for which stockholder approval is required in order for the Plan to continue to qualify under Section 422 of the Code and for Awards to be eligible for the performance-based exception under Section 162(m).

8. NON-LIMITATION OF THE COMPANY'S RIGHTS

The existence of the Plan or the grant of any Award shall not in any way affect the Company's right to award a person bonuses or other compensation in addition to Awards under the Plan.

9. GOVERNING LAW

The Plan shall be construed in accordance with the laws of the Commonwealth of Massachusetts.

10. DEFINED TERMS

The following terms, when used in the Plan, shall have the meanings and be subject to the provisions set forth below:

"ADMINISTRATOR": The Board or, if one or more has been appointed, the Committee, including their delegates (subject to such limitations on the authority of such delegates as the Board or the Committee, as the case may be, may prescribe). The senior Legal and Human Resources representatives of the Company shall also be the Administrator, but solely with respect to ministerial tasks related hereto.

"AFFILIATE": Any corporation or other entity owning, directly or indirectly, 50% or more of the outstanding Stock of the Company, or in which the Company or any such corporation or other entity owns, directly or indirectly, 50% of the outstanding capital stock (determined by aggregate voting rights) or other voting interests.

"AWARD": Any or a combination of the following:

(i) Stock Options.


(ii) SARs.

(iii) Restricted Stock.

(iv) Unrestricted Stock.

(v) Deferred Stock.

(vi) Other Stock-Based Awards.

(vii) Cash Performance Awards.

(viii) Other Performance Awards.

(ix) Grants of cash, or loans, made in connection with other Awards in order to help defray in whole or in part the economic cost (including tax cost) of the Award to the Participant.

"BOARD": The Board of Directors of the Company.

"CASH PERFORMANCE AWARD": A Performance Award payable in cash. The right of the Company under Section 4.a.(3) to extinguish an Award in exchange for cash or the exercise by the Company of such right shall not make an Award otherwise not payable in cash a Cash Performance Award.

"CHANGE IN CONTROL": Any of:

(i) an acquisition, consolidation or merger in which the Company is not the surviving corporation or with respect to which all or substantially all of the beneficial owners of the outstanding stock of the Company and the combined voting power of the outstanding voting securities of the Company entitled to vote generally in the election of directors immediately prior to such transaction do not own beneficially, directly or indirectly, and in substantially the same proportion, more than 60% of, respectively, the then outstanding shares of common stock and the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors, as the case may be, of the corporation resulting from such transaction;

(ii) a sale or transfer of all or substantially all the Company's assets;

(iii) a complete dissolution or liquidation of the Company; or

(iv) continuing directors constitute less than a majority of the Board, where a "continuing director" includes (A) each person who was a director of the Company on January 3, 2000, and (B) each person who subsequently becomes a director of the Company with approval by a vote of at least a majority of the "continuing directors" in office at the time of such person's election or nomination as a director unless that person became a director in connection with an actual or threatened election contest.

Notwithstanding clauses (i) through (iv) above, none of the following shall constitute a "Change in Control" for purposes of this definition:

(x) the shares of common stock of the Company or the voting securities of the Company entitled to vote generally in the election of directors are acquired directly from the Company;

(y) the shares of common stock of the Company or the voting securities of the Company entitled to vote generally in the election of directors are acquired by any employee benefit plan (or related trust) sponsored or maintained by the Company or any corporation controlled by the Company; or


(z) (A) the beneficial owners of the outstanding shares of common stock of the Company, and of the securities of the Company entitled to vote generally in the election of directors, immediately prior to such transaction beneficially own, directly or indirectly, in substantially the same proportions immediately following such transaction more than 60% of the outstanding shares of common stock and of the combined voting power of the then outstanding voting securities entitled to vote generally in the election of directors of the corporation (including, without limitation, a corporation which as a result of such transaction owns the Company or all or substantially all of the Company's assets either directly or through one or more subsidiaries) resulting from such transaction and (B) at least a majority of the members of the board of directors of the corporation resulting from such transaction were members of the board of directors at the time of the execution of the initial agreement, or of the action of the Board, authorizing such transaction.

"CODE": The U.S. Internal Revenue Code of 1986 as from time to time amended and in effect, or any successor statute as from time to time in effect.

"COMMITTEE": One or more committees of the Board (including any subcommittee thereof) appointed or authorized to make Awards and otherwise to administer the Plan. In the case of Awards granted to executive officers of the Company, the Committee shall be comprised solely of two or more outside directors within the meaning of Section 162(m).

"COMPANY": Boston Scientific Corporation.

"COVERED TRANSACTION": Any of (i) a consolidation or merger in which the Company is not the surviving corporation or which results in the acquisition of all or substantially all the Company's outstanding stock by a single person or entity or by a group of persons and/or entities acting in concert, (ii) a sale or transfer of all or substantially all the Company's assets, or (iii) a dissolution or liquidation of the Company.

"DEFERRED STOCK": A promise to deliver Stock or other securities in the future on specified terms.

"DISABILITY": Permanent and total disability as determined under the Company's long-term disability program for employees then in effect.

"EMPLOYEE": Any person who is employed by the Company or an Affiliate.

"FAMILY MEMBER": An individual or entity included as a "family member" within the meaning of the Security and Exchange Commission's Form S-8, Registration Statement Under The Securities Act of 1933.

"ISO": A Stock Option intended to be an "incentive stock option" within the meaning of Section 422 of the Code.

"PARTICIPANT": An Employee, director or other person providing services to the Company or its Affiliates who is granted an Award under the Plan.

"PERFORMANCE AWARD": An Award subject to Performance Criteria.

"PERFORMANCE CRITERIA": Specified criteria the satisfaction of which is a condition for the exercisability, vesting or full enjoyment of an Award. For purposes of Performance Awards that are intended to qualify for the performance-based compensation exception under Section 162(m), a Performance Criterion shall mean an objectively determinable measure of performance relating to any of the following (determined either on a consolidated basis or, as the context permits, on a divisional, subsidiary, line of business, project or geographical basis or in combinations thereof): (i) sales; revenues; assets; liabilities; costs; expenses; earnings before or after deduction for all or any portion of interest, taxes, depreciation, amortization or other items, whether or not on a continuing operations or an aggregate or per share basis; return on equity, investment, capital or assets; one or more operating ratios; borrowing levels, leverage ratios or credit rating; market share; capital expenditures; cash flow; working capital requirements;


stock price; stockholder return; sales, contribution or gross margin, of particular products or services; particular operating or financial ratios; customer acquisition, expansion and retention; or any combination of the foregoing; or (ii) acquisitions and divestitures (in whole or in part); joint ventures and strategic alliances; spin-offs, split-ups and the like; reorganizations; recapitalizations, restructurings, financings (issuance of debt or equity) and refinancings; transactions that would constitute a change of control; or any combination of the foregoing. A Performance Criterion measure and targets with respect thereto determined by the Administrator need not be based upon an increase, a positive or improved result or avoidance of loss.

"PLAN": The Boston Scientific Corporation 2000 Incentive Plan as set forth herein, as from time to time amended and in effect.

"RESTRICTED STOCK": An Award of Stock subject to forfeiture to the Company if specified conditions are not satisfied.

"RETIREMENT": Unless the Administrator expressly provides otherwise, cessation of employment or other service relationship with the Company and its Affiliates if, as of the date of such cessation, (i) the Participant has attained age 50 and has accrued at least five years of service with the Company and its Affiliates, and (ii) the sum of the Participant's age and years of service as of such date equals or exceeds 62.

"SECTION 162(m)": Section 162(m) of the Code.

"SARS": Rights entitling the holder upon exercise to receive cash or Stock, as the Administrator determines, equal to a function (determined by the Administrator using such factors as it deems appropriate) of the amount by which the Stock has appreciated in value since the date of the Award.

"STOCK": Common Stock of the Company, par value $.01 per share.

"STOCK OPTIONS": Options entitling the recipient to acquire shares of Stock upon payment of the exercise price.

"UNRESTRICTED STOCK": An Award of Stock not subject to any restrictions under the Plan.


EXHIBIT 10.30

February 8, 2000

Dr. Kshitij Mohan
5660 Oakwood Circle
Long Grove, IL 60047

Dear Dr. Mohan:

On behalf of Boston Scientific Corporation ("BSC"), I am very pleased to confirm our offer to you for the position of Senior Vice President R&D and Chief Technical Officer, officially reporting to James Tobin, President and Chief Executive Officer. This position will be based at our World Headquarters in Natick, Massachusetts.

This letter, the enclosed Employee Agreement, and the enclosed Code of Business Conduct summarize our understanding of the terms of your employment and provide you the means to accept our offer as described.

COMPENSATION:

Through annual and long term programs, Boston Scientific's compensation programs provide our employees with significant compensation opportunities on a pay for performance basis. The objective of these programs is to recognize and reward both individual and company performance.

* BASE SALARY Base salary for this position will be $10,577.60 per pay period, payable biweekly, equivalent to $275,017.60 on an annualized basis. Your performance and compensation will be reviewed in December 2000. Your merit increase amount will be based on performance and may be pro-rated based on your time of service.

* BSC PERFORMANCE BONUS AWARD PROGRAM You will be eligible to participate in the annual Performance Bonus Award Program beginning in 2000. Your annual target bonus opportunity will be 75% of base salary. Your first year incentive bonus will be guaranteed at 100% of your 75% target. To be eligible for payment, you must be employed on the date the award is paid.


* SIGN ON BONUS You will be paid a one-time sign on bonus of $150,000.00 payable as follows: An initial payment of[sic] $50,000 will be paid within one month of your official start date with the company; second payment of $50,000 will be paid after your first six months of service; and the final $50,000 will be paid after you complete one full year of service.

* LONG TERM INCENTIVE You will be nominated for a grant of a non-qualified stock option of 75,000 shares, which will provide you an opportunity for equity interest in Boston Scientific. Such options will be granted under the approved 1995 Long-Term Incentive Plan for active employees in effect on the date of this letter and will be subject to all terms of the Plan. Your options will vest over a four-(4) year period at a rate of 25% per year on the anniversary of the initial grant date.

* Additionally you will be nominated for a grant of stock of 20,000 shares, which will vest over an 18 month period of time, as follows: 50% nine months after the grant date; and 50% 18 months after the grant date.

* As part of your initial offer, you will be eligible to participate in the 2000 Long Term Incentive Stock program and be recommended for a grant of stock options for an additional 25,000 shares.

The grant of all stock options and restricted stock are subject to the approval of the Compensation Committee of the Board of Directors of Boston Scientific. The exercise price(s) of the nonqualified stock options will be the fair market value of Boston Scientific common stock as of the date[sic] each option grant is approved by the Compensation Committee.

BENEFITS

Enclosed is descriptive literature regarding Boston Scientific's current benefit programs. Please understand that the company reserves the right to amend or terminate any of these programs, or to require or change employee premium contributions toward any benefits.

CAPACITY AND DUTIES:

As Senior Vice President R&D and Chief Technical Officer, you will be expected to devote your full business time and your best professional efforts to the performance of your duties and responsibilities for BSC and to abide by all policies and procedures of BSC as in effect from time to time.


MISCELLANEOUS:

All payments by BSC under this letter will be reduced by taxes and other amounts required to be withheld by BSC under applicable law. Compensation programs and benefits will be applied to you on the same terms as are applicable to other participants and are subject to modification, termination or replacement from time to time at the discretion of BSC.

Should you be terminated by the Company not for cause within your first year of employment, the Company will pay you any remaining portion of your "sign on bonus"; and will immediately vest any unvested shares of the restricted stock grant described above.

If you desire, BSC will introduce you to one of the Partners at Ernst and Young for services rendered by a qualified tax consultant. The services provided will be for advice pertaining to the tax treatment of relocation and compensation in this offer package. Tax obligations resulting from your acceptance of this offer are your sole responsibility and are not intended to be part of the reimbursement.

Additionally, BSC provides Executive Members up to twenty-five thousand dollars for expenses related to executive benefits such as tax, legal, health, and financial services. I will explain this to you in more detail when we meet.

RELOCATION

In consideration of your relocation to the MetroWest Boston area, BSC will provide assistance as outlined in the enclosed document. Please contact Jean Majczek of The Relocation Department to begin the process. Jean can be reached at 1-888-458-7356.

ACCEPTANCE

This offer letter is contingent upon an acceptance date no later than February 18, 2000, and a starting date to be mutually agreed upon, but no later than April 17, 2000. (tentative start date April 10, 2000)

Please indicate your acceptance of this offer and the terms described in the enclosed Code of Business Conduct by signing and returning a copy of this letter and the Employee Agreement to myself. The Code of Business Conduct should be retained by you for your records.


This letter and the Employee Agreement together contain the entire agreement between you and BSC concerning your employment and all related matters. An amendment of this letter or the Employee Agreement will only be effective if in writing and signed by both you and an authorized representative of BSC. In accepting this offer, you give us your assurance that you have not relied on any other agreements or representations, express or implied, with respect to your employment that are not set forth expressly in this letter or the Employee Agreement.

Dr. Mohan, we believe that the opportunity here with Boston Scientific will be a mutually rewarding one and we look forward to your acceptance of this offer by returning a signed copy to me at Boston Scientific.

Sincerely,

/s/ Robert MacLean
-------------------------------------
Robert MacLean
Senior Vice President Human Resources
Boston Scientific




Accepted: /s/ Kshitij Mohan                      Date: February 18, 2000
          ------------------------                     -----------------
          Kshitij Mohan


Exhibit 10.31

DUPLICATE Original No. ______ of ______

AGREEMENT AND GENERAL RELEASE OF ALL CLAIMS

This Agreement and General Release of All Claims ("Agreement") is entered into by and between Philippe P. LeGoff ("You" or "Employee") and Boston Scientific Corporation ("BSC") as of the latest date of execution by the parties to this Agreement. This Agreement shall not become effective until the Effective Date (as defined in Paragraph 6(d), below). This Agreement supersedes and cancels any prior employment agreements or arrangements You may have entered into with BSC except for the Employee Agreement ("Employee Agreement") signed by You on November 3, 1997 and attached hereto as Attachment 1 and the Directors and Officers Indemnification Agreement ("Indemnification Agreement") signed by you on November 3, 1997 and attached hereto as Attachment 2. Your obligations under the Employee Agreement shall be in addition or complementary to and shall not be superseded by this Agreement. However, if there is any conflict in terms between this Agreement and the Employee Agreement, the terms of this Agreement prevail.

In consideration of the mutual covenants, agreements, and representations contained herein, the adequacy of which is hereby acknowledged, the parties hereto expressly and intentionally bind themselves as follows:

1. TERMINATION OF EMPLOYMENT

You hereby acknowledge and agree that on February 7, 2000 ("Notification Date") You were notified that your position as Senior Vice President and Group President-Vascular and Non-vascular Business and as an employee of BSC will end on February 29, 2000 ("Termination Date"). For the period between your Notification Date and Termination Date, You agree to provide full-time services of BSC. Furthermore, as of March 1, 2000, You agree to provide and be paid for services as further described in a document titled "Consulting Agreement between Philippe P. LeGoff and Boston Scientific Corporation", attached hereto as Attachment 3 (the "Consulting Agreement").

2. PAYMENTS BY BSC

(a) For the period between your Notification Date and Termination Date, BSC will pay to You on each regular payroll cycle the bi-weekly portion of your current BSC base annual salary, which is Three Hundred Eighty Thousand Sixteen Dollars and no cents ($380,016.00), less applicable payroll withholding for taxes and other applicable deductions. You expressly acknowledge that upon the occurrence of the Termination Date, You will not be eligible for any payments or benefits in addition to those described in this Agreement under any existing BSC Severance Pay Plan and/or Layoff Notification Plan.

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(b) BSC shall make all necessary arrangements to effectuate your move from the United States to Geneva, Switzerland, and in connection therewith, BSC agrees to pay all actual costs associated with the transfer of your personal goods and effects and your personal travel. You hereby agree that you are responsible for any tax obligations which may apply to any and all such payments made by BSC on your behalf.

(c) BSC agrees to assume the costs associated with the lease You have entered into for your present personal residence located at 32 Garrison Street, Boston, Massachusetts ("32 Garrison Street") as follows:

(i) BSC will pay up to Twenty-four Thousand One Hundred Fifty Dollars and no cents ($24,150.00) (for the period March 1, 2000 through August 31, 2000 at the rate of Four Thousand Twenty-Five Dollars and no cents ($4,025.00) per month) in connection with BSC's assumption of the lease of the 32 Garrison Street premises, such Twenty-four Thousand One Hundred Fifty Dollars and no cents ($24,150.00) amount to be reduced by Four Thousand Twenty-Five Dollars and no cents ($4,025.00) per month for each month that the 32 Garrison Street premises are in fact leased to someone other than You;

(ii) BSC has already paid on your behalf the sum of Two Thousand One Hundred Dollars and no cents ($2,100.00), which represents approximately one-half of the 32 Garrison Street monthly rent required as a deposit for a portion of the broker's fee assessed in connection with the attempt to lease the 32 Garrison Street premises to someone other than You, and BSC agrees to pay an additional Two Thousand One Hundred Dollars and no cents ($2,100.00) as the remainder of the broker's fee upon the actual lease of those premises to someone other than You.

(iii) You hereby agree that you are responsible for any tax obligations which may apply to any and all such payments described in Paragraphs 2(c)(i) and (ii), above, and made by BSC on your behalf.

(d) If Employee provides BSC with reasonable documentation establishing the marginal additional tax liability that he has incurred in the United States as a result of the payments made by BSC pursuant to Paragraphs 2(b) and 2(c)(i) and (ii) above, BSC will make a further payment to Employee equal to 1.5 times such actual tax liability

(e) BSC will pay You in accordance with applicable Massachusetts law for two days of unused vacation time accrued by You through the Termination Date under the terms of your September 24, 1997 offer of employment letter.

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3. STATUS OF EMPLOYMENT BENEFITS

(a) The Split Dollar Life Insurance Policy currently in place on your behalf (the "Policy") will remain in place, and all of the terms and conditions of that Policy will continue to apply through February 28, 2002, as of which date, BSC will cease paying its portion of the premium for the policy and You may elect to either:

(i) pay the entire premium necessary to keep the Policy in effect; or

(ii) take a paid-up policy in an amount of the Policy's cash value net of BSC contributions to the Policy through February 28, 2002.

(b) You agree and acknowledge that your participation in BSC's
401(k) Plan, Stock Option Plan(s), and Global Employee Stock Option Plan, if any, Accidental Death and Dismemberment (AD&D), Business Travel Accident, and Short-Term and Long-Term Disability Plans will terminate as of your Termination Date, as will your accrual of vacation time under the applicable vacation schedule. You further agree and acknowledge that You will participate through the Termination Date in all other benefits and benefit plans in which You are currently enrolled to the same extent as do active employees and that your participation in and entitlement to any and all other benefits and benefit plans in which You are currently enrolled, but which are not otherwise specifically addressed in this Agreement, terminates on the Termination Date.

(c) As of February 29, 2000 your participation in BSC's Medical/Dental/Vision Plans (as well as the participation of any of your dependents who were covered by such Plans one month prior to the Notification Date) shall continue, on the same terms and conditions as such coverage is made available from time to time to BSC employees generally as provided by the Consolidated Omnibus Budget and Reconciliation Act of 1985 ("COBRA"), should You be eligible for and elect it. To enable BSC to comply with its obligation to provide notification of any rights you may have to continue Medical/Dental/Vision Plan coverage, You agree to inform BSC of any change in address or marital status. You also acknowledge that You understand that the terms of BSC's Medical/Dental/Vision Plans offered to BSC employees generally may change from time to time, and that your coverage and associated contribution costs will be subject to any such change.

(d) Any unvested portions of previously awarded stock option grants will continue to vest through the Termination Date and will become exercisable under the terms and conditions contained in the applicable option agreement(s) and plan documents.

4. EXPENSE REIMBURSEMENT

BSC will reimburse You in accordance with usual BSC policy for all unreimbursed business travel and other out-of-pocket expenses incurred by You through the

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Termination Date in the performance of your duties as an employee of BSC. Such expenses must be submitted no later than March 10, 2000.

5. CONSIDERATION FOR ENTERING INTO THIS AGREEMENT

In addition to recitals made elsewhere in this Agreement, Employee acknowledges and agrees that BSC's provision of: (i) the payments described in Paragraphs 2(b) and 2(c), above, and (ii) the treatment of the Split Dollar Life Insurance Policy under Paragraph 3(a), above, constitute full, valid and adequate consideration for entering into this Agreement because Employee would not be entitled to them except for having entered into this Agreement.

6. RELEASE BY EMPLOYEE

Employee hereby releases and forever discharges BSC and its subsidiaries, affiliates, successors, and assigns and the Directors, officers, shareholders, employees, representatives and agents of each of the foregoing (collectively "Releasees") of and from the following as of the date of execution of this Agreement:

(a) Any and all claims, demands, and liabilities whatsoever of every name and nature (other than those arising directly out of this Agreement and/or the Indemnification Agreement between the parties effective as of November 3, 1997 attached as Attachment 2, and/or the Consulting Agreement between the parties executed contemporaneously herewith and attached as Attachment 3), including (without limitation) any claim in the nature of so-called whistleblower complaints to the extent permitted by applicable law, and any and all claims, demands and liabilities with respect to Employee's employment or the terms and conditions or termination of his employment, benefits or compensation which Employee has against Releasees, or ever had;

(b) As included in the above, without limitation, all claims known or which reasonably could have been known for tortious injury, breach of contract, and wrongful discharge (including without limitation, any claim for constructive discharge), all claims for infliction of emotional distress, all claims for slander, libel, or defamation of character, all claims of retaliation, and all claims for attorneys' fees, as related to Employee's employment by BSC, or the terms and conditions or termination of his employment, benefits, or compensation; and

(c) Employee specifically releases and forever discharges Releasees from any and all claims based upon any allegation of employment discrimination, including (without limitation) discrimination on the basis of race, color, sex, sexual orientation, age (including any claim pursuant to the Federal Age Discrimination in Employment Act ("ADEA")), religion, disability or national origin.

(d) Employee acknowledges that he has been given the opportunity, if he so desires, to consider this Agreement for twenty-one (21) days before executing it. In the event

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that Employee executes the Agreement within less than twenty-one (21) days of the date of its delivery to him, he acknowledges that such decision was entirely voluntary and that he had the opportunity to consider this Agreement for the entire twenty-one (21) day period. Employee agrees that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original twenty-one (21) day consideration period. BSC acknowledges that for a period of seven (7) days from the date of the execution of this Agreement, Employee shall retain the right to revoke this Agreement by written notice to BSC, c/o Robert G. MacLean, Senior Vice President, Human Resources, Boston Scientific Corporation, One Boston Scientific Place, Natick, MA 01701 ("Mr. MacLean"), or his successor, and that this express Agreement shall not become effective or enforceable until the date such revocation period expires (the "Effective Date"). Therefore, no BSC obligations will be met and payments called for by BSC under Paragraphs 2(b), 2(c) and 3(a), above or under the Consulting Agreement, shall not be made until the Effective Date.

7. NO DAMAGES SOUGHT; FUTURE ACTIONS

(a) Employee represents and states that he has not and will not seek any damages in connection with any complaints or charges filed against Releasees with any local, state, federal or foreign agency or court, and Employee agrees that if any complaint or charge is filed on his behalf, he shall take all reasonable steps necessary to refuse any compensation in connection with any damages claimed in connection therewith.

(b) In addition, to the extent permitted by applicable law, Employee represents and warrants that he has not previously recommended or suggested, and he will not recommend or suggest, to any foreign, federal, state or local governmental agency or any potential claimants against or employees of the Releasees, that they initiate any claim or lawsuit against the Releasees, and, again to the extent permitted by applicable law, Employee will not voluntarily aid, assist or cooperate with any claimants against or employees of the Releasees in bringing such claims or lawsuits; provided, however, that nothing in this Paragraph 7 will be construed to prevent Employee from giving truthful testimony in response to direct questions asked pursuant to a lawful subpoena or other legal process during any future legal proceeding involving the Releasees.

8. NO LIABILITY ADMITTED

Employee acknowledges that neither BSC's execution of this Agreement nor BSC's performance of any of its terms shall constitute an admission by BSC of any wrongdoing by any of the Releasees.

