TRANSITION AND RETIREMENT AGREEMENT
EXHIBIT
10.1
This
Transition and Retirement Agreement (the “Agreement”) is made
and entered into between Boston Scientific Corporation (“Boston Scientific” or
the “Company”)
and Xxxxx X. Xxxxx, effective as of the date of completion of
execution of this Agreement (the “Effective
Date”).
WHEREAS, Xx. Xxxxx has served
the Company effectively as President and Chief Executive Officer of the Company
and as a member of the Company’s Board of Directors (the “Board”);
WHEREAS, Xx. Xxxxx is retiring
from the Company; and
WHEREAS, the Company seeks Xx.
Xxxxx’x assistance during most of the remainder of 2009;
NOW, THEREFORE, in
consideration of the mutual covenants and agreements herein contained and other
good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. Transition to Senior
Advisor.
(a) Transition from
CEO. Effective July 13, 2009, Xx. Xxxxx shall resign from his
positions as President and Chief Executive Officer, member of the Board and
member of the Executive Committee and from any other positions that he then
holds with Boston Scientific or any affiliate. Immediately
thereafter, Xx. Xxxxx shall become a Senior Advisor to the
Company. If so requested by the Company, Xx. Xxxxx shall sign any
document reasonably requested by the Company to confirm any such
actions.
(b) Duties as Senior
Advisor. Xx. Xxxxx’x duties as a Senior Advisor shall be any
duties reasonably requested of him by his successor as the Company’s President
and Chief Executive Officer (the “New CEO”) or the
Chairman of the Board (the “Chairman”) that are
appropriate for an individual of Xx. Xxxxx’x knowledge and experience in the
industry; provided
that, unless otherwise directed by the Company, such duties are not expected to
include continued senior management authority. Xx. Xxxxx’x
responsibilities may include, by way of illustration, performing special
projects, providing transitional advice or reports or serving as a
representative of the Company.
(c) Location of Work;
Administrative Support. Xx. Xxxxx may perform his
responsibilities as a Senior Advisor away from the Company’s offices, except as
otherwise directed by the Company. The Company shall make
part-time administrative support services available to Xx. Xxxxx for his
performance of his responsibilities. The Company shall not be
obligated to maintain a dedicated office for Xx. Xxxxx but shall provide
reasonable office space as necessary when he performs responsibilities at
Company offices, including the headquarters.
(d) Full-Time
Status. Xx. Xxxxx is expected to have full-time
responsibilities as a Senior Advisor; provided that this shall not
be construed to obligate the Company to provide assigned responsibilities to Xx.
Xxxxx at all times during his employment as a Senior Advisor; and provided further that in any event Xx.
Xxxxx will be expected to devote time to performing services during his
employment as a Senior Advisor for no less than 30% of his average hours spent
in the performance of services for the Company over the immediately preceding
36-month period. If the Company does not assign sufficient
responsibilities to require all of Xx. Xxxxx’x working time during his
employment as a Senior Advisor, Xx. Xxxxx’x accrued vacation time shall not be
applied to business hours during which he is not requested to perform services
as a Senior Advisor. Unless otherwise provided in writing by the New
CEO, Xx. Xxxxx shall devote all of his working time during his employment as a
Senior Advisor to his requested responsibilities for the Company, except that he
may engage in religious, charitable or other nonprofit activities or serve as an
advisor, consultant, director or trustee of any noncompetitive public or private
for-profit organizations; provided that such services
and activities are disclosed in writing to the New CEO and the Company does not
reasonably object to such services and activities.
(e) Classification. Xx.
Xxxxx shall continue to be classified as an employee of the Company during the
period of his status as a Senior Advisor. The transition of
Xx. Xxxxx from President and Chief Executive Officer to Senior Advisor
shall not be considered to result in a termination of his employment for any
purpose, including without limitation, for employee benefits or equity
acceleration.
2. Term.
(a) Length of Term; Forms of
Termination. The term of Xx. Xxxxx’x employment as a
Senior Advisor (the “Term”) shall be from
July 13, 2009 to and including November 30, 2009; provided that the Company may
terminate Xx. Xxxxx’x employment before November 30, 2009 if it determines that
there is Cause for such termination. The date of any termination of
employment is the “Separation
Date.” A termination of employment on November 30, 2009 is a
“Retirement.” A
termination of employment by the Company when Cause exists is a “Termination With
Cause.” A resignation from employment before November 30, 2009
is an “Early
Resignation.”
(b) Notice of
Termination.
(i) Retirement. If
Xx. Xxxxx remains employed until November 30, 2009, his employment with the
Company shall end on such date, unless otherwise agreed in
writing. Such a termination shall take effect without
notice.
(ii) Termination With
Cause. The Company shall give Xx. Xxxxx written notice of
a Termination With Cause. A Termination With Cause shall be effective
upon notice, unless otherwise specified.
