UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): June 29, 2005

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

DELAWARE
1-11083
04-2695240
(State or other
(Commission
(IRS employer
jurisdiction of
file number)
identification no.)
incorporation)
   

One Boston Scientific Place, Natick, Massachusetts
01760-1537
(Address of principal executive offices)
(Zip code)

Registrant’s telephone number, including area code:     (508) 650-8000

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the fling obligation of the registrant under any of the following provisions:

o             Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o             Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o             Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
o             Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 
 

 

 

 

Item 1.01.

Entry into a Material Agreement.

 

In connection with the one-time special contribution by Boston Scientific to its 401(k) Retirement Savings Plan announced in September 2004, the Company adopted, effective June 29, 2005, an Excess Benefit Plan and related Trust Agreement. The Excess Benefit Plan is a non-qualified deferred compensation plan and is designed to provide specific supplemental benefits to eligible employees in excess of current Internal Revenue Code limits. Obligations under the Excess Benefit Plan are neither secured (subject to creditors in the event of Boston Scientific's insolvency) nor insured.

 

A form of each of the Excess Benefit Plan and the Trust Agreement between Boston Scientific Corporation and Vanguard Fiduciary Trust Company are attached hereto as Exhibits 10.1 and 10.2.

 

 

 

Item 9.01.

Financial Statements and Exhibits.

 

10.1

Form of Boston Scientific Corporation Excess Benefit Plan

 

10.2

Form of Trust Under the Boston Scientific Corporation Excess Benefit Plan

 

 

 


 


SIGNATURE


Pursuant to the requirements of the Securities and Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
     
  BOSTON SCIENTIFIC CORPORATION
 
  		 
  		 
 
Date: July 5, 2005 By:   /s/ Lawrence J. Knopf
 
Lawrence J. Knopf
  Vice President and Assistant General Counsel 

 



 
 

 

 

INDEX TO EXHIBITS

 

 

Exhibit  

Number

Description

 

10.1

Form of Boston Scientific Corporation Excess Benefit Plan

 

10.2

Form of Trust Under the Boston Scientific Corporation Excess Benefit Plan

 

 

 

 

 




 

 

 

 

 

FORM OF

BOSTON SCIENTIFIC CORPORATION

EXCESS BENEFIT PLAN

 

 







 

 

Table of Contents

Page

ARTICLE 1.

INTRODUCTION

1

 

 

1.1

Effect of Plan.

1

 

1.2

Purpose of Plan.

1

 

1.3

Status.

1

ARTICLE 2.

DEFINITIONS

1

 

 

2.1

“Account”

1

 

2.2

“Administrator”

1

 

2.3

“Affiliate”

1

 

2.4

“Beneficiary”

1

 

2.5

“Code”

1

 

2.6

“Company”

2

 

2.7

“Eligible Employee”

2

 

2.8

“ERISA”

2

 

2.9

“401(k) Plan”

2

 

2.10

“Measuring Investment”

2

 

2.11

“Participant”

2

 

2.12

“Plan”

2

 

2.13

“Separation from Service”

2

 

2.14

“Special Discretionary Contribution”

3

 

2.15

“Special Discretionary Credit”

3

ARTICLE 3.

PARTICIPATION.

3

 

 

3.1

Participation.

3

 

3.2

Duration of participation.

3

ARTICLE 4.

ADJUSTMENTS TO A PARTICIPANT'S ACCOUNT

3

 

 

4.1

Special Discretionary Credit.

3

 

4.2

Adjustments for Measuring Investments.

3

 

4.3

Account statements.

3

ARTICLE 5.

VESTING

4

 

ARTICLE 6.

PAYMENT OF BENEFITS

4

 

 

6.1

No in-service benefit payments.

4

 

6.2

Separation from Service for reasons other than death.

4

 

6.3

Distribution after a Participant’s death.

4

 

6.4

Key employees.

4

 

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ARTICLE 7.

NATURE OF CLAIM FOR BENEFIT PAYMENTS

4

 

 

7.1

Obligation of the Company.

4

 

7.2

Property of the Company.

5

 

7.3

Establishment of grantor trust.

5

 

7.4

No claim for specific assets.

5

ARTICLE 8.

ADMINISTRATION

5

 

 

8.1

Powers of the Administrator.

5

 

8.2

Interpretations to be final.

5

 

8.3

Indemnification.

6

 

8.4

Right to suspend benefits and correct errors.

6

ARTICLE 9.

AMENDMENT OR TERMINATION OF PLAN.