9. NONDISCLOSURE OF CONFIDENTIAL INFORMATION

(a) Employee shall keep entirely secret and confidential, and shall not disclose to any person or entity, in any fashion or for any purpose whatsoever, any information that is (i)

5

not available to the general public, and/or (ii) not generally known outside BSC, regarding Releasees to which he has had access or about which he heard during the course of his employment by BSC, including (without limitation) any information relating to BSC's business or operations; it plans, strategies, prospects or objectives; its products, technology, processes or specifications; its research and development operations or plans; its customers and customer lists; its manufacturing, distribution, procurement, sales, service, support and marketing practices and operations; its financial conditions and results of its operations; its operational strengths and weaknesses; and its personnel and compensation policies, procedures and transactions.

(b) Employee agrees to return to BSC, on or before the Termination Date, documents or media of whatever nature, including summaries containing any of the data referred to in the immediately preceding paragraph whatsoever, including all documents, data, material, details and copies thereof in any form. Employee agrees to return to BSC, on or before the Termination Date, all BSC property, including (without limitation) all computer equipment, property passes, keys, credit cards, business cards, identification badges, and all sample and demonstration products. Employee may purchase his computer and fax from BSC for One Thousand Dollars ($1,000.00).

10. NO DETRIMENTAL COMMUNICATIONS

Employee agrees that he will not disclose or cause to be disclosed any negative, adverse or derogatory comments or information about Releasees, about any product or service provided by Releasees, or about Releasees' prospects for the future. Furthermore, Employee hereby represents to BSC that he has made no such communication to any public official, to any person associated with the media, or to any other person or entity. Employee acknowledges that BSC relies upon this representation in agreeing to enter into this Agreement.

11. FUTURE ASSISTANCE

BSC may seek the assistance, cooperation or testimony of Employee in connection with any investigation, litigation, patent application or prosecution, or intellectual property or other proceeding arising out of matters within the knowledge of Employee and/or related to his position as an employee of BSC, and in any such instance, Employee shall provide such assistance, cooperation or testimony and BSC shall pay Employee's reasonable costs and expenses in connection therewith.

12. HIRING OF BSC'S EMPLOYEES

During the period beginning as of the date You sign this Agreement and for twenty-four (24) months thereafter, You shall not attempt to or actually solicit for hire any individual who was an employee of BSC or any of the Releasees within the twelve (12) month period immediately preceding the Termination Date, assist in the hiring away of any such employee by another person, or encourage any such employee to terminate his or her

6

employment with BSC or any of the Releasees, whether directly or indirectly, unless the President of BSC or his designee shall have given prior written approval.

13. POST-SEPARATION NON-COMPETITION RESTRICTION

During the period beginning as of the date You sign this Agreement, and for twenty-four (24) months thereafter, You agree that You shall not, directly or indirectly, without the written consent of an Executive Officer of BSC, engage in any activity in the area of medical device development, line or staff operations, manufacturing, marketing or sales which is competitive with BSC as it relates to any of the work You performed or with which You were familiar as an employee of BSC.

14. CONFIDENTIALITY

Employee agrees to keep confidential the existence of this Agreement, as well as all of its terms and conditions, and not to disclose to any person or entity the existence, terms or conditions of this Agreement except to his attorney, financial advisors and/or members of his immediate family provided they agree to keep confidential the existence, terms and conditions of this Agreement. In the event that Employee believes he is compelled by law to divulge the existence, terms or conditions of this Agreement, he will notify BSC (by notifying BSC's Legal Department) of the basis for the belief before actually divulging the information. Employee hereby confirms that as of the date of signing this Agreement, he has not disclosed the existence, terms or conditions of this Agreement, except as permitted by this Paragraph 14. In the event of a breach of this Agreement or the Employee Agreement, Employee shall repay to BSC all of the amounts paid under Paragraphs 2(b), 2(c) and 3(a), above, and shall be liable, moreover, for any damages which a court may determine and shall be subject to injunctive relief, damages, and any other relief which a court may award.

15. GOVERNING LAW; SEVERABILITY

This Agreement is entered into and shall be construed under the laws of the Commonwealth of Massachusetts, without regard to its conflict of laws rules and as an instrument under seal. In the event any provision of this Agreement is determined to be illegal or unenforceable by a duly authorized court of competent jurisdiction, then the remainder of this Agreement shall not be affected thereby, it being the intention of the parties that each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. However, if any portion of the Release language in Paragraph 6, above, were ruled to be unenforceable for any reason, Employee shall return the consideration provided under Paragraphs 2(b), 2(c) and 3(a), above, to BSC upon demand by BSC, which demand shall be made if Employee were to file any claim against BSC in violation of this Agreement, especially Paragraph 7.

16. WAIVERS; AMENDMENTS

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The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation and shall not be deemed a waiver of any subsequent breach. No modification, alteration, or change or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties wherein specific reference is made to this Agreement.

17. NO OTHER INDUCEMENTS

This Agreement sets forth the entire understanding of the parties in connection with its subject matter. Any and all prior negotiations are merged in this Agreement. Neither of the parties has made any settlement, representation or warranty in connection with the issues addressed in this Agreement (except those expressly set forth in this Agreement) which has been relied upon by the other party, or which acted as an inducement for the other party to enter into this Agreement.

18. PERSONS BOUND BY THE AGREEMENT

This Agreement shall be binding upon and inure to the benefit of Employee and to the benefit of BSC and its respective successors and assigns.

19. ASSIGNMENT OF INTERESTS

Employee warrants that he has not assigned, or transferred or purported to assign or transfer any claim against Releasees.

20. PREVAILING PARTY ENTITLED TO FEES

In the event that any action or proceeding is initiated to enforce or interpret the provisions of this Agreement, or to recover for a violation of the Agreement, the prevailing party in any such action or proceeding shall be entitled to its costs (including reasonable attorneys' fees).

21. REFERENCE

BSC agrees to provide Employee with a reference in the form attached hereto as Attachment 4. With permission of Employee, Mr. MacLean shall provide a copy of Attachment 4 in response to an inquiry that he receives as to Employee's employment relationship with BSC. BSC's only contractual undertakings with respect to supplying Employee with a reference are those set forth above which Mr. MacLean has agreed to perform on behalf of BSC. BSC further agrees to instruct those members of senior management who are made aware of this Agreement to refer inquiries about Employee's employment relationship with BSC to Mr. MacLean.

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Employee acknowledges that BSC has numerous directors, officers, employees and agents, any of whom may be contacted or may offer a view about Employee's employment relationship with BSC, and he further acknowledges and agrees that BSC has made no contractual undertaking as to how any of those directors, officers, employees or agents other than Mr. MacLean may comment about Employee.

21. REPRESENTATION

Employee represents that, prior to executing this Agreement, he had the opportunity to review the provisions of this Agreement with counsel of his choice.

The parties have read the foregoing Agreement and know its contents, and know that its terms are contractual and legally binding. The parties further agree that they enter this Agreement voluntarily and that they have not been pressured or coerced in any way into signing this Agreement.

IN WITNESS WHEREOF, the parties hereby agree.

By:
   --------------------------------                 ----------------------------
   Philippe P. LeGoff                               Date

BOSTON SCIENTIFIC CORPORATION

By:
   --------------------------------                 ----------------------------
   Robert G. MacLean                                Date
   Senior Vice President
   Human Resources

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Exhibit 10.32

DUPLICATE Original No. ______ of ______

February 28, 2000

Mr. Philippe P. LeGoff
c/o Mrs. Mathilde LeGoff
111 Avenue Briand
35000 Rennes
FRANCE

RE: CONSULTING AGREEMENT BETWEEN PHILIPPE P. LEGOFF AND
BOSTON SCIENTIFIC CORPORATION

This letter constitutes a Consulting Agreement ("Agreement") between you, Philippe P. LeGoff ("Consultant"), and Boston Scientific Corporation and its affiliated and associated companies (collectively "Boston Scientific").

1. FIELD OF CONSULTATION: To identify new business opportunities in the European Union and Eastern Europe (comprising Poland, Czech Republic, Croatia, Slovakia, Slovenia, and Hungary) which may be of interest to Boston Scientific and to advise Boston Scientific on emerging technologies and modalities applicable or potentially applicable to existing Boston Scientific business areas in the European Union and Eastern Europe.

2. CONTRACT LIAISON: The performance of Consulting Services (defined below) under this Agreement will be coordinated through Robert G. MacLean ("Mr. MacLean"), the Boston Scientific executive who has been designated as the Contract Liaison for this Agreement (the "Contract Liaison"). The Contract Liaison will direct the activities of Consultant and from time to time specify Consultant's assignments. If BSC designates a new Contract Liaison to replace Mr. MacLean, it will provide notice to Consultant. All reports, documents, and communications relating to the provision of the Consulting Services shall be transmitted to Boston Scientific through the Contract Liaison, or to persons designated by the Contract Liaison. Boston Scientific may designate a new Contract Liaison by written notice to Consultant. Robert G. MacLean can be reached by calling (508) 650-8481 (unless or until this number changes).

3. CONSULTING SERVICES: The Consultant is engaged to perform Consulting Services in the Field of Consultation as follows: (a) to assist in the identification, development and conduct of new and existing BSC business in the European Union and Eastern Europe, including, in particular, the identification of new business development opportunities in fields of current or potential interest to BSC; (b) to analyze and give advice to BSC in areas of current BSC

1

business focus, with particular emphasis on the fields of endovascular aneurysmal repair, peripheral angioplasty, and stenting, endourological and gastrointestinal endoscopic procedures; and, (c) to perform other related tasks (the "Consulting Services") in consultation with and under the general direction of the Contract Liaison. BSC acknowledges that the Consulting Services will not be on a full-time basis and shall not exceed 800 hours per year, excluding travel time. Consultant will not be required to travel outside Europe, except for a maximum of four meetings per year.

4. TERM: The initial term of this Agreement shall be for a two-year period commencing March 1, 2000 and ending February 28, 2002 ("Term"). The Term may be extended by mutual written agreement of the parties for additional six (6) month periods, notice of the request for any such extension to be given by each party to the other no later than 30 days prior to the expiration of the applicable term.

5. PAYMENT:

(a) Boston Scientific will pay Consultant a retainer of Ninety-five Thousand Dollars and no cents ($95,000.00) per quarter for services performed by Consultant and related to Consulting Services. Payment for services shall be made by Boston Scientific within the first thirty (30) days of the commencement of each quarter. The first quarter will cover the period from March 1, 2000 to May 31, 2000 and payment will be due on or before April 15, 2000.

(b) Boston Scientific will reimburse Consultant for reasonable expenses incurred while performing the Consulting Services. Generally, all reimbursement requests should be submitted for prior approval. Major expenses, including travel expenses, must be approved by the Contract Liaison in advance. Invoices and receipts must be submitted for all expenses whenever possible. Payment for expense reimbursement shall be made by Boston Scientific within thirty (30) days after receipt of Consultant's reimbursement request.

6. PERFORMANCE AND SUBSTANTIATION OF CONSULTING SERVICES: Consultant shall perform the Consulting Services requested by the Boston Scientific Contract Liaison during the Term of this Agreement. Consultant shall document and record all time spent in the performance of the Consulting Services to the reasonable satisfaction of the Boston Scientific Contract Liaison. This documentation shall be delivered to the Boston Scientific Contract Liaison in person or by fax on or before the first business day of each calendar quarter, such documentation to contain information for the prior quarter. The first such documentation shall be due on or before June 30, 2000.

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7. TERMINATION OF CONSULTING SERVICES: This Agreement will become effective when signed by both parties and shall continue for the Term specified in Section 4, above. Should Consultant breach any of his obligations under Paragraphs 8, 10, 11, 13, 14 and 15, below, Boston Scientific may terminate this Agreement upon written notice to Consultant if any such breach is not remedied, so long as Boston Scientific shall have first given Consultant a thirty (30) day opportunity to cure any such breach. In the event of such termination, Boston Scientific will, as its sole and exclusive obligation, pay Consultant at the rate specified in Paragraph 5, above, for Services rendered up to Consultant's receipt of termination notice. Upon termination of this Agreement, Consultant shall promptly deliver to Boston Scientific all Boston Scientific Property, as defined in Section 9 below, including work in progress, which was furnished by Boston Scientific to Consultant. Boston Scientific may withhold final payment until receipt of all such Boston Scientific Property. Consultant's obligations under Sections 8, 10, 11, 12, 13, 14 and 15 hereof shall survive expiration or any termination of this Agreement. Consultant may terminate this Agreement at any time upon thirty (30) days prior written notice to BSC.

8. CONFIDENTIAL INFORMATION:

(a) "Boston Scientific Confidential Information" shall mean all information disclosed by Boston Scientific to Consultant, including without limitation, information relating to the Field of Consultation of this Agreement, and all other information regarding Boston Scientific's past, present, or future research, technology, know-how, ideas, concepts, designs, products, prototypes, processes, machines, manufacture, compositions of matter, business plans and operations, technical information, drawings, specifications, and the like, and any knowledge or information developed by Consultant as a result of work in connection with this Agreement, except information which:

(i) is at the time of disclosure, or thereafter becomes, a part of the public domain through no act or omission by Consultant;

(ii) is lawfully in the possession of Consultant prior to disclosure by Boston Scientific, as shown by Consultant's written records; or

(iii) is lawfully disclosed to Consultant by a third party which did not acquire the same under an obligation of confidentiality from or through Boston Scientific, as shown by Consultant's written records.

(b) Consultant will not, without the prior written consent of Boston Scientific, disclose any Boston Scientific Confidential Information to anyone for any reason at any time or use any Boston Scientific Confidential Information for any purpose, except as requested by Boston Scientific.

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(c) Consultant will not disclose to Boston Scientific any confidential or proprietary information belonging to any third party without the written consent of such party, or represent as being unrestricted any designs, plans, models, samples, or other writings or products that Consultant knows are covered by valid patent, copyright, or other forms of intellectual property protection.

9. BOSTON SCIENTIFIC PROPERTY: To the extent that it is provided, the parties agree that all tangible property provided to Consultant in connection with this Agreement, including without limitation all samples, reports, communications, drawings, notes, analyses and materials received from Boston Scientific or produced in connection with this Agreement (collectively, "Boston Scientific Property"), shall be and remain the exclusive property of Boston Scientific. Consultant agrees to keep and maintain in Consultant's custody and control any Boston Scientific Property that Consultant receives or develops during the term of this Agreement, and agrees to return or surrender to Boston Scientific all Boston Scientific Property upon termination of this Agreement or otherwise upon request by Boston Scientific.

10. DEVELOPMENT RIGHTS: Consultant shall, during the term of this Agreement and for a period of one (1) year thereafter, promptly report and disclose to Boston Scientific all improvements to Boston Scientific products tested and evaluated by Consultant and all ideas and concepts heard, developed or conceived, either alone or with others, including any ideas and concepts which result in new products or significant enhancements to existing products, while performing the Consulting Services ("Developments"). Developments shall be the sole and exclusive property of Boston Scientific and are hereby assigned to Boston Scientific without any additional payments to Consultant by Boston Scientific. It is understood that Boston Scientific shall have the right but not the obligation to initiate, prosecute, maintain and defend any and all patentable ideas and concepts with respect to Developments. Consultant shall provide reasonable assistance to Boston Scientific with respect to any such patents and patent applications, and shall execute all appropriate documents and assignments with respect to any such patents and patent applications. Consultant agrees not to assert any rights in law or in equity in the Developments.

11. PUBLISHING: During the term of this Agreement and for a period of one
(1) year thereafter, Consultant shall submit to Boston Scientific any paper Consultant intends to publish relating to the Field of Consultation of this Agreement, and shall not submit any such paper to a publisher or other party prior to the expiration of forty-five (45) days from the date an outline of the paper is submitted to Boston Scientific. If Boston Scientific determines in good faith during such period that publication or presentation of such paper would be detrimental to its intellectual property interests, Consultant shall work in good faith with Boston Scientific to retract or modify the paper to remove all language which is detrimental to Boston

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Scientific's intellectual property interests, or, in the alternative and at Boston Scientific's election, shall refrain from submitting such paper to a publisher or other party for an additional 120 days to permit Boston Scientific to file patent applications or take other steps to protect its intellectual property interests.

During the term of this Agreement and for a period of one (1) year thereafter, Consultant shall also submit to Boston Scientific for review, on a confidential basis, any patent applications relating to the Field of Consultation naming Consultant as an inventor, either alone or with others, which Consultant or any third party intends to file with any U.S. or international patent offices in advance of the filing of any such application. Boston Scientific shall have thirty
(30) days in which to review such applications. If Boston Scientific makes a good faith determination, within such period, that the filing of such an application would be contrary to its intellectual property rights set forth herein, Consultant shall amend, or cause to be amended, such proposed patent application to remove any language that is determined by Boston Scientific to be contrary to its intellectual property rights hereunder.

12. INDEMNIFICATION: Consultant agrees to defend, indemnify and hold Boston Scientific harmless from any and all suits, claims, actions, damages or losses whatsoever (including reasonable attorney's fees):

(a) arising out of any claim that the use of the Developments by Boston Scientific infringes any patent or copyright or otherwise violates the rights of any third party; or resulting in any way from any act or omission of Consultant in his performance of the Consulting Services or his presence at a Boston Scientific facility.

(b) Consultant agrees to indemnify and hold harmless Boston Scientific to the extent of any obligations imposed by law on Boston Scientific to pay any withholding taxes, social security, unemployment or disability insurance, or similar items in connection with any payment made to Consultant by Boston Scientific for Consultant's services provided hereunder.

13. NON-SOLICITATION OF BOSTON SCIENTIFIC EMPLOYEES: Consultant agrees that during the term of this Agreement and for a period of one (1) year after its termination, Consultant will not attempt to or actually solicit for hire any individual who was an employee of Boston Scientific within the twelve (12) month period immediately preceding the termination date of this Agreement, assist in the hiring away of any such employee by another person, or encourage any such employee to terminate his or her employment with Boston Scientific, whether directly or indirectly, unless the President of Boston Scientific or his designee shall have given prior written approval.

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14. CONSULTANT'S WARRANTIES: Consultant represents and warrants:

(a) that Consultant has the unrestricted right to disclose any information it submits to Boston Scientific, free of all claims of third parties,

(b) that such disclosures do not breach or conflict with any confidentiality provisions of any agreement to which Consultant is a party, and

(c) that the services covered by this Agreement are not in violation of any other agreement with other parties or of any restrictions of any kind.

15. ABSENCE OF CONFLICTS: Consultant agrees and warrants that Consultant will not, during the term of this Agreement and for a period of one (1) year thereafter, work with any competitor on the development of any products which would be directly competitive with any existing or proposed Boston Scientific products of which Consultant is reasonably aware, or provide similar Consultantcy or consulting services relating to the Field of Consultation. Consultant further agrees to disclose to Boston Scientific, during the term of this Agreement, any services Consultant is providing to, or any arrangements Consultant has with, any competitor of Boston Scientific so that Boston Scientific can evaluate potential areas of conflict. For the purposes of this Paragraph, a "competitor" of Boston Scientific means any party in actual competition or intending or preparing to be in competition with Boston Scientific's products or business. Notwithstanding the foregoing, BSC acknowledges that Consultant will be establishing a Consulting Business that will not compete with BSC and that the establishment of that business is not a violation of this Agreement.

16. PRIMACY OF AGREEMENT: This Agreement supercedes and cancels all previous agreements and arrangements between Consultant and Boston Scientific relating to the Consultant's provision of Consulting Services. This Agreement may be changed only by a writing signed by both parties.

17. MISCELLANEOUS: This Agreement is made pursuant to the laws of the Commonwealth of Massachusetts and questions as to its validity and effect shall be governed thereby. Further, the Agreement is not assignable by Consultant, and shall inure to the benefit of Boston Scientific and its successors and assigns except that Consultant may assign this Agreement to any Consulting Business he creates and controls so long as Consultant continues personally to perform the Consulting Services. Consultant is an independent contractor; is responsible for paying all foreign, federal, state and local taxes, including but not limited to income, Social Security and unemployment taxes; and has no right to sign the name of or bind Boston Scientific in any manner. No failure of either party to enforce any right under this Agreement shall be deemed a waiver thereof.

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18. NOTICE: Any notice or communication required or permitted to be given by either party under the terms of this Agreement shall be deemed sufficiently given if mailed by registered mail or by a nationally recognized courier who guarantees overnight delivery and addressed as follows:

TO BOSTON SCIENTIFIC                        TO CONSULTANT

Robert G. MacLean                           Philippe P. LeGoff
Senior Vice President                       c/o Mathilde LeGoff
Human Resources                             111 Avenue Briand
Boston Scientific Corporation               35000 Rennes, FRANCE
One Boston Scientific Place
Natick, MA  01760-1537

WITH A COPY TO:

General Counsel                             Russell F. Conn, Esq.
Boston Scientific Corporation               Conn, Kavanaugh, Rosenthal,
One Boston Scientific Place                    Peisch & Ford, L.L.P.
Natick, MA  01760-1537                      Ten Post Office Square
                                            Boston, MA  02109
                                            (617) 482-8299
                                            - and -
                                            Mathys Schmid & Partners
                                            Attn:  Dr. Peter Mathys
                                            Dufourstrasse 5
                                            Basel, Switzerland

If the foregoing accurately represents our agreement, please sign at the appropriate place and return one copy of this Agreement to me.

BOSTON SCIENTIFIC CORPORATION

Name: Robert G. MacLean                  Title: Senior Vice President,
                                                Human Resources

Name:                                    Date:
      ------------------------                  --------------------------
         (Signature)

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AGREED TO, ACCEPTED AND ACKNOWLEDGED:

Name: Philippe P. LeGoff

Name:                                    Date:
      ------------------------                  --------------------------
         (Signature)

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EXHIBIT 12.1

BOSTON SCIENTIFIC CORPORATION

STATEMENT OF COMPUTATION OF RATIOS OF EARNINGS TO FIXED CHARGES (Unaudited)
(In thousands)

                                                                                    Year Ended December 31,
                                                           ---------------------------------------------------------------
                                                             1999           1998          1997          1996         1995
                                                           ---------------------------------------------------------------
Fixed charges:
        Interest expense                                   $117,567      $  67,573     $  14,285     $ 11,518     $  9,591
        Capitalized interest                                    650          4,460         4,976
        Debt issuance costs                                   3,521          1,675            65          501
        Interest portion of rental expense                   15,126         16,361        14,354        8,534        5,802
                                                           ---------------------------------------------------------------
          Total fixed charges                              $136,864      $  90,069     $  33,680     $ 20,553     $ 15,393
                                                           ===============================================================

Earnings:
        Income (loss) before income taxes
         and cumulative effect of change in accounting     $562,468      $(275,314)    $ 215,131     $303,330     $ 62,678
        Fixed charges per above                             136,864         90,069        33,680       20,553       15,393
        Net undistributed equity in earnings of equity
         investees                                           (1,375)
        Less: capitalized interest                              650          4,460         4,976
                                                           ---------------------------------------------------------------
          Total earnings, as adjusted                      $697,307      $(189,705)    $  243,835    $323,883     $ 78,071
                                                           ===============================================================

Ratio of earnings to fixed charges                             5.09                         7.24        15.76         5.07
                                                           ===============================================================

Coverage deficiency (1)                                                  $(279,774)
                                                                         =========

Supplemental pro forma coverage deficiency (2)                           $(345,507)
                                                                         =========

(1) Includes noncash special charges of $646 million recorded in connection with the acquisition of Schneider Worldwide and other merger-related initiatives.

(2) Reflects the coverage deficiency as if the acquisition of Schneider Worldwide occurred at the beginning of 1998, with pro forma adjustments to give effect to amortization of intangibles, an increase in interest expense on acquisition financing and certain other adjustments.


Exhibit 13.1


1999 CONSOLIDATED FINANCIAL STATEMENTS

[GRAPHIC]

BOSTON
SCIENTIFIC


FINANCIAL TABLE OF CONTENTS

1-10     Management's Discussion and Analysis of
         Financial Condition and Results of Operation

11       Consolidated Statements of Operations

12       Consolidated Balance Sheets

13       Consolidated Statements of Stockholders' Equity

14       Consolidated Statements of Cash Flows

15-32    Notes to Consolidated Financial Statements

33       Report of Independent Auditors

34       Five-Year Selected Financial Data

35       Quarterly Results of Operations

36       Market for the Company's Common Stock
         and Related Matters


MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS

RESULTS OF OPERATIONS

YEARS ENDED DECEMBER 31, 1999 AND 1998

Net sales increased 27% in 1999 to $2,842 million as compared to $2,234 million in 1998. The 1999 results include the operations of Schneider Worldwide (Schneider) which was acquired in the third quarter of 1998. On a pro forma basis, assuming Schneider revenues had been included in all of 1998, net sales in 1999 increased approximately 14%. Net income for 1999 was $371 million or $0.90 per share (diluted), including a special credit of $10 million ($7 million, net of tax), as compared to a reported net loss for 1998 of $264 million, or $0.68 per share, including merger-related charges and credits of $667 million ($527 million, net of tax). Excluding merger-related charges and credits, net income for 1999 increased 39% to $364 million, or $0.88 per share, as compared to $262 million, or $0.66 per share, for the year ended December 31, 1998.

