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Exhibit 10.1
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BOSTON SCIENTIFIC
CORPORATION
1992 LONG-TERM INCENTIVE PLAN
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SECTION CONTENTS PAGE
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1. Purpose 1
2. Definitions 1
3. Administration 3
4. Shares of Stock Subject
to the Plan 4
5. Eligibility 5
6. Stock Options 5
7. Stock Appreciation Rights 11
8. Restricted Stock 12
9. Long-Term Performance Awards 15
10. Stock Grants 16
11. Change in Control Provisions 16
12. Amendment and Termination 19
13. Unfunded Status of Plan 20
14. General Provisions 20
15. Term of Plan 21
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BOSTON SCIENTIFIC CORPORATION
1992 LONG-TERM INCENTIVE PLAN
1. Purpose. The purpose of this Plan is to enable key employees of and
consultants to Boston Scientific Corporation (the "Company") to (i) own shares
of stock in the Company, (ii) participate in the shareholder value which has
been created, (iii) have a mutuality of interest with other shareholders and
(iv) enable the Company to attract, retain and motivate key employees and
consultants of particular merit.
2. Definitions. For the purposes of the Plan, the following terms shall
have the meanings set forth below:
(a) Award means the grant or sale pursuant to the Plan of any of Stock
Options, Restricted Stock, Stock Appreciation Rights, Stock Grants, and Long
Term Awards.
(b) Board means the Board of Directors of the Company.
(c) Cause means a felony conviction of a Participant or the failure of a
Participant to contest prosecution for a felony, or a Participant's willful
misconduct or dishonesty, any of which is directly and materially harmful to the
business or reputation of the Company.
(d) Code means the Internal Revenue Code of 1986, as amended from time to
time, or any statute successor thereto, and any regulations issued from time to
time thereunder.
(e) Committee means the Committee referred to in Section 3 of the Plan. For
any period during which no such committee is in existence all authority and
responsibility assigned the Committee under this Plan shall be exercised, if at
all, by the Board.
(f) Company means Boston Scientific Corporation, a corporation organized
under the laws of the State of Delaware (or any successor corporation).
(g) Disability means permanent and total disability as determined under the
Company's long-term disability program for employees then in effect.
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(h) Fair Market Value means, as of any given date, the last reported sales
price of the Stock as reported in The Wall Street Journal for such date or, if
either no such sale is reported or the Stock is not publicly traded on or as of
such date, the fair market value of the Stock as determined by the Committee in
good faith based on the available facts and circumstances at the time.
(i) Incentive Stock Option means any Stock Option intended to be and
designated as an "Incentive Stock Option" within the meaning of Section 422 of
the Code.
(j) Long-Term Performance Award or Long-Term Award means an award made
pursuant to Section 9 below that is payable in cash and/or Stock (including
Restricted Stock) in accordance with the terms of the grant, based on Company,
business unit and/or individual performance over a period of at least two years.
(k) Non-Qualified Stock Option means any Stock Option that is not an
Incentive Stock Option.
(l) Participant means an employee or consultant to whom an Award is granted
pursuant to the Plan.
(m) Plan means the Boston Scientific Corporation 1992 Long-Term Incentive
Plan, as set forth herein and as it may be amended from time to time.
(n) Restricted Stock means an Award pursuant to Section 8 below of shares
of Stock subject to restrictions or other forfeiture conditions.
(o) Retirement means cessation of employment and other association with the
Company and any affiliates or subsidiaries of the Company at or after the normal
retirement date specified in the Company's pension or other deferred
compensation plan applicable generally to employees of the Company or, with the
consent of the Committee, any early retirement date so specified.
(p) Stock means the Class B non-voting common stock, $.01 par value per
share, of the Company.
(q) Stock Appreciation Right means the right, pursuant to an Award granted
under Section 7 below, to surrender to the Company all (or a portion) of a Stock
Option in exchange for an amount equal to the
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difference between (i) the Fair Market Value, as of the date such Stock Option
(or such portion thereof) is surrendered, of the shares of Stock covered by such
Stock Option (or such portion thereof), and (ii) the aggregate exercise price of
such Stock Option (or such portion thereof).
(r) Stock Grant means an Award pursuant to Section 10 below of shares of
Stock not subject to restrictions or other forfeiture conditions.
(s) Stock Option or Option means any option to purchase shares of Stock
(including Restricted Stock) granted pursuant to Section 6 below.
In addition, the terms Change in Control and Change in Control Price shall
have meanings set forth, respectively, in Sections 11.2 and 11.3.
3. Administration. The Committee shall consist of not less than two
"disinterested" persons (as such term is defined Rule 16b-3(c)(2)(i) as
promulgated by the Securities and Exchange Commission under the Securities
Exchange Act of 1934, or any successor definition adopted by the Securities and
Exchange Commission) who shall be appointed by the Board to serve at its
pleasure from time to time. The Committee shall have the authority to grant to
eligible individuals, pursuant to the terms of the Plan: (i) Stock Options, (ii)
Stock Appreciation Rights, (iii) Restricted Stock, (iv) Long-Term Performance
Awards, and/or (v) Stock Grants.
