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): July 1, 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) |
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One Boston Scientific Place, Natick, Massachusetts |
01760-1537 |
(Address of principal executive offices) |
(Zip code) |
Registrants 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. |
On July 1, 2005, the Compensation Committee of the Board of Directors of Boston Scientific approved special accelerated equity incentive awards to aid in the retention of certain members of the executive committee and senior management. Executive committee members received (i) an option to purchase a specified number of shares of common stock of Boston Scientific at a fixed price on the date of grant, vesting in annual installments over five years beginning on July 1, 2007, the second anniversary of the date of grant, and (ii) a Deferred Stock Unit award for a specified number of shares of Boston Scientific common stock to be issued in five equal annual installments beginning on July 1, 2007, the second anniversary of the date of grant. Participants must remain an employee of the Company through those dates. The Non-Qualified Stock Option grants and Deferred Stock Unit Awards were made under the Company's 2003 Long-Term Incentive Plan and are subject to both the terms and conditions of that Plan as well as the terms and conditions of each incentive award agreement.
The following members of the executive committee received the following awards: |
Name |
Title |
Stock Options |
Deferred Stock Units |
Lawrence C. Best |
Executive Vice President - Finance & Administration and Chief Financial Officer |
125,000 |
50,000 |
Brian R. Burns |
Senior Vice President - Quality |
100,000 |
40,000 |
Fredericus A. Colen |
Executive Vice President and Chief Technology Officer |
100,000 |
40,000 |
Paul Donovan |
Senior Vice President, Corporate Communications |
100,000 |
40,000 |
James Gilbert |
Senior Vice President |
100,000 |
40,000 |
Jeffrey H. Goodman |
Senior Vice President - International |
100,000 |
40,000 |
Paul A. LaViolette |
Chief Operating Officer |
250,000 |
100,000 |
Stephen F. Moreci |
Senior Vice President and Group President, Endosurgery |
100,000 |
40,000 |
Kenneth J. Pucel |
Senior Vice President, Operations |
100,000 |
40,000 |
Lucia L. Quinn |
Executive Vice President, Human Resources |
100,000 |
40,000 |
Dr. Mary E. Russell |
Senior Vice President and Chief Medical Officer |
100,000 |
40,000 |
Paul W. Sandman |
Executive Vice President, Secretary and General Counsel |
100,000 |
40,000 |
A form of each of the Non-Qualified Stock Option and Deferred Stock Unit Award Agreement are attached hereto as Exhibits 10.1 and 10.2.
Item 9.01. |
Financial Statements and Exhibits. |
10.1 |
Form of Non-Qualified Stock Option Agreement dated July 1, 2005 |
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10.2 |
Form of Deferred Stock Unit Award Agreement dated July 1, 2005 |
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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.
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BOSTON SCIENTIFIC CORPORATION |
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Date: July 7, 2005 |
By: |
/s/ Lawrence J. Knopf |
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Lawrence J. Knopf |
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Vice President and Assistant General Counsel |
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INDEX TO EXHIBITS
Exhibit
Number |
Description |
10.1 |
Form of Non-Qualified Stock Option Agreement dated July 1, 2005 |
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10.2 |
Form of Deferred Stock Unit Award Agreement dated July 1, 2005 |
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EXHIBIT 10.1
Form of
Boston Scientific Corporation
2003 Long-Term Incentive Plan
Non-Qualified Stock Option Agreement
July 1, 2005
PREPARED FOR:
[Name]
This Agreement is entered into by and between Boston Scientific Corporation (the "Corporation") and the person whose name appears on the signature page hereof (the "Optionee") effective as of the 1st day of July, 2005. This Agreement is made pursuant to the Boston Scientific Corporation 2003 Long-Term Incentive Plan (the "Plan"), which is administered by the Committee.
Capitalized terms not defined in this Agreement have the same meanings specified in the Plan.
I. |
Grant of Option |
The Corporation hereby grants to the Optionee a Non-Qualified Stock Option (the "Option") to purchase that number of shares of common stock of the Corporation set forth on the signature page hereof (the "Option Shares") at the price set forth on the signature page hereof (the "Exercise Price").
II. |
Term and Vesting of Option |
Except as otherwise provided in Section IV, the Option shall have a term of ten (10) years from July 1, 2005 until July 1, 2015 and shall vest in accordance with the provisions of Section IV hereof and the vesting schedule set forth on the signature page hereof.