United States (U.S.) revenues increased approximately 25% to $1,741 million during 1999, while international revenues increased approximately 31% to $1,101 million. Without the impact of foreign currency exchange rates on translation of international revenues, worldwide sales for 1999 increased approximately 25%. Worldwide vascular and nonvascular sales increased 30% and 21%, respectively, compared to 1998. The increases in worldwide and vascular sales were primarily attributable to the inclusion of Schneider sales for the entire year and the Company's sales of coronary stents in the U.S. and Japan. U.S. coronary stent revenues and worldwide coronary stent revenues, primarily sales of the NIR(R) stent, were approximately $409 million and $604 million, respectively, during 1999, compared to $211 million and $324 million, respectively, during 1998. Worldwide NIR(R) coronary stent sales as a percentage of worldwide sales were approximately 20% in 1999 compared to approximately 13% in 1998 and are planned to be approximately 21% of sales in 2000.

The worldwide coronary stent market is dynamic and highly competitive, with significant market share volatility. In addition, technology and competitive offerings in the market are constantly changing. The Company's reduction in coronary stent revenues in the U.S. during the fourth quarter of 1999 to $92 million from $130 million recorded during the fourth quarter of 1998 reflects this volatility. This reduction was partially offset by an increase in international coronary stent revenues (primarily Japan sales) from $29 million to $51 million during the same period. The reduction in coronary stent revenues as well as the inclusion of Schneider's sales for the entire period of both quarters resulted in 1999 fourth quarter sales being flat relative to those of 1998. Stent revenues for 2000 will be impacted by the timing of receipt of FDA approvals to market several new coronary and peripheral stent platforms in the U.S. In light of this environment, the Company expects 2000 sales growth to be below the Company's historical rates.

Gross profit as a percentage of net sales decreased from 67.1% in 1998 to 65.3% in 1999. The decrease in gross margin is primarily due to a provision recorded in the third quarter of 1999 of $62 million ($41 million, net of tax) for excess NIR(R) stent inventories and purchase commitments. The excess position was driven primarily by a shortfall in planned third quarter NIR(R) stent revenues, a reduction in NIR(R) stent sales forecasted for 1999 and 2000, and strategic decisions regarding versions of the NIR(R) stent system to be launched. In the third quarter of 1998, the Company provided $31 million ($21 million, net of tax) for costs associated with the Company's decision to recall voluntarily the NIR ON(R) Ranger(TM) with Sox(TM) coronary stent system in the U.S. Excluding these charges, gross margins were 67.5% and 68.1% for 1999 and 1998, respectively. Gross margins during 1999 were positively impacted compared to 1998 by a reduction in other inventory charges. However, the reduction was offset by a decrease in average selling prices and increased manufacturing costs.

As a result of multiple acquisitions, the Company's supply chain and manufacturing processes have not yet been fully optimized, and therefore gross margins have been negatively impacted. During 1998, the Company initiated a program to focus on supply chain optimization, and, during 1999, the program has been expanded to include a review of manufacturing processes. The program is designed to lower inventory levels and the cost of manufacturing, improve absorption and minimize inventory write-downs. The infrastructure related to the supply chain aspect of the program is substantially in place. However, gross margin benefits will be delayed until manufacturing processes are addressed, the program has time to develop and until historical inventories are sold. The Company continues to assess its plant network strategy.

Medinol Ltd. (Medinol) supplies the NIR(R) coronary stent, and unforeseen delays, stoppages or interruptions in the supply and/or mix of the NIR(R) stent could adversely affect future operating results of the Company. Generally, the Company has less control over inventory manufactured by third parties as compared to inventory manufactured internally. Furthermore, the purchase price of NIR(R) coronary stents and the amount of NIR(R) coronary stent sales as a percentage of worldwide sales could significantly impact gross margins. As average selling prices for the NIR(R) stents fluctuate, the Company's cost to purchase the stents will change, because cost is based on a constant percentage of average selling prices. Therefore, if higher-costing NIR(R) stents

1

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

are being sold as average selling prices are declining, gross margins could be negatively impacted. At December 31, 1999, the Company had approximately $143 million of net NIR(R) coronary stent inventory and was committed to purchase approximately $53 million of NIR(R) stents from Medinol.

Selling, general and administrative expenses as a percentage of sales decreased from 34% of sales in 1998 to 30% of sales in 1999 and increased approximately $87 million from 1998 to $842 million. The decrease as a percent of sales is primarily attributable to the launch of coronary stents in the U.S. and Japan, the realization of synergies as the Company integrated Schneider into its organization, and improved returns in Asia Pacific and Latin America as the Company continues to leverage its direct sales infrastructure. The Company plans to continue to leverage its infrastructure during 2000. The increase in expense dollars is primarily attributable to higher selling expenses as a result of the launch of coronary stents in the U.S., increased costs to expand the Company's direct sales presence in Asia Pacific and Latin America, and increased legal expenses.

Amortization expense increased from $53 million in 1998 to $92 million in 1999 and increased as a percentage of sales from 2% to 3%. The increase is primarily a result of the amortization of intangibles related to the purchase of Schneider.

Royalty expenses increased approximately 48% from $31 million in 1998 to $46 million in 1999. The increase in royalties is primarily due to royalty obligations assumed in connection with the Schneider acquisition and payments made to Medinol on sales of internally developed stent platforms. The Company continues to enter into strategic technological alliances, some of which include royalty commitments.

Research and development expenses decreased as a percentage of sales from 9% in 1998 to 7% in 1999. Research and development expenses were $200 million in 1998 and $197 million in 1999. The decrease as a percentage of sales is primarily attributable to the launch of coronary stents in the U.S. and Japan and the realization of synergies in connection with the Schneider acquisition. The investment in research and development dollars reflects spending on new product development programs as well as regulatory compliance and clinical research, and reflects the Company's continued commitment to refine existing products and procedures and to develop new technologies that provide simpler, less traumatic, less costly and more efficient diagnosis and treatment. The trend in countries around the world toward more stringent regulatory requirements for product clearance and more vigorous enforcement activities has generally caused or may cause medical device manufacturers to experience more uncertainty, greater risk and higher expenses.

During the third quarter of 1999, the Company identified and reversed restructuring and merger-related charges of $10 million ($7 million, net of tax) no longer deemed necessary. These amounts relate primarily to the restructuring charges accrued in the fourth quarter of 1998 and reflect the reclassification of assets from held-for-disposal to held-for-use resulting from management's decision to resume a development program previously planned to be eliminated. In addition, estimated severance costs for 1998 initiatives were reduced as a result of attrition. During 1998, the Company recorded merger-related charges and credits of $667 million ($527 million, net of tax) primarily related to purchased research and development acquired in the $2.1 billion cash purchase of Schneider. (See Results of Operations for the Years Ended December 31, 1998 and 1997 for further discussion.)

Interest expense increased from $68 million in 1998 to $118 million in 1999. The overall increase in interest expense is primarily attributable to a higher average outstanding debt balance borrowed in conjunction with the Schneider acquisition.

The Company's effective tax rate, including the impact of merger-related charges and credits, was approximately 4% in 1998 and 34% in 1999. The Company's pro forma effective tax rate, excluding the impact of merger-related charges and credits, increased from approximately 33% in 1998 to 34% in 1999. The increase is primarily attributable to a shift in the mix of the Company's U.S. and international business. The effective rate for 2000 is expected to decrease slightly due to changes in the geographic mix of the Company's business.

Uncertainty remains with regard to future changes within the healthcare industry. The trend toward managed care and economically motivated and more sophisticated buyers in the U.S. may result in continued pressure on selling prices of certain products and resulting compression on gross margins. In addition to impacting selling prices, the trend to managed care in the U.S. has also resulted in more complex billing and collection procedures. The Company's ability to react effectively to the changing environment may impact its bad debt and sales allowances in the future. Further, the U.S. marketplace is increasingly characterized by consolidation among healthcare providers and purchasers of medical devices that prefer to limit the number of suppliers from which they purchase medical products. There can be no assurance that these entities will continue to purchase products from the Company.

2

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

International markets are also being affected by economic pressure to contain reimbursement levels and healthcare costs. The Company's ability to benefit from its international expansion may be limited by risks and uncertainties related to economic conditions in these regions, competitive offerings, infrastructure development, rights to intellectual property, and the ability of the Company to implement its overall business strategy. Any significant changes in the political, regulatory or economic environment where the Company conducts international operations may have a material impact on revenues and profits. A deterioration in the Japan and/or emerging markets economies may impact the Company's ability to collect its outstanding receivables. Although these factors may impact the rate at which Boston Scientific can grow, the Company believes that it is well positioned to take advantage of opportunities for growth that exist in the markets it serves.

YEARS ENDED DECEMBER 31, 1998 AND 1997

On September 10, 1998, the Company consummated its acquisition of Schneider, formerly a member of the Medical Technology Group of Pfizer Inc., for $2.1 billion in cash. The acquisition was accounted for using the purchase method of accounting. The consolidated financial statements include Schneider's operating results from the date of acquisition.

Net sales increased 22% in 1998 to $2,234 million from $1,831 million in 1997. Without the impact of foreign currency exchange rates on translation of international revenues, sales for 1998 increased 25%. International sales during 1998 were negatively impacted compared to 1997 by approximately $47 million of unfavorable exchange rate movements caused primarily by the strengthening of the U.S. dollar versus the Japanese yen. Net income for the year ended December 31, 1998, excluding merger-related and special charges, was $262 million or $0.66 per share (diluted) compared to $266 million or $0.67 per share in 1997. The Company for 1998 reported a net loss of $264 million or $0.68 per share, including merger-related and special charges of $527 million, net of tax, as compared to 1997 net income of $110 million or $0.28 per share, including merger-related and special charges of $156 million, net of tax.

U.S. revenues increased approximately 30% from 1997 to $1,394 million in 1998, while international revenues increased approximately 11% from 1997 to $840 million in 1998. U.S. sales as a percentage of worldwide sales increased from 59% in 1997 to 62% in 1998. Worldwide vascular and nonvascular sales increased 25% and 13%, respectively, from 1997 to 1998. The increases in U.S. sales as a percentage of worldwide sales and in vascular sales were primarily attributable to the Company's 1998 third quarter introduction in the U.S. of coronary stents. U.S. coronary stent revenues, primarily sales of the NIR(R) stent, were approximately $211 million during the second half of 1998. Worldwide NIR(R) coronary stent sales as a percentage of worldwide sales were approximately 13% in 1998.

Gross profit as a percentage of sales was approximately 67.1% and 70.2% during 1998 and 1997, respectively. The decrease was a result of multiple acquisitions, which weakened the Company's supply chain and pressured gross margins, resulting in write-downs for excess and obsolete inventory and high manufacturing costs. The decrease in gross margins during 1998 compared to 1997 was also attributable to a decline in average selling prices due to continuing pressure on healthcare costs and increased competition, and the significant increase in sales of the NIR(R) coronary stent, which had lower gross margins than the corporate average. In the third quarter of 1998, the Company provided $31 million ($21 million, net of tax) for costs associated with the Company's decision to recall voluntarily the NIR ON(R) Ranger(TM) with Sox(TM) coronary stent system in the U.S.

Selling, general and administrative expenses as a percentage of net sales decreased from 36% in 1997 to 34% in 1998, while increasing approximately $92 million from $663 million in 1997 to $755 million in 1998. The decrease as a percentage of sales is primarily attributable to the increase in net sales related to the launch of coronary stents in the U.S. Approximately $17 million of the 1998 increase in expense dollars is attributable to results of Schneider operations from the date of acquisition through December 31, 1998. In addition, during 1998, the Company continued to expand its direct sales presence in Europe and emerging markets. Finally, the increase in expense dollars reflects costs to operate the Company's new global information system and increased costs of domestic distribution.

Amortization expense increased 63% from $33 million in 1997 to $53 million in 1998, and increased as a percentage of sales from 1.8% to 2.4% of net sales. The increase is primarily a result of the amortization of intangibles related to the purchase of Schneider from the date of acquisition through December 31, 1998.

Royalty expenses remained at approximately 1% of net sales while increasing 41% from $22 million in 1997 to $31 million in 1998. The increase in overall royalty expense is due to increased sales and royalties due under several strategic alliances that the Company initiated in 1997 and prior years.

3

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Research and development expenses remained at 9% of net sales while increasing 20% from $167 million in 1997 to $200 million in 1998. Approximately $7 million of the increase in 1998 is attributable to research and development of Schneider from the date of acquisition through December 31, 1998.

The aggregate purchase price of the Schneider acquisition has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at the date of acquisition. The estimated excess of purchase price over the fair value of the net tangible assets acquired was allocated to specific intangible asset categories with the remainder assigned to excess of cost over net assets acquired. At December 31, 1999, the net intangibles recorded in connection with the Schneider acquisition, including the excess of cost over net assets acquired, represented 40% and 83% of the Company's total assets and stockholders' equity, respectively. Core technology, developed technology, assembled workforce, trademarks and patents are being amortized on a straight-line basis over periods ranging from 9 to 25 years. The Company is amortizing the value assigned to customer lists (relationships) over 25 years because it has been the Company's experience that physician and hospital relationships are built for the long term and fundamental to the Company's business of bringing innovative products to market. The Company realizes that maintaining these and similar relationships will require ongoing efforts. However, both Schneider and the Company have over a 20-year history of working closely with interventionalists and their institutions for both vascular and nonvascular applications and management believes these relationships will continue to benefit the Company. In addition, after considering the long term prospects for the less invasive medical device industry and the fundamental role of catheter-based interventional medicine, as well as, Schneider's competitive position within the industry, management concluded that it is appropriate to amortize the excess of the Schneider purchase price over the fair value of the assets acquired over 40 years. Finally, the Company recorded a $671 million ($524 million, net of tax) charge to account for purchased research and development. The valuation of purchased research and development, for which management is primarily responsible, represents the estimated fair value at the date of acquisition related to in-process projects. As of the date of acquisition, the in-process projects had not yet reached technological feasibility and had no alternative future uses. Accordingly, the value attributable to these projects was immediately expensed at acquisition. If the projects are not successful or completed in a timely manner, the Company may not realize the financial benefits expected for these projects.

The income approach was used to establish the fair values of the purchased research and development. This approach established the fair value of an asset by estimating the after-tax cash flows attributable to the in-process project over its useful life and then discounting these after-tax cash flows back to a present value. Revenue estimates were based on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected product introductions by competitors. In arriving at the value of the in-process research and development projects, the Company considered, among other factors, the in-process project's stage of completion, the complexity of the work completed as of the acquisition date, the costs already incurred, the projected costs to complete, the contribution of core technologies and other acquired assets, the expected introduction date, and the estimated useful life of the technology. The discount rate used to arrive at a present value as of the date of acquisition was based on the time value of money and medical technology investment risk factors. For the Schneider purchased research and development programs, a risk-adjusted discount rate of 28% was utilized to discount the projected cash flows. The Company believes that the estimated purchased research and development amounts so determined represent the fair value at the date of acquisition and do not exceed the amount a third party would pay for the projects.

The most significant Schneider purchased research and development projects that were in-process at the date of acquisition were brachytherapy, devices for aneurysmal disease and coronary stents, which represented approximately 26%, 20% and 16% of the in-process value, respectively. Set forth below are descriptions of these in-process projects, including their status at the end of 1999.

The brachytherapy system is an intravascular radiation system designed to reduce clinical restenosis after PTCA and/or stenting. The system consists of a computer-controlled afterloader, beta radiation source, centering catheter, source delivery wire and dummy wire. As of the date of acquisition, the project was expected to be completed and the products commercially available in the U.S. within two to three years, with an estimated cost to complete of approximately $5 to $10 million.

The aneurysmal disease projects are endoluminal grafts for the treatment of late stage vascular aneurysms and occlusions. The most significant of the projects in this category at the date of acquisition was the endoluminal graft for the treatment of abdominal aortic aneurysms. As of the date of acquisition, the projects were expected to be completed and the products commercially available in the U.S. within two to three years, with an estimated cost to complete of approximately $10 to $15 million.

4

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

Coronary stent systems underway at the date of acquisition were stent systems for native coronary artery disease, saphenous vein graft disease, and versions with novel delivery systems. The Company believes that the stent systems will be especially helpful in the treatment of saphenous vein graft disease. As of the date of acquisition, the projects were expected to be completed and the products commercially available for sale in the U.S. within one year with an estimated cost to complete of approximately $1 to $3 million.

There have been no significant departures from the planned efforts and costs of the brachytherapy project. As part of a subsequent project consolidation program, the Schneider abdominal aortic aneurysm project has been integrated with another internal project. As a result, the Company will pursue the development of next generation products for aortic aneurysmal disease with an integrated platform while minimizing duplicative research and development. The cost of the development is still estimated to be in the range of approximately $10 to $15 million. The coronary stent projects have been completed.

During 1998, the Company established a rationalization plan in conjunction with the consummation of the Schneider acquisition, taking into consideration duplicate capacity as well as opportunities for further leveraging of cost and technology platforms. The Company's actions, approved and committed to in the fourth quarter of 1998, included the planned displacement of approximately 2,000 positions, over half of which were manufacturing positions and would result in annualized cost savings of approximately $50 to $75 million. During the fourth quarter of 1998, the Company estimated the costs associated with these activities, excluding transition costs, to be approximately $62 million, most of which represented severance and related costs. Approximately $36 million of the total was capitalized as part of the purchase price of Schneider. The remaining $26 million ($17 million, net of tax) was charged to operations during 1998. In addition, as part of the Schneider acquisition, the Company capitalized estimated costs of approximately $16 million to cancel Schneider's contractual obligations, primarily with its distributors.

The Company substantially completed its rationalization plan in 1999, including the closure of five Schneider facilities as well as the transition of manufacturing for selected Boston Scientific product lines to different sites. Approximately 1,800 positions were eliminated (resulting in the termination of approximately 1,500 employees) in connection with the rationalization plan and the anticipated cost savings have been achieved. As noted previously, in the third quarter of 1999, the Company identified and reversed restructuring and merger-related charges of $10 million ($7 million, net of tax) no longer deemed necessary. These amounts relate primarily to the rationalization plan recorded in the fourth quarter of 1998 and reflect the reclassification of assets from held-for-disposal to held-for-use resulting from management's decision to resume a development program previously planned to be eliminated. In addition, estimated severance costs for 1998 initiatives were reduced as a result of attrition. During 1999, the costs related to the transition of manufacturing operations were not significant and were recognized in operations as incurred.

The 1998 rationalization plan also resulted in the decision to expand, not close, the Target Therapeutics, Inc. (Target) facilities originally provided for in a 1997 merger-related charge and to relocate other product lines to those Target facilities. In the fourth quarter of 1998, the Company reversed $21 million ($14 million, net of tax) of previously recorded merger-related charges, of which $4 million related to facility costs and which also included reductions for revisions of estimates relating to contractual commitment payments, associated legal costs and other asset write-downs originally provided for as a 1997 merger-related charge.

In the second quarter of 1998, the Company realigned its operating units and decided to operate Target independently instead of as a part of its vascular division as was planned at the date of the Target acquisition. Management believed that an independent Target would allow the business unit to develop its technologies and markets more effectively than it would as part of the vascular division. As a result of this decision, in the second quarter of 1998, the Company reversed $20 million ($13 million, net of tax) of 1997 Target merger-related charges primarily related to revised estimates for costs of workforce reductions and costs of canceling contractual commitments. In addition, in the second quarter of 1998, the Company recorded purchased research and development of approximately $11 million in connection with another acquisition consummated during 1998, and, in the fourth quarter of 1998, the Company recorded $30 million ($20 million, net of tax) of year-end adjustments related primarily to write-downs of assets no longer deemed to be strategic. The assets relate primarily to inventory, long lived and intangible assets that the Company does not believe will be sold or realized, respectively, because of revisions to and terminations of strategic alliances. The provisions have been recorded as costs of sales ($12 million), selling, general and administrative expenses ($12 million), amortization expenses ($2 million), royalties ($2 million), research and development expenses ($1 million) and other expenses ($1 million).

5

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

During 1997, the Company recorded merger-related charges of $146 million ($106 million, net of tax) primarily related to the Company's acquisition of Target, purchased research and development of $29 million, net of tax, in conjunction with accounting for its additional investment in Medinol and other strategic investments, and a charge of $31 million ($21 million, net of tax) to reflect the impact of implementing a new accounting standard. 1997 results also include provisions related to unusual inventory write-downs of $19 million ($13 million, net of tax) and litigation-related reserves of $34 million ($23 million, net of tax). The Company's Target merger-related charges reflect estimated costs to integrate all aspects of the Target business into the vascular business, and include those costs typical in a merging of operations, such as rationalization of facilities, workforce reductions, unwinding of various contractual commitments, asset write-downs and other integration costs. The Target restructuring plan was initiated to gain expanded market opportunities and reduce costs. The Company planned to integrate the Target business into its vascular business, terminate the Target distributors in countries where the Company had a direct sales presence, move the Target manufacturing and research and development operations to Ireland and other vascular facilities, and manage Target's administrative and corporate activities at the Company's headquarters. Specifically, the Company planned to exit Target's leased headquarters, manufacturing and research locations in California, as well as terminate Target's sales offices in Germany, Japan and the United Kingdom. The lease terminations were planned to begin during 1997 and to be completed by the end of 1998. In conjunction with the exit plan, the Company planned to terminate approximately 500 people, of whom approximately 100 were corporate/administrative, 300 were manufacturing and 100 were research and development personnel. At the date of the Target acquisition, the Company also provided for the excess cost over fair market value of selected Target leasehold improvements, machinery and computer equipment, and other assets ($8 million). As discussed, the Company reversed its decision to integrate the Target business into the vascular division in the second quarter of 1998. The merger and integration activities, including the reversal of previously recorded charges related to the integration of Target into the vascular division, were substantially completed during 1998. The most significant costs (approximately $50 million) relate to estimated costs to cancel contractual obligations with distributors. During 1996 and 1997, the Company expanded its direct sales presence outside the United States so as to be in position to take advantage of expanded market opportunities; the cancellation of Target distributor contractual obligations is consistent with this strategy. Benefits from the strategy began to be realized in 1998 as the Company was able to eliminate duplicate sales infrastructure and to transition the businesses to a seasoned sales force. In the second quarter of 1997, the Company decided not to reintroduce a vascular product that had been previously withdrawn from the European market. As a result, the Company determined that there would be no future sales of the product, thus no projected cash flows. The Company wrote-off the intellectual property ($8 million) associated with the product as a result of this analysis. Finally, in conjunction with the implementation of a global information system, the Company provided for the estimated residual value of its legacy systems ($8 million), based on the date which the systems were planned to be removed from service. Due to the revised estimates for costs of workforce reductions discussed previously, the number of Target employees actually displaced was approximately 40 (approximately 35 of whom were terminated in 1997 and the remainder subsequent to 1997) as compared to the original estimate of 500 employees.

Interest expense increased from $14 million in 1997 to $68 million in 1998. The overall increase in interest expense is primarily attributable to a higher outstanding debt balance, including the issuance of $2.1 billion in commercial paper on September 10, 1998 to finance the acquisition of Schneider, and the issuance of $500 million in fixed rate debt securities during the first quarter of 1998.

The Company's effective tax rate, including the impact of special charges, was approximately 39% in 1997 and 4% in 1998. Excluding these special charges, the pro forma effective tax rate increased from approximately 32% during 1997 to 33% during 1998. The increase was primarily attributable to a shift in the mix of U.S. and international business.

