WWW.EXFILE.COM, INC. -- 888-775-4789 -- BOSTON SCIENTIFIC CORP. -- FORM 8-K
UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
DC 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date of
Report (Date of earliest event reported): June 22, 2009
BOSTON
SCIENTIFIC CORPORATION
(Exact
name of registrant as specified in charter)
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DELAWARE
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1-11083
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04-2695240
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(State
or other
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(Commission
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(IRS
employer
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jurisdiction
of
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file
number)
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identification
no.)
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incorporation)
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One Boston Scientific
Place, Natick, Massachusetts
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01760-1537
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(Address
of principal executive offices)
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(Zip
code)
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Registrant’s
telephone number, including area code: (508) 650-8000
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the fling obligation of the registrant under any of the following
provisions:
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¨
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Written
communication pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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¨
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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¨
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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ITEM
5.02.
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DEPARTURE
OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF
CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN
OFFICERS.
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5.02
(b) & (e)
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Resignation
of James R. Tobin as President and Chief Executive
Officer
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On June
22, 2009, our Board of Directors accepted the resignation of James R. Tobin as
our President, Chief Executive Officer and member of our Executive Committee
effective as of July 13, 2009, at which time Mr. Tobin will become Senior
Advisor through November 30, 2009 (the “Separation Date”). Mr. Tobin
will continue to be paid at his current annual base salary of $994,000 until
November 30, 2009 and will be eligible to receive a 2009 prorated bonus of up to
120% of his current annual base salary under our 2009 Performance Incentive Plan
(the “PIP Payment”), which has previously been filed.
Mr. Tobin
will receive benefits for which he is eligible under the Executive Retirement
Plan (2.5 months salary for each of his ten years of service), which has
previously been filed. In recognition of Mr. Tobin’s contributions to
Boston Scientific, the Board of Directors also approved a Career Service Award
for Mr. Tobin in an amount equal to 250% of his current base salary less the PIP
Payment.
The
Executive Compensation and Human Resource Committee of our Board of Directors
has exercised its authority under our 2000 Long Term Incentive
Plan to accelerate the vesting of 125,000 deferred stock units
awarded to Mr. Tobin on February 28, 2006 and under our 2003 Long Term Incentive
Plan to accelerate the vesting of the 2,000,000 non-qualified stock options
awarded to Mr. Tobin on February 26, 2009.
During
his tenure as Senior Advisor, the Company will reimburse Mr. Tobin for up to
$40,000, for legal and financial advisor fees incurred in connection with his
retirement. Subject to availability, he will have continued use of
the corporate aircraft through his Separation Date.
The
Transition and Retirement Agreement contains customary confidentiality,
nonsolicitation, noncompetition, nondisparagement and release
provisions.
A form of
Mr. Tobin’s Transition and Retirement Agreement is filed with this report as
Exhibit 10.1.
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5.02
(c) & (e)
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Appointment
of J. Raymond Elliott as President and Chief Executive
Officer
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On June
22, 2009, our Board of Directors appointed J. Raymond Elliott, age 59, as our
President, Chief Executive Officer and member of our Executive Committee
effective as of July 13, 2009. Mr. Elliott commenced employment with
Boston Scientific on June 23, 2009 as a Senior Advisor at an annualized salary
of $600,000 per year. He will remain a Senior Advisor through July
13, 2009.
Mr.
Elliott previously led the orthopedics company Zimmer Holdings Inc. for ten
years, joining the company as President in 1997 and rising to become
Chairman, President and Chief Executive Officer, retiring from all posts in
November 2007. He was a member of the Boston Scientific Board of
Directors from 2007 until earlier this year. He holds a bachelor’s
degree from the University of Western Ontario, Canada.
Under the
terms of his offer letter, Mr. Elliott will receive in connection with his
employment as President and Chief Executive Officer of Boston
Scientific:
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An
opportunity to participate in our Performance Incentive Plan. Mr.
Elliott’s target incentive is 120 percent of his base salary and for 2009 he
is eligible to receive a prorated bonus amount for 2009 to be paid entirely in
deferred stock units which will be fully vested upon issuance and payable on
the fourth anniversary of issuance. In subsequent years, Mr.