6

 

ARTICLE 10.

MISCELLANEOUS.

6

 

 

10.1

No assignment or alienation.

6

 

10.2

Limitation of rights.

6

 

10.3

Receipt and release.

7

 

10.4

Payments to minors, etc.

7

 

10.5

Tax withholding.

7

 

10.6

Participants' periods of military service.

7

 

10.7

No employment rights.

7

 

10.8

Governing law.

7

 

10.9

Severability.

7

 

10.10

Headings and subheadings.

8

 

 

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ARTICLE 1.

INTRODUCTION

1.1         Effect of Plan . This document sets forth the provisions of the Boston Scientific Corporation Excess Benefit Plan, effective June 29, 2005.

1.2         Purpose of Plan . The purpose of this Plan is to provide benefits supplementing the Special Discretionary Contribution to the 401(k) Plan which are limited by reason of section 415(c)(1) of the Code.

1.3         Status . The Plan is intended to be an "excess benefit plan" within the meaning of section 3(36) of ERISA and a nonqualified deferred compensation plan within the meaning of section 409A of the Code, and shall be administered in a manner consistent with that intent.

ARTICLE 2.

DEFINITIONS

Wherever used herein, the following terms have the following meanings:

2.1        “ Account ” means the account established on its books by the Company for a Participant reflecting the Company’s obligation to pay the Participant the Special Discretionary Credit as provided under this Plan.

2.2        “ Administrator ” means the Company or such other person or committee as may be selected from time to time by the Company.

2.3        “ Affiliate ” means (a) the Company, (b) any corporation that is a member of a controlled group of corporations (as defined in Code section 414(b)) of which the Company is also a member, (c) any trade or business, whether or not incorporated, that is under common control (as defined in Code section 414(c)) with the Company, (d) any trade or business that is a member of an affiliated service group (as defined in Code section 414(m)) of which the Company is also a member, or (e) to the extent required by Regulations issued under Code section 414(o), any other organization; provided, that the term “Affiliate” shall not include any corporation or unincorporated trade or business prior to the date on which such corporation, trade or business satisfies the affiliation or control tests of, (b), (c), (d) or (e) above. In identifying any “Affiliate” for purposes of the Code section 415 limits, the definitions in Code sections 414(b) and (c) shall be modified as provided in Code section 415(h).

2.4        “ Beneficiary ” means the person entitled to receive benefits under this Plan upon the death of the Participant, and shall at any point in time be identical to the beneficiary entitled to receive benefits under the 401(k) Plan upon the death of the Participant.

2.5        “ Code ” means the Internal Revenue Code of 1986, as amended from time to time. Reference to any section of the Code includes a reference to regulations issued by the

 


 

 

Department of Treasury and notices and other releases issued by the Internal Revenue Service which interpret or implement such Code section.

2.6        “ Company ” means Boston Scientific Corporation.

2.7        “ Eligible Employee ” means any employee or former employee of the Company or any Affiliate who is eligible to share in the Special Discretionary Contribution to the 401(k) Plan pursuant to the terms of the 401(k) Plan, and whose share of the Special Discretionary Contribution to the 401(k) Plan is limited due to section 415(c)(1) of the Code.

2.8        “ ERISA ” means the Employee Retirement Income Security Act of 1974, as amended from time to time. Reference to any section or subsection of ERISA includes reference to any comparable or succeeding provisions of any legislation which amends, supplements, or replaces such section or subsection, and also includes reference to any regulation issued pursuant to or with respect to such section or subsection.

2.9        “ 401(k) Plan ” means the Boston Scientific Corporation 401(k) Retirement Savings Plan, as amended from time to time, which is a profit-sharing plan maintained by the Company and is intended to be qualified under section 401(a) of the Code, as from time to time in effect.

2.10      “ Measuring Investment ” means the investment or investments selected from time to time by the Administrator to measure the value of Participants’ Accounts. The Administrator shall provide Measuring Investments that replicate, to the extent it deems practicable in its sole discretion, the investment options made available from time to time to participants under the 401(k) Plan, provided, however, that the Administrator shall be under no obligation to provide a Measuring Investment with respect to Company stock. The Administrator may, in its sole discretion, add or eliminate Measuring Investments at any time and for any reason.

2.11      “ Participant ” means any Eligible Employee who participates in the Plan in accordance with Article 3.

2.12      “ Plan ” means the Boston Scientific Corporation Excess Benefit Plan, as set forth herein and all subsequent amendments hereto.