LIQUIDITY AND CAPITAL RESOURCES

Cash and short-term investments totaled $78 million at December 31, 1999 compared to $75 million at December 31, 1998. Working capital increased from current liabilities exceeding current assets by $353 million at December 31, 1998 to current assets equaling current liabilities at December 31, 1999. Cash proceeds during 1999 were generated primarily from operating activities, the Company's public offering of 14.950 million shares of its common stock at a price of $39.875 per share and the exercise of stock options. Cash proceeds during the period were offset by the repayment of approximately $1.1 billion of outstanding debt obligations, payments of $128 million of acquisition-related obligations, purchases of the Company's stock for approximately $127 million and capital expenditures of approximately $80 million. Cash provided by operating activities increased from $259 million during

6

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

1998 to $727 million during 1999. The improvement is primarily attributable to increased net income and reductions in accounts receivable and inventory.

On June 30, 1999, the Company completed a public offering of 14.950 million shares of its common stock at a price of $39.875 per share under a $1.2 billion shelf registration filed with the Securities and Exchange Commission in September 1998. The public offering reduced the amount available for the issuance of various debt and equity securities under the shelf registration to $604 million. The Company used the net proceeds from the public offering of approximately $578 million to repay borrowings under its revolving credit facilities. At December 31, 1999, the Company had approximately $421 million in revolving credit facility borrowings outstanding at a weighted-average interest rate of 6.66% and approximately $277 million of commercial paper outstanding at a weighted-average interest rate of 6.70%, compared to $1.8 billion of commercial paper outstanding at a weighted-average interest rate of 6.23% at December 31, 1998. At December 31, 1999, the revolving credit facilities totaled $1.65 billion, consisting of a $1.0 billion credit facility that terminates in June 2002, a $600 million 364-day credit facility that terminates in September 2000 and a $50 million uncommitted credit facility. The revolving credit facilities require the Company to maintain a specific ratio of consolidated funded debt (as defined) to consolidated net worth (as defined) plus consolidated funded debt of less than or equal to 60%. As of December 31, 1999, the ratio was approximately 37%. The Company intends to continue to borrow under its revolving credit facilities until it is able to issue sufficient commercial paper at reasonable rates.

The Company has the ability to refinance a portion of its short-term debt on a long-term basis through its revolving credit facilities and expects a minimum of $108 million will remain outstanding through the next twelve months and, accordingly, the Company has classified this portion of borrowings as long-term at December 31, 1999 compared to $800 million classified as long-term at December 31, 1998.

In March 1998, the Company issued $500 million of seven-year senior notes. The senior notes bear a coupon of 6.625% payable semi-annually, and are not redeemable prior to maturity or subject to any sinking fund requirements.

The Company had 6.0 billion Japanese yen (translated to approximately $58 million and $53 million at December 31, 1999 and 1998, respectively) of borrowings outstanding with a syndicate of Japanese banks. The interest rate on the borrowings is 2.37% and the borrowings are payable in 2002. In addition, the Company had approximately 1.2 billion Japanese yen (translated to approximately $12 million and $11 million at December 31, 1999 and 1998, respectively) of borrowings outstanding from a Japanese bank used to finance a facility construction project. The interest rate on the borrowings is 2.1% and the borrowings are payable in 2012.

The Company has uncommitted Japanese credit facilities with several Japanese banks, which provided for borrowings and promissory notes discounting of up to 11.5 billion Japanese yen (translated to approximately $112 million) and 7.5 billion Japanese yen (translated to approximately $66 million) at December 31, 1999 and 1998, respectively. There were no borrowings outstanding under the Japanese credit facilities at December 31, 1999 and 1998. During 1999, the Company discounted approximately $442 million of notes receivable compared to $266 million during 1998. At December 31, 1999, approximately $112 million of notes receivable were discounted at average interest rates of approximately 1.4% compared to $61 million of discounted notes receivable at average interest rates of approximately 1.5% at December 31, 1998.

The Company has recognized net deferred tax assets aggregating $238 million at December 31, 1999, and $199 million at December 31, 1998. The assets relate principally to the establishment of inventory and product related reserves and purchased research and development. In light of the Company's historical financial performance, the Company believes that these assets will be substantially recovered.

The Company is authorized to purchase on the open market up to approximately 40 million shares of the Company's common stock. Stock repurchased under the Company's systematic plan will be used to satisfy its obligations pursuant to employee benefit and incentive plans. During the fourth quarter of 1999, the Company repurchased 5.9 million shares at an aggregate cost of $127 million. As of December 31, 1999, a total of 25.9 million shares of the Company's common stock were repurchased under the plan. The Company may also repurchase within its authorization shares outside of the Company's systematic plan. These additional shares would also be used to satisfy the Company's obligations pursuant to employee benefit and incentive plans.

Since early 1995, the Company has entered into several transactions involving acquisitions and alliances, certain of which have involved equity investments. As the healthcare environment continues to undergo rapid change, management expects that it will continue to focus on strategic initiatives and/or make additional investments in existing relationships. In connection with these acquisitions, the Company has acquired numerous in-process research and development projects. As the Company continues to build its research

7

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

base in future years, it is reasonable to assume that it will acquire additional research and development platforms. As of December 31, 1999, the Company's cash obligations required to complete the balance of its rationalization initiatives to integrate businesses related to its mergers and acquisitions and its 1998 rationalization plan are estimated to be approximately $28 million. Substantially all of these cash outlays will be completed by the first half of 2000. Further, the Company expects to incur capital expenditures of approximately $100 million during 2000. The Company expects that its cash and cash equivalents, marketable securities, cash flows from operating activities and borrowing capacity will be sufficient to meet its projected operating cash needs through the end of 2000.

YEAR 2000 READINESS

In prior years, the Company discussed the nature and progress of its plans to become Year 2000 ready. In late 1999, the Company completed its remediation and testing of systems. As a result of those planning and implementation efforts, the Company experienced no significant disruptions in mission critical information technology and non-information technology systems and believes those systems successfully responded to the Year 2000 date change. The Company expended in excess of $110 million to implement and operate a Year 2000 compliant global information system and on other costs relating to Year 2000 compliance. The Company is not aware of any material problems resulting from Year 2000 issues, either with its products, its internal systems, or the products and services of third parties. The Company will continue to monitor its mission critical computer applications and those of its suppliers and vendors throughout the year 2000 to ensure that any latent Year 2000 matters that may arise are addressed promptly.

MARKET RISK DISCLOSURES

In the normal course of business, the Company is exposed to market risk from changes in interest rates and foreign currency exchange rates. The Company addresses these risks through a risk management program that includes the use of derivative financial instruments. The program is operated pursuant to documented corporate risk management policies. The Company does not enter into any derivative transactions for speculative purposes.

The Company's floating and fixed rate debt obligations are subject to interest rate risk. A 100 basis point increase in interest rates related to the Company's floating rate borrowings, assuming the amount borrowed remains constant, would result in an annual increase in the Company's then current interest expense of approximately $7 million. A 100 basis point increase in interest rates related to the Company's fixed long-term debt would not result in a material change in its fair value.

The Company enters into forward foreign exchange contracts to hedge firmly committed foreign currency transactions for periods consistent with commitments, generally one to six months. The Company had spot and forward foreign exchange contracts outstanding in the notional amounts of $128 million and $230 million as of December 31, 1999 and 1998, respectively. The short-term nature of these contracts has resulted in these instruments having insignificant fair values at December 31, 1999. The Company's 1999 foreign exchange contracts should not subject the Company to material risk due to exchange rate movements because gains and losses on these contracts should offset losses and gains on the assets and liabilities being hedged.

A sensitivity analysis of changes in the fair value of foreign currency exchange contracts outstanding at December 31, 1999 indicates that, if the U.S. dollar uniformly weakened by 10% against all currencies, the fair value of these contracts would decrease by $9 million. While these hedging instruments are subject to fluctuations in value, such fluctuations are generally offset by changes in the value of the underlying exposures being hedged. In addition, unhedged foreign currency balance sheet exposures as of December 31, 1999 are not expected to result in a significant loss of earnings or cash flows. As the Company has expanded its international operations, its sales and expenses denominated in foreign currencies have expanded and that trend is expected to continue. Therefore, most international sales and expenses have been, and are expected to be, subject to the effect of foreign currency fluctuations, and these fluctuations may have an impact on margins. The Company's sensitivity analysis of the effects of changes in foreign currency exchange rates does not factor in a potential change in sales levels or local currency selling prices.

In June 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), which is required to be adopted for fiscal years beginning after June 15, 2000, although earlier application is permitted as of the beginning of any fiscal quarter. This statement requires the Company to recognize all derivatives on the balance sheet at fair value. The Company adopted SFAS No. 133 as of

8

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

January 1, 2000. The Company recorded an immaterial transition adjustment upon adoption of this Statement and initiated a program to hedge certain forecasted intercompany transactions with forward foreign exchange contracts.

Although the Company engages in hedging transactions that may offset the effect of fluctuations in foreign currency exchange rates on foreign currency denominated assets and liabilities, financial exposure may nonetheless result, primarily from the timing of transactions, forecast volatility and the movement of exchange rates.

EURO CONVERSION

On January 1, 1999, eleven of the fifteen member countries of the European Union established fixed conversion rates among existing sovereign currencies and the euro. The participating countries agreed to adopt the euro as their common legal currency on that date. Fixed conversion rates among participating countries' existing currencies (the legacy currencies) and the euro were established as of that date. The legacy currencies are scheduled to remain legal tender as denominations of the euro until at least January 1, 2002 (but not later than July 1, 2002). During this transition period, parties may settle transactions using either the euro or a participating country's legacy currency. The Company is addressing the potential impact resulting from the euro conversion, including adaptation of information technology systems, competitive implications related to pricing and foreign currency considerations.

Management currently believes that the euro will not have a material impact related to its information technology systems or foreign currency exposures. The increased price transparency resulting from the use of a single currency in the eleven participating countries may affect the ability of the Company to price its products differently in the various European markets. A possible result of this is price harmonization at lower average prices for products sold in some markets. However, uncertainty exists as to the effects the euro will have on the marketplace.

LITIGATION

The Company is involved in various lawsuits, including patent infringement and product liability suits, from time to time in the normal course of business. In management's opinion, the Company is not currently involved in any legal proceeding other than those specifically identified in the notes to consolidated financial statements which, individually or in the aggregate, could have a material effect on the financial condition, operations and cash flows of the Company. Additionally, legal costs associated with asserting the Company's patent portfolio and defending against claims that the Company's products infringe the intellectual property of others are increasing. Similarly, legal costs associated with non-patent litigation and compliance activities are also rising. Depending upon the prevalence, significance and complexity of these matters, the Company's legal provision could be adversely affected in the future.

Further, product liability claims may be asserted in the future relative to events not known to management at the present time. The Company has insurance coverage which management believes is adequate to protect against such product liability losses as could otherwise materially affect the Company's financial position. The Company is aware that the U.S Department of Justice is conducting an investigation of matters that include the Company's decision to voluntarily recall the NIR ON(R) Ranger(TM) with Sox(TM) coronary stent in the U.S. The Company is cooperating fully in the investigation.

SEC REVIEW OF FINANCIAL REPORTING

Within the past three years, the Securities and Exchange Commission (SEC) has publicly stated its desire to focus on transparent financial reporting and potential earnings management issues, including restructuring charges, asset write-downs, acquired in-process research and development write-offs, materiality thresholds, revenue recognition, and general reserves. In connection with these efforts, the SEC sent out letters to approximately 150 public companies indicating that their 1998 financial statements may be subject to review. Following its receipt of one of these letters, the Company requested the SEC staff to evaluate the Company's purchase price allocation of the Schneider acquisition, including the amount allocated to purchased research and development. Shortly thereafter, the Company informed the SEC of its intention to offer equity to refinance a portion of its outstanding credit facilities balance with more permanent financing. The SEC requested that the Company provide additional disclosures with respect to prior acquisitions and merger-related and special charges and provide the SEC with additional information with respect to direct transaction and other costs. The Company supplemented its disclosures and provided the information requested. In June 1999, the SEC completed its review, without adjustment, of the purchase price allocation for the acquisition of Schneider.

9

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL

CONDITION AND RESULTS OF OPERATIONS (CONTINUED)

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This report contains forward-looking statements. The Company desires to take advantage of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995 and is including this statement for the express purpose of availing itself of the protections of the safe harbor with respect to all forward-looking statements. Forward-looking statements contained in this report include, but are not limited to, statements with respect to, and the Company's performance may be affected by: (a) the Company's ability to obtain future benefits from the 1998 rationalization plan and the Schneider acquisition, including purchased research and development and physician and hospital relationships; (b) the process, outlays and plan for the integration of businesses acquired by the Company; (c) the successful implementation of the Company's supply chain and manufacturing process initiatives and the Company's ability to achieve manufacturing cost declines, gross margin benefits and inventory reductions; (d) the ability of the Company to manage accounts receivable, manufacturing costs and inventory levels and mix and to react effectively to the changing managed care environment and worldwide economic conditions; (e) the potential impacts of continued consolidation among healthcare providers, trends towards managed care, disease state management and economically motivated buyers, healthcare cost containment, more stringent regulatory requirements and more vigorous enforcement activities; (f) the Company's belief that it is well positioned to take advantage of opportunities for growth that exist in the markets it serves; (g) the Company's continued commitment to refine existing products and procedures and to develop new technologies that provide simpler, less traumatic, less costly and more efficient diagnosis and treatment; (h) the Company's ability to fund development of purchased technology at currently estimated costs and to realize value assigned to in-process research and development and other intangible assets; (i) the Company's ability to develop and launch products on a timely basis, including products resulting from purchased research and development; (j) risks associated with international operations; (k) the potential effect of foreign currency fluctuations on revenues, expenses and resulting margins and the trend toward increasing sales and expenses denominated in foreign currencies; (l) the Company's belief that its effective tax rate for 2000 will decrease slightly from 1999 and that its net deferred tax assets will be substantially recovered;
(m) the ability of the Company to meet its projected cash needs through the end of 2000; (n) the Company's ability to continue to leverage its infrastructure;
(o) unforeseen delays, stoppages or interruptions in the supply and/or mix of the NIR(R) coronary stent, difficulties in managing inventory relating to new product introductions and the Company's cost to purchase the NIR(R) coronary stent; (p) NIR(R) coronary stent sales as a percentage of worldwide sales in 2000; (q) volatility in the coronary stent market and the timing of regulatory approvals to market new coronary and peripheral stent platforms; (r) the development of competing or technologically advanced products by our competitors; (s) the Company's expectation that a minimum of $108 million of short-term debt supported by its revolving credit facilities will remain outstanding through the next twelve months; (t) the effect of litigation and compliance activities on the Company's legal provision; (u) the impact of stockholder class action, patent, product liability and other litigation, the outcome of the U.S. Department of Justice investigation, and the adequacy of the Company's product liability insurance; (v) the potential impact resulting from the euro conversion, including adaptation of information technology systems, competitive implications related to pricing and foreign currency considerations; and (w) the timing, size and nature of strategic initiatives available to the Company.

Several important factors, in addition to the specific factors discussed in connection with such forward-looking statements individually, could affect the future results and growth rates of the Company and could cause those results and rates to differ materially from those expressed in the forward-looking statements contained herein. Such additional factors include, among other things, future economic, competitive and regulatory conditions, demographic trends, third-party intellectual property, financial market conditions and future business decisions of Boston Scientific and its competitors, all of which are difficult or impossible to predict accurately and many of which are beyond the control of Boston Scientific. Therefore, the Company wishes to caution each reader of this report to consider carefully these factors as well as the specific factors discussed with each forward-looking statement in this report and as disclosed in the Company's filings with the Securities and Exchange Commission as such factors, in some cases, have affected, and in the future (together with other factors) could affect, the ability of the Company to implement its business strategy and may cause actual results to differ materially from those contemplated by the statements expressed herein.

10

CONSOLIDATED STATEMENTS OF OPERATIONS

(In millions, except per share data)

YEAR ENDED DECEMBER 31,                                         1999            1998            1997
-----------------------------------------------------------------------------------------------------
Net sales                                                     $ 2,842         $ 2,234         $ 1,831
Cost of products sold                                             986             735             546
                                                              -------         -------         -------
Gross profit                                                    1,856           1,499           1,285

Selling, general and administrative expenses                      842             755             663
Amortization expense                                               92              53              33
Royalties                                                          46              31              22
Research and development expenses                                 197             200             167
Purchased research and development                                                682              29
Restructuring and merger-related charges (credits)                (10)            (15)            146
                                                              -------         -------         -------
                                                                1,167           1,706           1,060
                                                              =======         =======         =======
Operating income (loss)                                           689            (207)            225

Other income (expense):
     Interest and dividend income                                   4               5               4
     Interest expense                                            (118)            (68)            (14)
     Other, net                                                   (13)             (5)
                                                              -------         -------         -------
Income (loss) before income taxes and cumulative
     effect of change in accounting                               562            (275)            215
Income taxes                                                      191             (11)             84
                                                              -------         -------         -------
Income (loss) before cumulative effect of change
     in accounting                                                371            (264)            131
Cumulative effect of change in accounting (net of tax)                                            (21)
                                                              -------         -------         -------
Net income (loss)                                             $   371         $  (264)        $   110
                                                              =======         =======         =======
Earnings (loss) per common share - basic:
Income (loss) before cumulative effect of change
     in accounting                                            $  0.92         $ (0.68)        $  0.34
Cumulative effect of change in accounting                                                       (0.06)
                                                              -------         -------         -------
Net income (loss) per common share - basic                    $  0.92         $ (0.68)        $  0.28
                                                              =======         =======         =======
Earnings (loss) per common share - assuming dilution:
Income (loss) before cumulative effect of change
     in accounting                                            $  0.90         $ (0.68)        $  0.33
Cumulative effect of change in accounting                                                       (0.05)
                                                              -------         -------         -------
Net income (loss) per common share - assuming dilution        $  0.90         $ (0.68)        $  0.28
                                                              =======         =======         =======

See notes to consolidated financial statements.

11

CONSOLIDATED BALANCE SHEETS

(In millions, except share and per share data)

DECEMBER 31,                                                    1999            1998
--------------------------------------------------------------------------------------
ASSETS
Current assets:
     Cash and cash equivalents                                $    64         $    70
     Short-term investments                                        14               5
     Trade accounts receivable, net                               445             538
     Inventories                                                  376             462
     Deferred income taxes                                        121             130
     Prepaid expenses and other current assets                     35              62
                                                              -------         -------
         Total current assets                                   1,055           1,267

Property, plant and equipment, net                                604             680

Other assets:
     Excess of cost over net assets acquired, net                 840             877
     Technology - core and developed, net                         570             607
     Patents, trademarks and other, net                           316             330
     Deferred income taxes                                        117              69
     Investments                                                   55              34
     Other assets                                                  15              29
                                                              -------         -------
                                                              $ 3,572         $ 3,893
                                                              =======         =======

DECEMBER 31,                                                    1999            1998
--------------------------------------------------------------------------------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
     Commercial paper                                         $   277         $ 1,016
     Bank obligations                                             323              11
     Accounts payable                                              92             109
     Accrued expenses                                             286             245
     Acquisition-related obligations                                              140
     Accrual for restructuring and
      merger-related charges                                       32              71
     Income taxes payable                                          42              19
     Other current liabilities                                      3               9
                                                              -------         -------
         Total current liabilities                              1,055           1,620

Long-term debt                                                    678           1,364
Other long-term liabilities                                       115              88

Commitments and contingencies

Stockholders' equity:
     Preferred stock, $ .01 par value - authorized
      50,000,000 shares, none issued and outstanding
     Common stock, $ .01 par value - authorized
      600,000,000 shares, 414,922,050 shares issued at
      December 31, 1999; 394,185,781 shares issued at
      December 31, 1998                                             4               4
     Additional paid-in capital                                 1,210             507
     Treasury stock, at cost - 5,872,857 shares
      at December 31, 1999                                       (126)
     Retained earnings                                            752             381
     Accumulated other comprehensive income (loss):
      Foreign currency translation adjustment                    (123)            (72)
      Unrealized gain on available-for-sale
          securities, net                                           7               1
                                                              -------         -------
     Total stockholders' equity                                 1,724             821
                                                              -------         -------
                                                              $ 3,572         $ 3,893
                                                              =======         =======

See notes to consolidated financial statements.

12

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(In millions, except share data)

                                                               Common Stock                            Contingent
                                                       -----------------------------    Additional          Stock
                                                        Shares Issued         Par       Paid-In        Repurchase     Treasury
                                                       (In thousands)        Value       Capital       Obligation        Stock
--------------------------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996                               195,611             $2         $  437           $25          $ (24)

Comprehensive income:
  Net income
  Other comprehensive expense, net of tax:
    Net change in equity investments
    Foreign currency translation adjustment
Issuance of common stock                                                                     (48)                         114
Purchase of common stock for treasury                                                                                    (188)
Sale of stock repurchase obligation                                                          (18)           18              2
Expiration of stock repurchase obligation                                                     25           (25)
Tax benefit relating to stock option and
  employee stock purchase plans                                                               37
                                                           -------             --         ------           ---          -----
BALANCE AT DECEMBER 31, 1997                               195,611              2            433            18            (96)

Comprehensive loss:
  Net loss

  Other comprehensive income (expense), net of tax:
    Net change in equity investments
    Foreign currency translation adjustment
Issuance of common stock                                     2,047                            47                           96
Stock split effected in the form of a
  stock dividend                                           196,528              2
Expiration of stock repurchase obligation                                                     18           (18)
Tax benefit relating to stock option and
  employee stock purchase plans                                                                9
                                                           -------             --         ------           ---          -----
BALANCE AT DECEMBER 31, 1998                               394,186              4            507

Comprehensive income:
  Net income
  Other comprehensive income (expense), net of tax:
    Net change in equity investments
    Foreign currency translation adjustment
Issuance of common stock                                    20,736                           654                            1
Purchase of common stock for treasury                                                                                    (127)
Tax benefit relating to stock option and
  employee stock purchase plans                                                               49
                                                           -------             --         ------           ---          -----
BALANCE AT DECEMBER 31, 1999                               414,922             $4         $1,210                        $(126)
                                                           =======             ==         ======                        =====

                                                                         Accumulated Other
                                                                             Comprehensive     Comprehensive
                                                            Retained                Income            Income
                                                            Earnings                (Loss)            (Loss)
------------------------------------------------------------------------------------------------------------
BALANCE AT DECEMBER 31, 1996                                   $574              $ (19)

Comprehensive income:
  Net income                                                    110                                $ 110
  Other comprehensive expense, net of tax:
    Net change in equity investments                                                (2)               (2)
    Foreign currency translation adjustment                                        (56)              (56)
Issuance of common stock                                        (11)
Purchase of common stock for treasury
Sale of stock repurchase obligation
Expiration of stock repurchase obligation
Tax benefit relating to stock option and
  employee stock purchase plans                                   5
                                                               ----              -----             ----
BALANCE AT DECEMBER 31, 1997                                    678                (77)            $  52
                                                                                                   =====
Comprehensive loss:
  Net loss
                                                               (264)                               $(264)
  Other comprehensive income (expense), net of tax:
    Net change in equity investments                                               (16)              (16)
    Foreign currency translation adjustment                                         22                22
Issuance of common stock                                        (56)
Stock split effected in the form of a
  stock dividend                                                 (2)
Expiration of stock repurchase obligation
Tax benefit relating to stock option and
  employee stock purchase plans                                  25
                                                               ----              -----             ----
BALANCE AT DECEMBER 31, 1998                                    381                (71)            $(258)
                                                                                                   =====
Comprehensive income:
  Net income                                                    371                                $ 371
  Other comprehensive income (expense), net of tax:
    Net change in equity investments                                                 6                 6
    Foreign currency translation adjustment                                        (51)              (51)
Issuance of common stock
Purchase of common stock for treasury
Tax benefit relating to stock option and
  employee stock purchase plans
                                                               ----              -----             -----
BALANCE AT DECEMBER 31, 1999                                   $752              $(116)            $ 326
                                                               ====              =====             =====

See notes to consolidated financial statements.

