Offer Letter – Mahoney

Amendment to Offer Letter – Mahoney

Offer Letter - Kucheman

Amendment to Offer Letter - Kucheman

Change in Control

 

 

 

EX-10.1 3 exhibit101_michaelmahoneyo.htm MAHONEY OFFER LETTER

 

 

EXHIBIT 10.1

 

 

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537

 

 

September 6, 2011

Michael F. Mahoney

324 Rumstick Road

Barrington, RI 02806

 

Dear Michael:

On behalf of Boston Scientific Corporation (“Boston Scientific” or the “Company”), we are very pleased to offer you employment on the terms and conditions set forth in this letter (the “Letter”). Your initial position of employment with Boston Scientific, commencing on September 21, 2011 or such other date as we may mutually agree (the “Hire Date”) will be as President, Boston Scientific, reporting to our Chief Executive Officer. In that position your duties and responsibilities shall be subject to the terms of the protocol attached hereto as Appendix A (the “Protocol”). At such time as we in good faith determine that the provisions of the Protocol are no longer applicable, you will assume the position of President and Chief Executive Officer of Boston Scientific, reporting to our Board of Directors (“Board”). You will be appointed as a member of the Company's management Executive Committee at the earliest opportunity as is consistent with the Protocol, as determined by the Company in good faith, and in all events not later than the date you assume the position of President and Chief Executive Officer. We look forward to a productive and successful working relationship and to your acceptance of this offer of employment.

In connection with your employment, we have attached an Agreement Concerning Employment (the “Employee Agreement”) hereto as Exhibit A and our Code of Conduct which summarize certain of the terms and conditions of your employment and the obligations of the Company and you.

This Letter constitutes an irrevocable offer, which is effective immediately, and open for your acceptance until the Hire Date at 5:00 p.m. (Eastern Time); provided, however, that this Letter shall be subject to the following conditions and shall immediately lapse prior to such time upon the earliest to occur of (i) your death or disability, (ii) your criminal or civil conviction, or a plea of nolo contendere or your commission of any act or omission that would constitute a felony, (iii) actions taken by you that would otherwise constitute a material breach of this Letter if you were deemed to have accepted this Letter, or (iv) your rejection of this Letter (each such condition under clauses (i) through (iv) being a “Lapse Condition”). It shall be a condition of this Letter that any acceptance by you of this Letter must be communicated in writing to the Chief Executive Officer of Boston Scientific and shall become effective upon receipt by the Company (to be delivered c/o the General Counsel).

The existence of this Letter and the matters contemplated hereby are to be treated in the strictest confidence and, except as may be required by applicable law, should not be disclosed by you to any person whatsoever (other than your representatives who need to know such information and have been apprised of, and agreed to, its confidential nature) without the Company's prior written consent; provided

 

 


 

 

that you are authorized to inform your current employer that you have been offered a position with the Company.

During the period commencing upon your receipt of this Letter and ending on the Hire Date you shall not be deemed an employee of the Company in any capacity and you shall not owe the Company or any of its affiliates any duty as an employee, shall not be required or requested to provide any services to the Company or its affiliates and shall not take any action which in any manner conflicts with or breaches any of your obligations or duty owed to any employer.

SIGN-ON BONUS

Boston Scientific will provide you with a lump-sum cash sign-on bonus of $1,500,000 (less applicable withholding taxes), which will be paid at the time of your first paycheck (the “Initial Sign-On Bonus”). Except as otherwise set forth in this Letter, you must be employed by Boston Scientific to receive the Initial Sign-On Bonus. If you should leave Boston Scientific voluntarily prior to the first anniversary of your start date, you will be required to pay back the Initial Sign-On Bonus within 30 days of your departure.

