1
EXHIBIT 10.23
[Date]
[Name]
[Address]
Re: Retention Agreement
Dear [Name]:
Boston Scientific Corporation (the "Company") considers it essential to
the best interests of its stockholders to xxxxxx 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 and in
consideration for your consent to certain amendments to the Company's 1992
Long-Term Incentive Plan (the "1992 LTIP") and certain agreements executed
thereunder, 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 8 hereof. For purposes of this Agreement, a "Notice of
2
2
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:
(i) Severance Payments. The Company shall pay you in cash within 5
days of the Date of Termination 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 within five days of the Date of
Termination 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, within five days of the Date of Termination, 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;
(ii) Benefit Continuation. Subject to your compliance with the
non-solicitation and confidentiality provisions described in Section 6, 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
3
3
and your dependents immediately prior to such termination. For purposes of
the previous sentence, "Benefit Continuation Period" means the period
beginning onthe 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;
(iii) 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; 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.
(b) 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. Additional Payment.
(a) Gross-Up Payment. Notwithstanding anything herein to the contrary,
if it is determined that any Payment (as defined herein) would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties with
respect to such excise tax (such excise tax, together with any interest or
penalties thereon, is herein referred to as an "Excise Tax"), then you shall be
entitled to an additional cash payment (a "Gross-Up Payment") in an amount that
will place you in the same after-tax economic position that you would have
enjoyed if the Excise Tax had not applied to the Payment. The amount of the
Gross-Up Payment shall be determined by the Accounting Firm (as defined herein)
in accordance with such formula as the Accounting Firm deems appropriate. No
Gross-Up Payments shall be payable hereunder if the Accounting Firm determines
that the Payments are not subject to an Excise Tax. The Accounting Firm shall be
paid by the Company for services performed hereunder.
(b) Determination of Gross-Up Payment. Subject to the provisions of
Section 3(c), all determinations required under this Section 3, including
whether a Gross-Up
4
4
Payment is required, the amount of the Payments constituting
excess parachute payments, and the amount of the Gross-Up Payment, shall be made
by the Accounting Firm, which shall provide detailed supporting calculations
both to you and the Company within fifteen days of any date reasonably requested
by you or the Company on which a determination under this Section 3 is necessary
or advisable. The Company shall pay you in cash the initial Gross-Up Payment
within five days of the receipt by you and the Company of the Accounting Firm's
determination. If the Accounting Firm determines that no Excise Tax is payable
by you, the Company shall cause the Accounting Firm to provide you with an
opinion that the Accounting Firm has substantial authority under the Code and
Regulations not to report an Excise Tax on your federal income tax return. Any
determination by the Accounting Firm shall be binding upon you and the Company.
If the initial Gross-Up Payment is insufficient to completely place you in the
same after-tax economic position that you would have enjoyed if the Excise Tax
had not applied to the Payments (hereinafter an "Underpayment"), the Company,
after exhausting its remedies under Section 3(c) below, shall promptly pay you
in cash an additional Gross-Up Payment in respect of the Underpayment.
(c) Procedures. You shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company of a Gross-Up Payment. Such notice shall be given as soon as
practicable after you know of such claim and shall apprise the Company of the
nature of the claim and the date on which the claim is requested to be paid. You
agree not to pay the claim until the expiration of the thirty-day period
following the date on which you notify the Company, or such shorter period
ending on the date the Taxes with respect to such claim are due (the "Notice
Period"). If the Company notifies you in writing prior to the expiration of the
Notice Period that it desires to contest the claim, you shall: (i) give the
Company any information reasonably requested by the Company relating to the
claim; (ii) take such action in connection with the claim as the Company may
reasonably request, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably selected by
the Company and reasonably acceptable to you; (iii) cooperate with the Company
in good faith in contesting the claim; and (iv) permit the Company to
participate in any proceedings relating to the claim. You shall permit the
Company to control all proceedings related to the claim and, at its option,
permit the Company to pursue or forgo any and all administrative appeals,
proceedings, hearings, and conferences with the taxing authority in respect of
such claim. If requested by the Company, you agree either to pay the tax claimed
and sue for a refund or contest the claim in any permissible manner and to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts as the
Company shall determine; provided, however, that, if the Company directs you to
pay such claim and pursue a refund, the Company shall advance the amount of such
payment to you on an after-tax and interest-free basis (the "Advance"). The
Company's control of the contest related to the claim shall be limited to the
issues related to the Gross-Up Payment and you shall be entitled to settle or
contest, as the case may be, any other issues raised by the Internal Revenue
Service or other taxing authority. If the
5
5
Company does not notify you in writing prior to the end of the Notice
Period of its desire to contest the claim, the Company shall pay you in cash an
additional Gross-Up Payment in respect of the excess parachute payments that
are the subject of the claim, and you agree to pay the amount of the Excise Tax
that is the subject of the claim to the applicable taxing authority in
accordance with applicable law.