(iii) Early
Resignation. Xx. Xxxxx shall give the Company written notice
of an Early Resignation at least thirty (30) days in advance of the effective
date of such Resignation. The Company may, in its discretion,
accelerate any such Early
2
Resignation
to any earlier date. Any acceleration of the date of Early
Resignation shall not affect the treatment of the termination as an Early
Resignation.
(c) “Cause”
Defined. For purposes of this Agreement, “Cause” shall have the
same meaning as set forth in the Boston Scientific Corporation Executive
Retirement Plan dated May 9, 2005 and amended effective January 1, 2009
(the “Executive
Retirement Plan”).
(d) Effect of Termination on
Compensation; Death or Disability. The effects of a
termination on compensation and the separation pay that may be available are
addressed in Section 4 (“Separation Pay”). Notwithstanding any
provision of this Agreement to the contrary, in the event of Xx. Xxxxx’x
inability to perform services as a Senior Advisor due to death or disability,
Xx. Xxxxx shall be treated thereafter for compensation purposes as if he
remained employed until his Retirement but did not perform any
services.
3. Compensation as Senior
Advisor.
(a) Salary. Xx.
Xxxxx’x salary as a Senior Advisor (the “Salary”) shall be
paid at the same annual rate as his salary as President and Chief Executive
Officer as in effect upon the effectiveness of this Agreement, i.e., the annual rate of
$994,000. The Company shall pay the Salary on its regular payroll
dates.
(b) PIP. Xx.
Xxxxx shall remain eligible for an annual Performance Incentive Plan (“PIP”) award for his
employment in 2009, inclusive of the period of his service as a Senior Advisor
(the “PIP
Award”).
(c) Career Service
Award. In recognition of Xx. Xxxxx’x contributions to the
Company over the course of his career with the Company, the Company shall pay
Xx. Xxxxx an amount equal to 250% of his Salary less the PIP Award (the “Career Service
Award”).
(d) Employee
Benefits.
(i) General. Xx.
Xxxxx shall be entitled to participate in all Company Benefit Plans during his
employment as a Senior Advisor, provided that his working hours permit such
participation. For purposes of this Agreement, “Company Benefit
Plans” means all “employee benefit plans,” as defined in 29 U.S.C.
§1002(3), that are generally available to regular full-time employees, except
that Xx. Xxxxx’x accrual of vacation time under the Company’s vacation policy
shall cease effective on July 13, 2009. If the Company terminates any
premium payments for Xx. Xxxxx during his employment as a Senior Advisor due to
a reduction in his working hours, the Company shall pay Xx. Xxxxx an amount
equivalent to any such ceased premium payments.
(ii) Executive Allowance
Plan. Notwithstanding anything in the Company’s Executive
Allowance Plan to the contrary, Xx. Xxxxx’x participation in the Executive
Allowance Plan shall continue to the Separation Date.
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(e) Equity.
(i) Summary of Equity Rights Not
Fully Vested. For the avoidance of doubt, the following are
Xx. Xxxxx’x existing equity awards that are not fully vested:
(A) Time-Based DSU
Award. Pursuant to an agreement between the Company and Xx.
Xxxxx dated February 28, 2006 (the “Time-Based DSU
Agreement”), the Company granted Xx. Xxxxx 250,000 Deferred Stock Units
pursuant to the Company’s 2000 Long-Term Incentive Plan, which were subject to
vesting 50% on December 31, 2008 and 50% on December 31, 2009 (the “Time-Based DSU
Award”).
(B) Performance-Based DSU
Award. On February 28, 2006, the Company granted Xx.
Xxxxx 2,000,000 Deferred Stock Units pursuant to the Company’s 2003 Long-Term
Incentive Plan, which were subject to the Company’s satisfaction of certain
share price criteria as of December 31, 2008 and December 31, 2009 (the
“Performance-Based DSU
Award”).
(C) Stock Option
Award. Pursuant to an agreement between the Company and Xx.
Xxxxx dated February 24, 2009 (the “Stock Option
Agreement”), the Company granted Xx. Xxxxx a non-qualified option to
acquire 2,000,000 shares of the Company’s common stock, subject to vesting, with
the vesting schedule subject to acceleration under certain circumstances (the
“Stock Option
Award”).
(ii) Amendment of Time-Based DSU
Award. The “Vesting Schedule” set forth at the end of the
Time-Based DSU Agreement is amended by replacing the text under the “Vesting
Schedule” heading with the following:
50%
December 31, 2008
50%
November 30, 2009
The
Time-Based DSU Award as amended pursuant to this provision is referred to as the
“Amended Time-Based
DSU Award.”