2.13      “ Separation from Service ” means, with respect to any Participant, termination of his or her employment with the Company and any Affiliate for a reason other than death, provided that such termination of employment is treated, for purposes of the 401(k) Plan, as a severance from employment which entitles such Participant to a distribution of his or account balance pursuant to Article 8 thereunder, and further provided that the termination of employment qualifies as a separation from service under section 409A of the Code and any regulations issued thereunder.

 

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2.14      “ Special Discretionary Contribution ” means the discretionary contribution to the 401(k) Plan described in section 3.14 thereunder.

2.15      “ Special Discretionary Credit ” means, for any participant in the 401(k) Plan, an amount equal to the excess of (i) over (ii), where

(i)

is the portion of the Special Discretionary Contribution to the 401(k) Plan which would have been allocated to the Participant's account under the 401(k) Plan if such allocation had been made without regard to the limitation of section 415(c)(1) of the Code; and

(ii)

is the amount of the Special Discretionary Contribution to the 401(k) Plan which is actually allocated to the Participant's account thereunder.

ARTICLE 3.

PARTICIPATION.

3.1         Participation . An Eligible Employee will become a Participant in this Plan as of the date on which the Company makes the Special Discretionary Contribution to the 401(k) Plan.

3.2         Duration of participation . A Participant will continue as such so long as an Account is maintained for his or her benefit.

ARTICLE 4.

ADJUSTMENTS TO A PARTICIPANT'S ACCOUNT

4.1         Special Discretionary Credit . As of the date on which the Company makes the Special Discretionary Contribution to the 401(k) Plan, the Administrator shall credit a Special Discretionary Credit to each Eligible Employee's Account under this Plan.

4.2         Adjustments for Measuring Investments . From time to time, the Administrator will adjust each Participant's Account to reflect investment returns or losses of a Participant’s Measuring Investment(s). In accordance with rules and procedures established by the Administrator, the Administrator will permit Participants to select the Measuring Investment(s) for specified portions of their respective Accounts from among the available Measuring Investments. Absent such an election, the Account will be adjusted in accordance with such Measuring Investment(s) as may be selected from time to time by the Administrator for this purpose.

4.3         Account statements . At least annually, the Administrator will provide each Participant with a statement showing the notional balance of the Participant’s Account.

 

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ARTICLE 5.

VESTING

At any point in time, a Participant shall have a vested and nonforfeitable right to the same percentage of his or her Account balance under this Plan as the Participant has to his or her Discretionary Contribution Account under the 401(k) Plan.

ARTICLE 6.

PAYMENT OF BENEFITS

6.1         No in-service benefit payments . A Participant will not be permitted to receive payment of his or her benefit under this Plan prior to his or her Separation from Service.

6.2         Separation from Service for reasons other than death . Following a Participant’s Separation from Service for any reason other than death, the Participant will receive an amount equal to the vested portion of his or her Account in cash in a single lump sum. Except as provided in Section 6.4 of the Plan, distribution will be made within 90 days of the Participant’s Separation from Service. If an Eligible Employee’s termination of employment occurs before the Eligible Employee becomes a Participant under the Plan, the Eligible Employee will be treated as a Participant who has had a Separation from Service and the amount of the Participant’s Special Discretionary Credit will be paid, subject to Section 6.4, in cash in a single lump sum to the Participant as soon as practicable after the Special Discretionary Credit is credited to the Participant’s Account.

6.3         Distribution after a Participant’s death . Upon the death of the Participant, an amount equal to the balance of his or her Account will be paid in cash in a single lump sum to his or her Beneficiary within 90 days after the Administrator receives notice of the Participant's death. If an Eligible Employee dies before becoming a Participant, the amount of the Participant’s Special Discretionary Credit will be paid in cash in a single lump sum to the Participant’s Beneficiary as soon as practicable after the Special Discretionary Credit is credited to the Participant’s Account.

6.4         Key employees . Notwithstanding anything in this Plan to the contrary, any distribution under Section 6.2 to a “key employee”, as defined in section 416(i) of the Code without regard to subsection 416(i)(5) of the Code, will be made no earlier than the date which is 6 months after the key employee’s Separation from Service.

ARTICLE 7.

NATURE OF CLAIM FOR BENEFIT PAYMENTS

7.1         Obligation of the Company . The Company will establish on its books a liability with respect to its obligations for benefits payable under the Plan to the Participants and their Beneficiaries.