(d) Repayments. If, after receipt by you of an Advance, you become
entitled to a refund with respect to the claim to which such Advance relates,
you shall pay the Company the amount of the refund (together with any interest
paid or credited thereon after Taxes applicable thereto). If, after receipt by
you of an Advance, a determination is made that you shall not be entitled to
any refund with respect to the claim and the Company does not promptly notify
you of its intent to contest the denial of refund, then the amount of the
Advance shall not be required to be repaid by you and the amount thereof shall
offset the amount of the additional Gross-Up Payment then owing to you.
(e) Further Assurances. The Company shall indemnify you and hold you
harmless, on an after-tax basis, from any costs, expenses, penalties, fines,
interest or other liabilities ("Losses") incurred by you with respect to the
exercise by the Company of any of its rights under this Section 3, including,
without limitation, any Losses related to the Company's decision to contest a
claim or any imputed income to you resulting from any Advance or action taken
on your behalf by the Company hereunder. The Company shall pay all legal fees
and expenses incurred under this Section 3, and shall promptly reimburse you
for the reasonable expenses incurred by you in connection with any actions
taken by the Company or required to be taken by you hereunder. The Company
shall also pay all of the fees and expenses of the Accounting Firm, including,
without limitation, the fees and expenses related to the opinion referred to in
Section 3(b).
[SECTION 3 FOR GROUP B1 AND B2 EXECUTIVES]
3. REDUCTION OF PAYMENTS IF REDUCTION WOULD RESULT IN GREATER AFTER-TAX
AMOUNT. Notwithstanding anything herein to the contrary, if the Payments
constitute a "parachute payment" (as defuned in Section 280g(b)(2) of the
Code), and the net after-tax amount of the parachute payment is less than the
net after-tax amount if the aggregate Payments to be made to yoou were three
times your "base amount" (as defined in Section 280g(b)(3) of the Code), less
$1.00, then the aggregate of the amounts constituting the parachute payment
shall be reduced to an amount that will equal three times your base amount,
less $1.00. The determinations to be made with respect to this Section 3 shall
be made by the Accounting Firm. The Accounting Firm shall be paid by the
Company for services performed hereunder.
6
6
4. Options.
(a) Amendment to 1992 Long-Term Incentive Plan. The 1992 LTIP has been
amended in accordance with Exhibit A attached hereto. You hereby agree that such
amendment will be applicable to each option to purchase the common stock of the
Company (an "Option") granted to you at any time, whether before, on or after
the date of this Agreement pursuant to the 1992 LTIP.
(b) 1995 Long-Term Incentive Plan. All Options granted to you pursuant
to the Company's 1995 Long-Term Incentive Plan will immediately become
exercisable upon a Change in Control.
5. 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.
(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.
7
7
6. 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
subsidiaries, any person or entity who is, or, during the then most recent
12-month period, was, employed by, or had served as an agent or key consultant
of, the Company or any of its subsidiaries, or (ii) solicit or endeavor to
entice away from the Company or any of its subsidiaries any person or entity who
is, or was within the then most recent 12-month period, a customer or client (or
reasonably anticipated (to your general knowledge or the public's general
knowledge) to become a customer or client) of the Company or any of its
subsidiaries.
