Summary
This 8-K filing from Boston Scientific (BSX) on December 22, 2008, primarily details administrative and technical amendments to several key employee compensation and benefit plans. These changes are driven by the upcoming effective date of new regulations under Internal Revenue Code Section 409A, which govern deferred compensation. The company's Board of Directors approved these amendments to ensure compliance with the new rules before they take effect on January 1, 2009. The filing also announces the approval of the 2009 Performance Incentive Plan, which aims to align executive compensation with divisional performance metrics.
Key Highlights
- 1Approval of the 2009 Performance Incentive Plan, effective January 1, 2009, with a focus on aligning executive incentives with divisional performance.
- 2Amendments to the 401(k) Retirement Savings Plan, effective June 30, 2008, to reflect the merger with the Guidant Employee Savings and Stock Ownership Plan and facilitate in-kind stock distributions.
- 3Significant administrative and technical amendments to various benefit and compensation plans to comply with new Section 409A deferred compensation regulations, effective January 1, 2009.
- 4Specific amendments were made to the 2000 Long Term Incentive Plan, Excess Benefit Plan, and Executive Retirement Plan for Section 409A compliance.
- 5Approval of a form of Retention Agreement, indicating potential retention incentives for certain employees.
- 6Amendments to Deferred Stock Unit Agreements for James R. Tobin, comprising both regular and performance-based units, also to comply with Section 409A.
Frequently Asked Questions
The primary reason for the amendments is to ensure compliance with new regulations under Internal Revenue Code Section 409A, which govern deferred compensation and become effective on January 1, 2009. These administrative and technical changes are necessary to avoid penalties associated with non-compliance.
The 2009 Performance Incentive Plan is substantially similar to the 2008 plan, but it specifically aligns incentive compensation for executive officers who are also Division Presidents to the achievement of previously established performance metrics for their respective divisions.
The 401(k) Plan was amended effective June 30, 2008, to incorporate the Guidant Employee Savings and Stock Ownership Plan following a merger. Additionally, the amendments provide for in-kind distributions of Boston Scientific common stock for all participants and include technical updates for compliance with final regulations under Internal Revenue Code section 415.
Yes, the filing indicates that Deferred Stock Unit Agreements with James R. Tobin, including those for both regular and performance-based units, were amended to comply with Section 409A. A form of Retention Agreement was also approved.