 

-4-


 

 

7.2         Property of the Company . The Plan is neither funded nor intended to qualify for special tax benefits under the Code. Nothing in the Plan shall be deemed to require the setting aside of any assets, in trust or otherwise, for the payment of benefits under the Plan. A Participant's or Beneficiary's rights to benefits under the Plan shall be no greater than the rights of a general, unsecured creditor of the Company.

7.3         Establishment of grantor trust . The Company shall not be required to set aside or segregate any assets of any kind to meet its obligations hereunder. The Company may, however, establish a trust of which the Company is treated as the owner under Subpart E of Subchapter J, Chapter 1 of the Code (known as a "grantor trust") and may deposit funds with the trustee of the grantor trust sufficient to satisfy the benefits provided under the Plan.

7.4         No claim for specific assets . Nothing in the Plan will be construed to give any Participant or Beneficiary rights to any specific assets of the Company.

ARTICLE 8.

ADMINISTRATION

8.1         Powers of the Administrator . The Administrator will have full discretionary power and authority to administer the Plan in all of its details. For this purpose the Administrator's powers will include, but will not be limited to, the following discretionary authority, in addition to all powers provided by this Plan:

(a)          to make and enforce such rules and regulations as the Administrator deems necessary or proper for the efficient administration of the Plan, or as required to comply with applicable law;

(b)

to interpret the Plan;

(c)           to decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;

(d)          to compute the amounts to be distributed to any Participant, former Participant, or Beneficiary in accordance with the provisions of the Plan, and to determine the person or persons to whom such amounts will be distributed;

(e)

to authorize the payment of distributions; and

 

(f)

to allocate or delegate its powers to another person.

8.2         Interpretations to be final. Any interpretation of the Plan or other determination with respect to the Plan by the Administrator shall be final and conclusive on all persons in the

 

-5-


 

 

absence of clear and convincing evidence that such interpretation or determination was made arbitrarily and capriciously.

8.3         Indemnification . The Company agrees to indemnify and hold harmless any employee or former employee acting as the Administrator, any employee or former employee to whom any of the Administrator’s responsibilities have been allocated or delegated, and any employee or former employee who has been asked to assist the Administrator in any way (the “indemnified person”) against any liability (including, without limitation, payment of attorney's fees) which the indemnified person may incur as a result of the discharge of his or her duties and responsibilities in good faith under the Plan.

8.4         Right to suspend benefits and correct errors . The Administrator may delay any payment until satisfied as to the correctness of the payment or the person to receive the payment or to allow filing in any court of competent jurisdiction of a suit in such form as the Administrator considers appropriate for a legal determination of the benefits to be paid and the persons to receive them. The Administrator specifically reserves the right to correct errors of every sort, and each Participant hereby agrees, on his or her own behalf and on behalf of any Beneficiary, to any method of error correction as the Administrator shall specify. The Administrator shall be authorized to recover any payment made in error.

ARTICLE 9.

AMENDMENT OR TERMINATION OF PLAN.

The Company hopes and expects to continue the Plan in effect, but it reserves the right to amend the Plan in any respect at any time (such amendment to take effect retroactively if the Company so provides) and to terminate the Plan. Any amendment or termination shall be stated in an instrument in writing, and signed by a duly authorized representative of the Company. In the event of an amendment or termination of the Plan, a Participant’s benefits shall not be less than the amount credited to the Participant’s Account immediately prior to such amendment or termination.

ARTICLE 10.

MISCELLANEOUS.

10.1       No assignment or alienation . The rights of any person to payments or benefits under the Plan shall not be assignable, either by voluntary or involuntary assignment, including without limitation bankruptcy, garnishment, attachment, levy or any other legal process, except to such extent as may be required by law.

10.2       Limitation of rights . Neither the establishment of the Plan, nor any amendment thereof, nor the payment of any benefits will be construed as giving any individual any legal or equitable right against the Company or the Administrator or the trustee of any trust established

 

-6-


 

 

under Section 7.3. In no event will the Plan be deemed to constitute a contract between any individual and the Company or the Administrator or any such trustee.

10.3       Receipt and release . Any payment of a benefit under the Plan to any Participant or Beneficiary shall be in full satisfaction of all claims with respect to such benefit under the Plan against the Company, the Administrator, and the trustee of any trust established under Section 7.3.

10.4       Payments to minors, etc. Any benefit payable to or for the benefit of a minor, an incompetent person or other person incapable of providing a valid receipt shall be deemed paid when paid to such person’s guardian or to the party providing or reasonably appearing to provide for the care of such person, and such payment shall fully discharge the Administrator, the Company and all other parties with respect thereto.