In particular, the Committee shall have the authority:
(i) to select from time to time the officers, other key employees and
consultants of the Company, its subsidiaries and affiliates to whom Awards shall
granted hereunder;
(ii) to determine whether and to what extent Incentive Stock Options,
Non-Qualified Stock Options, Stock Appreciation Rights, Restricted Stock,
Long-Term Performance Awards and Stock Grants or any combination thereof, are to
be granted hereunder;
(iii) to determine the number of shares of Stock to be covered by each
Award granted hereunder;
(iv) to determine the terms and conditions, not inconsistent with the terms
of the Plan, of any Award, including, but not limited to, the share price and
any restriction or limitation, or any vesting acceleration or forfeiture waiver
regarding any Stock Option or other award and/or the shares of Stock relating
thereto, based on such factors as the Committee shall determine, in its sole
discretion;
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(v) to determine whether and under what circumstances a Stock Option may be
settled in cash or Stock, including Restricted Stock under Section 6.2(k);
(vi) to determine whether and under what circumstances a Stock Option may
be exercised without a payment of cash under Section 6.2(l); and
(vii) to determine whether, to what extent and under what circumstances
Stock and other amounts payable with respect to an award under this Plan shall
be deferred either automatically or at the election of the Participant.
The Committee shall have the authority in its discretion to adopt, alter
and repeal such administrative rules, guidelines and practices governing the
Plan as it shall, from time to time, deem advisable; to interpret the terms and
provisions of the Plan and any Award issued under the Plan (and any agreements
relating thereto); to resolve all disputes arising under the Plan; and to
otherwise supervise the administration of the Plan. All decisions made by the
Committee pursuant to the provisions of the Plan shall be final and binding upon
all persons having or claiming any interest in the Plan or in any Award pursuant
to the Plan.
4. Shares of Stock Subject to the Plan.
(a) In General. Subject to adjustment pursuant to the subsection (c) of
this Section 4, no more than an aggregate of 5,000,000 shares of Stock may be
granted or awarded pursuant to the Plan. Such shares may be either shares of
Stock which are authorized but unissued or shares of Stock held by the Company
in its treasury. The Company shall at all times reserve and make available in
sufficient number of shares to meet the requirements of the Plan, provided that
following termination of the Plan the number of shares reserved need not exceed
the number of Shares issuable under Awards outstanding from time to time
thereafter.
(b) Computation of Available Shares. For the purpose of computing the total
number of shares of Stock available for Plan purposes at any time during which
the Plan is in effect, there shall be debited against the total number of shares
determined to be available pursuant to paragraphs (a) and (c) of this Section 4
any outstanding Restricted Stock and Stock Grants, and the maximum number of
shares of Stock subject to issuance upon exercise of Options or upon settlement
of other Awards theretofore made under the Plan. In addition, however, shares
related to the unexercised or undistributed portion of any terminated, expired
or forfeited Award for which no material benefit was received by a Participant
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(e.g. dividends, but not including voting rights), or to the portion of any
Award settled in cash, shall be recredited to the number remaining upon such
termination, expiration or forfeiture and thereafter again be available for
distribution in connection with future Awards under the Plan.
(c) Other Adjustment. In the event of any merger, reorganization,
consolidation, recapitalization, Stock dividend, or other change in corporate
structure affecting the Stock, such substitution or adjustment shall be made in
the aggregate number of shares reserved for issuance under the Plan, and in the
number and option price of shares subject to outstanding Options and other stock
based Awards granted under the Plan, as may be determined to be appropriate by
the Committee in its sole discretion, provided that the number of shares subject
to any Award shall always be a whole number. Any such adjusted option price
shall also be used to determine the amount payable by the Company upon the
exercise of any Stock Appreciation Right associated with any Stock Option.
5. Eligibility. Officers and other key employees of or consultants to the
Company, its affiliates and subsidiaries (but excluding members of the Committee
and any person who serves only as a director) who are responsible for or
contribute to, as determined by the Committee in its sole discretion, the
management, growth and/or profitability of the business of the Company and/or
its subsidiaries and affiliates are eligible for Awards under the Plan.
6. Stock Options.
6.1. Provision for Grant. Stock Options may be granted alone, in addition
to or in tandem with other Awards under the Plan. Any Stock Option granted under
the Plan shall be in such form as the Committee may from time to time approve.
The Committee shall have the authority to grant any optionee who is an employee
of the Company, or of any parent or subsidiary corporation of the Company (in
each case as defined in Section 424 of the Code) Incentive Stock Options,
Non-Qualified Stock Options, or both types of Stock Options (in each case with
or without Stock Appreciation Rights). To the extent that any Stock Option does
not qualify as an Incentive Stock Option, it shall constitute a separate
Non-Qualified Stock Option. In the case of any other person eligible for an
Award under the Plan, any Stock Option granted under the Plan shall be a
Non-Qualified Stock Option (with or without Stock Appreciation Rights).
