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EXHIBIT 10.27
THE GUIDANT EXECUTIVE DEFERRED BONUS PLAN
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TABLE OF CONTENTS
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Section 1. Restatement of the Plan
1
Section 2. Definitions
1
Section 3. Participation
4
3.1
Bonuses
4
3.2
Company Awards
4
3.3
Prior Plan Amounts
5
Section 4. Individual Account
5
Section 5. Accrual of Company Credit
5
Section 6. Payment
6
6.1
Payment Options
6
6.2
Payment Upon Death
7
6.3
Resignation or Dismissal
8
6.4
Payment on Unforeseeable Emergency
8
6.5
Cash Payments
9
Section 7. Prohibition Against Transfer
9
Section 8. Participant's Rights Unsecured
9
8.1
Unsecured General Creditor
9
8.2
Trust Fund
9
Section 9. Administration
10
9.1.
Committee
10
9.2.
Powers of the Committee
10
9.3.
Finality of Committee Determinations
11
9.4.
Claims Procedures
11
9.5.
Withholding
11
9.6.
Incapacity
12
9.7.
Legal Holidays
12
Section 10.
No Employment Rights
12
Section 11.
Amendment, Suspension, Termination
12
Section 12.
Applicable Law
13
Section 13.
Effective Date
13
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THE GUIDANT EXECUTIVE DEFERRED BONUS PLAN
SECTION 1. RESTATEMENT OF THE PLAN.
Guidant established for the benefit of Participants an unfunded
plan of
voluntarily deferred compensation known as
"The Guidant Executive Deferred
Compensation Plan," which was originally
effective September 25, 1995. The Plan
is hereby amended and restated in its
entirety, effective as of January 1, 1999,
and is renamed, effective January 1, 2000,
"The Guidant Executive Deferred Bonus
Plan." The Plan is maintained primarily for
the purpose of providing deferred
compensation for a select group of
management or highly compensated employees.
SECTION 2. DEFINITIONS.
When used in the Plan, the following terms shall have the
definitions
set forth in this Section 2:
2.1. Account. The term "Account" means the bookkeeping account
established for a Participant pursuant to
Section 4.
2.2. Beneficiary. The term "Beneficiary" means the beneficiary
or
beneficiaries (including any contingent
beneficiary or beneficiaries) designated
pursuant to Subsection 6.2.
2.3. Board of Directors. The term "Board of Directors" means the
Board
of Directors of the Company.
2.4. Bonus. The term "Bonus" means a payment to which an
Eligible
Employee is entitled pursuant to an
incentive compensation plan of Guidant,
including the Economic Value Added (EVA)
Incentive Pay Plan, or any similar
incentive compensation plan as may be
designated by the Committee from time to
time.
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2.5. Bonus Year. The term "Bonus Year" means each calendar year
after
1995 in which a Bonus deferred under the
Plan is earned by a Participant.
2.6. Committee. The term "Committee" means the committee designated
in
Subsection 9.1 to administer the Plan.
2.7. Company. The term "Company" means Guidant Corporation.
2.8. Company Contribution. The term "Company Contribution" means
any
additional amount that Guidant has awarded
to a Participant under Subsection
3.2.
2.9 . Company Credit. The term "Company Credit" means, with respect
to
a calendar quarter, an amount computed and
credited to Participants' Accounts
pursuant to Section 5 at a rate that is two
percent (2%) above the "bank prime
loan" rate reported in the Federal Reserve
Statistical Release (Report H.15) for
the first business day of the quarter.
2.10. Disability. The term "disability" means an Eligible
Employee's
inability to perform the material duties of
his regular occupation with Guidant
or any other Guidant position in the same
salary grade that is commensurate with
the Eligible Employee's education,
training, and experience; provided that the
inability results from an accidental bodily
injury or illness that requires the
Eligible Employee to be under the care of a
licensed physician, and provided
further that the inability is not
attributable to war, declared or undeclared,
or any act of war, to intentionally
self-inflicted injury (while sane or
insane), or to active participation in a
riot.
2.11. Eligible Employee. The term "Eligible Employee" means a
management or highly compensated employee
of the Company who is designated by
the Committee as eligible to defer under
the Plan any Bonus earned in the
following Bonus Year.
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2.12. Guidant. The term "Guidant" means the Company and its
subsidiaries and affiliates that adopt the
Plan.
2.13. Participant. The term "Participant" means an Eligible
Employee
who has elected to defer all or part of a
Bonus pursuant to the Plan in
accordance with Subsection 3.1, or an
Eligible Employee who has amounts credited
to his Account under Subsection 3.2 or
3.3.