13

CONSOLIDATED STATEMENTS OF CASH FLOWS

(In millions)

YEAR ENDED DECEMBER 31,                                1999            1998            1997
---------------------------------------------------------------------------------------------
OPERATING ACTIVITIES:
Net income (loss)                                    $   371         $  (264)        $   110
Adjustments to reconcile net income (loss)
  to cash provided by operating activities:
   Gain on sale of equity investments                                     (5)            (11)
   Depreciation and amortization                         178             129              87
   Deferred income taxes                                 (29)           (151)            (52)
   Noncash special charges (credits)                      (5)            (36)             37
   Purchased research and development                                    682              29
   Exchange (gain) loss                                                   (2)              4
   Increase (decrease) in cash flows from
      operating assets and liabilities:
      Trade accounts receivable                           82             (95)            (59)
      Inventories                                         68             (26)           (180)
      Prepaid expenses and other
       current assets                                      8               7              10
      Accounts payable and accrued
       expenses                                           38              36             101
      Accrual for restructuring and
       merger-related charges                            (45)            (22)             28
      Other liabilities                                   58              11             (17)
   Other, net                                              3              (5)             (7)
                                                     -------         -------         -------
Cash provided by operating activities                    727             259              80

INVESTING ACTIVITIES:
   Purchases of property, plant
     and equipment                                       (80)           (175)           (224)
   Proceeds from sale of property,
     plant and equipment                                  21               1               4
   Net maturities of held-to-maturity
     short-term investments                                                               29
   Purchases of available-for-sale securities                                             (8)
   Sales of available-for-sale securities                  5              11               5
   Acquisitions of businesses,
     net of cash acquired                                             (2,060)            (18)
   Payments related to 1998 acquisition                 (128)
   Payments for acquisitions of
     and/or investments in certain
       technologies, net                                  (3)             (2)            (39)
                                                     -------         -------         -------
Cash used in investing activities                       (185)         (2,225)           (251)

YEAR ENDED DECEMBER 31,                                1999            1998            1997
---------------------------------------------------------------------------------------------
FINANCING ACTIVITIES:
     Net increase (decrease) in
       commercial paper                               (1,539)          1,393             211
     Net proceeds from borrowings
       on revolving credit facilities                    421
     Proceeds from notes payable and
       long-term debt, net of debt
       issuance costs                                      8             522              52
     Payments on notes payable,
       capital leases and long-term borrowings           (10)            (33)            (11)
     Proceeds from issuances of
       shares of common stock, net of tax
       benefits                                          704             100              97
     Acquisitions of treasury stock,
       net of proceeds from put options                 (127)                           (187)
     Other, net                                           (1)             (5)
                                                     -------         -------         -------
Cash provided by (used for)
  financing activities                                  (544)          1,977             162
Effect of foreign exchange rates on cash                  (4)              1              (5)
                                                     -------         -------         -------
Net increase (decrease) in cash
  and cash equivalents                                    (6)             12             (14)
                                                     -------         -------         -------
Cash and cash equivalents at
  beginning of period                                     70              58              72
                                                     -------         -------         -------
Cash and cash equivalents at end of period           $    64         $    70         $    58
                                                     =======         =======         =======

See notes to consolidated financial statements.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A

NOTE A - SIGNIFICANT ACCOUNTING POLICIES

PRINCIPLES OF CONSOLIDATION: The consolidated financial statements include the accounts of Boston Scientific Corporation (Boston Scientific or the Company) and its subsidiaries, substantially all of which are wholly-owned, and include the results of Target Therapeutics, Inc. (Target) acquired in 1997, accounted for as a pooling-of-interests for all periods presented. The statements also include the results of Schneider Worldwide (Schneider) beginning in September 1998. Investments in affiliates, representing 20% to 50% of the ownership of such companies, are accounted for under the equity method, including the Company's 22% ownership in Medinol Ltd. (Medinol). Income recorded in connection with these investments did not have a material impact on the Company's operating results during the periods presented. Investments in affiliates, representing less than 20% of the ownership of such companies, are accounted for under the cost method.

ACCOUNTING ESTIMATES: The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

TRANSLATION OF FOREIGN CURRENCY: All assets and liabilities of foreign subsidiaries are translated at the rate of exchange at year end while sales and expenses are translated at the average rates in effect during the year. The net effect of these translation adjustments is shown in the accompanying financial statements as a component of stockholders' equity.

CASH AND CASH EQUIVALENTS: The Company considers all highly liquid investments purchased with a maturity of three months or less to be cash equivalents.

SHORT-TERM INVESTMENTS: Short-term investments are recorded at fair value, which approximates cost.

CONCENTRATION OF CREDIT RISK: Financial instruments that potentially subject the Company to concentration of credit risk consist primarily of temporary cash and cash equivalents, marketable securities, forward foreign exchange contracts and accounts receivable. The Company invests its excess cash primarily in high quality securities and limits the amount of credit exposure to any one financial institution. The Company's investment policy limits exposure to concentration of credit risk and changes in market conditions. The Company is exposed to credit-related losses in the event of non-performance by counterparties to financial instruments. The Company transacts forward foreign exchange contracts with major financial institutions to limit its credit exposure.

The Company provides credit, in the normal course of business, primarily to hospitals, private and governmental institutions and healthcare agencies and doctors' offices. The Company performs ongoing credit evaluations of its customers and maintains allowances for potential credit losses.

INVENTORIES: Inventories are stated at the lower of first-in, first-out cost or market.

PROPERTY, PLANT AND EQUIPMENT: Property, plant, equipment and leaseholds are stated at historical cost. Expenditures for maintenance and repairs are charged to expense; betterments are capitalized. The Company provides for depreciation and amortization by the straight-line method at rates which are intended to depreciate and amortize the cost of these assets over their estimated useful lives. Buildings and improvements are depreciated over a 15 to 40-year life; equipment, furniture and fixtures are depreciated over a 2 to 12-year life. Leasehold improvements are amortized on a straight-line basis over the shorter of the useful life of the improvement or the term of the lease.

The Company capitalizes interest incurred on funds used to construct property, plant and equipment. Interest of $1 million, $4 million and $5 million was capitalized during 1999, 1998 and 1997, respectively. The Company receives grant money equal to a percentage of expenditures on eligible capital equipment which is recorded as deferred income and recognized ratably over the life of the underlying assets. The grant money would be repayable, in whole or in part, should the Company fail to meet certain employment goals.

INTANGIBLE ASSETS: Intangible assets are recorded at historical cost and amortized using the straight-line method over the following lives: Patents and trademarks (3 - 20 years); Licenses (2 - 20 years); Core and developed technology (3 - 25 years); Excess of cost over net assets acquired (15 - 40 years); Other intangibles (various).

The Company reviews its excess of cost over net assets acquired and other intangible assets to determine if any adverse conditions exist that would indicate impairment. Conditions that would trigger an impairment assessment include, but are not limited to, a significant adverse change in legal factors or business climate that could affect the value of an asset or an adverse action or assessment by a regulator. If the carrying amount of an asset exceeds the sum of its undiscounted cash flows, the carrying value is written down to fair value in the period identified. Fair value is calculated as the present value of estimated future cash flows using a risk-adjusted discount rate commensurate with the Company's weighted-average cost of capital.

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A CONTINUED

INCOME TAXES: The Company utilizes the asset and liability method for accounting for income taxes. Under this method, deferred tax assets and liabilities are determined based on differences between financial reporting and tax bases of assets and liabilities. Deferred tax assets and liabilities are measured using the enacted tax rates and laws that will be in effect when the differences are expected to reverse.

Taxes are not provided on unremitted earnings of subsidiaries outside the United States (U.S.) where such earnings are permanently reinvested. At December 31, 1999, unremitted earnings of non-U.S. subsidiaries were $529 million. It is not practical to estimate the amount of taxes payable on these foreign earnings. Research and development tax credits are recorded as a reduction in income tax expense in the year realized.

FORWARD FOREIGN EXCHANGE CONTRACTS: The Company enters into forward foreign exchange contracts to hedge foreign currency transactions on a continuing basis for periods consistent with commitments. The Company does not engage in speculation. The Company's foreign exchange contracts do not subject the Company to material balance sheet risk due to exchange rate movements because gains and losses on these contracts offset losses and gains on the assets and liabilities being hedged. Net foreign currency transaction and translation gains (losses) during 1999, reflected as other income (expense) on the Consolidated Statements of Operations, were less than $1 million compared to net foreign exchange gains of $2 million in 1998 and net foreign exchange losses of $4 million in 1997.

In June 1998, the Financial Accounting Standards Board issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" (SFAS No. 133), which is required to be adopted for fiscal years beginning after June 15, 2000, although earlier application is permitted as of the beginning of any fiscal quarter. This statement requires the Company to recognize all derivatives on the balance sheet at fair value. The Company adopted SFAS No. 133 as of January 1, 2000. The Company recorded an immaterial transition adjustment upon adoption of this Statement and initiated a program to hedge certain forecasted intercompany transactions with forward foreign exchange contracts.

Although the Company engages in hedging transactions that may offset the effect of fluctuations in foreign currency exchange rates on foreign currency denominated assets and liabilities, financial exposure may nonetheless result, primarily from the timing of transactions, forecast volatility and the movement of exchange rates. Further, any significant changes in exchange rates and/or the political, regulatory or economic environment where the Company conducts international operations may have a material impact on revenues and profits.

REVENUE RECOGNITION: The Company recognizes revenue from the sale of its products when the products are shipped to its customers. The Company allows its customers to return certain products for credit. The Company also allows customers to return defective or damaged products for credit or replacement. Accruals are made and evaluated for adequacy for all returns.

LEGAL COSTS: The Company accrues costs of settlement, damages and, under certain conditions, costs of defense when such costs are probable and estimable. Otherwise, such costs are expensed as incurred.

RESEARCH AND DEVELOPMENT: Research and development costs are expensed as incurred.

STOCK COMPENSATION ARRANGEMENTS: The Company accounts for its stock compensation arrangements under the provisions of APB Opinion No. 25, "Accounting for Stock Issued to Employees," and intends to continue to do so. The Company has adopted the disclosure-only provisions of Statement of Financial Accounting Standards (SFAS) No. 123, "Accounting for Stock-Based Compensation."

ACCOUNTING CHANGE: In 1997, the Company implemented Emerging Issues Task Force (EITF) No. 97-13, "Accounting for Costs Incurred in Connection with a Consulting Contract or an Internal Project that Combines Business Process Reengineering and Information Technology Transformation," the effect of which ($31 million or $21 million, net of tax) is reflected as a cumulative effect of change in accounting in 1997.

NEW ACCOUNTING STANDARD: In 1999, the Company adopted the American Institute of Certified Public Accountants' Statement of Position 98-5, "Reporting on the Costs of Start-Up Activities," which requires costs of start-up activities and organization costs to be expensed as incurred. The Company's adoption of this statement had no material effect on the Company's reported results of operations or financial position.

NET INCOME PER COMMON SHARE: Net income (loss) per common share is based upon the weighted-average number of common shares, common share equivalents and the dilutive effect of European put options, if applicable, outstanding each year. The Company paid a two-for-one stock split on November 30, 1998. All historical per share amounts have been restated to reflect the stock split.

RECLASSIFICATIONS: Certain prior years' amounts have been reclassified to conform to the current year's presentation.

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE B

NOTE B - OTHER BALANCE SHEET INFORMATION

Components of other selected captions in the Consolidated Balance Sheets at December 31 consisted of:

(In millions)                                         1999        1998
-----------------------------------------------------------------------
TRADE ACCOUNTS RECEIVABLE
Accounts receivable                                   $508        $587
Less allowances                                         63          49
                                                      ----        ----
                                                      $445        $538
                                                      ====        ====
INVENTORIES
Finished goods                                        $194        $249
Work-in-process                                         60          83
Raw materials                                          122         130
                                                      ----        ----
                                                      $376        $462
                                                      ====        ====
PROPERTY, PLANT AND EQUIPMENT
Land                                                  $ 56        $ 56
Buildings and improvements                             376         411
Equipment, furniture and fixtures                      508         478
                                                      ----        ----
                                                       940         945
Less accumulated depreciation and amortization         336         265
                                                      ----        ----
                                                      $604        $680
                                                      ====        ====
EXCESS OF COST OVER NET ASSETS ACQUIRED
Excess of cost over net assets acquired               $886        $898
Less accumulated amortization                           46          21
                                                      ----        ----
                                                      $840        $877
                                                      ====        ====

(In millions)                                         1999        1998
-----------------------------------------------------------------------
TECHNOLOGY - CORE AND DEVELOPED
Core technology                                       $421        $421
Developed technology                                   222         220
                                                      ----        ----
                                                       643         641
Less accumulated amortization                           73          34
                                                      ----        ----
                                                      $570        $607
                                                      ====        ====
PATENTS, TRADEMARKS AND OTHER
Patents and trademarks                                $284        $273
Licenses                                                69          66
Other                                                   75          77
                                                      ----        ----
                                                       428         416
Less accumulated amortization                          112          86
                                                      ----        ----
                                                      $316        $330
                                                      ====        ====
ACCRUED EXPENSES
Payroll and related liabilities                       $ 97        $ 84
Other                                                  189         161
                                                      ----        ----
                                                      $286        $245
                                                      ====        ====

During 1999, the Company purchased approximately $214 million of NIR(R) coronary stents from Medinol and had approximately $143 million of net NIR(R) inventory on hand as of December 31, 1999. Delays, stoppages, or interruptions in the supply and/or mix of the NIR(R) stent could adversely affect the operating results of the Company. During the third quarter of 1999, the Company recorded a provision of $62 million ($41 million, net of tax) for excess NIR(R) stent inventories and purchase commitments. Worldwide NIR(R) coronary stent sales were approximately 20% of 1999 worldwide sales.

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE C TO NOTE D

NOTE C - CASH, CASH EQUIVALENTS AND INVESTMENTS

Cash, cash equivalents and investments, stated at fair market value, consisted of the following:

                                                  Fair           Gross          Gross
                                                Market      Unrealized     Unrealized       Amortized
(In millions)                                    Value           Gains         Losses           Cost
------------------------------------------------------------------------------------------------------
DECEMBER 31, 1999
AVAILABLE-FOR-SALE:
  Cash and money market accounts                  $64                                             $64
  Equity securities (with a readily
    determinable fair value)                       29             $17              $5              17
                                                  ---            ----              --             ---
                                                  $93             $17              $5             $81
                                                  ===            ====              ==             ===

DECEMBER 31, 1998
AVAILABLE-FOR-SALE:
  Cash and money market accounts                  $70                                             $70
  Equity securities (with a readily
   determinable fair value)                        21            $  9              $7              19
  Debt securities                                   5                                               5
                                                  ---            ----              --             ---
                                                  $96            $  9              $7             $94
                                                  ===            ====              ==             ===

The Company has no trading securities. Unrealized gains and temporary losses for available-for-sale securities are excluded from earnings and are reported, net of tax, as a separate component of stockholders' equity until realized. The cost of available-for-sale securities is based on the specific identification method.

At December 31, 1999 and 1998, the Company had investments totaling $40 million, including $16 million representing its investment in Medinol, and $13 million, respectively, in which the fair market value was not readily determinable. During 1999, the Company received cash dividends of approximately $23 million, net of tax, from Medinol.

NOTE D - BORROWINGS AND CREDIT ARRANGEMENTS

The Company's borrowings at December 31 consisted of:

(In millions)                                    1999                    1998
--------------------------------------------------------------------------------
Commercial paper                                 $277                  $1,016
Bank obligations - short-term                     323                      11
Long-term debt - fixed rate                       570                     564
Long-term debt - floating rate                    108                     800

At December 31, 1999, the Company had approximately $421 million in revolving credit facility borrowings outstanding at a weighted-average interest rate of 6.66% and approximately $277 million of commercial paper outstanding at a weighted-average interest rate of 6.70%, compared to $1.8 billion of commercial paper outstanding at a weighted-average interest rate of 6.23% at December 31, 1998. At December 31, 1999, the revolving credit facilities totaled $1.65 billion, consisting of a $1.0 billion credit facility that terminates in June 2002, a $600 million 364-day credit facility that terminates in September 2000 and a $50 million uncommitted credit facility. The revolving credit facilities also support the Company's commercial paper borrowings. Use of the borrowings is unrestricted and the borrowings are unsecured. The revolving credit facilities require the Company to maintain a specific ratio of consolidated funded debt (as defined) to consolidated net worth (as defined) plus consolidated funded debt of less than or equal to 60%. As of December 31, 1999, the ratio was approximately 37%. The Company intends to continue to borrow under its revolving credit facilities until it is able to issue sufficient commercial paper at reasonable rates.

The Company has the ability to refinance a portion of its short-term debt on a long-term basis through its revolving credit facilities and expects a minimum of $108 million will remain outstanding through the next twelve months and, accordingly, the Company has classified this portion of borrowings as long-term at December 31, 1999 compared to $800 million classified as long-term at December 31, 1998.

In March 1998, the Company issued $500 million of seven-year senior notes. The senior notes bear a coupon of 6.625% payable semi-annually, and are not redeemable prior to maturity or subject to any sinking fund requirements.

The Company had 6.0 billion Japanese yen (translated to approximately $58 million and $53 million at December 31, 1999 and 1998, respectively) of borrowings outstanding with a syndicate of Japanese banks. The interest rate on the borrowings is 2.37% and the borrowings are payable in 2002. In addition, the Company had approximately 1.2 billion Japanese yen (translated to approximately $12 million and $11 million at December 31, 1999 and 1998, respectively)of borrowings outstanding from a Japanese bank used to finance a facility construction project. The interest rate on the borrowings is 2.1% and the borrowings are payable in 2012.

The Company has uncommitted Japanese credit facilities with several Japanese banks, which provided for borrowings and promissory notes discounting of up to 11.5 billion Japanese yen (translated to approximately $112 million) and 7.5 billion Japanese yen (translated to approximately $66 million) at December 31,

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE D CONTINUED TO NOTE F

1999 and 1998, respectively. There were no borrowings outstanding under the Japanese credit facilities at December 31, 1999 and 1998. During 1999, the Company discounted approximately $442 million of notes receivable compared to $266 million during 1998. At December 31, 1999, approximately $112 million of notes receivable were discounted at average interest rates of approximately 1.4% compared to $61 million of discounted notes receivable at average interest rates of approximately 1.5% at December 31, 1998.

In addition, the Company had other outstanding bank obligations of $10 million and $11 million at December 31, 1999 and 1998, respectively, at weighted-average interest rates of 5.04% and 6.45%, respectively.

Interest paid, including interest paid under capital leases and mortgage loans, amounted to $117 million in 1999, $65 million in 1998 and $19 million in 1997.

NOTE E - LEASES

Rent expense amounted to $37 million in 1999, $40 million in 1998 and $37 million in 1997. Future minimum rental commitments as of December 31, 1999 under noncancelable capital and operating lease agreements are as follows:

(In millions)
YEAR ENDING DECEMBER 31,                        Capital Leases           Operating Leases
-----------------------------------------------------------------------------------------
2000                                                       $ 2                      $  30
2001                                                         2                         28
2002                                                         2                         17
2003                                                         3                         10
2004                                                         4                          8
Thereafter                                                   5                         54
                                                           ---                       ----
Total minimum lease payments                                18                       $147
                                                           ===                       ====
Amount representing interest                                 7
                                                           ---
Present value of minimum lease payments                    $11
                                                           ===

NOTE F - FAIR VALUE OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in estimating its fair value disclosures for financial instruments. However, considerable judgment is required in interpreting market data to develop the estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that the Company could realize in a current market exchange.

CASH AND CASH EQUIVALENTS: The carrying amounts reported in the balance sheets for cash and cash equivalents are valued at cost which approximates their fair value.

INVESTMENTS: The fair values for marketable debt and equity securities are based on quoted market prices when readily determinable.

COMMERCIAL PAPER AND BANK OBLIGATIONS: The carrying amounts of the Company's borrowings under its commercial paper program and its financing agreements approximate their fair value.

LONG-TERM DEBT: The fair value of the Company's fixed rate long-term debt is estimated based on quoted market prices. The carrying amounts of the Company's floating rate long-term debt approximate their fair value.

FORWARD FOREIGN EXCHANGE CONTRACTS: The fair values of forward foreign exchange contracts are estimated based on the amount that the Company would receive or pay to terminate the agreements at the reporting date. The Company had spot and forward foreign exchange contracts outstanding in the notional amounts of $128 million and $230 million as of December 31, 1999 and 1998, respectively.

The carrying amounts and fair values of the Company's financial instruments at December 31, 1999 and 1998 are as follows:

                                                        1999                             1998
                                             Carrying          Fair            Carrying         Fair
(In millions)                                  Amount          Value            Amount          Value
-------------------------------------------------------------------------------------------------------
ASSETS:
   Cash, cash equivalents and investments       $  93          $  93           $    96        $    96
LIABILITIES:
   Commercial paper                               277            277             1,016          1,016
   Bank obligations - short-term                  323            323                11             11
   Long-term debt - fixed rate                    570            530               564            550
   Long-term debt - floating rate                 108            108               800            800
   Forward foreign exchange contracts, net                                           7              8

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE G

NOTE G - INCOME TAXES

Income (loss) before income taxes and cumulative effect of change in accounting consisted of:

                                                 YEAR ENDED DECEMBER 31,
(In millions)                              1999           1998           1997
--------------------------------------------------------------------------------
Domestic                                   $422          $(346)          $178
Foreign                                     140             71             37
                                           ----          -----           ----
                                           $562          $(275)          $215
                                           ====          =====           ====

The related provision (benefit) for income taxes consisted of:

                                                 YEAR ENDED DECEMBER 31,
(In millions)                              1999           1998           1997
--------------------------------------------------------------------------------
CURRENT:
   Federal                                 $164          $ 106           $ 97
   State                                     17             21             15
   Foreign                                   39             13             17
                                           ----          -----           ----
                                            220            140            129
                                           ====          =====           ====

DEFERRED:
   Federal                                   (8)          (112)           (30)
   State                                     (1)           (27)            (6)
   Foreign                                  (20)           (12)            (9)
                                           ----          -----           ----
                                            (29)          (151)           (45)
                                           ====          =====           ====
                                           $191         $  (11)          $ 84
                                           ====          =====           ====

The reconciliation of taxes on income at the federal statutory rate to the actual provision (benefit) for income taxes is:

                                                 YEAR ENDED DECEMBER 31,
(In millions)                              1999           1998           1997
--------------------------------------------------------------------------------
Tax at statutory rate                      $197         $  (96)          $ 75
State income taxes,
  net of federal
  benefit                                    11              8              8
Effect of foreign taxes                     (20)           (25)           (10)
Non-deductible merger-
  related expenses and
  purchased research
  and development                                           93             15
Other, net                                    3              9             (4)
                                           ----         ------           ----
                                           $191         $  (11)          $ 84
                                           ====         ======           ====

Significant components of the Company's deferred tax assets and liabilities at December 31 consisted of:

(In millions)                                    1999                    1998
--------------------------------------------------------------------------------
DEFERRED TAX ASSETS:
   Inventory costs, intercompany
     profit and related reserves                 $ 89                    $ 85
   Tax benefit of net operating
     loss and tax credits                          42                      29
   Reserves and accruals                           21                      29
   Merger-related charges,
     including purchased research
     and development                              230                     201
   Other, net                                      21                       6
                                                 ----                    ----
                                                  403                     350
   Less valuation allowance on
     deferred tax assets                           38                      25
                                                 ----                    ----
                                                 $365                    $325
                                                 ====                    ====
DEFERRED TAX LIABILITIES:
   Property, plant and equipment                 $ (3)                   $ (7)
   Intangible assets                              (45)                    (51)
   Unremitted earnings of subsidiaries            (59)                    (56)
   Other                                          (15)                    (11)
                                                 ----                    ----
                                                 (122)                   (125)
                                                 ====                    ====
Deferred SFAS No. 115 adjustments                  (5)                     (1)
                                                 ----                    ----
                                                 $238                    $199
                                                 ====                    ====

At December 31, 1999, the Company had U.S. tax net operating loss carryforwards and tax credits of approximately $27 million that will expire periodically beginning in the year 2006. In addition, the Company had foreign tax net operating loss carryforwards of approximately $15 million that will expire periodically beginning in the year 2000. The Company established a valuation allowance of $38 million for these carryforwards that are primarily attributable to the carryforwards acquired as part of the Company's prior mergers and acquisitions.

Income taxes paid amounted to $93 million in 1999, $109 million in 1998 and $89 million in 1997. The income tax provision (benefit) of the unrealized gain or loss component of other comprehensive income (loss) was approximately $4 million, $(11) million and $1 million for 1999, 1998 and 1997, respectively.