Anything in the Plan to the contrary notwithstanding, no term of this Plan
relating to Incentive Stock Options shall be interpreted, amended or altered,
nor shall any discretion or authority granted under the Plan be so exercised, so
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as to disqualify the Plan under Section 422 of the Code, or, without the consent
of the optionee(s) affected, to disqualify any Incentive Stock Option under such
Section 422.
6.2. Terms and Conditions. Options granted under the Plan shall be subject
to the following terms and conditions and shall contain such additional terms
and conditions, not inconsistent with the terms of the Plan, as the Committee
shall deem appropriate:
(a) Option Price. The option price per share of Stock purchasable under a
Stock Option shall be determined by the Committee at the time of grant but in
the case of any Incentive Stock Option shall be not less than 100% of the Fair
Market Value of the Stock at the time of grant. However, any Incentive Stock
Option granted to any optionee who, at the time the option is granted, owns more
than 10% of the voting power of all classes of stock of the Company or of a
parent or subsidiary corporation (in each case as defined in Section 424 of the
Code), shall have an exercise price no less than 110% of Fair Market Value per
share on date of the grant.
(b) Option Term. The term of each Stock Option shall be fixed by the
Committee, but no Incentive Stock Option shall be exercisable more than ten
years after the date the Option is granted. However, any Option granted to any
optionee who, at the time the Option is granted owns more than 10% of the voting
power of all classes of stock of the Company or of a parent or subsidiary
corporation (in each case as defined in section 424 of the Code) may not have a
term of more than five years. No Stock Option may be exercised by any person
after expiration of the term of the Option.
(c) Exercisability. Stock Options shall be exercisable at such time or
times and subject to such terms and conditions as shall be determined by the
Committee at or after grant, provided, however, that, except as provided in
Sections 6.2(g), 6.2(h) and 11, unless otherwise determined by the Committee at
or after grant no Stock Option shall be exercisable during the six months
following the date of the granting of the Option. If the Committee provides, in
its discretion, that any Stock Option is exercisable only in installments, the
Committee may waive such installment exercise provisions at any time at or after
grant in whole or in part, based on such factors as the Committee shall
determine, in its sole discretion.
(d) Method of Exercise. Subject to whatever installment exercise provisions
apply pursuant to Section 6.2(c), Stock Options may be exercised in whole or in
part at any time and from time to time during the option period, by giving
written notice of exercise to the Company specifying the number of shares to be
purchased. Such notice shall be accompanied by payment in full of the purchase
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price, either by certified or bank check, or such other instrument as the
Committee may accept. As determined by the Committee, in its sole discretion, at
or after grant, payment in full or in part may also be made in the form of
unrestricted Stock already owned by the optionee or, in the case of the exercise
of a Non-Qualified Stock Option, Restricted Stock subject to an Award hereunder
(based, in each case, on the Fair Market Value of the Stock on the date the
option is exercised, as determined by the Committee); provided, however, that,
in the case of an Incentive Stock Option, the right to make a payment in the
form of already owned shares may be authorized only at the time the option is
granted.
If payment of the option exercise price of a Non-Qualified Stock Option is
made in whole or in part in the form of Restricted Stock, such Restricted Stock
(and any replacement shares relating thereto) shall remain (or be) restricted in
accordance with the original terms of the Restricted Stock Award in question,
and any additional Stock received upon the exercise shall be subject to the same
forfeiture restrictions, unless otherwise determined by the Committee, in its
sole discretion, at or after grant.
If payment of the Option exercise price of a Stock Option is made in whole
or in part in the form of unrestricted Stock already owned by the Participant,
the Company may require that the Stock has been owned by the Participant for a
specified minimum period of time, for the purpose of avoiding any charge to the
Company's earnings, limiting the pyramiding of Stock Option exercises, or such
other purposes as the Company deems appropriate.
No shares of Stock shall be issued until full payment therefor has been
made. An optionee shall generally have the rights to dividends or other rights
of a shareholder with respect to shares subject to the Option when the optionee
has given written notice of exercise, has paid in full for such shares, and, if
requested, has given the representation described in Section 14.1(a).
(e) Replacement Options. If an Option granted pursuant to the Plan may be
exercised by an optionee by means of the delivery of previously acquired Stock
as provided in 6.2(d) above, then the Committee may, in its sole discretion and
at the time of the original option grant, authorize the Participant to
automatically receive a replacement Option pursuant to this part of the Plan to
the extent shares are available under Section 4 at the time such replacement
Option would be issued. Any such replacement Option shall cover such number of
shares as may be determined by the Committee, but in no event more than the
number of shares equal to the difference between the number of shares of the
original Option exercised and the net shares received by the Participant from
such exercise. Any such replacement Option shall have an exercise price equal to
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the then current Fair Market Value of Stock, and a term extending to the
expiration date of the original Option.
The Committee shall have the right, in its sole discretion and at any time, to
discontinue the automatic grant of replacement Options.
(f) Transferability. No Stock Option shall be transferable by the optionee
otherwise than by will or by the laws of descent and distribution, and all Stock
Options shall be exercisable, during the optionee's lifetime, only by the
optionee.