(iii) Amendment of Stock Option
Award. The Stock Option Agreement is amended by inserting the
following at the end of the first paragraph of Section IV (“Termination of
Employment”): “In addition, the Option shall immediately vest
effective upon the Effective Date of the Transition and Retirement Agreement
between the Company and the Optionee (the “Retirement Agreement”). If
the Optionee’s employment ends due to a Retirement as defined in the Retirement
Agreement, the Option shall be exercisable by the Optionee or the Optionee’s
appointed representative, as the case may be, until February 24, 2019, subject
to Section VI. If the Optionee’s employment ends for any other
reason, the exercise period shall be as otherwise provided below.” The Stock
Option Award as amended pursuant to this provision is referred to as the “Amended Stock Option
Award.”
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(iv) Continuity of
Employment. For the avoidance of doubt, the transfer of Xx.
Xxxxx from President and Chief Executive Officer to Senior Advisor shall not be
considered to terminate his employment or otherwise interrupt his service
relationship with the Company for purposes of the Amended Time-Based DSU Award,
the Performance-Based DSU Award or the Amended Stock Option Award (together, the
“Pending Equity
Awards”). Termination of employment shall be effective as of
the Separation Date. Notwithstanding anything in this Agreement to
the contrary, Xx. Xxxxx shall not be eligible for further grants of stock
options, deferred stock units or other forms of equity or equity rights; provided that this shall not
be construed to affect Xx. Xxxxx’x eligibility to participate in the
Company’s Global Employee Stock Ownership Plan, known as GESOP.
(v) Effect of Termination on
November 30, 2009. For the avoidance of doubt, pursuant to the
terms of the Pending Equity Awards, if Xx. Xxxxx’x Separation Date is November
30, 2009, the Amended Time-Based DSU Award and the Amended Stock Option Award
shall be fully vested. The Performance-Based DSU Award shall be
forfeited.
(vi) Additional Equity
Rights. Nothing in this Agreement shall be construed to affect
Xx. Xxxxx’x rights or obligations with respect to outstanding fully vested
equity rights, all of which shall remain subject to the terms of the applicable
plans and agreements, except as provided in the next sentence. To the
extent the exercise period for any of the fully vested equity rights identified
below can be shortened by determination of the Committee or Administrator (as
defined in the applicable plan identified in the applicable non-qualified
option) after grant, other than on a Change in Control or Covered Transaction
(as defined in the applicable plans), the Committee and/or Administrator has
conclusively and irrevocably determined to waive such provision. The
parties agree that the following identifies all outstanding fully vested equity
rights:
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·
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May
9, 2000 grant of a non-qualified option to purchase 180,000 shares of the
Company’s common stock at $14.563 per share, which remains exercisable for
180,000 shares;
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·
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July
25, 2000 grant of a non-qualified option to purchase 180,000 shares of the
Company’s common stock at $8.50 per share, which remains exercisable for
130,000 shares;
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·
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December
17, 2001 grant of a non-qualified option to purchase 90,000 shares of the
Company’s common stock at $12.50 per share, which remains exercisable for
90,000 shares;
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·
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February
25, 2003 grant of a non-qualified option to purchase 200,000 shares of the
Company’s common stock at $21.78 per share, which remains exercisable for
200,000 shares;
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5
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·
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December
16, 2003 grant of a non-qualified option to purchase 200,000 shares of the
Company’s common stock at $33.80 per share, which remains exercisable for
200,000 shares; and
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·
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January
3, 2005 grant of a non-qualified option to purchase 225,000 shares of the
Company’s common stock at $34.29 per share, which remains exercisable for
225,000 shares.
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The
foregoing are together referred to as the “Fully Vested Equity
Rights.”
(f) Certain Personal
Expenses. The Company shall pay Xx. Xxxxx $40,000 in
recognition of expenses that he shall incur in connection with the negotiation
and implementation of this Agreement, including without limitation financial
planning expenses and attorney’s fees. The Company shall pay such
amount on or before November 30, 2009. In addition, Xx. Xxxxx may use
the corporate aircraft for personal purposes during the Term; provided that: (i)
consistent with the practice during his service as Presidential Chief Executive
Officer and Section 5 (“Taxation of Payments and Benefits”), Xx. Xxxxx shall
bear the adverse tax consequences associated with any such personal use; (ii)
any such personal use shall be subject to the Company’s needs for such aircraft;
and (iii) any use of the aircraft for personal purposes beyond five (5)
occasions during the Term shall be subject to the approval of the New CEO or the
Executive Vice President, Human Resources (“EVP-HR”).
(g) Business
Expenses. Xx. Xxxxx shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him in performing services
as a Senior Advisor, in accordance with the Company’s business expense
reimbursement policies and procedures then in effect. To the extent
that Xx. Xxxxx’x responsibilities as Senior Advisor require business travel, Xx.
Xxxxx may make travel arrangements consistent with his prior practice in
2009.
4. Separation
Pay.