20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE H TO NOTE I

NOTE H - STOCKHOLDERS' EQUITY

PREFERRED STOCK: The Company is authorized to issue 50 million shares of preferred stock in one or more series and to fix the powers, designations, preferences and relative, participating, option or other rights thereof, including dividend rights, conversion rights, voting rights, redemption terms, liquidation preferences and the number of shares constituting any series, without any further vote or action by the Company's stockholders. At December 31, 1999, the Company had no shares of preferred stock outstanding.

COMMON STOCK: The Company is authorized to issue 600 million shares of common stock, $.01 par value per share. Holders of common stock are entitled to one vote per share. Holders of common stock are entitled to receive dividends when and if declared by the Board of Directors and to share ratably in the assets of the Company legally available for distribution to its stockholders in the event of liquidation. Holders of common stock have no preemptive, subscription, redemption or conversion rights. The holders of common stock do not have cumulative voting rights. The holders of a majority of the shares of common stock can elect all of the Directors and can control the management and affairs of the Company.

The Company paid a two-for-one stock split on November 30, 1998. All historical share and per share amounts have been restated to reflect the stock split except for share amounts presented in the Consolidated Statements of Stockholders' Equity which reflect the actual share amounts outstanding for each period presented.

On June 30, 1999, the Company completed a public offering of 14.950 million shares of its common stock at a price of $39.875 per share under a $1.2 billion shelf registration filed with the Securities and Exchange Commission in September 1998. The Company used the net proceeds from the public offering of approximately $578 million to repay borrowings under the revolving credit facilities. Approximately $604 million remain available for the issuance of various debt or equity securities under the shelf registration.

The Company is authorized to purchase on the open market up to approximately 40 million shares of the Company's common stock. Stock repurchased under the Company's systematic plan will be used to satisfy its obligations pursuant to employee benefit and incentive plans. During the fourth quarter of 1999, the Company repurchased 5.9 million shares at an aggregate cost of $127 million. As of December 31, 1999, a total of 25.9 million shares of the Company's common stock were repurchased under the plan. The Company may also repurchase within its authorization shares outside of the Company's systematic plan. These additional shares would also be used to satisfy the Company's obligations pursuant to employee benefit and incentive plans.

NOTE I - STOCK OWNERSHIP PLANS

EMPLOYEE AND DIRECTOR STOCK INCENTIVE PLANS

Boston Scientific's 1992 and 1995 Long-Term Incentive Plans provide for the issuance of up to 40 million shares of common stock. The terms of these two plans are similar. The plans cover officers of, employees of and consultants to the Company and provide for the grant of various incentives, including qualified and non-qualified options, stock grants, share appreciation rights and performance awards. Options granted to purchase shares of common stock are either immediately exercisable or exercisable in installments as determined by an appointed committee consisting of two or more non-employee directors (the Committee), and, in the case of any qualified options, expire within ten years from date of grant. In the case of qualified options, if an employee owns more than 10% of the voting power of all classes of stock, the option granted will be at 110% of the fair market value of the Company's common stock on the date of grant and will expire over a period not to exceed five years.

The Committee may also make stock grants in which shares of common stock may be issued to officers, employees and consultants at a purchase price less than fair market value. The terms and conditions of such issuances, including whether achievement of individual or Company performance targets is required for the retention of such awards, are determined by the Committee. The Committee may also issue shares of common stock and/or authorize cash awards under the incentive plans in recognition of the achievement of long-term performance objectives established by the Committee. Stock grants for 5,000 shares and 15,000 shares were issued to employees during 1998 and 1997, respectively. No stock grants were issued in 1999.

Boston Scientific's 1992 Non-Employee Directors' Stock Option Plan provides for the issuance of up to 200,000 shares of common stock and authorizes the automatic grant to outside directors of options to acquire 4,000 shares of common stock generally on the date of each annual meeting of the Stockholders of the Company. Options under this plan are exercisable ratably over a three-year period and expire ten years from the date of grant.

21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE I CONTINUED

Shares reserved for future issuance under all of the Company's incentive plans totaled approximately 33 million at December 31, 1999.

If the Company had elected to recognize compensation expense for the granting of options under stock option plans based on the fair values at the grant dates consistent with the methodology prescribed by SFAS No. 123, "Accounting for Stock-Based Compensation," net income (loss) and earnings (loss) per share would have been reported as the following pro forma amounts:

                                                  YEAR ENDED DECEMBER 31,
(In millions, except per share data)        1999           1998          1997
--------------------------------------------------------------------------------
Net income (loss)
   As reported                             $ 371        $ (264)         $ 110
   Pro forma                                 329          (302)            83
                                           -----        ------          -----
Earnings (loss) per common share -
assuming dilution
   As reported                             $0.90        $(0.68)         $0.28
   Pro forma                                0.80         (0.77)          0.21
                                           -----        ------          -----

The weighted-average grant-date fair value per share of options granted during 1999, 1998 and 1997, calculated using the Black-Scholes options pricing model, is $13.81, $13.13 and $9.08, respectively.

The fair value of the stock options used to calculate the pro forma net income
(loss) and earnings (loss) per share amounts above is estimated using the Black-Scholes options pricing model with the following weighted-average assumptions:

                                            1999           1998          1997
--------------------------------------------------------------------------------
Dividend yield                                0%             0%            0%
Expected volatility                       48.60%         37.80%        35.90%
Risk-free interest rate                    5.37%          5.64%         6.42%
Actual forfeitures                     1,272,000      1,127,000     1,340,000
Expected life                                4.2            3.7           4.0

The effects of expensing the estimated fair value of stock options on 1997 pro forma amounts are not necessarily representative of the effects on reporting the results of operations, as the period presented includes only three years of option grants under the Company's plans.

Information related to stock options at December 31 under stock ownership plans is as follows:

(Option amounts in thousands)        1999              1998             1997
---------------------------------------------------------------------------------------
                                       Weighted            Weighted            Weighted
                                        Average             Average             Average
                                       Exercise            Exercise            Exercise
                             Options    Price    Options     Price    Options     Price
                             ----------------------------------------------------------
Outstanding at January 1      32,048    $20.45   33,206    $15.76    29,078    $11.42
  Granted                      6,634     31.57    6,621     35.91    10,716     24.70
  Exercised                   (5,195)    12.39   (5,557)    10.19    (5,106)     8.98
  Canceled                    (1,976)    28.29   (2,222)    22.02    (1,482)    18.58
                              ------    ------   ------    ------    ------    ------
Outstanding at December 31    31,511     23.63   32,048     20.45    33,206     15.76
                              ======    ======   ======    ======    ======    ======
Exercisable at December 31    13,346    $16.22   13,053    $11.58    12,230    $ 9.08
                              ======    ======   ======    ======    ======    ======

Below is additional information related to stock options outstanding and exercisable at December 31, 1999:

                                          Stock Options                 Stock Options
(Option amounts in thousands)             Outstanding                    Exercisable
-----------------------------------------------------------------------------------------
                                             Weighted
                                             Average      Weighted              Weighted
                                            Remaining      Average               Average
                                           Contractual    Exercise              Exercise
Range of Exercise Prices        Options        Life        Price     Options      Price
-----------------------------------------------------------------------------------------
      $0.00-8.00                  4,359        3.56       $ 5.76      4,359     $ 5.76
       8.01-16.00                 4,190        5.24        13.66      3,259      13.60
      16.01-24.00                 5,574        7.72        20.63      2,291      20.57
      24.01-32.00                 7,563        7.44        25.09      2,266      25.06
      32.01-40.00                 9,586        8.76        36.19      1,171      36.78
      40.01-48.00                   239        9.53        44.98
                                 ------        ----       ------     ------     ------
                                 31,511        7.07       $23.63     13,346     $16.22
                                 ======        ====       ======     ======     ======

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE I CONTINUED TO NOTE J

STOCK PURCHASE PLAN

Boston Scientific's Global Employee Stock Ownership Plan (Stock Purchase Plan) provides for the granting of options to purchase up to 3 million shares of the Company's common stock to all eligible employees. Under the Stock Purchase Plan, each eligible employee is granted, at the beginning of each period designated by the Committee as an offering period, an option to purchase shares of the Company's common stock equal to not more than 10% of the employee's eligible compensation. Such options may be exercised generally only to the extent of accumulated payroll deductions at the end of the offering period, at a purchase price equal to 85% of the fair market value of the Company's common stock at the beginning or end of each offering period, whichever is less.

During 1999, approximately 603,000 shares were issued at prices ranging from $22.47 to $22.79 per share. During 1998, approximately 380,000 shares were issued at $23.35 per share, and, during 1997, approximately 240,000 shares were issued at prices ranging from $23.45 to $24.33 per share. At December 31, 1999, there were approximately 1 million shares available for future issuance.

NOTE J - EARNINGS PER SHARE

The following table sets forth the computations of basic and diluted earnings per share:

(In millions, except share and per share data)
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31,                    1999           1998           1997
--------------------------------------------------------------------------------
BASIC:
   Net income (loss)                      $ 371         $ (264)         $ 110
                                        =======        =======        =======
   Weighted-average shares
   outstanding (in thousands)           404,783        390,836        389,146
                                        =======        =======        =======
   Net income (loss) per
   common share                           $0.92          $(0.68)        $0.28
                                        =======        =======        =======
ASSUMING DILUTION:
   Net income (loss)                      $ 371         $ (264)        $  110
                                        =======        =======        =======
   Weighted-average shares
   outstanding (in thousands)           404,783        390,836        389,146

   Net effect of dilutive
   put options (in thousands)                                              28

   Net effect of dilutive
   stock options (in thousands)           6,568                        10,602
                                        -------        -------        -------
   Total                                411,351        390,836        399,776
                                        =======        =======        =======
   Net income (loss) per
    common share                          $0.90          $(0.68)       $ 0.28
                                        =======        =======        =======

During 1999, 1998 and 1997, approximately 7 million, 7 million and 10 million stock options, respectively, were not included in the computation of earnings per share, assuming dilution, because exercise prices were greater than the average market price of the common shares. In addition, during 1998, approximately 9 million stock options were not included in the computation of earnings per share, assuming dilution, because they would have been antidilutive.

23

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K

NOTE K - COMMITMENTS AND CONTINGENCIES

On May 31, 1994, SCIMED Life Systems, Inc. (SCIMED), a subsidiary of the Company, filed a suit for patent infringement against Advanced Cardiovascular Systems, Inc. (ACS), alleging willful infringement of two of SCIMED's U.S. patents by ACS's RX ELIPSE(TM) PTCA catheter. The suit was filed in the U.S. District Court for the Northern District of California seeking monetary and injunctive relief. In January 1998, the Company added the ACS RX MULTILINK(TM) stent delivery system to its complaint. On June 6, 1999, the Court granted summary judgment in favor of ACS affirming that ACS's patents were not infringed. SCIMED has appealed the judgment.

On December 29, 1998, the Company and SCIMED filed a cross-border suit against ACS, Guidant Corporation (Guidant) and various foreign subsidiaries in The Netherlands alleging ACS's MULTILINK(TM), RX ELIPSE, RX MULTILINK HP(TM) and RX DUET(TM) catheters and stent delivery systems infringe one of the Company's European patents. In this action, the Company requested relief covering The Netherlands, the United Kingdom, France, Germany and Italy. A hearing on the merits was held on November 5, 1999. The court's decision is expected to be announced on February 16, 2000.

On January 13, 1999, SCIMED filed a suit for patent infringement against ACS, Guidant and Guidant Sales Corporation alleging willful infringement of two of SCIMED's U.S. patents by ACS's RX MULTILINK HP and RX DUET stent delivery systems and one of SCIMED's U.S. patents by ACS's RX MULTILINK stent delivery system. The suit was filed in the U.S. District Court for the Northern District of California seeking monetary and injunctive relief. ACS has answered, denying the allegations of the complaint. A trial date has not yet been set.

On October 10, 1995, ACS filed a suit for patent infringement against SCIMED, alleging willful infringement by SCIMED's EXPRESS PLUS(TM) and EXPRESS PLUS II(TM) PTCA catheters of four U.S. patents licensed to ACS. Suit was filed in the U.S. District Court for the Northern District of California and seeks monetary and injunctive relief. SCIMED has answered, denying the allegations of the complaint. A trial date is scheduled for August 2000.

On March 12, 1996, ACS filed two suits for patent infringement against SCIMED, alleging in one case the willful infringement of a U.S. patent by SCIMED's EXPRESS PLUS, EXPRESS PLUS II and LEAP(R) EXPRESS PLUS PTCA catheters, and in the other case the willful infringement of a U.S. patent by SCIMED's BANDIT(TM) PTCA catheter. The suits were filed in the U.S. District Court for the Northern District of California and seek monetary and injunctive relief. On June 24, 1999, in the case involving the BANDIT PTCA catheter the Court granted ACS's motions for summary judgment on the validity (with respect to certain issues) and infringement of ACS's patent; the Court denied ACS's motion for summary judgment on the enforceability of its patent and SCIMED's motions for summary judgment on the invalidity of, and SCIMED's failure to willfully infringe, ACS's patent. A trial date on the remaining issues with respect to the BANDIT PTCA catheter is set for May 2000. A trial date with respect to the EXPRESS PLUS catheters is set for August 2000.

On September 16, 1997, ACS filed a suit for patent infringement against the Company and SCIMED, alleging that SCIMED's REBEL(TM) PTCA catheter infringes two U.S. patents licensed to ACS and one U.S. patent owned by ACS. Suit was filed in the U.S. District Court for the Northern District of California seeking monetary damages, injunctive relief and that the patents be adjudged valid, enforceable and infringed. The Company and SCIMED have answered, denying the allegations of the complaint. A trial date has not yet been set.

On August 12, 1998, ACS and an affiliate of ACS filed suit for patent infringement against the Company and SCIMED alleging that the Company's NIR(R) stent infringes five patents owned by ACS. The suit was filed in the U.S. District Court for the Southern District of Indiana seeking injunctive and monetary relief. The Company and SCIMED have answered, denying the allegations of the complaint. A trial date has been set for February 22, 2000.

On March 25, 1996, Cordis Corporation (Cordis), a subsidiary of Johnson & Johnson Company (Johnson & Johnson), filed a suit for patent infringement against SCIMED, alleging the infringement of five U.S. patents by SCIMED's LEAP balloon material used in certain SCIMED catheter products, including SCIMED's BANDIT and EXPRESS PLUS catheters. The suit was filed in the U.S. District Court for the District of Minnesota and seeks monetary and injunctive relief. SCIMED has answered, denying the allegations of the complaint. A trial date has not yet been set.

On March 27, 1997, SCIMED filed suit for patent infringement against Cordis, alleging willful infringement of several SCIMED U.S. patents by Cordis' TRACKSTAR 14(TM), TRACKSTAR 18(TM), OLYMPIX(TM), POWERGRIP(TM), SLEEK(TM), SLEUTH(TM), THOR(TM), TITAN(TM) and VALOR(TM) catheters. The suit was filed in the U.S. District Court for the District of Minnesota, seeking monetary and injunctive relief. The parties have agreed to add Cordis' CHARGER(TM) and HELIX(TM) catheters to the suit. Cordis has answered, denying the allegations of the complaint. A trial date has not yet been set.

24

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K CONTINUED

On March 13, 1997, the Company (through its subsidiaries) filed suits against Johnson & Johnson (through its subsidiaries) in The Netherlands, the United Kingdom and Belgium, and on March 17, 1997 filed suit in France, seeking a declaration of noninfringement for the NIR(R) stent relative to two European patents licensed to Ethicon, Inc. (Ethicon), a Johnson & Johnson subsidiary, as well as a declaration of invalidity with respect to those patents. After a trial on the merits in the United Kingdom during March 1998, the Court ruled on June 26, 1998 that neither of the patents is infringed by the NIR(R) stent, and that both patents are invalid. Ethicon has appealed and a hearing was held January 31, 2000 through February 3, 2000. A decision is expected in March 2000. On October 28, 1998, the Company's motion for a declaration of noninfringement in France was dismissed for failure to satisfy statutory requirements; the French invalidity suits were not affected.

On March 20, 21 and 22, 1997, the Company (through its subsidiaries) filed additional suits against Johnson & Johnson (through its subsidiaries) in Sweden, Italy and Spain, respectively, seeking a declaration of noninfringement for the NIR(R) stent relative to one of the European patents licensed to Ethicon in Sweden, Italy and Spain and a declaration of invalidity in Italy and Spain. In Italy, following a July 9, 1999 hearing, a technical expert was appointed by the court. A hearing is scheduled for March 21, 2000.

Ethicon and other Johnson & Johnson subsidiaries filed a cross-border suit in The Netherlands on March 17, 1997, alleging that the NIR(R) stent infringes one of the European patents licensed to Ethicon. In this action, the Johnson & Johnson entities requested relief, including provisional relief (a preliminary injunction), covering Austria, Belgium, France, Greece, Italy, The Netherlands, Norway, Spain, Sweden, Switzerland and the United Kingdom. On April 2, 1997, the Johnson & Johnson entities filed a similar cross-border proceeding in The Netherlands with respect to a second European patent licensed to Ethicon. Johnson & Johnson subsequently withdrew its request for cross-border relief in the United Kingdom. In October, 1997, Johnson & Johnson's request for provisional cross-border relief on both patents was denied by the Dutch court, on the ground that it is "very likely" that the NIR(R) stent will be found not to infringe the patents. Johnson & Johnson appealed this decision with respect to the second patent; the appeal has been denied on the ground that there is a "ready chance" that the patent will be declared null and void. In January 1999, Johnson & Johnson amended the claims of the second patent, changed the action from a cross-border case to a Dutch national action, and indicated its intent not to pursue its action on the first patent. On June 23, 1999, the Dutch Court affirmed that there were no remaining infringement claims with respect to either patent. In late 1999, Johnson & Johnson appealed this decision and a hearing is expected during the summer of 2000.

On May 6, 1997, Ethicon Endosurgery, Inc. sued the Company in Dusseldorf, Germany, alleging that the Company's NIR(R) stent infringes one of Ethicon's patents. On June 23, 1998, the case was stayed following a decision in an unrelated nullity action in which the Ethicon patent was found to be invalid.

On June 16, 1997, the Company and SCIMED filed a suit against Johnson & Johnson, Ethicon and Johnson & Johnson International Systems Co. in the U.S. District Court for the District of Massachusetts seeking a declaratory judgment of noninfringement for the NIR(R) stent relative to two patents licensed to Johnson & Johnson and that the two patents are invalid and unenforceable. The Company subsequently amended its complaint to add a third patent. Johnson & Johnson answered, denying the allegations of the complaint, and counterclaiming for patent infringement. In October 1997, Johnson & Johnson's motion to dismiss the suit was denied. This action has been consolidated with the Delaware action described below.

On August 22, 1997, Johnson & Johnson filed a suit for patent infringement against the Company alleging that the sale of the NIR(R) stent infringes certain Canadian patents owned by Johnson & Johnson. Suit was filed in the federal court of Canada seeking a declaration of infringement, monetary damages and injunctive relief. The Company has answered, denying the allegations of the complaint. Trial is expected to begin in late 2000.

On October 22, 1997, Cordis filed a suit for patent infringement against the Company and SCIMED alleging that the importation and use of the NIR(R) stent infringes two patents owned by Cordis. The suit was filed in the U.S. District Court for the District of Delaware seeking monetary damages, injunctive relief and that the patents be adjudged valid, enforceable and infringed. The Company and SCIMED have answered the complaint, denying Cordis' allegations. The Massachusetts case described above has been consolidated with this action. A trial date has been set for November 2000.

On April 13, 1998, Cordis filed a suit for patent infringement against the Company and SCIMED alleging that the Company's NIR(R) stent infringes two patents owned by Cordis. The suit was filed in the U.S. District Court for the District of Delaware seeking injunctive and monetary relief. The Company and SCIMED have answered, denying the allegations of the complaint. A trial date has been set for November 2000.

25

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K CONTINUED

On June 7, 1999, the Company, SCIMED and Medinol Ltd. filed suit for patent infringement against Johnson & Johnson, Johnson & Johnson Interventional Systems and Cordis, alleging two U.S. patents owned by Medinol Ltd. are infringed by at least Cordis' CROWN(TM), MINI CROWN(TM) and CORINTHIAN(TM) stents. The suit was filed in the U.S. District Court for the District of Minnesota seeking injunctive and monetary relief. The case has been transferred to the U.S. District Court for the District of Delaware. A trial date has not yet been scheduled.

On August 13, 1998, Arterial Vascular Engineering, Inc., now named Medtronic AVE Inc. (AVE), filed a suit for patent infringement against the Company and SCIMED alleging that the Company's NIR(R) stent infringes two patents owned by AVE. The suit was filed in the U.S. District Court for the District of Delaware seeking injunctive and monetary relief. The Company and SCIMED have answered, denying the allegations of the complaint. Trial is expected to begin in March 2001.

On December 15, 1998, the Company and SCIMED filed a cross-border suit against AVE in The Netherlands alleging that AVE's AVE GFX(TM), AVE GFX 2(TM), AVE LTX(TM) and USCI CALYPSO(TM) rapid exchange catheters and stent delivery systems infringe one of the Company's European patents. In this action, the Company requested relief covering The Netherlands, the United Kingdom, France, Germany and Italy. A hearing was held on October 22, 1999 and a decision is expected on February 16, 2000.

On December 18, 1998, AVE filed a suit for patent infringement against the Company and SCIMED alleging that the Company's MAXXUM(TM) and VIVA!(TM) catheters infringe a patent owned by AVE. The suit was filed in the U.S. District Court for the District of Delaware seeking injunctive and monetary relief. The Company and SCIMED have answered, denying the allegations of the complaint. A trial date is scheduled for September 25, 2000.

On March 2, 1999, AVE filed a cross-border suit in The Netherlands against the Company and various subsidiaries of the Company including SCIMED, alleging that the Company's MAXXUM(TM), MAXXUM(TM) ENERGY, MAXXUM(TM) 29 MM, NIR(R) Primo(TM), VIVA!(TM), EXPRESS PLUS and EXPRESS PLUS II balloon dilatation catheters infringe one of AVE's European patents. In this action, AVE requested relief covering The Netherlands, Germany, the United Kingdom, France and Spain. The Company has answered, denying the allegations of the complaint. A hearing was held on January 7, 2000 and a decision is expected on February 16, 2000.

On March 10, 1999, the Company through its subsidiary Schneider (Europe) AG filed suit against AVE alleging that AVE's AVE GFX, AVE GFX 2, AVE LTX, CALYPSO RELY(TM), PRONTO SAMBA(TM) and SAMBA RELY(TM) rapid-exchange catheters and stent delivery systems infringe one of the Company's German patents. The suit was filed in the District Court of Dusseldorf, Germany seeking injunctive and monetary relief. A hearing was held on January 27, 2000 and a decision is expected on March 9, 2000.

On April 6, 1999, AVE filed suit against the Company and SCIMED alleging that the Company's NIR(R) stent infringes one of AVE's European patents. The suit was filed in the District Court of Dusseldorf, Germany seeking injunctive and monetary relief. A hearing was held in Germany on September 23, 1999, and on November 4, 1999, the court dismissed the complaint. On December 21, 1999, AVE appealed the dismissal. A hearing date has not yet been scheduled.

On May 14, 1999, Medtronic, Inc. (Medtronic) filed suit against the Company and SCIMED alleging that a variety of the Company's NIR(R) stent products infringe a Medtronic patent. The suit was filed in the U.S. District Court for the District of Minnesota seeking injunctive and monetary relief. The Company has answered, denying the allegations of the complaint. A trial date is scheduled for May 2001.

On July 7, 1999, Medtronic filed suit against the Company and SCIMED, alleging that SCIMED's RADIUS(TM) stent infringes two patents owned by Medtronic. The suit was filed in the U.S. District Court for the District Court of Minnesota seeking injunctive and monetary relief. The Company has answered, denying allegations of the complaint. A trial date is scheduled for June 2001.

On April 5, 1995, C.R. Bard, Inc. (Bard) filed a lawsuit in the U.S. District Court for the District of Delaware alleging that certain Company products, including the Company's MaxForce TTS(TM) catheter, infringe a patent assigned to Bard. Following a trial and jury verdict, on February 3, 1999 the court entered a judgment that the Company infringed the Bard patent and awarded damages to Bard in the amount of $10.8 million. The Company was also enjoined from selling the product found to be infringing. The Company is appealing the judgment to the Court of Appeals for the Federal Circuit. The Company no longer markets the accused device.