(g) Termination by Reason of Death. If an optionee's employment by or
association with the Company and its subsidiaries and affiliates terminates by
reason of death, any Stock Option held by such optionee may thereafter by
exercised, to the extent then exercisable or on such accelerated basis as the
Committee may determine at or after grant, by the legal representative of the
estate or by the legatee of the optionee under the will of the optionee, for a
period of one year (or such shorter period as the Committee may specify at
grant) from the date of such death or until the expiration of the stated term of
such Stock Option, whichever period is the shorter.
(h) Termination by Reason of Disability or Retirement. If an optionee's
employment by or association with the Company and its subsidiaries and
affiliates terminates by reason of Disability or Retirement, any Stock Option
held by such optionee may thereafter be exercised by the optionee, to the extent
it was exercisable at the time of termination, or on such accelerated basis as
the Committee may determine at or after grant, for a period of three years (or
such shorter period as the Committee may specify at grant) from the date of such
termination of employment or until the expiration of the stated term of such
Stock Option, whichever period is the shorter; provided, however, that, if the
optionee dies within such three-year period (or such shorter period as the
Committee shall specify at grant), any unexercised Stock Option held by such
optionee shall thereafter be exercisable to the extent to which it was
exercisable at the time of death for a period of twelve months from the date of
such death or until the expiration of the stated term of such Stock Option,
whichever period is the shorter.
(i) Other Termination. Unless otherwise determined by the Committee at
grant, if an optionee's employment by or association with the Company and its
subsidiaries and affiliates terminates for any reason other than death,
Disability or Retirement, the Stock Option shall thereupon terminate, except
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that such Stock Option may be exercised, to the extent exercisable at
termination, or on such accelerated basis as the Committee may determine at or
after grant, for a period of three months (or such shorter period as the
Committee shall specific at grant) from the date of such termination or until
the expiration of the stated term of such Stock Option, whichever period is
shorter, if the optionee is involuntarily terminated by the Company without
Cause.
(j) Incentive Stock Option Limitations. To the extent required for
"incentive stock option" status under Section 422 of the Code, the aggregate
Fair Market Value (determined as of the time of grant) of the stock with respect
to which Incentive Stock Options granted are exercisable for the first time by
the optionee during any calendar year under the Plan and/or any other stock
option plan of the Company and any parent or subsidiary corporation (within the
meaning of Section 424 of the Code) shall not exceed $100,000.
(k) Cash-out of Option; Settlement of Spread Value in Restricted Stock. On
receipt of written notice to exercise, the Committee may, in its sole
discretion, elect to cash out all or part of the portion of the Option(s) to be
exercised by paying the optionee an amount, in cash or Stock, equal to the
excess of the Fair Market Value of the Stock over the option price (the "Spread
Value") on the effective date of such exercise. In addition, if the Option
agreement so provides at grant or is amended after grant and prior to exercise
to so provide (with the optionee's consent), the Committee may require that all
or part of the shares to be issued with respect to the Spread Value of an
exercised option take the form of Restricted Stock, which shall be valued on the
date of exercise on the basis of the Fair Market Value of such Restricted Stock
determined without regard to the forfeiture restrictions involved, if any.
(l) Cashless Exercise; Satisfaction of Tax Withholdings. To the extent
permitted under the applicable laws and regulations, at the request of a
Participant and with the consent of the Committee, the Company agrees to
cooperate in a "cashless exercise" of an Option. The cashless exercise shall be
effected by the Participant delivering to a registered securities broker
acceptable to the Company instructions to sell a sufficient number of shares of
Stock from which such Option is then exercisable to cover the costs and expenses
associated with such exercise and sale. Under any Option, the Committee may
permit a Participant to pay any applicable withholding taxes by delivering a
sufficient number of previously-owned shares of Common Stock to the Company to
satisfy such taxes or upon Participant's request, by having the Company withhold
the number of shares of Common Stock obtainable on the exercise of an Option
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which when valued at Fair Market Value (determined as of the day preceding the
date of exercise) is equivalent to the minimum required withholding taxes due.
7. Stock Appreciation Rights
7.1. Provision for Grant. Stock Appreciation Rights may be granted in
conjunction with all or part of any Stock Option granted under the Plan. In the
case of a Non-Qualified Stock Option, such rights may be granted either at or
after the time of the grant of such Stock Option. In the case of an Incentive
Stock Option, such rights may be granted only at the time of the grant of such
Stock Option.
7.2. Termination. A Stock Appreciation Right or applicable portion thereof
granted with respect to a given Stock Option shall terminate and no longer be
exercisable upon the termination or exercise of the related Stock Option, except
that, unless otherwise determined by the Committee, in its sole discretion, at
the time of grant, a Stock Appreciation Right granted with respect to less than
the full number of shares covered by a related Stock Option shall not be reduced
until the number of shares covered by an exercise or termination of the related
Stock Option exceeds the number of shares not covered by the Stock Appreciation
Right.
7.3. Manner and Effect of Exercise. A Stock Appreciation Right may be
exercised by an optionee, in accordance with Section 7.4(b), by surrendering the
applicable portion of the related Stock Option. Upon such exercise and
surrender, the optionee shall be entitled to receive an amount determined in the
manner prescribed in Section 7.4(b). Stock Options which have been so
surrendered, in whole or in part, shall no longer be exercisable to the extent
the related Stock Appreciation Right has been exercised.
