WWW.EXFILE.COM, INC. -- 14384 -- 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):     May 12, 2006
 

 
BOSTON SCIENTIFIC CORPORATION
(Exact name of registrant as specified in charter)

DELAWARE
1-11083
04-2695240
(State or other
(Commission
(IRS employer
jurisdiction of
file number)
identification no.)
incorporation)
    

One Boston Scientific Place, Natick, Massachusetts
01760-1537
  
(Address of principal executive offices)
(Zip code)
  

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 filing obligation of the registrant under any of the following provisions:

¨
Written communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
 
 
 
 
ITEM 1.01
ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT
 
Increase in Compensation for Executive Committee Members

On May 8, 2006, the Board of Directors of Boston Scientific appointed two new members to the Company’s Executive Committee, Mark C. Bartell, as Senior Vice President—Global Sales and Marketing, Cardiac Rhythm Management, and William F. McConnell, as Senior Vice President—Administration, Cardiac Rhythm Management.

Also on May 8, 2006, the Compensation Committee of the Board of Directors approved salary increases, performance incentive opportunities and long-term incentive awards for Messrs. Bartell and McConnell and Fred A. Colen, the Company’s Executive Vice President and Chief Technology Officer, in connection with their assumption of significantly increased responsibilities relating to our CRM business after the closing of the Guidant transaction. The performance incentive opportunity is a percentage of the executive’s annual base salary. The long-term incentive awards consist of: (i) options to purchase a specified number of shares of common stock of Boston Scientific at a fixed price on the date of grant, vesting in equal annual installments over four years beginning on May 8, 2007, (ii) a deferred stock unit award for a specified number of shares of Boston Scientific common stock to be issued in four equal annual installments beginning on May 8, 2008 and (iii) a cash component. The stock option grants and deferred stock unit awards will be made under the Company’s 2003 Long-Term Incentive Plan and are subject to both the terms and conditions of that Plan as well as the terms and conditions of each incentive award agreement. Forms of these incentive award agreements are attached as Exhibits 10.1 and 10.2. Subject to the timely receipt of executed waivers of certain pre-existing change in control payments, as appropriate, Messrs. Bartell, McConnell and Colen will receive the following salary increases, performance incentive opportunities and long-term incentive awards:

Salary Increase
Performance Incentive Opportunity
Long-Term Incentive Award
 
Name
 
New Salary
 
Amount of Increase
Percentage of Base Salary
 
Options
Deferred
Stock Units
 
Cash
Mark Bartell
$390,000
$35,000
75%
123,500
82,150
$921,178
William McConnell
$365,000
$63,000
75%
123,500
74,300
$740,065
Fred Colen
$500,000
$35,000
75%
130,000
45,500
N/A

 
Key Guidant Executive Retention Awards

On May 8, 2006, the Compensation Committee approved retention awards for certain key executives of Guidant Corporation. In exchange for the timely execution of waivers of certain pre-existing change in control payments, as appropriate, recipients of the awards may receive a combination of: (i) stock options and deferred stock unit awards or (ii) stock options, deferred stock unit awards and cash. The options vest in equal annual installments over four years beginning on May 8, 2007 and the deferred stock unit awards will be issued in four equal annual installments beginning on May 8, 2008. The stock option grants and deferred stock unit awards will be made under the Company’s 2003 Long-Term Incentive Plan and are subject to both the terms and conditions of that Plan as well as the terms and conditions of each incentive award agreement. Forms of these incentive award agreements are attached as Exhibits 10.1 and 10.2. The total options expected to be issued is approximately 905,500 and the total deferred stock units expected to be issued is between 966,200 and 1,624,200, depending upon the number of recipients who elect cash in lieu of deferred stock units. The maximum cash issuable approximates $15 million.

Special Recognition Awards

On May 8, 2006, the Compensation Committee approved special recognition awards for certain employees of the Company who were instrumental to the successful closing of the Guidant transaction. Award recipients included five executive officers of the Company, who may elect to receive their awards in either: (i) cash, stock options and deferred stock units or (ii) stock options and deferred stock units. The stock options vest in equal annual installments over four years beginning on May 8, 2007, and the deferred stock unit awards will be issued in four equal annual installments beginning on May 8, 2008. The stock option grants and deferred stock unit awards will be made under the Company’s 2003 Long-Term Incentive Plan and are subject to both the terms and conditions of that Plan as well as the terms and conditions of each incentive award agreement. Forms of these incentive award agreements are attached as Exhibits 10.3 and 10.4. The following members of the Company’s Executive Committee received the following awards and each recipient must chose either Election 1 or Election 2:

 
Election 1
Election 2
Name
Cash
Options
Deferred Stock Units
Options
Deferred Stock Units
Larry Best
$625,000
39,900
13,600
79,800
27,200
Jim Gilbert
$500,000
31,900
10,900
63,800
21,800
Paul Sandman
$400,000
25,500
8,700
51,000
17,400
Lucia Quinn
$250,000
16,000
5,500
32,000
11,000
Paul Donovan
$200,000
12,800
4,400
25,600
8,800
TOTAL
$1,975,000
126,100
43,100
252,200
86,200


 
ITEM 9.01
FINANCIAL STATEMENTS AND EXHIBITS

Exhibit No.
Description

10.1
Form of Non-Qualified Stock Option Agreement (Increase in Compensation for Executive Committee Members and Key Guidant Executive Retention Awards)

10.2
Form of Deferred Stock Unit Award Agreement (Increase in Compensation for Executive Committee Members and Key Guidant Executive Retention Awards)
 
10.3
Form of Non-Qualified Stock Option Agreement (Special Recognition Awards)
 
10.4
Form of Deferred Stock Unit Award Agreement (Special Recognition Awards)

 
 

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.
 
 
     
  BOSTON SCIENTIFIC CORPORATION
 
 		  
 
 

 
Date:      May 12, 2006  By:   /s/ Lawrence J. Knopf
 
Lawrence J. Knopf
  Vice President and Assistant General Counsel