III. |
Exercise of Option |
While this Option remains exercisable, the Optionee may exercise a vested portion of the Option by delivering to the Corporation or its designee in the form and at the location specified by the Corporation, notice stating the Optionee's intent to exercise a specified number of shares subject to the Option and payment of the full Exercise Price for the specified number of shares. The payment for the full Exercise Price for the shares exercised must be made in (i) cash, (ii) by certified check or bank draft payable in U.S. dollars ($US) to the order of the Corporation, (iii) in whole or in part in Common Stock of the Corporation owned by the Optionee, valued at Fair Market Value or (iv) if available to the Optionee, by "cashless exercise", by the Optionee delivering to his/her securities broker instructions to sell a sufficient number of shares of Common Stock to cover the Exercise Price, applicable tax obligations and the brokerage fees and expenses associated therewith.
Shares of Common Stock of the Corporation used for payment, in whole or part, of the Exercise Price must have been owned by the Optionee, free and clear of all liens or encumbrances for a period of at least six (6) months prior to the exercise date. In addition, the Committee may impose such other or different requirements as it may deem necessary to avoid charges to earnings of the Corporation.
The exercise date for the Optionee's exercise of all or a specified portion of the Option pursuant to this Section III will be deemed to be the date on which the Corporation receives the irrevocable commitment from the Optionee to exercise the Option Shares in the form of notice of exercise
specified by the Corporation, subject to Optionee's payment in full of the Option Shares to be exercised. Notice of exercise of all portions of the Option being exercised along with payment in full of the Exercise Price for such portion must be received by the Corporation or its designee on or prior to the last day of the Option term, as set forth in Section II above, except as provided in Section IV below.
Upon the Corporation's determination that there has been a valid exercise of the Option, the Corporation shall issue certificates in accordance with the terms of this Agreement, or cause the Corporations transfer agent to make the necessary book entries, for the shares subject to the exercised portion of the Option. However, the Corporation shall not be liable to the Optionee, the Optionee's personal representative, or the Optionee's successor(s)-in-interest for damages relating to any delays in issuing the certificates or in making book entries, any loss of the certificates, or any mistakes or errors in the issuance of the certificates or in making book entries, or in the certificates themselves.
IV. |
Termination of Employment |
Upon the Optionee's termination of employment for reasons of death or Disability, all remaining unexercised portion(s) of the Option shall immediately vest and become exercisable by the Optionee or the Optionee's appointed representative, as the case may be, until the expiration of term of the Option, or such other term as the Committee may determine at or after grant, provided that such exercise period does not extend beyond the original term of the Option and no portion of the Option shall become vested earlier than six (6) months from the date of grant.
For purposes of this Agreement, upon the Optionee's Retirement, non-vested portions of the Option will immediately vest and become exercisable by the Optionee until the expiration of the term of the Option as follows: (i) if Optionee retires during the period beginning on the first day following the sixth month anniversary of the date of grant (January 1, 2006) through the first anniversary of the date of grant (July 1, 2006), 33% of the Option granted hereunder shall immediately vest and become exercisable by the Optionee, (ii) if Optionee retires during the period beginning on the first day of the second year following the date of grant (July 2, 2006) through the second anniversary of the date of grant (July 1, 2007), 67% of the Option granted hereunder shall immediately vest and become exercisable by the Optionee, or (iii) if Optionee retires on or after the first day of the third year following the date of grant (July 2, 2007), all remaining unexercised and non-vested portions of the Option will immediately vest and become exercisable by the Optionee.
Upon termination of the Optionee's employment for reasons other than for Cause or those set forth above, the Optionee shall have the shorter of (i) twelve (12) months from the date of termination or (ii) the remaining term of the Option, to exercise all vested, unexercised portion(s) of the Option. Upon termination of the Optionee's employment for reasons other than for Cause, all non-vested unexercised portions of the Option shall lapse; provided that the Committee, in its sole discretion, may extend the exercise period and/or accelerate vesting of unvested portions of the Option provided that such exercise period does not extend beyond the original term of the Option and no portion of the Option shall become vested earlier than six (6) months from the date of grant.
At the time the Optionee is informed of termination of the Optionee's employment for Cause, all unexercised portions of the Option shall lapse and be forfeited.
The Option, to the extent unexercised on the date following the end of any period described above or the Option term set forth above in Section II, shall thereupon lapse and be forfeited.