(a) General. As
a result of any termination of employment as a Senior Advisor, Xx. Xxxxx shall
be entitled to payment of all Salary and PIP payments accrued through the
Separation Date and all accrued but unused vacation pay. For purposes
of this Agreement, Xx. Xxxxx shall be considered to accrue the PIP Award
ratably, daily, over the course of his employment during 2009. Xx.
Xxxxx’x PIP Award and Career Service Award shall be paid at such time as the
Company makes PIP award payments to other PIP participants; provided that any PIP Award
and Career Service Award shall be paid no later than March 15,
2010. Effective upon any termination of employment, Xx. Xxxxx’x
right to Salary and PIP payments shall end, except as specified
below. In addition, Xx. Xxxxx’x Company Benefit Plan
participation rights shall end.
(b) Executive Retirement
Plan. Notwithstanding any provision of the Executive
Retirement Plan to the contrary, Xx. Xxxxx’x employment as Senior Advisor shall
be treated as if he is actively serving on the Company’s Executive Committee
during such employment for purposes of continued Executive Retirement Plan
eligibility, for crediting “Years of Service” for purposes of the Executive
Retirement Plan and for determining the
6
amount of
benefits under the Executive Retirement Plan; provided that this shall not
be construed to entitle Xx. Xxxxx to serve on the Executive Committee during
such period. This Agreement shall be considered to be the separation
agreement referenced in Section 5 of the Executive Retirement Plan (“Amount
of Benefit”); provided
that such separation agreement shall not be considered to have been executed for
purposes of the Executive Retirement Plan until both this Agreement has been
fully executed and the release agreement in the form of Exhibit A (the
“Release
Agreement”) has been executed and has become effective. The
Release Agreement shall be considered to be offered to Xx. Xxxxx on the
Separation Date (other than in the event of a Termination With Cause, in which
case Xx. Xxxxx would not be otherwise eligible for benefits under the Executive
Retirement Plan). For the avoidance of doubt, in the event of a
Retirement, the Release Agreement shall be considered to be offered to
Xx. Xxxxx on November 30, 2009. As set forth in the Release
Agreement, Xx. Xxxxx may consider the Release Agreement for up to
twenty-one (21) days after the Separation Date and may revoke the Release
Agreement within seven (7) days after signing the Release
Agreement. If the Release Agreement is signed within the twenty-one
(21) day period and is not revoked within the seven (7) day period, it shall
become effective on the first business day after the expiration of the seven (7)
day period. Benefits payable under the Executive Retirement Plan
shall be paid in a lump sum in the first payroll period after the last day of
the six-month period following Xx. Xxxxx’x “separation from service” within the
meaning of Section 1.409A-1(h) of the Treasury Regulations.
(c) Consulting
Services. Nothing in this Agreement shall be construed to
restrict the right of the parties to reach an agreement for the provision of
Consulting Services after the Separation Date pursuant to Section 13 of the
Executive Retirement Plan (“Consulting Services”).
(d) Effect on Severance Pay
Plan. Xx. Xxxxx acknowledges and agrees that he shall not
have any right to payments or benefits under the Company’s Severance Pay and
Layoff Notification Plan.
(e) Release by the
Company. In exchange for, among other terms, the requirement
for Xx. Xxxxx to agree to a Release Agreement as a condition of receiving
payments pursuant to the Executive Retirement Plan, the Company and its
subsidiaries, affiliated companies, successors and assigns (the “Company Releasors”)
hereby release and forever discharge Xx. Xxxxx and his heirs, administrators,
executors and assigns (the “Xxxxx Releasees”)
from any and all claims, agreements, obligations, injuries, damages, causes of
action, debts or liabilities (together “Claims”) that any of
them may have or may have ever had, whether known or unknown, against any of the
Xxxxx Releasees as a result of any facts or circumstances that occurred or
existed or of which any such Company Releasor had notice at any time to the date
of the Company’s execution of this Agreement; provided that notwithstanding
the foregoing, the Company Releasors do not release the Xxxxx Releasees from any
civil Claims based on any acts and/or omissions that satisfy the elements of a
criminal offense. The foregoing proviso shall not be construed as an
implication that any Company Releasor believes that Xx. Xxxxx has committed a
criminal offense. To the contrary, the Company represents that no one
involved in the authorization or preparation of this Agreement has reason to
believe that Xx. Xxxxx has committed any criminal
offense. Furthermore, nothing in this paragraph shall be construed to
limit Xx. Xxxxx’x obligations under this Agreement.
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5. Taxation of Payments and
Benefits. Boston Scientific shall undertake to make
deductions, withholdings and tax reports with respect to payments and benefits
under this Agreement to the extent that it reasonably and in good faith believes
that it is required to make such deductions, withholdings and tax
reports. Payments under this Agreement shall be in amounts net of any
such deductions or withholdings. Except to the extent otherwise
specified, nothing in this Agreement shall be construed to require Boston
Scientific to make any payments to compensate Xx. Xxxxx for any adverse tax
effect associated with any payments or benefits or for any deduction or
withholding from any payment or benefit. Each payment pursuant to
this Agreement that is due at a different time shall be considered to be a
separate payment for purposes of Section 409A of the Internal Revenue
Code.