10.5       Tax withholding . Notwithstanding any provision of the Plan to the contrary, all payments under the plan shall be subject to reduction for applicable income tax withholding and other legally or contractually required withholdings. To the extent amounts credited under the Plan are includible in "wages" for purposes of Chapter 21 of the Code, or are otherwise includible in taxable income, prior to distribution the Company may deduct the required withholding with respect to such wages or income from compensation currently payable to the Participant or the Administrator may reduce the Participant's Account hereunder or require the Participant to make other arrangements satisfactory to the Administrator for the satisfaction of the Company's withholding obligations.

10.6       Participants' periods of military service . Notwithstanding any provision of the Plan to the contrary, contributions, benefits and service credit with respect to qualified military service will be provided in accordance with Code section 414(u).

10.7       No employment rights . Nothing in this Plan shall be deemed to give any person a right to remain in the employ of the Company or any Affiliate, or affect the right of the Company or any Affiliate to terminate such person’s employment with or without cause. This Plan shall not be deemed to be consideration for, or an inducement for the performance of, services by any individual.

10.8       Governing law . The Plan will be construed, administered, and governed under the laws of the Commonwealth of Massachusetts, to the extent not preempted by federal law.

10.9       Severability . If any provision of the Plan is held by a court of competent jurisdiction to be invalid or unenforceable, the remaining provisions shall continue to be fully effective.

 

-7-


 

 

10.10     Headings and subheadings . Headings and subheadings are inserted for convenience only and are not to be considered in the construction of the provisions of the Plan.

* * * * *

 

-8-


IN WITNESS WHEREOF, the Company has caused this Plan to be executed by its duly authorized representative this ____ day of __________________, 2005.

BOSTON SCIENTIFIC CORPORATION

By:

________________________________

Title:

________________________________

Date:

________________________________

 

 

 

 

 

-9-

FORM OF

TRUST UNDER

THE BOSTON SCIENTIFIC CORPORATION EXCESS BENEFIT PLAN

 

This AGREEMENT, made this 29th day of June, 2005, by and between BOSTON SCIENTIFIC CORPORATION (“Company”), and VANGUARD FIDUCIARY TRUST COMPANY, a trust company incorporated under Chapter 10 of the Pennsylvania Banking Code (“Trustee”):

 

W I T N E S S E T H :

 

WHEREAS, the Company has adopted the BOSTON SCIENTIFIC CORPORATION EXCESS BENEFIT PLAN (the “Plan”);

 

WHEREAS, Company has incurred or expects to incur liability under the terms of such Plan with respect to the individuals participating in such Plan;

 

WHEREAS, Company wishes to establish a trust (hereinafter called “Trust”) and to contribute to the Trust assets that shall be held therein, subject to the claims of Company’s creditors in the event of Company’s Insolvency, as herein defined, until paid to Plan participants and their beneficiaries in such manner and at such times as specified in the Plan;

 

WHEREAS, it is the intention of the parties that this Trust shall constitute an unfunded arrangement and shall not affect the status of the Plan as an unfunded excess benefit plan described in section 3(36) of Title I of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”);

 

WHEREAS, it is the intention of Company to make contributions to the Trust to provide itself with a source of funds to assist it in the meeting of its liabilities under the Plan; and

 

NOW, THEREFORE, the parties do hereby establish the Trust and agree that the Trust shall be comprised, held and disposed of as follows:

 


 

 

SECTION 1. Establishment of Trust .

 

(a) The Company shall from time to time deposit amounts with Trustee in trust which shall become the principal of the Trust to be held, administered and disposed of by Trustee as provided in this Trust Agreement.

 

(b) The Trust hereby established shall be irrevocable. The Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payments of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan; provided that the Company may, in its sole discretion, direct the Trustee to distribute to the Company any portion of the Trust that is not attributable to a Plan participant’s benefit.

 

(c) The Trust is intended to be a grantor trust, of which Company is the grantor, within the meaning of subpart E, part I, subchapter J, chapter 1, subtitle A of the Internal Revenue Code of 1986, as amended, and shall be construed accordingly.

 

(d) The principal of the Trust, and any earnings thereon shall be held separate and apart from other funds of Company and shall be used exclusively for the uses and purposes of Plan participants and general creditors as herein set forth. Plan participants and their beneficiaries shall have no preferred claim on, or any beneficial ownership interest in, any assets of the Trust. Any rights created under the Plan and this Trust Agreement shall be mere unsecured contractual rights of Plan participants and their beneficiaries against Company. Any assets held by the Trust will be subject to the claims of Company’s general creditors under federal and state law in the event of insolvency, as defined in Section 3(a) herein.

