What are the key changes to Boston Scientific's credit facilities?

Boston Scientific has entered into a new $500 million Five-Year Revolving Credit Agreement and amended its existing Multi-Year Revolving Credit Agreement. The new facility has an option for an additional $500 million, and the existing facility size was reduced to $1.5 billion from $1.62375 billion. These facilities are available for general corporate purposes, including acquisitions and supporting commercial paper borrowings.

How will the new 401(k) Restoration Plan benefit employees?

The 401(k) Restoration Plan is designed for domestic employees whose base salary and commissions exceed $210,000 per year. It allows these employees to make additional retirement contributions and participate more fully in the company's 6% matching contribution, which may be limited in the standard 401(k) plan due to IRS earnings caps.

What are the retirement benefits for the co-founders?

Co-founders Peter M. Nicholas and John E. Abele, who retired as employees on May 9, 2005, will receive annual payments for life ($225,000 for Mr. Nicholas and $150,000 for Mr. Abele). They will also continue to receive medical and dental coverage as long as they remain directors or 'director emeritus,' along with continued funding for long-term care and executive life insurance, and access to office and administrative support. Additionally, the company will make a charitable donation of up to $1 million for each designated by them.

Are there any changes to executive compensation or retirement plans beyond the co-founders?

Yes, the company adopted a new formulaic Executive Retirement Plan for executive officers and division presidents, providing lump-sum benefits based on service years and salary, contingent on a separation agreement including non-competition clauses. The Compensation Committee also approved an oral agreement for James H. Taylor to receive annual payments equal to his executive life insurance premium (plus tax gross-up) until 2012.

BSX 8-K: Material Agreements

Summary

Boston Scientific Corporation (BSX) filed an 8-K on May 13, 2005, detailing several significant corporate actions approved on May 9, 2005. The company refinanced its credit facilities, establishing a new $500 million five-year revolving credit facility and amending an existing multi-year facility, increasing its overall liquidity and flexibility for corporate purposes, including acquisitions. The filing also introduces a new 401(k) Restoration Plan for highly compensated domestic employees to ensure they can fully benefit from the company's 6% matching contribution.

Key Highlights

1Refinanced credit facilities with a new $500 million Five-Year Revolving Credit Agreement and amended an existing multi-year facility, increasing total credit availability for general corporate purposes and acquisitions.
2Established a 401(k) Restoration Plan for domestic employees with salaries exceeding $210,000 to allow for additional retirement contributions and full participation in the company's 6% match.
3Adopted a new formulaic Executive Retirement Plan for executive officers and division presidents, offering lump-sum benefits based on years of service and salary, contingent on separation agreements including non-competition clauses.
4Announced retirement packages for co-founders Peter M. Nicholas and John E. Abele, including lifetime annual payments, continued medical/dental coverage, office/support services, and charitable donations.
5Modified non-employee director compensation, increasing annual retainers and maintaining equity grants, with specific adjustments for committee chairs and the Chairman of the Board.
6Implemented a technical amendment to long-term incentive plans to comply with Sarbanes-Oxley Act Section 402, prohibiting loans to executive officers for incentive award exercise prices.

BOSTON SCIENTIFIC CORP 8-K Report, Material Agreement (May 13, 2005)

Summary

Key Highlights

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