6. Confidential Information,
Restrictive Covenants and Other Obligations.
(a) Confidential
Information. Xx. Xxxxx shall not, except in the performance of
his obligations to the Company hereunder or as may otherwise be approved in
advance by the New CEO, directly or indirectly, disclose or use (except for the
direct benefit of the Company) any Confidential Information that Xx. Xxxxx may
learn or have learned by reason of his association with the Company, any
customer or client of the Company or any of their respective subsidiaries and
affiliates. The term “Confidential
Information” means all data, analyses, reports, interpretations,
forecasts, documents and information in any form concerning or otherwise related
to the Company and its affairs, that the Company intends to treat as
confidential (including information that may be expected to be disclosed in the
future that has not yet been disclosed) including, without limitation,
information with respect to customers, 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 Xx. Xxxxx prior
to his 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 Xx. Xxxxx in violation of this paragraph, or (iii) Xx. Xxxxx is
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. Xx. Xxxxx acknowledges
that this Agreement and the negotiations leading to this Agreement constitute
Confidential Information; provided that (i) Xx.
Xxxxx may communicate information concerning this Agreement and the negotiations
leading to it to his immediate family, attorneys and financial advisors
(provided that he shall direct such individuals not to make any disclosures of
such information), (ii) Xx. Xxxxx may disclose such information to the
extent that such information is publicly disclosed by the Company, and
(iii) Xx. Xxxxx may disclose such information to the extent that he is
responding to information that has entered the public domain other than due to
his violation of this paragraph. As used in this Agreement, 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.
(b) Return of Property; Home
Office Equipment. All documents, records, data, equipment and
other physical property, whether or not pertaining to Confidential Information,
that have been or are in the future furnished to Xx. Xxxxx by the Company or are
8
produced
by Xx. Xxxxx in connection with his employment shall be and remain the sole
property of the Company. Xx. Xxxxx shall return to the Company
all such materials and property as and when requested by the
Company. In any event, Xx. Xxxxx shall return all such materials and
property immediately upon termination of his employment for any
reason. Notwithstanding the foregoing, Xx. Xxxxx may retain and
purchase home office equipment provided to him by the Company to the extent that
he specified such equipment that he elects to retain (the “Home Office
Equipment”) in the written notice that he provided to the EVP-HR on June
18, 2009. The Company shall transfer ownership of the Home Office
Equipment to Xx. Xxxxx effective on the Separation Date. The purchase
price for the Home Office Equipment shall be the market value of the Home Office
Equipment as of the Separation Date as determined reasonably and in good faith
by the Company. Xx. Xxxxx shall pay such amount no later than thirty
(30) days after the later of the Separation Date or the Company’s notice to Xx.
Xxxxx of the purchase price.
(c) Nonsolicitation and
Noncompetition. Xx. Xxxxx agrees that the terms of Section 12
of the Executive Retirement Plan (“Restrictive Covenants”) shall apply to
him. For purposes of such Section 12, the “Retirement date” shall be
construed to mean the Separation Date. Xx. Xxxxx acknowledges that in
his capacity as President and Chief Executive Officer, he does not have the
authority to exempt himself from any obligations under Section 12 of the
Executive Retirement Plan or to exercise any other rights of the Chief Executive
Officer under the Executive Retirement Plan with respect to
himself. The Company agrees that in exercising discretion with
respect to Xx. Xxxxx under Section 12 of the Executive Retirement Plan, the New
CEO or designee shall not withhold consent to Xx. Xxxxx’x employment or
other activities that would otherwise violate Section 12, unless the New CEO or
designee reasonably concludes that such employment or other activities are
reasonably likely to be inconsistent with the Company's legitimate business
interests. For purposes of the Executive Retirement Plan, the EVP-HR
shall be considered a designee of the Chief Executive Officer. Without limiting the
foregoing, Xx. Xxxxx acknowledges that the remedial provisions set forth in
Section 12(c) of the Executive Retirement Plan shall apply in the event of his
breach of Section 12 of the Executive Retirement Plan. The Company
agrees that this Agreement supersedes in all respects the March 17, 1999
Employee Agreement between Xx. Xxxxx and the Company and further agrees that Xx.
Xxxxx is not subject to any contractual obligations to the Company concerning
nonsolicitation, noncompetition, confidential information or assignment of
developments other than those set forth in this Agreement or the Executive
Retirement Plan.