2.14. Plan. The term "Plan" means "The Guidant Executive Deferred
Bonus
Plan" as set forth in this instrument, as
it may be amended from time to time.
2.15. Points. A Participant shall be deemed to have accumulated
one
Point for every year of his age and for
each Year of Service credited to him.
2.16 Retirement. The term "Retirement" means the Participant's
termination of employment with Guidant, but
only if that termination occurs on
or after the date when the Participant has
(1) attained age 65, (2) attained age
55 and accumulated ten (10) Years of
Service, or (3) if the Participant is
entitled to receive Transition Benefits,
accumulated 80 Points.
2.17. Transition Benefits. The term "Transition Benefits" means
the
additional benefit accruals that are
provided under The Guidant Retirement Plan
to participants in that plan who, as of
September 25, 1995, had accumulated at
least 65 Points.
2.18. Year of Service. The term "Year of Service" means 365 days
of
"Service," as defined in section 1.01(23)
of The Guidant Employee Savings and
Stock Ownership Plan.
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SECTION 3. PARTICIPATION.
3.1. Bonuses. Prior to the beginning of each Bonus Year, the
Committee shall select those Eligible
Employees who may elect to defer Bonuses
pursuant to the Plan. Upon selection by the
Committee and before the beginning
of the applicable Bonus Year, an Eligible
Employee may defer the receipt of a
Bonus pursuant to the Plan by filing a
written election with the Committee (or
its designee), in a form satisfactory to
the Committee, that does the following:
(a) defers payment of a designated amount (of One Thousand
Dollars ($1,000) or more) or a percentage of the Bonus (in any
increment of five (5) percent), if any, to be earned in the Bonus
Year,
and
(b) specifies the payment option selected by the Participant
pursuant to Subsection 6.1.
The amount deferred may not exceed the amount of the Bonus.
Except as provided in Subsections 6.1 and 6.3, any election
made pursuant to this Section 3 (including
any election made pursuant to
Paragraphs (a) and (b) above) with respect
to a Bonus Year shall be irrevocable
when made.
Selection of an Eligible Employee for deferral of a Bonus
during one Bonus Year does not confer upon
the Eligible Employee a right to
defer Bonuses for subsequent Bonus Years.
The Eligible Employees who shall be
permitted to defer Bonuses pursuant to the
Plan shall be selected annually by
the Committee.
3.2. Company Awards. In its sole discretion, Guidant may award
an additional amount to any Participant at
any time. Any such award shall be
specified in a written notice to the
Participant. Any amount awarded under this
subsection shall be treated the same as any
other amounts held under this Plan.
The Participant shall specify the payment
option with respect to the awarded
amount pursuant to Subsection 6.1 promptly
upon receipt of notice of the amount
awarded.
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3.3 Prior Plan Amounts. Compensation previously deferred by a
Participant (and interest credited on those
amounts) under The Lilly Deferred
Compensation Plan shall be credited to the
Participant's Account as of December
31, 1995, and credited with the Company
Credit for periods after that date.
Amounts credited under this Subsection
shall be treated the same as any other
amounts held under this Plan. A Participant
credited with an amount under this
Subsection shall specify the payment option
with respect to that amount pursuant
to Subsection 6.1 within 30 days of the
date specified in the preceding
sentence.
SECTION 4. INDIVIDUAL ACCOUNT.
The Committee shall maintain a bookkeeping account in the name of
each
Participant. In the year following each
Bonus Year, each Participant's Account
shall be credited with the amount that the
Participant has elected to defer
under Subsection 3.1, as of the date on
which the deferred amount is reported to
the Committee's designated recordkeeper.
Each Participant shall be given an
annual statement, as of December 31 of each
year, showing for that year (a) the
amount of Bonus deferred, (b) the amount of
the Company Credit to the
Participant's Account, (c) any other
amounts credited to the Participant's
Account, and (d) the total amount of the
Participant's Account as of the end of
the year.
SECTION 5. ACCRUAL OF COMPANY CREDIT.
The Treasurer of the Company shall determine the applicable rate
of
Company Credit as of the first business day
of each quarter of each calendar
year. This rate shall be effective for that
calendar quarter and is defined as
two percent (2%) above the "bank prime
loan" rate as reported in the Federal
Reserve Statistical Release (Report H.15)
for the applicable date. Prior to
October 1, 1999, the Company Credit shall
be calculated on the basis of a
365/366-day year
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and shall be credited daily to the
Participant's Account and
compounded quarterly. Effective October 1,
1999, the Company Credit shall be
calculated on the basis of a 365/366 day
year and shall accrue and compound
daily on the daily balance of the
Participant's Account. The daily balance of
the Participant's Account shall refl
