Boston
Scientific Corporation (the “ Company ”)
considers it essential to the best interests of its stockholders to
foster the continuous employment of key management personnel.
Further, the Board of Directors of the Company (the “
Board ”) recognizes that the possibility of a change
in control exists, and that such possibility, and the uncertainty
and questions that it may raise among management, may result in the
departure or distraction of management personnel to the detriment
of the Company and its stockholders.
The
Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of
members of the management of the Company, including yourself, to
their assigned duties without distraction in the face of
potentially disturbing circumstances arising from any possible
change in control of the Company.
In
order to induce you to remain in the employ of the Company, the
Company agrees that you shall receive the severance benefits set
forth in this letter agreement (this “ Agreement
”) in the event your employment with the Company is
terminated subsequent to a Change in Control (as defined herein)
under the circumstances described below.
1.
Termination Following Change in Control . If a Change in
Control occurs, you will be entitled to the benefits provided in
Section 2 hereof upon the subsequent termination of your
employment by the Company without Cause (as defined herein) or by
you for Good Reason (as defined herein) during the two-year period
following such Change in Control (the “ Covered Period
”). Any purported termination of your employment by the
Company or by you shall be communicated by a Notice of Termination
to the other party hereto in accordance with Section 7 hereof.
For purposes of this Agreement, (i) references to termination
of employment mean a “separation from service” (as
defined in Section 1.409A-1(h) of the Treasury Regulations)
from the Company, and (ii) a “ Notice of
Termination ” shall mean a written notice which shall
indicate the specific termination provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
2.
Compensation upon Termination .
(a)
Severance Benefits . If your employment by the Company shall
be terminated during the Covered Period by the Company without
Cause or by you for Good Reason, then you shall be entitled to the
following benefits:
(1) Amount of
Payment. The Company shall pay you in cash the full amount of any
earned but unpaid base salary through the Date of Termination at
the rate in effect at the time of the Notice of Termination, plus a
cash payment for all unused vacation time which you may have
accrued as of the Date of Termination. The Company shall also pay
you in cash a pro rata portion of the annual bonus for the year in
which your employment terminates, calculated on the basis of your
target bonus for that year and on the assumption that all
performance targets have been or will be achieved. In addition, the
Company shall pay you in a cash lump sum, an amount (the “
Severance
Payment ”) equal to three times the sum of
(A) your base salary on the Termination Date (without giving
effect to any salary reductions which satisfy the definition of
“ Good Reason ”), (B) the greater of
(x) the most recent bonus paid to you (which shall be deemed
to be the sum of (I) the cash bonus amount most recently paid
to you and (II) the value of restricted stock (calculated as
of the date of vesting) issued to you as bonus compensation that
vested (other than restricted stock that vested solely by virtue of
the Change in Control) within the immediately preceding year)
plus the value of any other shares of stock issued to you
without forfeiture provisions as bonus compensation within the
immediately preceding year and (y) your target bonus in effect
for the year in which the Change in Control occurred (calculated
assuming that all performance targets have been or will be
achieved) and (C) $25,000. The Severance Payment shall be in lieu
of any other severance payments which you are entitled to receive
under any other severance pay plan or arrangement sponsored by the
Company or any of its subsidiaries;.
(2) Timing of
Payment. Subject to Section 2(b), the Company shall pay the
amounts due to you under this Section 2 (a)(i) within
5 days of the Date of Termination, and in all events such
amounts shall be paid no later than 90 days after the Date of
Termination.