On March 7, 1996, Cook Inc. (Cook) filed suit in the Regional Court, Munich Division for Patent Disputes, in Munich, Germany against MinTec, Inc. Minimally Invasive Technologies alleging that the Cragg EndoPro(TM) System I and Stentor(TM) endovascular device infringe a certain Cook patent. Following the purchase of the assets of the Endotech/MinTec companies by the Company,

26

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE K CONTINUED TO NOTE L

the Company assumed control of the litigation. A final hearing was held on May 12, 1999, and the court held no infringement of the Cook patents. The case was dismissed in June 1999. Cook has appealed the decision. A hearing is scheduled for May 4, 2001.

On June 30, 1998, Cook filed suit in the Regional Court, Dusseldorf Division for Patent Disputes, in Dusseldorf, Germany against the Company alleging that the Company's PASSAGER(TM) peripheral vascular stent graft and VANGUARD(TM) endovascular aortic graft products infringe the same Cook patent. A hearing was held on July 22, 1999 and a decision was received in September 1999 finding the Company's products infringe the Cook patent. The Company appealed the decision. A hearing is scheduled for April 26, 2001.

On March 18, 1999, Cook filed suit against the Company and SCIMED, alleging that SCIMED's RADIUS(TM) coronary stent infringes a certain U.S. patent owned by Cook. The suit was filed in the U.S. District Court for the Southern District of Indiana seeking monetary damages and injunctive relief. On July 14, 1999, Cook filed an amended complaint adding Meadox Medicals, Inc. (Meadox), a wholly owned subsidiary of the Company, as a party to the suit, and adding a breach of contract claim. The Company, SCIMED and Meadox have answered, denying the allegations of the complaint. A trial date is scheduled for May 14, 2001.

The U.S. Federal Trade Commission (FTC) is investigating the Company's compliance with a Consent Order dated May 5, 1995, pursuant to which the Company licensed certain intravascular ultrasound technology to Hewlett-Packard Company (HP). On February 1, 1999, HP filed a suit in the U.S. District Court for the District of Massachusetts against the Company alleging violation of the Sherman Antitrust Act and Massachusetts General Laws Chapter 93A and breach of the License Agreement entered into pursuant to the FTC Consent Order. The Company has answered, denying the allegations of the complaint. A trial date has not yet been set.

Beginning November 4, 1998, a number of shareholders of the Company, on behalf of themselves and all others similarly situated, filed purported stockholders' class action suits in the U.S. District Court for the District of Massachusetts alleging that the Company and certain of its officers violated certain sections of the Securities Exchange Act of 1934. The complaints principally alleged that as a result of certain accounting irregularities involving the improper recognition of revenue by the Company's subsidiary in Japan, the Company's previously issued financial statements were materially false and misleading. In August 1999, lead plaintiffs and lead counsel filed a purported consolidated class action complaint adding allegations that the Company issued false and misleading statements with respect to the launch of its NIR ON(R) Ranger(TM) with Sox(TM) coronary stent delivery system and the system's subsequent recall. The Company and its officers have filed a motion to dismiss the consolidated complaint. The Plaintiffs have opposed the Company's motion to dismiss the consolidated complaint, and the Company intends to file its response on February 11, 2000.

The Company is aware that the U.S. Department of Justice is conducting an investigation of matters that include the Company's NIR ON(R) Ranger(TM) with Sox(TM) coronary stent delivery system which was voluntarily recalled by the Company in October 1998 following reports of balloon leaks. The Company is cooperating fully in the investigation.

The Company is involved in various other lawsuits from time to time. In management's opinion, the Company is not currently involved in any legal proceedings other than those specifically identified above which, individually or in the aggregate, could have a material effect on the financial condition, operations or cash flows of the Company. As of December 31, 1999, the potential exposure for litigation-related accruable costs is estimated to range from $46 million to $56 million. The Company's total accrual as of December 31, 1999 and 1998 for litigation-related reserves was approximately $46 million and $38 million, respectively.

The Company believes that it has meritorious defenses against claims that it has infringed patents of others. However, there can be no assurance that the Company will prevail in any particular case. An adverse outcome in one or more cases in which the Company's products are accused of patent infringement could have a material adverse effect on the Company. Further, product liability claims may be asserted in the future relative to events not known to management at the present time. The Company has insurance coverage which management believes is adequate to protect against product liability losses as could otherwise materially affect the Company's financial position.

NOTE L - BUSINESS COMBINATIONS

On September 10, 1998, the Company consummated its acquisition of Schneider Worldwide, formerly a member of the Medical Technology Group of Pfizer Inc., for $2.2 billion, net of assets acquired and liabilities assumed. The acquisition was accounted for using the purchase method of accounting. The consolidated financial statements include Schneider's operating results from the date of acquisition. The aggregate purchase price has been allocated to the assets acquired and liabilities assumed based on their estimated fair values at

27

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE L CONTINUED

date of acquisition. The excess of purchase price over the fair value of net tangible assets acquired was allocated to specific intangible asset categories. These categories include core technology, developed technology, assembled workforce, customer lists, trademarks and patents, which are being amortized on a straight-line basis over periods ranging from 9 to 25 years and the excess of cost over net assets acquired, which is being amortized on a straight-line basis over 40 years.

In connection with the acquisition of Schneider, the Company recorded a charge to account for purchased research and development. The valuation of purchased research and development, for which management is primarily responsible, represents the estimated fair value at the date of acquisition related to in-process projects. As of the date of acquisition, the in-process projects had not yet reached technological feasibility and had no alternative future uses. Accordingly, the value attributable to these projects was immediately expensed at acquisition. If the projects are not successful or completed in a timely manner, the Company may not realize the financial benefits expected for these projects.

The income approach was used to establish the fair values of the purchased research and development. This approach established the fair value of an asset by estimating the after-tax cash flows attributable to the in-process project over its useful life and then discounting these after-tax cash flows back to a present value. Revenue estimates were based on estimates of relevant market sizes, expected market growth rates, expected trends in technology and expected product introductions by competitors. In arriving at the value of the in-process research and development projects, the Company considered, among other factors, the in-process project's stage of completion, the complexity of the work completed as of the acquisition date, the costs already incurred, the projected costs to complete, the contribution of core technologies and other acquired assets, the expected introduction date, and the estimated useful life of the technology. The discount rate used to arrive at a present value as of the date of acquisition was based on the time value of money and medical technology investment risk factors. For the Schneider purchased research and development programs, a risk-adjusted discount rate of 28% was utilized to discount the projected cash flows. The Company believes that the estimated purchased research and development amounts so determined represent the fair value at the date of acquisition and do not exceed the amount a third party would pay for the projects.

The most significant Schneider purchased research and development projects that were in-process at the date of acquisition were brachytherapy, devices for aneurysmal disease and coronary stents, which represented approximately 26%, 20% and 16% of the in-process value, respectively. Set forth below are descriptions of these in-process projects, including their status at the end of 1999.

The brachytherapy system is an intravascular radiation system designed to reduce clinical restenosis after PTCA and/or stenting. The system consists of a computer-controlled afterloader, beta radiation source, centering catheter, source delivery wire and dummy wire. As of the date of acquisition, the project was expected to be completed and the products commercially available in the U.S. within two to three years, with an estimated cost to complete of approximately $5 to $10 million.

The aneurysmal disease projects are endoluminal graft devices for the treatment of late stage vascular aneurysms and occlusions. The most significant of the projects in this category at the date of acquisition was the endoluminal graft for the treatment of abdominal aortic aneurysms. As of the date of acquisition, the projects were expected to be completed and the products commercially available in the U.S. within two to three years, with an estimated cost to complete of approximately $10 to $15 million.

Coronary stent systems underway at the date of acquisition were stent systems for native coronary artery disease, saphenous vein graft disease, and versions with novel delivery systems. The Company believes that the stent systems will be especially helpful in the treatment of saphenous vein graft disease. As of the date of acquisition, the projects were expected to be completed and the products commercially available for sale in the U.S. within one year with an estimated cost to complete of approximately $1 to $3 million.

There have been no significant departures from the planned efforts and costs of the brachytherapy project. As part of a subsequent project consolidation program, the Schneider abdominal aortic aneurysm project has been integrated with another internal project. As a result, the Company will pursue the development of next generation products for aortic aneurysmal disease with an integrated platform while minimizing duplicative research and development. The cost of the development is still estimated to be in the range of approximately $10 to $15 million. The coronary stent projects have been completed.

The following unaudited pro forma information presents a summary of consolidated results of operations of the Company and Schneider as if the acquisition had occurred at the beginning of each year presented, with pro forma adjustments to give effect to amortization of intangibles, purchased research and development, an increase in interest expense on acquisition financing and certain other adjustments together with related tax effects:

28

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE L CONTINUED TO NOTE M

                                                    YEAR ENDED DECEMBER 31,
(In millions, except per share data)             1998                   1997
--------------------------------------------------------------------------------
Net sales                                      $2,483                 $2,162
Net loss                                         (303)                  (471)
Net loss per share -- assuming dilution         (0.77)                 (1.21)

In 1997, the Company completed its merger with Target in a tax-free, stock-for-stock transaction accounted for as a pooling-of-interests. In conjunction with this merger, Target's stockholders received 1.07 shares of the Company's common stock in exchange for each share of Target common stock. Approximately 33 million shares of the Company's common stock were issued in connection with the Target merger.

NOTE M - RESTRUCTURING AND MERGER-RELATED CHARGES

At December 31, 1999, the Company had an accrual for restructuring and merger-related charges of $36 million, which is comprised of $20 million of accrued severance and related costs primarily associated with integrating Schneider and streamlining manufacturing operations, $6 million related to the cost of canceling contractual commitments recorded in connection with the Schneider acquisition and approximately $10 million of accruals remaining for 1997 and prior mergers (primarily costs associated with rationalized facilities and statutory benefits which are subject to litigation).

During 1998, the Company established a rationalization plan in conjunction with the consummation of the Schneider acquisition, taking into consideration duplicate capacity as well as opportunities for further leveraging of cost and technology platforms. The Company's actions, approved and committed to in the fourth quarter of 1998, included the planned displacement of approximately 2,000 positions, over half of which were manufacturing positions. During the fourth quarter of 1998, the Company estimated the costs associated with these activities, excluding transition costs, to be approximately $62 million, most of which represented severance and related costs. Approximately $36 million of the total was capitalized as part of the purchase price of Schneider. The remaining $26 million ($17 million, net of tax) was charged to operations during 1998. In addition, as part of the Schneider acquisition, the Company capitalized estimated costs of approximately $16 million to cancel Schneider's contractual obligations, primarily with its distributors.

The Company substantially completed its rationalization plan in 1999, including the closure of five Schneider facilities as well as the transition of manufacturing for selected Boston Scientific product lines to different sites. Approximately 1,800 positions were eliminated (resulting in the termination of approximately 1,500 employees) in connection with the rationalization plan. In the third quarter of 1999, the Company identified and reversed restructuring and merger-related charges of $10 million ($7 million, net of tax) no longer deemed necessary. These amounts relate primarily to the rationalization plan recorded in the fourth quarter of 1998 and reflect the reclassification of assets from held-for-disposal to held-for-use resulting from management's decision to resume a development program previously planned to be eliminated. In addition, estimated severance costs for 1998 initiatives were reduced as a result of attrition. The Company also recorded additional costs of $6 million as part of the purchase price of Schneider in 1999, representing revised estimates to recorded liabilities. During 1999, the costs related to the transition of manufacturing operations were not significant and were recognized in operations as incurred.

The 1998 rationalization plan also resulted in the decision to expand, not close, the Target facilities originally provided for in a 1997 merger-related charge and to relocate other product lines to those Target facilities. In the fourth quarter of 1998, the Company reversed $21 million ($14 million, net of tax) of previously recorded merger-related charges of which $4 million related to facility costs and which also included reductions for revisions of estimates relating to contractual commitment payments, associated legal costs and other asset write-downs originally provided for as a 1997 merger charge. In the second quarter of 1998, the Company realigned its operating units and decided to operate Target independently instead of as a part of its vascular division as was planned at the date of the Target acquisition. As a result, in the second quarter of 1998, the Company reversed $20 million ($13 million, net of tax) of 1997 merger-related charges primarily related to revised estimates for costs of workforce reductions and costs of canceling contractual commitments.

During 1997, the Company recorded merger-related charges of $146 million ($106 million, net of tax) primarily related to the Company's acquisition of Target and purchased research and development of $29 million, net of tax, in conjunction with accounting for its additional investment in Medinol and other strategic investments. The Company's Target merger-related charges reflect estimated costs to integrate all aspects of the Target business into the vascular business, and include those costs typical in a merging of operations, such as rationalization of facilities, workforce reductions, unwinding of various contractual commitments, asset write-downs and other integration costs. The Company planned to integrate the Target business into its vascular business, terminate the Target distributors in countries where the Company had a direct sales presence, move the Target manufacturing and research and development operations to Ireland and other vascular facilities, and manage Target's admin-

29

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE M CONTINUED

istrative and corporate activities at the Company's headquarters. Specifically, the Company planned to exit Target's leased headquarters, manufacturing and research locations in California, as well as terminate Target's sales offices in Germany, Japan and the United Kingdom. The lease terminations were planned to begin during 1997 and to be completed by the end of 1998. In conjunction with the exit plan, the Company planned to terminate approximately 500 people, of which approximately 100 were corporate/administrative, 300 were manufacturing and 100 were research and development personnel. At the date of the Target acquisition, the Company also provided for the excess cost over fair market value of selected Target leasehold improvements, machinery and computer equipment, and other assets ($8 million). In the second quarter of 1997, the Company decided not to reintroduce a vascular product that had been previously withdrawn from the European market. As a result, the Company determined that there would be no future sales of the product, thus no projected cash flows. The Company wrote off the intellectual property ($8 million) associated with the product as a result of this analysis. Finally, in conjunction with the implementation of a global information system the Company provided for the estimated residual value of its legacy systems ($8 million), based on the date which the systems were planned to be removed from service. Due to the revised estimates for costs of workforce reductions discussed previously, the number of Target employees actually displaced was approximately 40 (approximately 35 of whom were terminated in 1997 and the remainder subsequent to 1997) as compared to the original estimate of 500 employees.

The activity impacting the accrual for restructuring and merger-related charges during 1999, 1998 and 1997, net of reclassifications made by management based on available information, is summarized in the table below:

                                                                                       Purchase       Charges
                          Balance at    Charges to        Charges     Balance at          Price   (Credits) to       Charges
                            December    Operations       Utilized       December    Adjustments    Operations       Utilized
(In millions)               31, 1996       in 1997        in 1997       31, 1997        in 1998       in 1998        in 1998
----------------------------------------------------------------------------------------------------------------------------
1995 AND 1996 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Facilities                       $19        $    2         $  (7)            $14                       $   2          $  (5)
Workforce reductions              26            10           (23)             13                          (5)            (4)
Contractual commitments            8                          (6)              2                          (1)
Asset write-downs                  6             4            (8)              2                          (1)
Direct transaction and
  other costs                      6                          (4)              2                           2             (2)
                                 ---         -----          ----             ---            ---        -----           ----
                                 $65         $  16          $(48)            $33                       $  (3)          $(11)
                                 ===         =====          ====             ===            ===        =====           ====

1997 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Facilities                                  $    6                          $  6                       $  (6)
Workforce reductions                            14         $  (2)             12                         (11)         $  (1)
Contractual commitments                         53           (25)             28                          (7)           (20)
Asset write-downs                               24           (10)             14                          (7)            (6)
Direct transaction and
  other costs                                   33           (24)              9                          (7)
                                 ---         -----          ----             ---            ---        -----           ----
                                              $130          $(61)            $69                        $(38)          $(27)
                                 ===         =====          ====             ===            ===        =====           ====

1998 SCHNEIDER PURCHASE PRICE ADJUSTMENTS:
Workforce reductions                                                                        $36                       $  (9)
Contractual commitments                                                                      16
                                 ---         -----          ----             ---            ---        -----           ----
                                                                                            $52                       $  (9)
                                 ===         =====          ====             ===            ===        =====           ====


                                          Purchase
                          Balance at         Price     Credits to        Charges     Balance at
                            December    Adjustments     Operations       Utilized      December
(In millions)               31, 1998       in 1999        in 1999        in 1999       31, 1999
-----------------------------------------------------------------------------------------------
1995 AND 1996 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Facilities                      $ 11                         $(1)         $  (7)           $  3
Workforce reductions               4                                                          4
Contractual commitments            1                                                          1
Asset write-downs                  1                                         (1)
Direct transaction and
  other costs                      2                                                          2
                                 ---         -----          ----             ---            ---
                                 $19                         $(1)         $  (8)            $10
                                 ===         =====          ====             ===            ===

1997 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Facilities
Workforce Reductions
Contractual commitments         $  1                                      $  (1)
Asset write-downs                  1                                         (1)
Direct transaction and
  other costs                      2                         $(1)            (1)
                                 ---         -----          ----             ---            ---
                                $  4                         $(1)         $  (3)
                                 ===         =====          ====             ===            ===

1998 SCHNEIDER PURCHASE PRICE ADJUSTMENTS:
Workforce reductions             $27            $3                         $(17)            $13
Contractual commitments           16             3                          (13)              6
                                 ---         -----          ----             ---            ---
                                 $43            $6                         $(30)            $19
                                 ===         =====          ====             ===            ===

30

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE M CONTINUED TO NOTE N

                                                                                              Purchase         Charges
                         Balance at      Charges to          Charges       Balance at            Price     (Credits) to
                           December      Operations         Utilized         December      Adjustments      Operations
(In millions)              31, 1996         in 1997          in 1997         31, 1997          in 1998         in 1998
--------------------     -----------     -------------     ----------     -----------     ------------     -------------
1998 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Workforce reductions                                                                                             $  14
Contractual commitments                                                                                              1
Asset write-downs                                                                                                    9
Direct transaction and
  other costs                                                                                                        2
                                ---            ----           -----              ----              ---           ----
                                                                                                                 $ 26
                                ===            ====           =====              ====              ===           ====

TOTAL:
Facilities                      $19          $    8          $   (7)             $ 20                            $ (4)
Workforce reductions             26              24             (25)               25              $36             (2)
Contractual commitments           8              53             (31)               30               16             (7)
Asset write-downs                 6              28             (18)               16                                1
Direct transaction and
  other costs                     6              33             (28)               11                              (3)
                                ---            ----           -----              ----              ---           ----
                                $65            $146           $(109)             $102              $52           $(15)
                                ===            ====           =====              ====              ===           ====



                                                            Purchase
                            Charges       Balance at           Price       Credits to          Charges       Balance at
                           Utilized         December     Adjustments       Operations         Utilized         December
(In millions)               in 1998         31, 1998         in 1999          in 1999          in 1999         31, 1999
--------------------     ----------     ------------     -----------     -------------     -----------     ------------
1998 RESTRUCTURING AND MERGER-RELATED INITIATIVES:
Workforce reductions         $  (1)              $13                           $  (4)           $  (7)             $  2
Contractual commitments         (1)
Asset write-downs                                  9                              (4)              (1)                4
Direct transaction and
  other costs                   (1)                1                                                                  1
                              ----               ---              --            ----             ----               ---
                             $ (3)               $23                           $  (8)           $  (8)             $  7
                              ====               ===              ==            ====             ====               ===

TOTAL:
Facilities                   $  (5)              $11                           $  (1)           $  (7)             $  3
Workforce reductions           (15)               44              $3              (4)             (24)               19
Contractual commitments        (21)               18               3                              (14)                7
Asset write-downs               (6)               11                              (4)              (3)                4
Direct transaction and
  other costs                   (3)                5                              (1)              (1)                3
                              ----               ---              --            ----             ----               ---
                              $(50)              $89              $6            $(10)            $(49)              $36
                              ====               ===              ==            ====             ====               ===

The 1998, 1997 and prior restructuring and merger-related charges were recognized under the provisions of EITF 94-3, "Liability Recognition for Certain Employee Termination Benefits and Other Costs to Exit an Activity (including Certain Costs Incurred in a Restructuring)." The purchase price adjustments were recognized under the provisions of APB 16, "Business Combinations" and EITF 95-3, "Recognition of Liabilities in Connection with a Purchase Business Combination."

Total facilities write-downs under the Company's restructuring and merger-related charges provided for during 1996, 1997 and 1998 for owned assets were measured as the difference between carrying value and fair value less cost to sell (approximately $8 million, net of reversals). The charge for leased facilities during the same periods was measured using the lease commitments remaining after the facility was removed from service (approximately $3 million, net of reversals). Write-downs of machinery and equipment, intangibles and other assets were measured by the difference between the carrying value and fair market value of the assets (approximately $28 million, net of reversals). Reversals in 1998 and 1999 of previously recorded charges were primarily based on the initial amount charged. To the extent that any of the above assets continued to be used in operations before being sold, scrapped or abandoned, depreciation and lease payments continued to be charged to operations. Depreciation not charged to operations related to assets held for disposal was less than $1 million during 1999 and was approximately $2 million in 1998.

As of December 31, 1999, the Company's cash obligations required to complete the balance of the Company's initiatives to integrate businesses related to its mergers and acquisitions and its 1998 rationalization strategy are estimated to be approximately $28 million. As of December 31, 1999, the Company has completed all significant actions of its plans and expects that substantially all of these cash outlays (primarily severance) will be paid during the first half of 2000 from normal operations.

NOTE N - SEGMENT REPORTING

Boston Scientific is a worldwide developer, manufacturer and marketer of medical devices for less invasive procedures. The Company has four reportable operating segments based on geographic regions: the United States, Europe, Japan and Inter-Continental (formerly Emerging Markets). Each of the Company's reportable segments generates revenues from the sale of minimally invasive medical devices. The reportable segments represent an aggregate of operating divisions.

31

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE N CONTINUED

Sales and operating results of reportable segments are based on internally derived standard foreign exchange rates, which may differ from year to year and do not include inter-segment profits. Because of the interdependence of the reportable segments, the operating profit as presented may not be representative of the geographic distribution that would occur if the segments were not interdependent. Total assets and purchases of property, plant and equipment are based on foreign exchange rates used in the Company's consolidated financial statements.

                            UNITED                             INTER-
(In millions)               STATES     EUROPE       JAPAN    CONTINENTAL   TOTAL
--------------------------------------------------------------------------------
1999:
Net sales                   $1,741       $465        $436        $171      $2,813
Depreciation
  and amortization              60         19           3           3          85
Operating income excluding
  special charges              662         87         265          30       1,044
Total assets                 1,257        458         215         101       2,031
Purchases of property,
  plant and equipment           50         21           6           3          80
                            ------       ----        ----        ----      ------

1998:
Net sales                   $1,394       $381        $333        $119      $2,227
Depreciation
  and amortization              64         17           2           1          84
Operating income excluding
  special charges              463         54         178          10         705
Total assets                 1,395        552         204          75       2,226
Purchases of property,
  plant and equipment           97         51          19           8         175
                            ------       ----        ----        ----      ------

1997:
Net sales                   $1,076       $326        $299       $  88      $1,789
Depreciation
  and amortization              57          9           2                      68
Operating income excluding
  special charges              373         62         155          17         607
Total assets                 1,089        429         136          53       1,707
Purchases of property,
  plant and equipment          138         70          14           2         224
                            ------       ----        ----        ----      ------

A reconciliation of the totals reported for the reportable segments to the applicable line items in the consolidated financial statements is as follows:

(In millions)                                       1999        1998       1997
--------------------------------------------------------------------------------
NET SALES:
 Total net sales for reportable segments           $2,813      $2,227     $1,789
 Foreign exchange                                      29           7         42
                                                   ------      ------     ------
                                                   $2,842      $2,234     $1,831
                                                   ======      ======     ======
DEPRECIATION AND AMORTIZATION:
 Total depreciation and amortization allocated
    to reportable segments                         $   85      $   84     $   68
 Corporate expenses and foreign exchange               93          45         19
                                                   ------      ------     ------
                                                   $  178      $  129     $   87
                                                   ======      ======     ======

INCOME (LOSS) BEFORE INCOME TAXES AND CUMULATIVE EFFECT OF CHANGE IN ACCOUNTING:

 Total operating income excluding special
    charges for reportable segments                $1,044       $ 705      $ 607
 Corporate expenses and foreign exchange             (365)       (245)      (207)
 Purchased research and development                              (682)       (29)
 Restructuring and merger-related (charges)
   credits                                             10          15       (146)
                                                   ------      ------     ------
                                                      689        (207)       225
 Other income (expense)                              (127)        (68)       (10)
                                                   ------      ------     ------
                                                   $  562      $ (275)    $  215
                                                   ======      ======     ======
TOTAL ASSETS:
 Total assets for reportable segments              $2,031      $2,226     $1,707
  Corporate assets                                  1,541       1,667        217
                                                   ------      ------     ------
                                                   $3,572      $3,893     $1,924
                                                   ======      ======     ======

Operating income (excluding special charges) for the U.S. and Europe for the year ended December 31, 1999 would have been approximately $678 million and $102 million, respectively, if certain costs had been allocated between geographic regions and corporate expenses consistent with the allocation method used in 1998.