 

(e) Company, in its sole discretion, may at any time, or from time to time, make additional deposits of cash or other property in trust with Trustee to augment the principal to be held, administered and disposed of by Trustee as provided in this Trust Agreement. Neither Trustee nor any Plan participant or beneficiary shall have any right to compel such additional deposits.

 

Pg. 2

 


 

 

SECTION 2. Payments to Plan Participants and Their Beneficiaries .

 

(a) Company shall deliver to Trustee a schedule (the “Payment Schedule”) that indicates the amounts payable in respect of each Plan participant (and his or her beneficiaries), that provides a formula or other instructions acceptable to Trustee for determining the amounts so payable, the form in which such amount is to be paid (as provided for or available under the Plan), and the time of commencement for payment of such amounts. Except as otherwise provided herein, Trustee shall make payments to the Plan participants and their beneficiaries in accordance with such Payment Schedule. The Trustee shall make provision for the reporting and withholding of any federal or state taxes that may be required to be withheld with respect to the payment of benefits pursuant to the terms of the Plan and shall pay amounts withheld to the appropriate taxing authorities or determine that such amounts have been reported, withheld and paid by Company.

 

(b) The entitlement of a Plan participant or his or her beneficiaries to benefits under the Plan shall be determined by Company or such party as it shall designate under the Plan, and any claim for such benefits shall be considered and reviewed under the procedures set out in the Plan.

 

(c) Company may make payment of benefits directly to Plan participants or their beneficiaries as they become due under the terms of the Plan. Company shall notify Trustee of its decision to make payment of benefits directly prior to the time amounts are payable to participants or their beneficiaries. In addition, if the principal of the Trust, and any earnings thereon, are not sufficient to make payments of benefits in accordance with the terms of the Plan, Company shall make the balance of each such payment as it falls due. Trustee shall notify Company where principal and earnings are not sufficient.

 

SECTION 3. Trustee Responsibility Regarding Payments to Trust Beneficiary When Company is Insolvent .

 

(a) Trustee shall cease payment of benefits to Plan participants and their beneficiaries if the Company is Insolvent. Company shall be considered “Insolvent” for purposes of this Trust Agreement if (i) Company is unable to pay its debts as they become due, or (ii) Company is subject to a pending proceeding as a debtor under the United States Bankruptcy Code.

 

Pg. 3

 


 

 

(b) At all times during the continuance of this Trust, as provided in Section 1(d) hereof, the principal and income of the Trust shall be subject to claims of general creditors of Company under federal and state law as set forth below.

 

(1) The Board of Directors and the Chief Executive Officer of Company shall have the duty to inform Trustee in writing of Company’s Insolvency. If a person claiming to be a creditor of Company alleges in writing to Trustee that Company has become Insolvent, Trustee shall determine whether Company is Insolvent and, pending such determination, Trustee shall discontinue payment of benefits to Plan participants or their beneficiaries.

 

(2) Unless Trustee has actual knowledge of Company’s Insolvency, or has received notice from Company or a person claiming to be a creditor alleging that Company is Insolvent, Trustee shall have no duty to inquire whether Company is Insolvent. Trustee may in all events rely on such evidence concerning Company’s solvency as may be furnished to Trustee and that provides Trustee with a reasonable basis for making a determination concerning Company’s solvency.

 

(3) If at any time Trustee has determined that Company is Insolvent, the Trustee shall discontinue payments to Plan participants or their beneficiaries and shall hold the assets of the Trust for the benefit of Company’s general creditors. Nothing in this Trust Agreement shall in any way diminish any rights of Plan participants or their beneficiaries to pursue their rights as general creditors of Company with respect to benefits due under the Plan or otherwise.

 

(4) Trustee shall resume the payment of benefits to Plan participants or beneficiaries in accordance with Section 2 of this Trust Agreement only after Trustee has determined that Company is not Insolvent (or is no longer Insolvent).

 

(c) Provided that there are sufficient assets, if Trustee discontinues the payment of benefits from the Trust pursuant to subsection 3(b) hereof and subsequently resumes such payments, the first payment following such discontinuance shall include the aggregate amount of all payments due to Plan

 

Pg. 4

 


 

 

participants or their beneficiaries under the terms of the Plan for the period of such discontinuance, less the aggregate amount of any payments made to Plan participants or their beneficiaries by Company in lieu of the payments provided for hereunder during any such period of discontinuance.