7.4. Other Terms and Conditions. Stock Appreciation Rights granted under
the Plan shall be subject to the following terms and conditions, and shall
contain such additional terms and conditions, not inconsistent with the
provisions of the Plan, as the Committee shall deem appropriate:
(a) Exercisability. Stock Appreciation Rights shall be exercisable only at
such time or times and to the extent that the Stock Options to which they
relate, if any, shall be exercisable in accordance with the provisions of
Section 6 and this Section 7 of the Plan; provided, however, that any Stock
Appreciation Right granted subsequent to the grant of the related Stock Option
shall not be exercisable during the first six months of its term, except that
this special limitation shall not apply in the event of death or Disability of
the optionee prior to the expiration of the six-month period and provided,
further, however, that a Stock Appreciation Right granted in connection with an
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Incentive Stock Option may be exercised only if and when the market price of the
Stock subject to the Incentive Stock Option exceeds the exercise price of such
Stock Option.
(b) Amount Payable. Upon the exercise of a Stock Appreciation Right, an
optionee shall be entitled to receive up to, but not more than, an amount in
cash and/or shares of Stock equal in value to the excess of the Fair Market
Value of one share of Stock over the option price per share specified in the
related Stock Option, multiplied by the number of shares in respect of which the
Stock Appreciation Right shall have been exercised. The Committee shall
determine the form of payment.
(c) Transferability. Stock Appreciation Rights shall be transferable only
when and to the extent that the underlying Stock Option would be transferable
under Section 6.2(e) of the Plan.
8. Restricted Stock
8.1. Provision for Grant. Shares of Stock may be issued either alone or in
addition to other Awards granted under the Plan at such price, if any, as the
Committee may determine. The Committee may condition the grant of Restricted
Stock upon the completion of additional service, attainment of specified
performance goals or such other factors as the Committee may determine, in its
sole discretion. The provisions of Restricted Stock Awards need not be the same
with respect to each Participants.
8.2. Awards and Certificates. The prospective recipient of a Restricted
Stock Award shall not have any rights with respect to such Award, unless and
until such recipient has executed an agreement evidencing the Award and has
delivered a fully executed copy thereof to the Company, and has otherwise
complied with the applicable terms and conditions of such Award.
8.3. Additional Terms and Conditions. Grants of Restricted Stock may be
made under the following additional terms and conditions:
(a) Purchase Price. The purchase price for shares of Restricted Stock shall
be equal to or less than their Fair Market Value and may be zero.
(b) Acceptance of Awards. Awards of Restricted Stock must be accepted
within a period of 60 days (or such shorter period as the Committee may specify
at grant) after the Award date, by executing a Restricted Stock Award agreement
and paying whatever price (if any) is required pursuant to the terms of the
Award.
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(c) Issuance of Certificates. Each Participant receiving a Restricted Stock
Award shall be issued a stock certificate in respect of such shares of
Restricted Stock. Such certificate shall be registered in the name of such
Participant, and, if applicable, shall bear an appropriate legend referring to
the terms, conditions, and restrictions applicable to such Award, substantially
in the following form:
"The transferability of this certificate and the shares of stock represented
hereby are subject to the terms and conditions (including forfeiture) of the
Boston Scientific Corporation 1992 Long-Term Incentive Plan and an Agreement
entered into between the registered owner and Boston Scientific Corporation.
Copies of such Plan and Agreement are on file in the offices of Boston
Scientific Corporation at 480 Pleasant Street, Watertown Massachusetts 02172"
(d) Escrow of Shares. The Committee may require that the stock certificates
evidencing shares of Restricted Stock be held in custody by the Company until
the restrictions thereon shall have lapsed, and that the Participant deliver a
stock power, endorsed in blank, relating to the Stock covered by such Award.
(e) Transferability. Subject to the provisions of this Plan and the Award
agreement, during the period set by the Committee commencing with the date of
such Award (the "Restriction Period"), the Participant shall not be permitted to
sell, transfer, pledge, assign or otherwise encumber shares of Restricted Stock
awarded under the Plan. Within these limits, the Committee, in its sole
discretion, may provide for the lapse of such restrictions in installments and
may accelerate or waive such restrictions in whole or in part, based on service,
performance and/or such other factors or criteria as the Committee may
determine, in its sole discretion.
(f) Rights Pending Lapse of Restrictions or Forfeiture of Award. Except as
provided in this subsection (f) and subsection (e) above, the Participant shall
have, with respect to the shares of Restricted Stock, all of the rights of a
shareholder of the Company, including the right to vote the shares, and the
right to receive any cash dividends. The Committee, in its sole discretion, as
determined at the time of Award, may permit or require the payment of cash
dividends to be deferred and, if the Committee so determines, reinvested in
additional Restricted Stock to the extent shares are available under Section 4.