Any permitted transferee (pursuant to Section VIII below) of the Optionee shall receive the rights herein granted subject to the terms and conditions of this Agreement. No transfer of this Option shall be approved and effected by the Corporation unless (i) the Corporation shall have been timely furnished with written notice of such transfer and any copies of such notice as the Committee may deem, in its sole discretion, necessary to establish the validity of the transfer; (ii) the transferee or transferees shall have agreed in writing to be bound by the terms and conditions of this Agreement; and (iii) such transfer complies with applicable laws and regulations.
V. |
No Rights to Continued Employment |
The Option grant made under the Plan and this Agreement shall not confer on the Optionee any right to continue serving as an employee of the Corporation and this Agreement shall not be construed in any way to limit the Corporation's right to terminate or change the terms of the Optionee's employment.
VI. |
Change in Control |
All unvested portions of the Option shall vest in the event of a Change in Control (as defined in the Plan), immediately prior to the effective date of the Change in Control and in the case of a Covered Transaction (as defined in the Plan), at least ten (10) days prior to the effective date of a Covered Transaction. This Option shall terminate immediately prior to the Covered Transaction unless the Committee provides, at its discretion, for the substitution or assumption of the Option, by conversion into an option to acquire securities of equivalent kind and value of the surviving entity as of the effective date of the Covered Transaction.
VII. |
Legend on Certificate |
The certificates representing the shares received by the Optionee pursuant to the exercise of the Option may be stamped or otherwise imprinted with a legend in such form as the Corporation or its counsel may require with respect to any applicable restrictions on sale or transfer and the stock transfer records of the Corporation may reflect stop-transfer instructions with respect to such shares.
VIII. |
Transferability |
Except as required by law, the Option granted under this Agreement is not transferable and shall not be sold, transferred, assigned, pledged, gifted, hypothecated or otherwise disposed of by the
Optionee other than by will or the laws of descent and distribution or without payment of consideration to Family Members of the Optionee or to trusts or other entities for the benefit of the Optionee or immediate family members of the Optionee. During the Optionee's lifetime, the Option is exercisable only by the Optionee, except as provided in Section IV above.
IX. |
Satisfaction of Tax Obligations |
The Optionee agrees to make appropriate arrangements with the Corporation for satisfaction of any applicable federal, state or local income tax, withholding requirements or like requirements, including the payment to the Corporation at the time of exercise of the Option of all such taxes and requirements.
X. |
Securities Laws |
Upon the acquisition of any shares pursuant to the exercise of the Option, Optionee will make or enter into such written representations, warranties and agreements as the Corporation may reasonably request in order to comply with applicable securities laws, or with the Plan.
XI. |
Legal Notices |
Any legal notice necessary under this Agreement shall be addressed to the Corporation in care of its Secretary at the principal executive office of the Corporation and to the Optionee at the address appearing in the personnel records of the Corporation for such Optionee or to either party at such other address as either party may designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.
XII. |
Choice of Law |
The interpretation, performance and enforcement of this Agreement shall be governed by the laws of The Commonwealth of Massachusetts (without regard to the conflicts of laws principles) and applicable federal laws.
XIII. |
Conflicts |
The Option granted by this Agreement is subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. This Agreement contains terms and provisions established by the Committee specifically for the grant described herein. Unless the Committee has been authorized under the Plan to establish specific terms of an option grant, the terms of the Plan shall govern. The Committee retains the right to alter or modify the Option granted under this Agreement as the Committee may determine as in the best interests of the Company.
XIV. |
Headings |
The headings contained in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.
XV. |
Counterparts |
This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to be one and the same instrument.
[remainder of page left intentionally blank]
IN WITNESS WHEREOF, the Corporation, by its duly authorized officer, and the Optionee have executed and delivered to the Agreement effective as of the date and year first above written.
Option Shares: # shares
Exercise Price: $26.89
Vesting Schedule:
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Percent of Option |
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Date Vested |
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20% |
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July 1, 2007 |
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20% |
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July 1, 2008 |
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20% |
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July 1, 2009 |
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20% |
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July 1, 2010 |
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20% |
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July 1, 2011 |
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OPTIONEE |
Signature: _________________________
Name: |
Name |
BOSTON SCIENTIFIC CORPORATION
James R. Tobin |
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President and Chief Executive Officer |
EXHIBIT 10.2
FORM OF
BOSTON SCIENTIFIC CORPORATION
INTENT TO GRANT
DEFERRED STOCK UNIT AWARD AGREEMENT
This Agreement, dated as of the 1st day of July, 2005 (the "Grant Date"), is between Boston Scientific Corporation, a Delaware corporation (the "Company"), and the person whose name appears on the Signature Page of this Agreement (the "Participant"), an employee of the Company or any of its affiliates or subsidiaries. All capitalized terms not otherwise defined herein shall have the meaning ascribed thereto in the Company's Long-Term Incentive Plan set forth on the Signature Page of this Agreement (the "Plan").