(b) Confidentiality. On and after the date of this Agreement, you will
not, except in the performance of your obligations to the Company hereunder or
as may otherwise be approved in advance by the Board, directly or indirectly,
disclose or use (except for the direct benefit of the Company) any confidential
information that you may learn or have learned by reason of your association
with the Company, any customer or client of the Company or any of their
respective subsidiaries and affiliates. The term "confidential information"
includes all data, analyses, reports, interpretations, forecasts, documents and
information concerning or otherwise reflecting information and concerning the
Company and its affairs, including, without limitation, with respect to
clients, products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical
information, financial information, business transactions, business plans,
prospects or opportunities, but shall exclude any portion of such information
that (i) was acquired by you prior to your employment by, or other association
with, the Company or any affiliated or predecessor entity, (ii) is or becomes
generally available to the public or is generally known in the industry or
industries in which the Company or any customer or client of the Company
operates, in each case other than as a result of disclosure by you in violation
of this Section 6 or (iii) you are required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority
having jurisdiction in the matter or under subpoena or other process of law. As
used in this Section 6, an "affiliate" of a person or entity is a person or
entity in control of, controlled by, or in common control with, such first
person or entity.
8
8
7. Definitions. For purposes of this Agreement, the following
capitalized words shall have the meanings set forth below:
"Accounting Firm" shall mean Ernst & Young, LLP or, if such firm is
unable or unwilling to perform such calculations, such other national accounting
firm as shall be designated by agreement between you and the Company.
"Cause" shall mean the willful engaging by you in criminal or
fraudulent acts or gross misconduct that is demonstrably and materially
injurious to the Company, monetarily or otherwise. No act or failure to act on
your part shall be deemed "willful" unless done, or omitted to be done, by you
not in good faith and without reasonable belief that your action or omission was
in the best interest of the Company. Notwithstanding the foregoing, you shall
not be deemed to have been terminated for Cause unless and until there shall
have been delivered to you a copy of a resolution duly adopted by the
affirmative vote of not less than three quarters of the entire membership of the
Board at a meeting of the Board called and held for such purpose (after
reasonable notice to you and an opportunity for you, together with your counsel,
to be heard before the Board), finding that in the good faith opinion of the
Board you were guilty of conduct set forth above in the first sentence of this
subsection and specifying the particulars thereof in detail.
"Change in Control" shall mean the happening of any of the following:
(a) The acquisition, other than from the Company, by any individual,
entity or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of either (i) the then outstanding shares
of common stock of the Company (the "Outstanding Company Common Stock") or
(ii) the combined voting power of the then outstanding voting securities of
the Company entitled to vote generally in the selection of directors (the
"Company Voting Securities"); provided, however, that any acquisition by
(x) any non-corporate shareholder of the Company as of the effective date
of the initial registration of an offering of Stock under the Securities
Act of 1933, (y) the Company or any of its subsidiaries, or any employee
benefit plan (or related trust) sponsored or maintained by the Company or
any of its subsidiaries or (z) any corporation with respect to which,
following such acquisition, more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and combined voting
power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners,
9
9
respectively, of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such acquisition in substantially the same
proportion as their ownership, immediately prior to such acquisition, of
the Outstanding Common Stock and Company Voting Securities, as the case
may be, shall not constitute a Change in Control of the Company; or
(b) Individuals who, as of the effective date of the initial
registration of an offering of Stock under the Securities Act of 1933,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any individual
becoming a director subsequent to such effective date whose election or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose
initial assumption of office is in connection with an actual or threatened
election contest relating to the election of the Directors of the Company
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act); or
(c) Approval by the shareholders of the Company of a reorganization,
merger or consolidation (a "Business Combination"), in each case, with
respect to which all or substantially all of the individuals and entities
who were the respective beneficial owners of the Outstanding Company Common
Stock and Company Voting Securities immediately prior to such Business
Combination do not own beneficially, directly or indirectly, more than 60%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination in substantially the
same proportion as their ownership immediately prior to such Business
Combination of the Outstanding Company Common Stock and Company Voting
Securities, as the case may be; provided, however, that (x) if the Change
in Control occurs as a result of shareholder approval described above and
the Business Combination to which such approval relates (the "Contemplated
Busines Combination") subsequently does not occur, then the Covered Period
shall expire on the sixtieth day (the "Reset Date") following the date the
Board certifies by resolution duly adopted by three quarters of the
Incumb Board then in office that the Business Combination is not reasonably
likely to occur, and (y) following the Reset Date, the provisions of this