(g) Termination of Employment. Subject to the applicable provisions of the
Award agreement and this Section 8, upon termination of a Participant's
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employment or other association with the Company and its subsidiaries and
affiliates for any reason during the Restriction Period, all shares still
subject to restriction shall be forfeited by the Participant. In the event of
hardship or other special circumstances of a Participant whose employment or
association with the Company and its subsidiaries and affiliates is
involuntarily terminated (other than for Cause), the Committee may, in it sole
discretion, waive in whole or in part any or all remaining restrictions with
respect to such Participant's shares of Restricted Stock, based on such factors
as the Committee may deem appropriate.
(h) Lapse of Restrictions. If and when the Restriction Period expires
without a prior forfeiture of the Restricted Stock subject to such Restriction
Period, the certificates for such shares shall be delivered to the Participant
promptly if not theretofore so delivered.
9. Long Term Performance Awards
9.1. Provision for Grant. Long-Term Performance Awards may be awarded
either alone or in addition to other Awards granted under the Plan. The
Committee shall determine the nature, length and starting date of the
performance period (the "Performance Period") for each Long-Term Performance
Award, which subject to Section 11 below shall be a period of at least two
years, and shall determine the performance objectives to be used in valuing
Long-Term Performance Awards and determining the extent to which such Long-Term
Performance Awards have been earned. Performance objectives may vary from
Participant to Participant and between groups of Participants and shall be based
upon such Company, business unit and/or individual performance factors and
criteria as the Committee may deem appropriate, including, but not limited to,
earnings per share or return on equity. Performance Periods may overlap and
Participants may participate simultaneously with respect to Long-Term
Performance Awards that are subject to different Performance Periods and/or
different performance factors and criteria.
9.2. Periodical Determination of Performance. At the beginning of each
Performance Period, the Committee shall determine for each Long-Term Performance
Award subject to such Performance Period the range of dollar values or number of
shares of Stock to be awarded to the Participant at the end of the Performance
Period if and to the extent that the relevant measure(s) of performance for such
Long Term Performance Award is (are) met. Such dollar values or number of shares
of Stock may be fixed or may vary in accordance with such performance and/or
other criteria as may be specified by the Committee, in its sole discretion.
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9.3. Adjustment of Awards. In the event of special or unusual events or
circumstances affecting the application of one or more performance objectives to
a Long-Term Performance Award, the Committee may revise the performance
objectives and/or underlying factors and criteria applicable to the Long-Term
Performance Awards affected, to the extent deemed appropriate by the Committee,
in its sole discretion, to avoid unintended windfalls or hardship.
9.3. Termination of Employment. Subject to Section 11 below and unless
otherwise provided in the applicable Award agreement(s), if a Participant
terminates employment or other association with the Company and its affiliates
and subsidiaries during a Performance Period because of death, Disability or
Retirement, such Participant shall be entitled to a payment with respect to each
outstanding Long-Term Performance Award at the end of the applicable Performance
Period (i) based, to the extent relevant under the terms of the award, upon the
Participant's performance for the portion of such Performance Period ending on
the date of termination and the performance of the applicable business unit(s)
for the entire Performance Period, and (ii) prorated, where deemed appropriate
by the Committee, for the portion of the Performance Period during which the
Participant was employed by or associated with the Company and its affiliates
and subsidiaries, all as determined by the Committee, in its sole discretion.
However, the Committee may provide for an earlier payment in settlement of such
award in such amount and under such terms and conditions as the Committee deems
appropriate.
Subject to Section 11 below, if a Participant terminates employment by or
association with the Company and its subsidiaries and affiliates during a
Performance Period for any other reason, then such Participant shall not be
entitled to any payment with respect to the Long-Term Performance Awards subject
to such Performance Period, unless the Committee shall otherwise determine, in
its sole discretion.
9.4. Form of Payment. The earned portion of a Long-Term Performance Award
may be paid currently or on a deferred basis with such interest or earnings
equivalent as may be determined by the Committee, in its sole discretion.
Payment shall be made in the form of cash or whole shares of Stock, including
Restricted Stock, either in a lump sum payment or in annual installments
commencing as soon as practicable after the end of the relevant Performance
Period, all as the Committee shall determine at or after grant.
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10. Stock Grants. In recognition of significant contributions to the
success of the Company, its affiliates and subsidiaries, and in such other
circumstances as the Committee deems appropriate in its sole discretion, shares
of Stock may be issued either alone or in addition to other stock or cash-based
Awards granted under the Plan at such price, if any, as the Committee may
determine. Stock Grants Awards shall be made without forfeiture conditions of
any kind and otherwise pursuant to such terms and conditions as the Committee
may determine, in its sole discretion.
11. Change in Control Provisions.
11.1. Consequences of Event. In the event of a Change in Control the
following acceleration and valuation provisions shall apply:
(a) Any Stock Appreciation Rights outstanding for at least six months and
any Stock Options awarded under the Plan not previously exercisable and vested
shall become fully vested and exercisable.
(b) The restrictions applicable to any Restricted Stock Awards under the
Plan shall lapse and such shares and Awards shall be deemed fully vested.