(d) Mutual
Nondisparagement. Xx. Xxxxx shall not at any time, either
before or after the Separation Date, make or cause to be disclosed any negative,
adverse, derogatory or otherwise disparaging statement to anyone about the
Company, its products or services, its financial condition or proposals, any
member of the Board, any officer or any employee, except as required by
law. Xx. Xxxxx acknowledges that any statement made at his
specific and explicit direction by anyone, including but not limited to any of
his family members or his attorney or other agent, shall be deemed to be a
statement by him for purposes of this paragraph. Notwithstanding the
foregoing, this shall not be construed to apply to statements made on a
confidential basis to the Chairman, the New CEO or the Chair of any committee of
the Board or to any statements in legally compelled testimony. Boston
Scientific agrees that promptly after the Effective Date, it shall direct its
officers and directors not to make any negative, adverse, derogatory or
otherwise disparaging statements to anyone about Xx. Xxxxx or his personal or
professional reputation, except as required by law.
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(e) Developments. Within
sixty (60) days following the Separation Date, Xx. Xxxxx shall report and
disclose to Boston Scientific all improvements to Boston Scientific’s products
and/or services tested and/or evaluated by him during the term of his employment
by Boston Scientific, to the extent that (i) such improvements were under active
consideration in the six months preceding the Separation Date and (ii) Xx. Xxxxx
has reason to believe that no other senior manager currently in Boston
Scientific’s employ has full knowledge of such improvements. All such
improvements, and all other inventions, discoveries, developments, methods,
processes, ideas and concepts relating to any Company Business Area (as defined
below) that are or were developed or conceived by him, alone or with others
during the term of his employment (collectively, “Developments”), and
intellectual property rights (including patents, patent applications, and other
intellectual property rights in all countries and territories worldwide and
under any international conventions) that are related to any and all
Developments shall be the sole and exclusive property of Boston Scientific and
are hereby assigned, and will be assigned, to Boston Scientific without any
additional payments by Boston Scientific. It is understood that
Boston Scientific shall have the right but not the obligation to initiate,
prosecute, maintain and defend any and all patentable
Developments. Xx. Xxxxx shall provide reasonable assistance to Boston
Scientific with respect to any such patents and patent applications, and shall
execute all appropriate documents and assignments with respect to any such
patents and patent applications. Xx. Xxxxx agrees not to assert any
rights in law or in equity in any Developments. For purposes of this
Agreement, the term “Company Business
Area” means an area of business that the Company conducted at any time
during the period from the Effective Date to the Separation Date or that was in
development by the Company or was under active consideration by the Company’s
senior management at any time during the one year period before the Separation
Date.
(f) Litigation and Regulatory
Cooperation. During and after Xx. Xxxxx’x employment, Xx.
Xxxxx shall cooperate reasonably with the Company in the defense or prosecution
of any claims or actions now in existence or which may be brought in the future
against or on behalf of the Company that relate to events or occurrences that
transpired while Xx. Xxxxx was employed by the Company. Xx.
Xxxxx’x reasonable cooperation in connection with such claims or actions shall
include, but not be limited to, being available to meet with counsel to prepare
for discovery or trial and to testify truthfully as a witness on behalf of the
Company at mutually convenient times or at such other times as may be required
by the court. During and after Xx. Xxxxx’x employment, Xx. Xxxxx
also shall cooperate reasonably with the Company in connection with any
investigation or review of any federal, state or local regulatory authority as
any such investigation or review relates to events or occurrences that
transpired while Xx. Xxxxx was employed by the Company. To the extent
reasonably practicable, cooperation shall be provided at mutually convenient
times and places and shall not be scheduled at times that would unreasonably
interfere with employment or board of directors commitments that Xx. Xxxxx may
have; provided that it
is acknowledged this sentence shall not apply to the time or location of
testimony scheduled by the court or another party. The Company shall
compensate Xx. Xxxxx at the rate of $500 per hour for all time that he
reasonably expends after the Separation Date performing cooperation services
requested by the Company including without limitation his travel time; provided that Xx. Xxxxx shall
not be entitled to compensation for time spent testifying in any
proceeding. Xx. Xxxxx shall also be entitled to receive prompt
reimbursement for all reasonable expenses incurred by him in activities
performed pursuant to
10
this
paragraph, in accordance with the Company’s business expense reimbursement
policies and procedures then in effect.
7. Arbitration of
Disputes. Any controversy or claim arising out of or relating
to this Agreement or the breach thereof or otherwise arising out of
Xx. Xxxxx’x employment, the termination of that employment (including,
without limitation, any claims of unlawful employment discrimination whether
based on age or otherwise) or either party’s other rights or obligations under
this Agreement shall, to the fullest extent permitted by law, be settled by
arbitration in any forum and form agreed upon by the parties or, in the absence
of such an agreement, under the auspices of the American Arbitration Association
(“AAA”) in
Boston, Massachusetts in accordance with the Employment Arbitration Rules of the
AAA, including, but not limited to, the rules and procedures applicable to the
selection of arbitrators. Judgment upon the award rendered by the
arbitrator may be entered in any court having jurisdiction
thereof. This paragraph shall be specifically enforceable.