In addition, Boston Scientific will provide you with a lump sum cash sign-on bonus of $750,000 (less applicable taxes), within 30 days following your promotion to President and Chief Executive Officer of Boston Scientific (the “CEO Sign-On Bonus”). You must be employed by Boston Scientific to receive the CEO Sign-On Bonus. If you should leave Boston Scientific voluntarily prior to the first anniversary of your promotion to President and Chief Executive Officer, you will be required to pay back the CEO-Sign On Bonus within 30 days of your departure.

BASE SALARY

Your base salary will initially be $34,615.39, payable bi-weekly, which is $900,000 on an annualized basis. Your next base salary review will be in February 2012 during the normal annual executive review process. Thereafter, your performance and compensation will be reviewed in the normal course, on an annual basis starting with the annual review process.

PERFORMANCE INCENTIVE PLAN

The Performance Incentive Plan (PIP) provides employees with the opportunity for a variable financial incentive in recognition of individual and Company performance in a given year. You are eligible to participate in the annual PIP (as in effect from time to time) beginning this year and you will be eligible to receive a prorated bonus amount at the funded target for 2011, based on the Company's achievement of corporate performance goals. Per the current plan, your annual target incentive is 120% of base salary. Starting with the 2012 annual PIP, your actual award will be based on your achievement of individual goals and the Company's achievement of corporate performance goals, and may be at, less than or greater than such target amount, and will be paid out by March 15th of the year following the Boston Scientific performance year. The Boston Scientific performance year currently runs from January 1st through December 31st of each year. Under the current plan, you must be an active employee on the date of payment to receive any award pay-out under the plan.

DEFERRED BONUS PROGRAM

You will be eligible to participate in the Boston Scientific Corporation Deferred Bonus Plan (as in effect from time to time). This plan allows you to save additional tax-deferred money for your future by deferring a portion of your annual bonus awarded under the PIP. Specifically, under the plan, on an annual

 

 


 

 

basis, you can elect to defer up to 75% of the PIP bonus awarded to you starting with the 2012 or any subsequent year.

LONG TERM INCENTIVE PROGRAM

New Hire Equity Grant

As part of this offer the Compensation Committee has determined that you be granted effective on the first trading day of the month following the Hire Date, an equity incentive in the form of Deferred Stock Units having a total value of $9,532,570 on the effective date of grant, in accordance with the form of award agreement attached hereto as Exhibit B (“New Hire DSUs”). The award will be made pursuant to the 2011 Boston Scientific Long Term Incentive Plan.

2012 Annual Equity Grant

As part of this offer the Compensation Committee has determined that during the normal annual executive review process you will be granted an equity award having a total value of $7,200,000 on the effective date of grant (“2012 Annual Equity Grant”). This award is inclusive of Boston Scientific annual equity to be granted to you under the 2012 Long Term Incentive Program. The total award will consist of $3,600,000 in Non-Qualified Stock Options (50% of total grant), $1,800,000 in Deferred Stock Units (DSUs) (25% of total grant) and $1,800,000 in Performance Share Units (PSUs) (25% of total grant). These awards will be made pursuant to the 2011 Boston Scientific Long Term Incentive Plan.  Our Long Term Incentive Plans are designed to share the rewards of the business with individuals who most significantly contribute to the achievement of the Company's strategic and operating goals. The effective date of grant will be the date on which 2012 long-term incentive awards are made to senior executives of Boston Scientific generally under the 2012 Long Term Incentive Program, which under our policies is generally on the date of approval or the first open trading day following the date of approval, should the date of grant be in a closed trading window. Thereafter, your performance and entitlement to long term incentive compensation grants will be reviewed in the normal course, on an annual basis starting with the annual review process in 2013.