(c) The value of all shares of Stock subject to outstanding Stock Options
and, to the extent vesting by reason of the Change in Control, Restricted Stock
Awards shall be paid to the holders thereof in cash within thirty days following
the Change of Control (less any applicable exercise price and tax withholdings,
and subject to the surrender of the shares which are the subject of the
Restricted Stock Award) on the basis of the Change in Control Price as of the
date of such Change in Control.
(d) Any outstanding Long-Term Performance Awards shall be vested and paid
out in cash within thirty days following the Change in Control based on prorated
target results for the performance periods in question.
10.2. Change in Control. For purposes of this Plan, a "Change in Control"
means the happening of any of the following:
(a) The acquisition, other than from the Company, by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act")) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of 20% or
more of either (i) the then outstanding shares of common stock of the Company
(the "Outstanding Company Common Stock") or (ii) the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally
in the election of directors (the "Company Voting Securities"); provided,
however, that any acquisition by (x) any non-corporate shareholder of the
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Company as of the effective date of the initial registration of an offering of
Stock under the Securities Act of 1933, (y) the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) sponsored or
maintained by the Company or any of its subsidiaries or (z) any corporation with
respect to which, following such acquisition, more than 60% of, respectively,
the then outstanding shares of common stock of such corporation and combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the individuals
and entities who were the beneficial owners, respectively, of the Outstanding
Company Common Stock and Company Voting Securities immediately prior to such
acquisition in substantially the same proportion as their ownership, immediately
prior to such acquisition, of the Outstanding Company Common Stock and Company
Voting Securities, as the case may be, shall not constitute a Change in Control
of the Company; or
(b) Individuals who, as of the effective date of the initial registration
of an offering of Stock under the Securities Act of 1933, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a majority
of the Board, provided that any individual becoming a director subsequent to
such effective date whose election or nomination for election by the Company's
shareholders, was approved by a vote of at least a majority of the directors
then comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Company (as such terms are used in Rule 14a-11 of Regulation
14A promulgated under the Exchange Act); or
(c) Approval by the shareholders of the Company of a reorganization, merger
or consolidation (a "Business Combination"), in each case, with respect to which
all or substantially all of the individuals and entities who were the respective
beneficial owners of the Outstanding Company Common Stock and Company Voting
Securities immediately prior to such Business Combination do not own
beneficially, directly or indirectly, more than 60% of, respectively, the then
outstanding shares of common stock and the combined voting power of the then
outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the corporation resulting from such Business
Combination in substantially the same proportion as their ownership immediately
prior to such Business Combination of the Outstanding Company Common Stock and
Company Voting Securities, as the case may be; or
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(d) a complete liquidation or dissolution of the Company or a sale or other
disposition of all or substantially all of the assets of the Company other than
to a corporation with respect to which, following such sale or disposition, more
than 60% of, respectively, the then outstanding shars of common stock and the
combined voting power of the then outstanding voting securities entitled to vote
generally in the election of directors is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and entities who were
the beneficial owners, respectively, of the Outstanding Company Common Stock and
Company Voting Securities immediately prior to such sale or disposition in
substantially the same proportion as their ownership of the Outstanding Company
Common Stock and Company Voting Securities, as the case may be, immediately
prior to such sale or disposition.
11.3. Change in Control Price. For purposes of this Plan, "Change in
Control Price" means the highest closing price per share paid in any transaction
on the New York Stock Exchange, or the highest price paid or offered in any bona
fide transaction related to a potential or actual change in control of the
Company, at any time during the preceding sixty day period as determined by the
Committee except that, in the case of Incentive Stock Options and Stock
Appreciation Rights relating to Incentive Stock Options, such price shall be
based only on transactions reported for the date on which the Committee decides
to cash out such options.
12. Amendment and Termination. The Board may terminate or amend the Plan at
any time and from time to time; provided, however, that the Board may not,
without approval of the shareholders of the Company, increase the maximum number
of shares of Stock purchasable under the Plan or change the description of the
individuals eligible to receive Awards. No termination of or amendment to the
Plan may adversely affect the rights of a Participant with respect to any Award
theretofore granted under the Plan without such Participant's consent.
The Committee may amend the terms of any Award theretofore granted,
prospectively or retroactively, but, subject to Section 4 above, no such
amendment shall impair the rights of any Participant without the Participant's
consent.
13. Unfunded Status of Plan. The Plan is intended to constitute an
"unfunded" plan for incentive and deferred compensation. With respect to any
payments not yet made to a Participant by the Company, nothing contained herein
shall give any such Participant any rights that are greater than those of any
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other general creditor of the Company. In its sole discretion, the Committee may
authorize the creation of trusts or other arrangements to meet the obligations
created under the Plan to deliver Stock or payments in lieu of or with respect
to Awards hereunder, provided, however, unless the Committee otherwise
determines with the consent of the affected Participant, the existence of such
trusts or other arrangements is consistent with the "unfunded" status of the
Plan.