 

SECTION 4. Payments to Company .

 

Except as provided in Section 3 hereof, Company shall have no right or power to direct Trustee to return to Company or to divert to others any of the Trust assets before all payments of benefits have been made to Plan participants and their beneficiaries pursuant to the terms of the Plan.

 

SECTION 5. Investment Authority .

 

(a) The Trust shall be invested by the Trustee among regulated investment companies which have been previously designated as investment fund alternatives by the Company (the “Investment Funds”). The Company shall notify the Trustee in writing of the selection of the Investment Funds and any changes thereto. The Trustee shall invest the Trust in accordance with the written directions of the Company or to the extent that such directions are not received for all or a portion of the Trust, in the Trustee’s discretion among any of the Investment Funds. The Trustee shall have no liability or responsibility for acting without question on the direction of the Company, or for the exercise of investment discretion in the absence of direction from the Company, unless such actions are contrary to the express provisions of this Trust Agreement.

 

(b) The Trustee shall invest the principal of the Trust and any earnings thereon in accordance with such investment directions as the Company shall provide (or, if the Company has appointed an investment manager to manage or direct the investment of some or all of the assets of the Trust, in accordance with the directions of such investment manager) or in accordance with such objectives, policies and restrictions as the Company or such investment manager may from time to time prescribe. The Trustee shall have no duty to inquire into or review the aforesaid investment directions, objectives, policies, or restrictions, or the investments made pursuant to the directions of an investment manager. Without limiting the foregoing, Trustee may invest in securities (including stock or rights to acquire stock) or obligations issued by the Company. All rights associated with the assets of the Trust shall be

 

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exercised by Trustee or the person designated by Trustee, and shall in no event be exercisable by or rest with Plan participants except that voting rights with respect to Trust assets will be exercised by the Company.

 

SECTION 6. Disposition of Income .

 

During the term of the Trust, all income received by the Trust, net of expenses and taxes, shall be accumulated and reinvested.

 

SECTION 7. Accounting by Trustee .

 

Trustee shall keep accurate and detailed records of all investments, receipts, disbursements, and all other transactions required to be made, including such specific records as shall be agreed upon in writing between Company and Trustee. Within ninety (90) days following the close of each calendar year and within ninety (90) days after the removal or resignation of Trustee, Trustee shall deliver to Company a written account of its administration of the Trust during such year or during the period from the close of the last preceding year to the date of such removal or resignation, setting forth all investments, receipts, disbursements and other transactions effected by it, including a description of all securities and investments purchased and sold with the cost or net proceeds of such purchases or sales (accrued interest paid or receivable being shown separately), and showing all cash, securities and other property held in the Trust at the end of such year or as of the date of such removal or resignation, as the case may be.

 

SECTION 8. Responsibility of Trustee .

 

(a) Trustee shall act with the care, skill, prudence and diligence under the circumstances then prevailing that a prudent person acting in like capacity and familiar with such matters would use in the conduct of an enterprise of a like character and with like aims, provided, however, that Trustee shall incur no liability to any person for any action taken pursuant to a direction, request or approval given by Company which is contemplated by, and in conformity with, the terms of the Plan or this Trust and is

 

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given in writing by Company. In the event of a dispute between Company and a party, Trustee may apply to a court of competent jurisdiction to resolve the dispute.

 

(b) Trustee may consult with legal counsel (who may also be counsel for Company generally) with respect to any of its duties or obligations hereunder.

 

(c) Trustee may hire agents, accountants, actuaries, investment advisors, financial consultants or other professionals to assist it in performing any of its duties or obligations hereunder.

 

(d) Trustee shall have, without exclusion, all powers conferred on Trustees by applicable law, unless expressly provided otherwise herein, provided, however, that if an insurance policy is held as an asset of the Trust, Trustee shall have no power to name a beneficiary of the policy other than the Trust, to assign the policy (as distinct from conversion of the policy to a different form) other than to a successor Trustee, or to loan to any person the proceeds of any borrowing against such policy.

 

(e) Notwithstanding any powers granted to Trustee pursuant to this Trust Agreement or to applicable law, Trustee shall not have any power that could give this Trust the objective of carrying on a business and dividing the gains therefrom, within the meaning of section 301.7701-2 of the Procedure and Administrative Regulations promulgated pursuant to the Internal Revenue Code.

