8-KLeadership ChangesExhibits & Filings

BOSTON SCIENTIFIC CORP 8-K Report, Executive Changes (Mar 6, 2013)

Filed March 6, 2013For Securities:BSX

Summary

Boston Scientific Corporation (BSX) has filed an 8-K report detailing the approval of new Change in Control Agreements for its executive officers and certain senior management members, effective February 28, 2013. These agreements replace existing ones nearing their three-year term expiration. The primary purpose is to ensure executive retention and provide a structured framework for compensation and benefits in the event of a change in control and subsequent termination. While the core terms remain substantially similar to previous agreements, a notable change is the removal of the "executive allowance" from severance calculations, reflecting the termination of that historical program. The new agreements offer robust severance packages, including a lump sum payment equivalent to three times the executive's base salary and target incentive bonus, prorated bonus, extended benefit coverage, and legal fee reimbursement. They also address the accelerated vesting of equity awards and include standard non-disclosure and non-solicitation clauses.

Key Highlights

  • 1Boston Scientific approved new Change in Control Agreements for executives and senior management.
  • 2The new agreements are effective February 28, 2013, and have a three-year term.
  • 3Severance calculations will no longer include the "executive allowance" due to program termination.
  • 4In case of a change in control and qualifying termination, executives are entitled to 3x base salary + target incentive bonus.
  • 5Additional severance includes prorated target bonus and continued benefits for up to three years.
  • 6Outstanding stock options, restricted stock, and deferred stock units will accelerate vesting upon a change in control and termination.
  • 7Agreements include provisions for legal fee reimbursement up to $100,000 in specific dispute scenarios.

Frequently Asked Questions

The primary purpose is to provide financial security and incentivize retention for key executives and senior management during periods of potential corporate change. These agreements ensure a clear and defined compensation and benefits package should a change in control occur followed by a termination of employment.

The most significant change is the removal of the 'executive allowance' from the calculation of severance payments. This is due to the termination of the company's historical program that provided this allowance, which was effective December 31, 2012.

If a change in control occurs and the executive's employment is terminated without 'cause' or by the executive for 'good reason' within two years, they are entitled to a lump sum payment of three times their base salary plus target incentive bonus, a prorated target incentive bonus for the year of termination, continued health and welfare benefits for up to three years, and reimbursement of up to $100,000 in legal fees.

Outstanding stock options, restricted stock, and deferred stock unit awards will vest or become free from restrictions. This acceleration generally occurs if a change in control happens during the agreement term and employment is terminated as described. If the acquiring entity does not assume or substitute these awards, they will vest immediately upon the change in control.