Notwithstanding the foregoing, this paragraph shall not preclude either party
from pursuing a court action for the sole purpose of obtaining a temporary
restraining order or a preliminary injunction in circumstances in which such
relief is appropriate; provided that any other relief shall be pursued through
an arbitration proceeding pursuant to this paragraph.
8. Jurisdiction. To
the extent that any court action is permitted consistent with or to enforce
Section 7 of this Agreement, the parties hereby agree that the Superior Court of
the Commonwealth of Massachusetts and the United States District Court for the
District of Massachusetts shall have exclusive jurisdiction of such
dispute. Accordingly, with respect to any such court action, Xx.
Xxxxx submits to the personal jurisdiction of such courts.
9. Integration. This
Agreement constitutes the entire agreement between the parties with respect to
the subject matter hereof and supersedes all prior agreements between the
parties concerning such subject matter. Xx. Xxxxx acknowledges that
this Agreement resolves all matters concerning negotiation of employment terms
and compensation, including without limitation separation compensation, that
have previously been discussed between the parties. Xx. Xxxxx
further acknowledges that the Retention Agreement between him and the Company
dated December 17, 2008 and all previous Retention Agreements shall have no
further force or effect. Notwithstanding the foregoing, nothing in
this Agreement shall affect either party’s rights under the Directors and
Officers Indemnification Agreement dated March 17, 1999; provided that it is
acknowledged that Xx. Xxxxx shall not be an officer of the Company after
July 13, 2009, nor shall this Agreement supersede any of the Pending Equity
Rights or Fully Vested Equity Rights.
10. Assignment; Successors and
Assigns, etc. The Company may assign its rights under this
Agreement in the event that it shall effect reorganization, consolidate with or
merge into any other corporation, partnership, organization or other entity, or
transfer all or substantially all of its properties or assets to any other
corporation, partnership, organization or other entity. This
Agreement shall inure to the benefit of and be binding upon Xx. Xxxxx and
the Company and each party’s respective successors, executors, administrators,
heirs and permitted assigns.
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11. Enforceability. If
any portion or provision of this Agreement (including, without limitation, any
portion or provision of any section of this Agreement) shall to any extent be
declared illegal or unenforceable by a court of competent jurisdiction, then the
remainder of this Agreement, or the application of such portion or provision in
circumstances other than those as to which it is so declared illegal or
unenforceable, shall not be affected thereby, and each portion and provision of
this Agreement shall be valid and enforceable to the fullest extent permitted by
law.
12. Waiver. No
waiver of any provision hereof shall be effective unless made in writing and
signed by the waiving party. The failure of either party to require
the performance of any term or obligation of this Agreement, or the waiver by
either party of any breach of this Agreement, shall not prevent any subsequent
enforcement of such term or obligation or be deemed a waiver of any subsequent
breach.
13. Notices. Any
notices, requests, demands and other communications provided for by this
Agreement shall be sufficient if in writing and delivered in person or sent by a
nationally recognized overnight courier service or by registered or certified
mail, postage prepaid, return receipt requested, to Xx. Xxxxx at the last
address he has filed in writing with the Company or, in the case of the Company,
at its main offices, attention of the Chairman. Delivery by overnight
courier service shall be effective on the first business day after
mailing. Delivery by registered or certified mail shall be effective
three (3) days after mailing. Delivery in person shall be effective
upon delivery.
14. Amendment. This
Agreement may be amended or modified only by a written instrument signed by Xx.
Xxxxx and by a duly authorized representative of the Company.
15. Governing
Law. This is a Massachusetts contract and shall be construed
under and be governed in all respects by the laws of the Commonwealth of
Massachusetts, without giving effect to the conflict of laws principles of such
Commonwealth. With respect to any disputes concerning federal law,
such disputes shall be determined in accordance with the law as it would be
interpreted and applied by the United States Court of Appeals for the First
Circuit.
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16. Counterparts. This
Agreement may be executed in any number of counterparts, each of which when so
executed and delivered shall be taken to be an original. Such
counterparts shall together constitute one and the same document.
IN WITNESS WHEREOF, the
parties have executed this Agreement effective as of the Effective
Date.
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By:
Xxxxx
X. Xxxxx
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Date
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Boston
Scientific
Coporation
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By:
Xxxxx
Xxxx Xxxxx
Its
Executive Vice President,
Human
Resources
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Date
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13
EXHIBIT
A
RELEASE
AGREEMENT
I am a
party to an agreement with Boston Scientific Corporation (“BSC” or the “Company”) entitled
Transition and Retirement Agreement (the “Retirement
Agreement”). I acknowledge that this is the Release Agreement
that is required by the Company pursuant to Section 4(b) of the Retirement
Agreement as a condition of my eligibility for any payment under the Company’s
Executive Retirement Plan (together, the “Consideration”).