Elliott will be given the opportunity, in compliance with applicable
regulations, to elect the portion of the bonus that will be paid in cash and
the portion that will be paid in deferred stock units;
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Non-qualified
stock options to purchase 3,400,000 shares of Boston Scientific common stock
to be granted under our 2000 and 2003 Long Term Incentive Plans, with an
exercise price equal to the fair market value on Mr. Elliott’s first date of
employment, June 23, 2009 (the “Commencement Date”) and which will vest in
four equal annual installments beginning on the first anniversary of the
Commencement Date;
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An
award of 1,000,000 deferred stock units, one third of which will vest on the
first anniversary of the Commencement Date, and thereafter the remainder of
the award will vest at a rate of 1/36th of
the deferred stock units per month until all of the deferred stock units have
vested;
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An
award of 1,250,000 performance-based deferred stock units which will vest and
settle upon the attainment of predetermined stock prices (the “Performance
Shares”). The Performance Shares will be earned and settled
in shares of our common stock in 250,000 increments on each of the dates
(occurring prior to December 31, 2012) on which, while Mr. Elliott remains
employed by Boston Scientific, Boston Scientific common stock’s average
closing price for any ten consecutive trading days equals or exceeds $20.00,
$22.50, $25.00, $27.50 and $30.00. Any Performance Shares that have
not been earned by December 31, 2012 shall be forfeited;
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A
non-qualified stock option to acquire 600,000 shares of Boston Scientific
common stock to be granted in 2010 on the date that long-term incentive awards
are made to senior executives of Boston Scientific generally, with an exercise
price equal to the fair market value on the date of grant and which will vest
in four equal annual installments beginning on the first anniversary of the
date of grant;
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Boston
Scientific will purchase Mr. Elliott’s primary residence in Indiana no earlier
than September 15, 2009 at original cost plus the cost of documented
improvements, not to exceed $1.5 million; and under certain conditions, Boston
Scientific will repurchase Mr. Elliott’s new primary residence in
Massachusetts at original cost plus the cost of documented improvements;
and
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Personal
use of corporate aircraft in accordance with our current practices with
respect to the Chief Executive Officer. All personal use of
aircraft will result in imputed income based on U.S. Department of
Transportation SIFL rates as required by law, and Mr. Elliott will not be
reimbursed for any taxes resulting from such imputed
income.
At this
time, Mr. Elliott will not be eligible to participate in our Executive Allowance
Plan, which has been previously filed. Along with our other executive
officers, he will be provided with an Indemnification Agreement, which has been
previously filed. Mr. Elliott will also be provided a Retention
Agreement in the form previously filed, however, he will not be entitled to
excise tax gross-up. Mr. Elliott will also, as a member of our Executive
Committee, be eligible for benefits under the Executive Retirement Plan, which
has been previously filed, once he has satisfied the five-year service
requirement; however, if Mr. Elliott is terminated other than for cause
following the third anniversary but prior to the fifth anniversary of the
Commencement Date, he will be entitled to receive a lump sum benefit equivalent
to that available to an eligible participant in the Executive Retirement Plan,
calculated using his actual years of service (rather than the five years’
minimum service required under such plan), and otherwise subject to
the same terms and conditions as would apply under the
plan.
A form of
Mr. Elliott’s offer letter is filed with this report as Exhibit
10.2.
We are presently assessing the accounting implications of the two
agreements, which we expect to include in our second quarter 2009 financial
results.
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5.02
(b) & (d)
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Membership
on our Board of Directors
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On June
22, 2009, our Board of Directors accepted the resignation of James R. Tobin as a
member of our Board of Directors, effective July 13, 2009, and elected
J.
Raymond Elliott to serve on the Board of Directors, effective July 13,
2009. Mr. Elliott’s term will expire at our 2010 Annual Meeting of
Stockholders where he will stand for re-election by our
stockholders. Mr. Elliott has not been appointed to any Board
committee. There are no arrangements or understandings between Mr.
Elliott and any other persons pursuant to which Mr. Elliott was elected a
director of Boston Scientific. Mr. Elliott is not eligible to receive
our standard director compensation because he is an employee of Boston
Scientific.
A copy of
our press release issued today is filed with this report as Exhibit
99.1.
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ITEM
9.01.
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FINANCIAL
STATEMENTS AND EXHIBITS.
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Exhibit No.
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Description |
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10.1
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Form
of Transition and Retirement Agreement for James R.
Tobin
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10.2
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Form
of Offer Letter for J. Raymond
Elliott
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99.1
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Press
Release issued by Boston Scientific Corporation dated June 25,
2009
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SIGNATURE
Pursuant to the requirements of the
Securities and Exchange Act of 1934, as amended, the Registrant has duly caused
this report to be signed on its behalf by the undersigned hereunto duly
authorized.
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BOSTON
SCIENTIFIC CORPORATION |
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Date: June
25, 2009
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By:
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/s/ Lawrence
J. Knopf |
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Lawrence
J. Knopf |
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Senior
Vice President and Deputy General Counsel |
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EXHIBIT
INDEX
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Exhibit No.
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Description |
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10.1
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Form
of Transition and Retirement Agreement for James R.
Tobin
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10.2
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Form
of Offer Letter for J. Raymond
Elliott
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99.1
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Press
Release issued by Boston Scientific Corporation dated June 25,
2009
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