Agreement shall remain in effect and a new Covered Period shall commence
upon the occurrence of a subsequent Change in Control; or
(d) A complete liquidation or dissolution of the Company or a sale or
other disposition of all or substantially all of the assets of the Company
other than to a corporation with respect to which, following such sale or
disposition, more than 60%
10
10
of, respectively, of the Outstanding Company Common Stock and Company
Voting Securities immediately prior to such acquisition in substantially
the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Common Stock and Company Voting
Securities, as the case may be, shall not constitute a Change in Control
of the Company; or
(b) Individuals who, as of the effective date of the initial
registration of an offering of Stock under the Securities Act of 1933,
constitute the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board, provided that any individual
becoming a director subsequent totion such effective date whose election or
nomination for election by the Company's shareholders, was approved by a
vote of at least a majority of the directorsty then comprising the
Incumbent Board shall be considered as though suchent to individual were a
member of the Incumbent Board, but excluding, for thispany's purpose, any
such individual whose initial assumption of office is inrectors connection
with an actual or threatened election contest relating to the election of
the Directors of the Company (as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act); or
(c) Approval by the shareholders of the Company of a reorganization,
a-11 merger or consolidation (a "Business Combination"), in each case, with
respect to which all or substantially all of the individuals and entities
who were the respective beneficial owners of the Outstanding Company Common
Stock andn, Company Voting Securities immediately prior to such Business
Combination do not own beneficially, directly or indirectly, more than 60%
of, respectively, thee then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities entitled to
vote generally in the electionot of directors, as the case may be, of the
corporation resulting from such, the Business Combination in substantially
the same proportion as their ownership immediately prior to such Business
Combination of the Outstanding Companytion Common Stock and Company Voting
Securities, as the case may be; provided, however, that (x) if the Change
in Control ame proportion as their ownership immediately prior to such
Business Combination of the Outstanding Company Common Stock and Company
Voting Securities, as the case may be; provided, however, that (x) if the
Change in Control
under this Agreement and shall not be offset against or reduce any other amounts
due under this Agreement.
"Good Reason" shall mean, without your express written consent, any of
the following:
(i) A meaningful and detrimental alteration in your position or in
the nature or status of your responsibilities (including those as a
director of the Company, if any) from those in effect immediately prior to
the Change in Control;
11
11
(ii) A reduction by the Company in your annual base salary as in
effect on the date hereof or as the same may be increased from time to
time; a failure by the Company to increase your salary at a rate
commensurate with that of other key executives of the Company; a reduction
in your annual bonus (expressed as a percentage of base salary) below the
target in effect for you immediately prior to the Change in Control; or any
adverse change in your long-term incentive opportunities in comparison to
those in effect prior to the Change in Control.
(iii) The relocation of the office of the Company where you are
employed at the time of the Change in Control (the "CIC Location") to a
location which is more than 50 miles away from the CIC Location or the
Company's requiring you to be based more than 50 miles away from the CIC
Location (except for required travel on the Company's business to an extent
substantially consistent with your customary business travel obligations in
the ordinary course of business prior to the Change in Control);
(iv) The failure by the Company to continue in effect any incentive
or deferred compensation plan in which you participate or the failure by
the Company to continue your participation therein on at least as favorable
a basis, both in terms of the amount of benefits provided and the level of
your participation relative to other participants, as existed at the time
of the Change in Control;
(v) The failure by the Company to continue to provide you with
benefits at least as favorable as those enjoyed by you under any of the
Company's retirement, life insurance, medical, health and accident,
disability or savings plans in which you were participating at the time of
the Change in Control; the taking of any action by the Company that would
directly or indirectly materially reduce any of such benefits or deprive
you of any material perquisite enjoyed by you at the time of the Change in
Control including without limitation, the use of a car, secretary, office
space, telephones, expense reimbursement and club dues; or the failure by
the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time
of the Change in Control;
(vi) The failure of the Company to pay you any amounts of salary,
bonus or expense reimbursement then owed to you or the failure of the
Company to adhere to its payroll and other compensation schedules in place
just prior to the Change in Control;
(vii) The failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof or, if the business of the Company for
which your services are principally
12
12
performed is sold at any time after a Change in Control, the purchaser
of such business shall fail to agree to provide you with the same or a
comparable position, duties, compensation and benefits (as described in
subsections (iv) and (v) above) as provided to you by the Company
immediately prior to the Change in Control; or
(viii) Any purported termination of your employment which is not
effected pursuant to a Notice of Termination satisfying the requirements of
Section 1 (and, if applicable, the requirements set out in the definition
of "Cause" above); for purposes of this Agreement, no such purported
termination shall be effective.