 

(f) Unless resulting from the Trustee’s negligence, willful misconduct, lack of good faith, or breach of its duties under this Agreement, the Company shall indemnify and save harmless the Trustee from, against, for and in respect of any and all damages, losses, obligations, liabilities, liens, deficiencies, costs and expenses, including without limitation, reasonable attorney’s fees incident to any suit, action, investigation, claim or proceedings suffered, sustained, incurred or required to be paid by the Trustee in connection with the Plan or this Agreement. If Company does not pay such costs, expenses and liabilities for which it is liable hereunder in a reasonably timely manner, Trustee may obtain payment from the Trust. Nothing in this Trust Agreement shall be construed as constituting the Trustee plan “administrator” as that term is defined in Section 3(16) of ERISA, of the Plan.

 

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SECTION 9. Compensation and Expenses of Trustee .

 

Company shall pay all administrative and Trustee’s fees and expenses. If not so paid, the fees and expenses shall be paid from the Trust.

 

SECTION 10. Resignation and Removal of Trustee .

 

(a) Trustee may resign at any time by written notice to Company, which shall be effective forty-five (45) days after receipt of such notice unless Company and Trustee agree otherwise.

 

(b) Trustee may be removed by Company on forty-five (45) days notice or upon shorter notice accepted by Trustee.

 

(c) Upon resignation or removal of Trustee and appointment of a successor Trustee, all assets shall subsequently be transferred to the successor Trustee. The transfer shall be completed within ninety (90) days after receipt of notice of resignation, removal or transfer, unless Company extends the time limit.

 

(d) If Trustee resigns or is removed, a successor shall be appointed, in accordance with Section 11 hereof, by the effective date of resignation or removal under paragraphs (a) or (b) of this section. If no such appointment has been made, Trustee may apply to a court of competent jurisdiction for appointment of a successor or for instructions. All expenses of Trustee in connection with the proceeding shall be allowed as administrative expenses of the Trust.

 

SECTION 11. Appointment of Successor .

 

(a) If Trustee resigns or is removed in accordance with Section 10(a) or (b) hereof, Company may appoint any third party, such as a bank trust department or other party that may be granted corporate trustee powers under state law, as a successor to replace Trustee upon resignation or removal. The appointment shall be effective when accepted in writing by the new trustee, who shall have all of the rights and powers of the former Trustee, including ownership rights in the Trust assets. The former

 

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Trustee shall execute any instrument necessary or reasonably requested by Company or the successor trustee to evidence the transfer.

 

(b) The successor trustee need not examine the records and acts of any prior trustee and may retain or dispose of existing Trust assets, subject to Sections 5, 7 and 8 hereof. The successor trustee shall not be responsible for and Company shall indemnify and defend the successor trustee from any claim or liability resulting from any action or inaction of any prior trustee or from any other past event or any condition existing at the time it becomes successor trustee.

 

SECTION 12. Amendment or Termination .

 

(a) This Trust Agreement may be amended by a written instrument executed by Trustee and Company. Notwithstanding the foregoing, no such amendment shall conflict with the terms of the Plan.

(b) The Trust shall not terminate until the date on which Plan participants and their beneficiaries are no longer entitled to benefits pursuant to the terms of the Plan. Upon termination of the Trust any assets remaining in the Trust shall be returned to Company.

 

(c) Upon written approval of participants or beneficiaries entitled to payment of benefits pursuant to the terms of the Plan, Company may terminate this Trust prior to the time all benefit payments under the Plan have been made. All assets in the Trust at termination shall be returned to Company.

 

SECTION 13. Miscellaneous .

 

(a) Any provision of this Trust Agreement prohibited by law shall be ineffective to the extent of any such prohibition, without invalidating the remaining provisions hereof.

 

(b) Benefits payable to Plan participants and their beneficiaries under this Trust Agreement may not be anticipated, assigned (either at law or in equity), alienated, pledged, encumbered or subjected to attachment, garnishment, levy, execution or other legal or equitable process.

 

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(c) This Trust Agreement shall be governed by and construed in accordance with the laws of the Commonwealth of Pennsylvania.

 

SECTION 14. Effective Date .

 

The effective date of this Trust Agreement shall be June 29, 2005.

 

IN WITNESS WHEREOF, this instrument has been executed as of the day and year first above written.

 

ATTEST:

BOSTON SCIENTIFIC CORPORATION

 

________________________________

By: _________________________________

Title: ________________________________

 

 

ATTEST:

VANGUARD FIDUCIARY TRUST COMPANY

 

________________________________

By: _________________________________

 

 

Title: Principal _________________________

 

 

 

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