1. Grant and Acceptance of Award . The Company hereby indicates its intent to award to the Participant that number of Deferred Stock Units set forth on the Signature Page of this Agreement (the "Unit"), each Unit representing the Company's commitment to issue to Participant one share of the Company's common stock, par value $.01 per share (the "Stock"), subject to certain eligibility and other conditions set forth herein. The award is intended to be granted pursuant to and is subject to the terms and conditions of this Agreement and the provisions of the Plan.
2. Eligibility Conditions upon Award of Units . Participant hereby acknowledges the intent of the Company to award Units subject to certain eligibility and other conditions set forth herein.
3. Satisfaction of Conditions . Except as otherwise provided in Section 5 hereof (relating to death of the Participant), Section 6 hereof (relating to Retirement or Disability of the Participant) and Section 8 hereof (relating to Change in Control of the Company), the Company intends to award shares of Stock hereunder subject to the eligibility conditions described in Section 7 hereof in equal annual installments on each of five anniversaries of the date first set forth above, beginning on the second anniversary of the date of grant. No shares of Stock shall be issued to Participant prior to the date on which the Units vest.
4. Participant's Rights in Stock . The shares of Stock if and when issued hereunder shall be registered in the name of the Participant and evidenced in the manner as the Company may determine. During the period prior to the issuance of Stock, the Participant will have no rights of a stockholder of the Company with respect to the Stock, including no right to receive dividends or vote the shares of Stock.
5. Death . Upon the death of the Participant while employed by the Company and its affiliates or subsidiaries, the Company will issue to the Participant or beneficiary of the Participant as set forth under the provisions of the Company's program of life
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insurance for employees, any shares of Stock to Participant to be awarded hereunder that remain subject to eligibility conditions.
6. Retirement or Disability . In the event of the Participant's Disability, the Company will issue to Participant any shares of Stock to be awarded hereunder that remain subject to eligibility conditions. For purposes of this Agreement, upon the Participant's Retirement, the Company will issue shares of Stock to the Participant as follows: (i) if Participant retires during the period beginning on the first day following the sixth month anniversary of the date of grant (January 1, 2006) through the first anniversary of the date of grant (July 1, 2006), the Company will issue 33% of the shares of Stock to be awarded hereunder to Participant, (ii) if Participant retires during the period beginning on the first day of the second year following the date of grant (July 2, 2006) through the second anniversary of the date of grant (July 1, 2007), the Company will issue 67% of the shares of Stock to be awarded hereunder to Participant, or (iii) if Participant retires on or after the first day of the third year following the date of grant (July 2, 2007), the Company will issue all remaining shares of Stock to be awarded hereunder to Participant.
7. Other Termination of Employment -- Eligibility Conditions . If the employment of the Participant with the Company and its affiliates or subsidiaries is terminated or Participant separates from the Company and its affiliates or subsidiaries for any reason other than death, Retirement or Disability, any Units that remain subject to eligibility conditions shall be void and no Stock shall be issued. Eligibility to be issued shares of Stock is conditioned on Participants continuous employment with the Company through and on the applicable anniversary of the date as set forth in Section 3 above.
8. Change in Control of the Company . In the event of a Change in Control of the Company, the Company will issue to Participant any shares of Stock to be awarded hereunder that remain subject to eligibility conditions.
9. Consideration for Stock . The shares of Stock are intended to be issued for no cash consideration.
10. Delivery of Stock . The Company shall not be obligated to deliver any shares of Stock to be awarded hereunder until (i) all federal and state laws and regulations as the Company may deem applicable have been complied with; (ii) the shares have been listed or authorized for listing upon official notice to the New York Stock Exchange, Inc. or have otherwise been accorded trading privileges; and (iii) all other legal matters in connection with the issuance and delivery of the shares have been approved by the Company's legal department.