"Payment" means (i) any amount due or paid to you under this Agreement,
(ii) any amount that is due or paid to you under any plan, program or
arrangement of the Company and its subsidiaries, and (iii) any amount or benefit
that is due or payable to you under this Agreement or under any plan, program or
arrangement of the Company and its subsidiaries not otherwise covered under
clause (i) or (ii) hereof which must reasonably be taken into account under
Section 280G of the Code and the Regulations in determining the amount of the
"parachute payments" received by you, including, without limitation, any amounts
which must be taken into account under the Code and Regulations as a result of
(x) the acceleration of the vesting of Options, restricted stock or other equity
awards, (y) the acceleration of the time at which any payment or benefit is
receivable by you or (z) any contingent severance or other amounts that are
payable to you.
"Regulations" shall mean the proposed, temporary and final regulations
under Section 280G of the Code or any successor provision thereto.
"Taxes" shall mean the federal, state and local income taxes to which
you are subject at the time of determination, calculated on the basis of the
highest marginal rates then in effect, plus any additional payroll or
withholding taxes to which you are then subject.
8. Notice. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to,
General Counsel, Boston Scientific Corporation, Xxx Xxxxxx Xxxxxxxxxx Xxxxx,
Xxxxxx, XX 00000-0000, or to you at the address set forth on the
signature page of this Agreement or to such other address as either party may
have furnished to the other in writing in accordance herewith, except that
notice of change of address shall be effective only upon receipt.
9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such
13
13
other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not expressly set
forth in this Agreement and this Agreement shall supersede all prior
agreements, negotiations, correspondence, undertakings and communications of
the parties, oral or written, with respect to the subject matter hereof. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the Commonwealth of Massachusetts.
10. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
11. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Boston in accordance with the rules of the American Arbitration Association then
in effect. Judgment may be entered on the arbitrator's award in any court having
jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.
13. No Contract of Employment. Nothing in this Agreement shall be
construed as giving you any right to be retained in the employ of the Company.
14. Headings. The headings contained in this Agreement are intended
solely for convenience and shall not affect the rights of the parties to this
Agreement.
14
14
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
BOSTON SCIENTIFIC CORPORATION
By_____________________________
[NAME]
[TITLE]
Agreed to this [ ] day of [ ], 1996
__________________________________
[NAME]
15
EXHIBIT A
Amendment to Boston Scientific Corporation 1992 Long-Term Incentive Plan
10.2 Pooling-of-Interests Transactions. Notwithstanding anything
contained in Section 10.1, in the event of a merger or consolidation of the
Company with another entity which is intended to qualify for
pooling-of-interests accounting under U.S. Generally Accepted Accounting
Principles pursuant to Accounting Principles Board Opinion No. 16 ("Business
Combinations") or any successor opinion (a "Pooling Transaction"), the following
shall result:
(i) at the closing of a Pooling Transaction in which the Company
is not the surviving corporation (the "Combined Entity"), each
outstanding Stock Option granted hereunder (a "Predecessor Option")
shall be converted into an option (a "Substitute Option") to acquire
common stock of the Combined Entity in the Pooling Transaction, which
Substitute Option shall (A) have the same terms and conditions
(including vesting schedule) as the Predecessor Option, except as
provided in clause (ii) below, and (B) be exercisable at an exercise
price, and for a number of shares of the Combined Entity's common
stock, determined in accordance with Section 424(a) of the Code as if
the conversion of the Predecessor Option into the Successor Option was
intended to constitute "issuing or assuming a stock option in a
transaction to which Section 424(a) applies"; and
(ii) solely in the case of a Pooling Transaction (whether or not
the Company is the Combined Entity) in which, after giving effect to
the closing of such transaction, shareholders of the Company
immediately prior to such closing beneficially own less than 60% or
less of the Combined Entity's voting common stock, all Stock Options
granted hereunder (or Successor Options, if the Company is not the
Combined Entity) shall be fully vested and immediately exercisable upon
such closing.