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(ii)
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Benefit Continuation
. Subject to your
compliance with the non-solicitation and confidentiality provisions
described in Section 5, you and your eligible dependents shall
continue to be eligible to participate during the Benefit
Continuation Period (as hereinafter defined) in the medical,
dental, health, life and other welfare benefit plans and
arrangements applicable to you immediately prior to your
termination of employment on the same terms and conditions in
effect for you and your dependents immediately prior to such
termination; provided that the provision of such benefits in each
calendar year during the Benefit Continuation Period does not
affect the provision of such benefits in any other calendar year
during the Benefit Continuation Period. For purposes of the
previous sentence, “ Benefit Continuation Period
” means the period beginning on the Date of Termination and
ending on the earlier to occur of (i) the third anniversary of
the Date of Termination and (ii) the date that you and your
dependents are eligible for coverage under the plans of a
subsequent employer which provide substantially equivalent or
greater benefits to you and your dependents. The right to
participate in the benefit plans under this Section 2(a)(ii)
is not subject to liquidation or exchange for any other
benefit;
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(iii)
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Legal Fees and Expenses
. The Company shall also
pay you in cash all legal fees and expenses, if any, incurred by
you in contesting or disputing any such termination or in seeking
to obtain or enforce any right or benefit provided by this
Agreement if such expenses are incurred on or prior to the
December 31 of the second calendar year following the calendar
year in which the Date of Termination occurs, such payment(s) to be
made on or before the December 31 of the third calendar year
following the calendar year(s) in which the Date of Termination
occurs; provided , however, that the amount of the payments
and reimbursements under this Section 2(a)(iii) shall not
exceed $100,000; and provided, further , that no such legal
fees or expenses shall be reimbursed if it is determined by the
applicable arbitral panel or other tribunal that your claim is
entirely without merit. Furthermore, nothing shall prohibit the
arbitral panel or other tribunal from awarding legal fees in excess
of $100,000 if, in the interests of fairness and equity, the
arbitral panel or other tribunal deems such award appropriate. The
right to receive payments and reimbursements under this Section
2(a)(iii) is not subject to liquidation or exchange for any other
benefit.
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(b)
Specified Employee . Notwithstanding anything to the
contrary in this Agreement, if you are a “specified
employee” as hereinafter defined at the time of the Date of
Termination, any and all amounts payable in connection with your
termination of employment (including amounts payable under this
Section 2) that constitute deferred compensation subject to
Section 409A of the Code, as determined by the Committee in
its sole discretion, and that would (but for this sentence) be
payable within six months following the Date of Termination, shall
instead be paid on the date that follows the Date of Termination by
six months and one day (the “Specified Employee Payment
Date”). The provision of benefits pursuant to
Section 2(a)(ii) that constitute deferred compensation under
Section 409A of the Code will not be provided in-kind during
the first six months following the Date of Termination, but rather
will be continued by your payment of any applicable premiums for
which you will be reimbursed on the Specified Employee Payment
Date. The provision of in-kind benefits will commence on the
Specified Employee Payment Date in accordance with
Section 2(a)(ii). For purposes of this Agreement, the term
“specified employee” means an individual who is
determined by the Committee to be a specified employee as defined
in Section 409A(a)(2)(B)(i) of the Code. The Committee may, but
need not, elect in writing, subject to the applicable limitations
under Section 409A of the Code, any of the special elective
rules prescribed in Section 1.409A-1(i) of the Treasury
Regulations for purposes of determining “specified
employee” status. Any such written election shall be deemed
part of this Agreement.
(c) No
Mitigation . You shall not be required to mitigate the amount
of any payment or benefit provided for in this Section 2 by
seeking other employment or otherwise.
3. Equity
Incentive Awards .
(a)
Options . All options granted to you under the
Company’s equity incentive plans will immediately become
exercisable upon a Change in Control (as defined
herein).
(b)
Restricted Stock Awards . All restricted stock awards will
immediately become free from restriction upon a Change in Control
(as defined herein).
4.
Successors; Binding Agreement .
(a)
Assumption By Successor . The Company will require any
successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the
business or assets of the Company to expressly assume and agree to
perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement and shall entitle
you to compensation from the Company in the same amount and on the
same terms as you would be entitled hereunder if you had terminated
your employment for Good Reason following a Change in Control,
except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the
Date of Termination. As used in this Agreement, “ the
Company ” shall mean the Company as hereinbefore defined
and any successor to its business or assets which assumes and
agrees to perform this Agreement by operation of law, by agreement
or otherwise.
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(b)
Enforceability By Beneficiaries . This Agreement shall inure
to the benefit of and be enforceable by your personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If you should die while any
amount would still be payable to you hereunder if you had continued
to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to your
devisee, legatee or other designee or, if there is no such
designee, to your estate.
5.
Nonsolicitation; Confidentiality
(a)
Nonsolicitation . For three years following your Date of
Termination, you shall not, without the prior written consent of
the Company, directly or indirectly, as a sole proprietor, member
of a partnership, stockholder or investor, officer or director of a
corporation, or as an employee, associate, consultant, independent
contractor or agent of any person, partnership, corporation or
other business organization or entity other than the Company: (i)
solicit or endeavor to entice away from the Company or any of its
affiliates or subsidiaries, any person or entity who is, or,
during
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