11. Tax Withholding . The Participant shall be responsible for the payment of any taxes of any kind required by any national or local law to be paid with respect to the
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Units or the shares of Stock to be awarded hereunder, including, without limitation, the payment of any applicable withholding, income, social and similar taxes or obligations. Except as otherwise provided in this Section, upon the issuance of Stock or the satisfaction of any eligibility condition with respect to the Stock to be issued hereunder, the Company shall hold back from the total number of shares of Stock to be delivered to the Participant, and shall cause to be transferred to the Company, whole shares of Stock having a Fair Market Value on the date the shares are subject to issuance an amount as nearly as possible equal to (rounded to the next whole share) the Companys withholding, income, social and similar tax obligations with respect to the Stock. To the extent of the Fair Market Value of the withheld shares, Participant shall be deemed to have satisfied Participants responsibility under this Section 11 to pay these obligations. The Participant shall satisfy Participants responsibility to pay any other withholding, income, social or similar tax obligations with respect to the Stock, and (subject to such rules as the Committee may prescribe) may satisfy Participants responsibility to pay the tax obligations described in the immediately preceding sentence, by so indicating to the Company in writing at least thirty (30) days prior to the date the shares of Stock are subject to issuance and paying the amount of these tax obligations in cash to the Company within ten (10) business days following the date the Units vest or by making other arrangements satisfactory to the Committee for payment of these obligations. In no event shall whole shares be withheld by or delivered to the Company in satisfaction of tax withholding requirements in excess of the maximum statutory tax withholding required by law. The Participant agrees to indemnify the Company against any and all liabilities, damages, costs and expenses that the Company may hereafter incur, suffer or be required to pay with respect to the payment or withholding of any taxes. The obligations of the Company under this Agreement and the Plan shall be conditional upon such payment or arrangements, and the Company shall, to the extent permitted by law, have the right to deduct any such taxes from any payment of any kind otherwise due to the Participant.
12. Investment Intent . The Participant acknowledges that the acquisition of the Stock to be issued hereunder is for investment purposes without a view to distribution thereof.
13. Limits on Transferability . Until the eligibility conditions of this award have been satisfied and shares of Stock have been issued in accordance with the terms of this Agreement or by action of the Committee, the Units awarded hereunder are not transferable and shall not be sold, transferred, assigned, pledged, gifted, hypothecated or otherwise disposed of or encumbered by the Participant. Transfers of shares of Stock by the Participant are subject to the Companys Stock Trading Policy.
14. Award Subject to the Plan . The award to be made pursuant to this Agreement is made subject to the Plan. The terms and provisions of the Plan as it may be amended from time to time are hereby incorporated herein by reference. In the event of a conflict between any term or provision contained in this Agreement and a term or provision of the Plan, the applicable terms and conditions of the Plan will govern and
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prevail. However, no amendment of the Plan after the date hereof may adversely alter or impair the issuance of the Stock to be made pursuant to this Agreement.
15. No Rights to Continued Employment . The Companys intent to grant the shares of Stock hereunder shall not confer upon the Participant any right to continued employment or other association with the Company or any of its affiliates or subsidiaries; and this Agreement shall not be construed in any way to limit the right of the Company or any of its subsidiaries or affiliates to terminate the employment or other association of the Participant with the Company or to change the terms of such employment or association at any time.
16. Legal Notices . Any legal notice necessary under this Agreement shall be addressed to the Company in care of its General Counsel at the principle executive offices of the Company and to the Participant at the address appearing in the personnel records of the Company for such Participant or to either party at such other address as either party may designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof by the addressee.
17. Governing Law . The interpretation, performance and enforcement of this Agreement shall be governed by the laws of The Commonwealth of Massachusetts (without regard to the conflict of laws principles thereof) and applicable federal laws.
18. Headings . The headings contained in this Agreement are for convenience only and shall not affect the meaning or interpretation of this Agreement.
19. Counterparts . This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original and all of which together shall be deemed to the one and the same instrument.
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SIGNATURE PAGE
IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Participant have executed and delivered this Agreement as a sealed instrument as of the date and year first above written.
PLAN: 2003 LONG-TERM INCENTIVE PLAN
Number of Deferred Stock Units: #
Issuance Schedule
20% |
July 1, 2007 |
20% |
July 1, 2008 |
20% |
July 1, 2009 |
20% |
July 1, 2010 |
20% |
July 1, 2011 |
BOSTON SCIENTIFIC CORPORATION |
By:_________________________________ |
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Name: |
James R. Tobin |
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President and Chief Executive Officer |
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PARTICIPANT |
____________________________________ |
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Name |
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