ENTERPRISE-WIDE INFORMATION
(In millions)                                        1999        1998       1997
--------------------------------------------------------------------------------
NET SALES:
 Vascular                                          $2,309      $1,777     $1,426
 Nonvascular                                          516         426        377
 Other                                                 17          31         28
                                                   ------      ------     ------
                                                   $2,842      $2,234     $1,831
                                                   ======      ======     ======
LONG-LIVED ASSETS:
 United States                                      $ 446       $ 484      $ 378
 Ireland                                              110         119         79
 Other foreign countries                               48          77         42
                                                   ------      ------     ------
                                                    $ 604       $ 680      $ 499
                                                   ======      ======     ======

32

REPORT OF INDEPENDENT AUDITORS

BOARD OF DIRECTORS
BOSTON SCIENTIFIC CORPORATION

We have audited the accompanying consolidated balance sheets of Boston Scientific Corporation and subsidiaries as of December 31, 1999 and 1998, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended December 31, 1999. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted in the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Boston Scientific Corporation and subsidiaries at December 31, 1999 and 1998, and the consolidated results of their operations and their cash flows for each of the three years in the period ended December 31, 1999, in conformity with accounting principles generally accepted in the United States.

As more fully described in Note A, in 1997, the Company changed its accounting policy to conform to the consensus reached by the FASB Emerging Issues Task Force on its Issue No. 97-13.

[Ernst & Young LLP]

Boston, Massachusetts
February 4, 2000

33

FIVE-YEAR SELECTED FINANCIAL DATA (UNAUDITED)

(In millions, except share and per share data)

YEAR ENDED DECEMBER 31,        1999      1998      1997       1996      1995
--------------------------------------------------------------------------------
OPERATING DATA:
Net sales                    $2,842    $2,234    $1,831     $1,551    $1,191
Gross profit                  1,856     1,499     1,285      1,123       848
Selling, general and
  administrative expenses       842       755       663        492       386
Amortization expense             92        53        33         24         6
Royalties                        46        31        22         17        26
Research and development
  expenses                      197       200       167        135       106
Purchased research and
  development                             682        29        110        68
Restructuring and
  merger-related charges
  (credits)                     (10)      (15)      146         32       204
Total operating expenses      1,167     1,706     1,060        810       796
Operating income (loss)         689      (207)      225        313        52
Income (loss) before
  cumulative effect of
  change in accounting          371      (264)      131        167       (18)
Cumulative effect of change
  in accounting (net of tax)                        (21)
Net income (loss)            $  371    $ (264)   $  110     $  167    $  (18)

Income (loss) per common share before cumulative effect of change in accounting:
  Basic                      $ 0.92    $ (0.68)  $  0.34   $  0.43    $(0.05)
  Assuming dilution            0.90      (0.68)     0.33      0.42     (0.05)

Net income (loss) per common share:
  Basic                      $ 0.92    $ (0.68)  $  0.28   $  0.43    $(0.05)
  Assuming dilution            0.90      (0.68)     0.28      0.42     (0.05)

Weighted-average shares
    outstanding - assuming
    dilution (in thousands)  411,351   390,836   399,776    398,706   381,574

YEAR ENDED DECEMBER 31,        1999      1998      1997       1996      1995
--------------------------------------------------------------------------------
BALANCE SHEET DATA:

Working capital                        $ (353)   $  227     $  335    $  345
Total assets                 $3,572     3,893     1,924      1,585     1,159
Commercial paper                277     1,016       423        213
Bank obligations-short-term     323        11        24         28        58
Long-term debt, net of
   current portion              678     1,364        46                    4
Stockholders' equity          1,724       821       957        995       808
Book value per
  common share               $ 4.21     $ 2.08   $ 2.47     $ 2.50    $ 2.12

The Company paid a two-for-one stock split on November 30, 1998. All historical amounts have been restated to reflect the stock split.

See notes to consolidated financial statements.

34

QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

(In millions, except per share data)

THREE MONTHS ENDED                 MARCH 31,   JUNE 30,   SEPT. 30,   DEC. 31,
--------------------------------------------------------------------------------
YEAR ENDED DECEMBER 31, 1999
Net sales                             $ 708      $ 726     $   691      $ 717
Gross profit                            478        491         408        479
Operating income                        189        202         115        183
Net income                              100        109          55        107
Net income per common share -
  basic                               $0.25      $0.27     $  0.13      $0.26
Net income per common share -
  assuming dilution                   $0.25      $0.27     $  0.13      $0.26

YEAR ENDED DECEMBER 31, 1998
Net sales                             $ 453      $ 488     $   576      $ 717
Gross profit                            315        339         370        475
Operating income (loss)                  96        110       (559)        146
Net income (loss)                        60         67       (462)         71
Net income (loss) per common
  share - basic                       $0.15     $0.17      $(1.18)      $0.18
Net income (loss) per common
  share - assuming dilution           $0.15     $0.17      $(1.18)      $0.18

During the third quarter of 1999, the Company recorded a provision of $62 million for excess NIR(R) stent inventories and purchase commitments. The excess position was driven primarily by a shortfall in planned third quarter NIR(R) stent revenues, a reduction in NIR(R) stent sales forecasted for 1999 and 2000, and strategic decisions regarding versions of the NIR(R) stent system to be launched. Additionally, the third quarter results include a provision for increased legal costs of $22 million to cover certain costs of defense. These expenses relate primarily to defense costs associated with stent-related litigation. Further, during the third quarter of 1999, the Company identified and reversed restructuring and merger-related charges of $10 million no longer deemed necessary. These amounts relate primarily to the restructuring charges accrued in the fourth quarter of 1998 and reflect the reclassification of assets from held-for-disposal to held-for-use following management's decision to resume a development program previously planned to be eliminated. In addition, estimated severance costs for 1998 initiatives were reduced as a result of attrition.

During the fourth quarter of 1998, the Company recorded a charge of $26 million representing estimated severance and other related cost associated with integrating Schneider and streamlining manufacturing operations and reversed $21 million of merger-related amounts no longer required. The 1998 fourth quarter results also include adjustments of $30 million related primarily to write-downs of assets no longer deemed to be strategic. During the third quarter of 1998, the Company recorded a $671 million charge to account for purchased research and development acquired in the purchase of Schneider. Further, the third quarter results include a provision of $31 million for costs associated with the Company's decision to recall voluntarily the NIR ON(R) Ranger(TM) with Sox(TM) coronary stent system in the U.S. During the second quarter of 1998, the Company reversed approximately $20 million of merger-related amounts no longer required and recorded purchased research and development of $11 million in connection with another acquisition consummated during the period.

The Company paid a two-for-one stock split on November 30, 1998. All historical amounts have been restated to reflect the stock split.

See notes to consolidated financial statements.

35

MARKET FOR THE COMPANY'S COMMON STOCK AND

RELATED MATTERS (UNAUDITED)

The following table shows the market range for the Company's common stock based on reported sales prices on the New York Stock Exchange. All amounts below reflect the impact of the Company's two-for-one common stock split which was effected in the form of a 100% stock dividend paid in the fourth quarter of 1998.

1999                                       High                     Low
--------------------------------------------------------------------------------
First Quarter                           $43.000                 $23.000

Second Quarter                           44.875                  33.625

Third Quarter                            47.063                  21.563

Fourth Quarter                           26.000                  17.563

1998                                       High                     Low
--------------------------------------------------------------------------------
First Quarter                           $35.844                 $21.125

Second Quarter                           37.281                  30.219

Third Quarter                            40.844                  25.125

Fourth Quarter                           29.500                  20.125

The Company has not paid a cash dividend during the past five years. The Company currently intends to retain all of its earnings to finance the continued growth of its business. Boston Scientific may consider declaring and paying a dividend in the future; however, there can be no assurance that it will do so.

At December 31, 1999, there were approximately 9,811 record holders of the Company's common stock.

See notes to consolidated financial statements.

36

EXECUTIVE OFFICERS AND DIRECTORS
John E. Abele
Director, Founder Chairman

Lawrence C. Best
Senior Vice President, Finance and Administration and Chief Financial Officer

Joseph A. Ciffolillo
Director, Private Investor

Paul Donovan
Vice President, Communications

*+# Joel L. Fleishman
Director, President of The Atlantic Philanthropic Service Company, Inc. and Professor of Law and Public Policy, Duke University

+# Ray J. Groves Director, Chairman of Legg Mason Merchant Banking, Inc.

*+ Lawrence L. Horsch
Director, Chairman of Eagle Management & Financial Corp.

Paul A. LaViolette
Senior Vice President, President, Boston Scientific International, and Group President

Robert G. MacLean
Senior Vice President, Human Resources

Kshitij Mohan, Ph.D.
Senior Vice President and Chief Technology Officer

N.J. Nicholas, Jr.
Director, Private Investor

# Peter M. Nicholas
Director, Chairman of the Board

*# John E. Pepper
Director, Chairman, Executive Committee of the Board of Directors, The Procter & Gamble Company

Arthur L. Rosenthal, Ph.D.
Senior Vice President and Chief Scientific Officer

+# Warren B. Rudman Director, Former U.S. Senator, Partner, Paul, Weiss, Rifkind, Wharton and Garrison

Paul W. Sandman
Senior Vice President, Secretary and General Counsel

James H. Taylor, Jr.
Senior Vice President, Corporate Operations

James R. Tobin
Director, President and Chief Executive Officer

* Member of the Audit Committee
+ Member of the Compensation and Human Resources Committee # Member of the Corporate Governance Committee

CORPORATE HEADQUARTERS
Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-1537
508-650-8000
508-647-2200 (Investor Relations Facsimile) www.bsci.com

REGIONAL HEADQUARTERS
Boston Scientific Argentina S.A.
Buenos Aires, Argentina

Boston Scientific Asia Pacific Pte. Ltd. Singapore

Boston Scientific International B.V.
Paris, France

Boston Scientific Japan K.K.
Tokyo, Japan

TECHNOLOGY CENTERS
Cork, Ireland
Fremont, CA, U.S.A
Galway, Ireland
Glens Falls, NY, U.S.A
Maple Grove, MN, U.S.A
Miami, FL, U.S.A
Miyazaki, Japan
Natick, MA, U.S.A
Plymouth, MN, U.S.A
Redmond, WA, U.S.A
San Jose, CA, U.S.A
Spencer, IN, U.S.A
Tullamore, Ireland
Watertown, MA, U.S.A
Wayne, NJ, U.S.A

STOCKHOLDER INFORMATION
STOCK LISTING
Boston Scientific Corporation common stock is traded on the NYSE under the symbol "BSX".

TRANSFER AGENT
Inquiries concerning the transfer or exchange of shares, lost stock certificates, duplicate mailings or changes of address should be directed to the Company's Transfer Agent at:

EQUISERVE, L.P.
Post Office Box 8040
Boston, MA 02266-8040
781-575-3100
www.equiserve.com

INDEPENDENT AUDITORS
Ernst & Young LLP
Boston, Massachusetts

ANNUAL MEETING
The annual meeting for shareholders will take place on Tuesday, May 9, 2000, beginning at 10:00 a.m. at BankBoston, Corporate Headquarters, 100 Federal Street, Boston.

INVESTOR INFORMATION REQUESTS
Investors, shareholders and security analysts seeking information about the Company should refer to the Company's website at www.bsci.com or call Investor Relations at (508) 650-8555.

A copy of the Form 10-K filed with the Securities and Exchange Commission may be obtained upon written request to the Company.

Address requests to:
Investor Relations
Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-1537
(508) 650-8555
(508) 647-2200 (Facsimile)


[BOSTON SCIENTIFIC LOGO]

Boston Scientific Corporation
One Boston Scientific Place
Natick, MA 01760-1537
508 650 8000
www.bsci.com

(C) 2000 Boston Scientific Corporation 1127-FRP-00


Exhibit 21

Page 1

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

AMS MEDINVENT S.A.

Incorporated State:        Switzerland

BSC FSC, INC.

Incorporated State:        Barbados

BSC FINANCE CORP.

Incorporated State:        Indiana

BSC FINANCE TRUST

Incorporated State:        Massachusetts

BSC INTERNATIONAL CORPORATION

Incorporated State: Delaware

BSC INTERNATIONAL HOLDING LIMITED

Incorporated State: Ireland

BSC INTERNATIONAL MEDICAL TRADING (SHANGHAI) CO., LTD.

Incorporated State:        People's Republic of China

BSC SECURITIES CORPORATION

Incorporated State:        Massachusetts

BOSTON SCIENTIFIC (MALAYSIA) SDN. BHD.

Incorporated State: Malaysia

BOSTON SCIENTIFIC (SOUTH AFRICA) (PROPRIETARY) LIMITED

Incorporated State: South Africa

BOSTON SCIENTIFIC (THAILAND) LTD.

Incorporated State: Thailand

BOSTON SCIENTIFIC (ZURICH) GMBH

Incorporated State:        Switzerland

BOSTON SCIENTIFIC AG

Incorporated State:        Switzerland

BOSTON SCIENTIFIC ARGENTINA S.A.

Incorporated State: Argentina


Page 2

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

BOSTON SCIENTIFIC ASIA PACIFIC PTE. LTD.

Incorporated State:        Singapore

BOSTON SCIENTIFIC B.V.

Incorporated State:        Netherlands

BOSTON SCIENTIFIC BENELUX B.V.

Incorporated State: Netherlands

BOSTON SCIENTIFIC BENELUX SA

Incorporated State: Belgium

BOSTON SCIENTIFIC CESKA REPUBLIKA, S.R.O.

Incorporated State: Czech Republic

BOSTON SCIENTIFIC COLOMBIA LIMITADA

Incorporated State: Colombia

BOSTON SCIENTIFIC CORK LIMITED

Incorporated State: Ireland

BOSTON SCIENTIFIC CORPORATION

Incorporated State: Delaware

BOSTON SCIENTIFIC CORPORATION NORTHWEST TECHNOLOGY CENTER, INC.

Incorporated State: Washington

BOSTON SCIENTIFIC DENMARK A/S

Incorporated State: Denmark

BOSTON SCIENTIFIC DISTRIBUTION COMPANY

Incorporated State: Ireland

BOSTON SCIENTIFIC DISTRIBUTION IRELAND LIMITED

Incorporated State: Ireland

BOSTON SCIENTIFIC EASTERN EUROPE B.V.

Incorporated State: Netherlands

BOSTON SCIENTIFIC EUROPE S.P.R.L.

Incorporated State: Belgium


Page 3

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

BOSTON SCIENTIFIC FSC CORPORATION

Incorporated State: Barbados

BOSTON SCIENTIFIC FAR EAST B.V.

Incorporated State: Netherlands

BOSTON SCIENTIFIC GES.M.B.H.

Incorporated State: Austria

BOSTON SCIENTIFIC HONG KONG LIMITED

Incorporated State: Hong Kong

BOSTON SCIENTIFIC HUNGARY TRADING LIMITED LIABILITY COMPANY

Incorporated State: Hungary

BOSTON SCIENTIFIC IBERICA, S.A.

Incorporated State: Spain

BOSTON SCIENTIFIC INTERNATIONAL B.V.

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL CORPORATION

Incorporated State: Virgin Islands

BOSTON SCIENTIFIC INTERNATIONAL S.A.

Incorporated State: France

BOSTON SCIENTIFIC IRELAND LIMITED

Incorporated State: Ireland

BOSTON SCIENTIFIC JAPAN K.K.

Incorporated State: Japan

BOSTON SCIENTIFIC KOREA CO., LTD.

Incorporated State: Korea

BOSTON SCIENTIFIC LATIN AMERICA B.V.

Incorporated State: Netherlands

BOSTON SCIENTIFIC LATIN AMERICA B.V. (CHILE) LTDA.

Incorporated State: Chile


Page 4

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

BOSTON SCIENTIFIC LIMITED

Incorporated State:        England

BOSTON SCIENTIFIC LIMITED

Incorporated State:        Ireland

BOSTON SCIENTIFIC LTD.

Incorporated State: Canada

BOSTON SCIENTIFIC MEDIZINTECHNIK GMBH

Incorporated State: Germany

BOSTON SCIENTIFIC NEW ZEALAND LIMITED

Incorporated State:        New Zealand

BOSTON SCIENTIFIC NORDIC AB

Incorporated State:        Sweden

BOSTON SCIENTIFIC NORWAY AS

Incorporated State:        Norway

BOSTON SCIENTIFIC PHILIPPINES, INC.

Incorporated State: Philippines

BOSTON SCIENTIFIC POLSKA SP. Z O.O.

Incorporated State:        Poland

BOSTON SCIENTIFIC PTY. LTD.

Incorporated State:        Australia

BOSTON SCIENTIFIC PUERTO RICO, INC.

Incorporated State:        Puerto Rico

BOSTON SCIENTIFIC S.P.A.

Incorporated State:        Italy

BOSTON SCIENTIFIC SCIMED, INC.

Incorporated State: Minnesota

BOSTON SCIENTIFIC SWITZERLAND S.A.R.L.

Incorporated State: Switzerland


Page 5

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

BOSTON SCIENTIFIC TIP GERECLERI LIMITED SIRKETI

Incorporated State: Turkey

BOSTON SCIENTIFIC URUGUAY S.A.

Incorporated State: Uruguay

BOSTON SCIENTIFIC DE MEXICO, S.A. DE C.V.

Incorporated State: Mexico

BOSTON SCIENTIFIC DE VENEZUELA, S.A.

Incorporated State: Venezuela

BOSTON SCIENTIFIC DO BRASIL LTDA.

Incorporated State:        Brazil

BOSTON SCIENTIFIC, S.A.

Incorporated State:        France

CORVITA CANADA, INC.

Incorporated State:        Canada

CORVITA CORPORATION

Incorporated State:        Florida

CORVITA EUROPE S.A.

Incorporated State:        Belgium

EP TECHNOLOGIES, INC.

Incorporated State:        Delaware

FORWICH LIMITED

Incorporated State:        Ireland

HEART TECHNOLOGY FSC, INC.

Incorporated State:        Barbados

INTERVENTIONAL THERAPEUTICS CORPORATION

Incorporated State: California

INTERVENTIONAL THERAPEUTICS INT'L

Incorporated State: California


Page 6

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

LABORATOIRES CORVITA S.A.R.L.

Incorporated State: France

MM FOREIGN SALES CORPORATION

Incorporated State:        Virgin Islands

MEADOX (U.K.) LIMITED

Incorporated State:        England

MEADOX MEDICALS, INC.

Incorporated State:        New Jersey

NAMIC INTERNATIONAL INC.

Incorporated State:        Virgin Islands

NILO HOLDING SA

Incorporated State:        Switzerland

SCHNEIDER PUERTO RICO

Incorporated State:        Delaware

SCHNEIDER/NAMIC

Incorporated State:        Delaware

SCIMED LIFE SYSTEMS LIMITED

Incorporated State:        England

SCIMEDMEDIZENTECHNIK GMBH I.L.

Incorporated State:        Germany

SCHNEIDER (EUROPE) GMBH

Incorporated State:        Switzerland

SCHNEIDER BELGIUM N.V.

Incorporated State:        Belgium

SCHNEIDER HOLLAND BV

Incorporated State:        Netherlands


Page 7

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

SCHNEIDER IRELAND BV

Incorporated State:        Netherlands

SCHNEIDER PUERTO RICO

Incorporated State:        Delaware

SCIMED LIFE SYSTEMS, INC.

Incorporated State:        Minnesota

SCIMED, INC.

Incorporated State:        Minnesota

SYMBIOSIS CORPORATION

Incorporated State:        Florida

TARGET THERAPEUTICS INTERNATIONAL SALES CORPORATION

Incorporated State: Barbados

TARGET THERAPEUTICS INTERNATIONAL, INC.

Incorporated State:        Delaware

TARGET THERAPEUTICS, INC.

Incorporated State:        Delaware

BOSTON SCIENTIFIC EASTERN EUROPE B.V.- LEBANESE REPRESENTATIVE OFFICE

Incorporated State: Netherlands

BOSTON SCIENTIFIC FAR EAST B.V. - BRANCH OFFICE (SINGAPORE)

Incorporated State: Netherlands

BOSTON SCIENTIFIC FAR EAST B.V. - INDONESIA REPRESENTATIVE OFFICE

Incorporated State: Netherlands

BOSTON SCIENTIFIC FAR EAST B.V. - REPRESENTATIVE OFFICE (INDONESIA)

Incorporated State: Netherlands

BOSTON SCIENTIFIC IBERICA S.A. - PORTUGUESE BRANCH

Incorporated State: Spain

BOSTON SCIENTIFIC INTERNATIONAL B.V. - BEIJING REPRESENTATIVE OFFICE

Incorporated State: Netherlands


Page 8

LIST OF SUBSIDIARIES AND PLACES OF INCORPORATION

BOSTON SCIENTIFIC INTERNATIONAL B.V. - CYPRUS BRANCH OFFICE

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL B.V. - FRENCH BRANCH

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL B.V. - GUANGZHOU REPRESENTATIVE OFFICE

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL B.V. - MUMBAI BRANCH

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL B.V. - SHANGHAI REPRESENTATIVE OFFICE

Incorporated State: Netherlands

BOSTON SCIENTIFIC INTERNATIONAL B.V. - TAIWAN BRANCH

Incorporated State: Netherlands

BOSTON SCIENTIFIC LIMITED - BAHAMAS BRANCH

Incorporated State: Ireland

BOSTON SCIENTIFIC LIMITED - BARBADOS (INTERNATIONAL BUSINESS COMPANY)

Incorporated State: Ireland


Exhibit 23.1

Consent of Independent Auditors

We consent to the incorporation by reference in this Annual Report (Form 10-K) of Boston Scientific Corporation of our report dated February 4, 2000, included in the 1999 Annual Report to Shareholders of Boston Scientific Corporation.

Our audits also included the financial statement schedule of Boston Scientific Corporation listed in Item 14(a). This schedule is the responsibility of the Company's management. Our responsibility is to express an opinion based on our audits. In our opinion, the financial statement schedule referred to above, when considered in relation to the basic financial statements taken as a whole, presents fairly in all material respects the information set forth therein.

We also consent to the incorporation by reference in the Registration Statements (Forms S-8 Nos. 33-57242, 33-89772, 33-93790, 33-99766, 33-80265, 333-02256, 333-25033, and 333-25037) and in the Registration Statements (Forms S-3 Nos. 333-37255, 333-64887, and 333-64991) of our report dated February 4, 2000, with respect to the consolidated financial statements incorporated herein by reference, and our report included in the preceding paragraph with respect to the financial statement schedule included in this Annual Report (Form 10-K) of Boston Scientific Corporation.

ERNST & YOUNG LLP

Boston, Massachusetts
March 27, 2000


ARTICLE 5
MULTIPLIER: 1,000,000
CURRENCY: USD


PERIOD TYPE YEAR
FISCAL YEAR END DEC 31 1999
PERIOD START JAN 01 1999
PERIOD END DEC 31 1999
EXCHANGE RATE 1
CASH 64
SECURITIES 14
RECEIVABLES 508
ALLOWANCES 63
INVENTORY 376
CURRENT ASSETS 1,055
PP&E 940
DEPRECIATION 336
TOTAL ASSETS 3,572
CURRENT LIABILITIES 1,055
BONDS 678
PREFERRED MANDATORY 0
PREFERRED 0
COMMON 4
OTHER SE 1,720
TOTAL LIABILITY AND EQUITY 3,572
SALES 2,842
TOTAL REVENUES 2,842
CGS 986
TOTAL COSTS 986
OTHER EXPENSES 1,167
LOSS PROVISION 0
INTEREST EXPENSE 118
INCOME PRETAX 562
INCOME TAX 191
INCOME CONTINUING 371
DISCONTINUED 0
EXTRAORDINARY 0
CHANGES 0
NET INCOME 371
EPS BASIC .92
EPS DILUTED .90