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1.
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Release of
Claims. In consideration of and in exchange for the
commitment of the Company to provide the Consideration, I, for myself, my
heirs, administrators, executors and assigns agree to release and forever
discharge the Company and its subsidiaries, affiliated companies,
successors and assigns, and the current and former employees,
officers, directors, shareholders (but only in their capacity as
shareholders of the Company) and agents of each of the foregoing (the
“Released
Parties”) from any and all claims, agreements, obligations,
injuries, damages, causes of action, debts or liabilities (together “Claims”) that I
may have or may have ever had, whether known or unknown, against any of
the Released Parties as a result of any facts or circumstances that
occurred or existed or of which I had notice at any time to the date of my
execution of this Release
Agreement.
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This
release of Claims includes, without limitation, all Claims based on any facts or
circumstances arising out of or in any way connected with or relating to my
employment with BSC or the termination of that employment, including but not
limited to, the release of Claims of breach of contract, impairment of economic
opportunity, defamation, misrepresentation, intentional infliction of emotional
harm or other tort, or violation of the Civil Rights Act of 1866, Title VII of
the Civil Rights Act of 1964, the Age Discrimination in Employment Act, the
Civil Rights Act of 1991, the Americans with Disabilities Act, the Family and
Medical Leave Act and any other federal, state or municipal statute, ordinance
or the common law relating to employment or employment discrimination, and
Claims arising out of any legal restrictions on the rights of BSC to take
employment actions, that I now have or claim to have, or which I heretofore had,
or which I may have or claim to have at any time hereafter based on actions or
omissions that occurred on or before the date of my execution of this Release
Agreement. I also expressly waive any and all remedies that may be
available under any statute or the common law, including, without limitation,
back pay, front pay, other damages, attorney’s fees, court costs and
reinstatement.
Notwithstanding
the foregoing, if an individual who is a Released Party initiates a legal
proceeding against me with respect to any Claim that accrued before this Release
Agreement became effective, this Release Agreement shall not limit my right to
file a counterclaim against such individual.
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2.
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Continuing Rights and
Obligations. This Release Agreement does not affect any
rights to which I may be entitled under any Company Benefit Plans, the
Executive Retirement Plan, any Pending Equity Awards or any Fully Vested
Equity Rights, each as defined in
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the
Retirement Agreement, nor does it affect my rights under the Retirement
Agreement or the Directors and Officers Indemnification Agreement between
the Company and me dated March 17, 1999 or under any Company insurance
agreement or bylaw. It also does not affect any rights I have
under COBRA or the Workers’ Compensation Act. I acknowledge and
agree that nothing in this Release Agreement affects the ongoing
obligations that I may have under the Retirement Agreement. I
acknowledge that my rights to future payments from the Company are
conditioned on my continued compliance with such
agreements.
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3.
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Receipt of
Payment. I acknowledge that I have received payment for
all salary, vacation pay and other compensation due to me based on my
employment with BSC to and including the most recent regular payroll date
of BSC preceding the date of my signing of this Release
Agreement. This shall not be construed to waive my right, if
applicable, to payment of salary, vacation pay and any other employment
compensation that was not yet due to be paid to me as of the most recent
regular payroll date of BSC preceding the date of my signing of this
Release Agreement.
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4.
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No
Admission. I understand and agree that this Release
Agreement is not to be construed as an admission of liability by the
Released Parties.
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5.
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Consideration of
Release Agreement. I understand that I have had the
opportunity, if I so desired, to take up to twenty-one (21) days to
consider this Release Agreement. I agree that any
modifications, material or otherwise, made to this Release Agreement do
not restart or affect in any manner the original twenty-one (21) day
consideration period. I further acknowledge that I have been
advised to consult with an attorney prior to executing this Release
Agreement.
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6.
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Revocation
Period. I understand that I will have seven (7) days
following my signing of this Release Agreement in which to revoke this
Release Agreement by a written notice to be received by the Company’s
Executive Vice President of Human Resources no later than the end of such
seven-day period. I understand that at this Release Agreement
shall not become effective until the revocation period has
expired.
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7.
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Governing
Law. I agree that this Release Agreement shall be
interpreted and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts.
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8.
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Full Review of Release
Agreement. My signature below confirms that I have
carefully read and reviewed this Release Agreement. I fully
understand all of its terms and conditions and have not relied upon any
other representations by the Company or the employees or agents of the
Company concerning the terms of this Release Agreement. I
execute and deliver this Release Agreement freely and
voluntarily.
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UNDERSTOOD,
ACCEPTED AND AGREED
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Xxxxx X.
Xxxxx
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Date
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2