14. General Provisions.
14.1. Investment Representation. The Committee may require each person
acquiring shares pursuant to an Award under the Plan to represent to and agree
with the Company in writing that the Participant is acquiring the shares for
investment without a view to distribution thereof. The certificates for such
shares may include any legend which the Committee deems appropriate to reflect
any restrictions on transfer. All certificates for shares of Stock or other
securities delivered under the Plan shall be subject to such stock-transfer
orders and other restrictions as the Committee may deem advisable under the
rules, regulations, and other requirements of any stock exchange upon which the
Stock is then listed, and any applicable Federal or state securities law, and
the Committee may cause a legend or legends to be put on any such certificates
to make appropriate reference to such restrictions.
14.2. Adoption of Other Plans. Nothing contained in this Plan shall prevent
the Board of Directors from adopting other or additional compensation
arrangements, subject to stockholder approval if such approval is required; and
such arrangements may be either generally applicable or applicable only in
specific cases.
14.3. No Employment Rights. Neither the establishment or continuation of
the Plan, nor the grant of any Award hereunder, shall confer upon any employee
or consultant of the Company or its affiliates or subsidiaries any right to
continued employment or association with the Company and its affiliates and
subsidiaries, nor shall it interfere in any way with the right of the Company
and its affiliates and subsidiaries to terminate the employment or association
of any of its employees or consultants at any time.
14.4. Tax Withholding. No later than the date as of which an amount first
becomes includible in the gross income of the Participant for Federal income tax
purposes with respect to any Award, the Participant shall pay to the Company, or
make arrangements satisfactory to the Committee regarding the payment of, any
Federal, state, or local taxes of any kind required by law to be withheld with
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respect to such amount. Unless otherwise determined by the Committee, the
minimum required withholding obligations may be settled with Stock, including
Stock that is part of the Award that gives rise to the withholding requirement.
The obligations of the Company under the Plan shall be conditional on such
payment or arrangements and the Company shall, to the extent permitted by law,
have the right to deduct any such taxes from any payment of any kind otherwise
due to the Participant.
14.5. Payments on Death. The Committee shall establish such procedures as
it deems appropriate for a Participant to designate a beneficiary to whom any
amounts payable in the event of the Participant's death are to be paid.
14.6. Governing Law. The Plan and all Awards and actions taken thereunder
shall be governed by and construed in accordance with the laws of the
Commonwealth of Massachusetts, without regard to the conflict of laws principles
thereof.
15. Term of Plan. The Plan shall become effective upon the approval of the
Plan by the shareholders of the Company. No Award shall be granted pursuant to
the Plan on or after the tenth anniversary of the Plan's approval by
shareholders, but Awards theretofore granted may extend beyond that date.
22
Amendment to Boston Scientific Corporation 1992 Long-Term Incentive Plan
10.2 Pooling-of-Interests Transactions. Notwithstanding anything
contained in Section 10.1, in the event of a merger or consolidation of the
Company with another entity which is intended to qualify for
pooling-of-interests accounting under U.S. Generally Accepted Accounting
Principles pursuant to Accounting Principles Board Opinion No. 16 ("Business
Combinations") or any successor opinion (a "Pooling Transaction"), the
following shall result:
(i) at the closing of a Pooling Transaction in which the Company
is not the surviving corporation (the "Combined Entity"), each
outstanding Stock Option granted hereunder (a "Predecessor Option")
shall be converted into an option (a "Substitute Option") to acquire
common stock of the Combined Entity in the Pooling Transaction, which
Substitute Option shall (A) have the same terms and conditions
(including vesting schedule) as the Predecessor Option, except as
provided in clause (ii) below, and (B) be exercisable at an exercise
price, and for a number of shares of the Combined Entity's common stock,
determined in accordance with Section 424(a) of the Code as if the
conversion of the Predecessor Option into the Successor Option was
intended to constitute "issuing or assuming a stock option in a
transaction to which Section 424(a) applies"; and
(ii) solely in the case of a Pooling Transaction (whether or not
the Company is the Combined Entity) in which, after giving effect to the
closing of such transaction, shareholders of the Company immediately
prior to such closing beneficially own less than 60% or less of the
Combined Entity's voting common stock, all Stock Options granted
hereunder (or Successor Options, if the Company is not the Combined
Entity) shall be fully vested and immediately exercisable upon such
closing.
AMENDMENT NO. 1 TO THE BOSTON SCIENTIFIC CORPORATION
1992 LONG-TERM INCENTIVE PLAN
The Boston Scientific Corporation 1992 Long-Term Incentive Plan (the
"Plan") is hereby amended as follows:
1. Section 6.2(f) of the Plan is amended by deleting the existing Section 6.2(f)
in its entirety and replacing it with the following:
"(f) Transferability. No Option shall be transferable by a Participant
other than by will or by the laws of descent and distribution and all Options
granted thereunder shall be exercisable, during the Participants lifetime, only
by the Participant provided, however, that, subject to such conditions as the
may from time to time establish, Participants may transfer, without payment of
consideration, any Options whenever granted under the Plan to members of their
respective immediate families or to trusts, partnerships, or similar vehicles
established for the benefit of members of their respective immediate families."
2. Section 2(p) of the Plan is amended by deleting the existing Section 2(p) in
its entirety and replacing it with the following:
"(p) Stock means the Common Stock, $.01 par value per share, of the
Company."