DEFERRED STOCK UNITS

An award of Deferred Stock Units reflects Boston Scientific's commitment to grant to you a number of shares of Boston Scientific common stock (less applicable tax and other withholdings), to be issued to you in five equal annual increments beginning on the first anniversary of the date of the grant.  The number of DSUs to be awarded will be calculated using the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. This award is also subject to all provisions of the 2011 Long Term Incentive Plan and Deferred Stock Unit Agreement.  In accordance with the 2011 Long Term Incentive Plan, Deferred Stock Unit Agreement, and your Change in Control Agreement (described below), as applicable, upon your Retirement, Disability, death or a Change in Control of Boston Scientific (as those terms are defined in the 2011 Long Term Incentive Plan or Change in Control Agreement, as applicable), we will issue to you or your beneficiary (as the case may be), any shares of Boston Scientific stock to be awarded to you under your DSU grants described in this offer that remain subject to eligibility conditions. In the event of any inconsistency between this section and the section captioned “New Hire Equity Grant” with respect to the New Hire DSUs, the section captioned “New Hire Equity Grant” will control.

NON-QUALIFIED STOCK OPTIONS 

The option grant will provide you with the opportunity to purchase shares of Boston Scientific common

 

 


 

 

stock.  The number of stock options will be calculated using a Black Scholes calculation of the value of the options on the effective date of grant.  The exercise price will be equal to the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. The option grant will vest in four equal annual installments beginning on the first anniversary of the date of grant and will expire on the 10th anniversary of the grant date.  The option grant will be subject to the provisions of the 2011 Long Term Incentive Plan and Non-Qualified Stock Option Agreement.  In accordance with the 2011 Long Term Incentive Plan, Non-Qualified Stock Option Agreement and your Change in Control Agreement, as applicable, any unvested stock options will accelerate upon your Retirement, Disability, death or a Change in Control of Boston Scientific (as those terms are defined in the 2011 Long Term Incentive Plan or Change in Control Agreement, as applicable) and in those scenarios would remain exercisable until the expiration of the stated term of the stock option.

PERFORMANCE SHARE PROGRAM (PSP) AWARD 

The PSP award reflects Boston Scientific's commitment to grant to you a number of shares of Boston Scientific common stock (less applicable tax and other withholdings), subject to certain performance, eligibility and other conditions, and will fully vest at the end of a three year period beginning on the effective date of the grant.  The target number of Performance Share Units (PSU) to be awarded to you will be calculated using the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. The actual number of shares delivered to you at the end of the vesting period will be based on Boston Scientific's stock performance over the three year period as compared to the S&P HealthCare Index and in accordance therewith may be earned at less than, at or greater than the target number of shares awarded. This award is also subject to all provisions of the 2011 Long Term Incentive Plan, the Performance Share Program and the Performance Share Unit Award Agreement.  In accordance with the 2011 Long Term Incentive Plan, Performance Share Program, Performance Share Unit Award Agreement and your Change in Control Agreement, as applicable, upon your Retirement, Disability, or death (as those terms are defined in the 2011 Long Term Incentive Plan, Performance Share Program and Change in Control Agreement, as applicable), we will issue to you or your beneficiary (as the case may be), the number of shares of Boston Scientific stock in accordance with the terms set forth in the Performance Share Program and the Change in Control Agreement, as applicable.

BENEFITS

 

Enclosed is descriptive literature regarding Boston Scientific's current benefit programs.  You should review this information prior to your start date so you are prepared to enroll within your first 31 days of employment.  Please understand that the Company reserves the right to unilaterally amend or terminate any of these programs, or to require or change employee premium contributions toward any benefits.

 

EXECUTIVE RETIREMENT PLAN

As a member of the Executive Committee, you will be eligible to participate in the Boston Scientific Executive Retirement Plan in accordance with its terms. As a member of the Executive Committee, if you “Retire” from Boston Scientific (as that term is defined in our Executive Retirement Plan), you may be eligible to receive certain benefits provided in that plan, including a lump sum payment equal to 2.5 months of base salary times your years of service, subject to a maximum benefit of 36 months. A copy of Boston Scientific's Executive Retirement Plan is attached for your information.

BOSTON SCIENTIFIC CHANGE IN CONTROL AND INDEMNIFICATION AGREEMENTS

Boston Scientific provides Change in Control and indemnification agreements to its key executives. In

 

 


 

 

general, the Change in Control agreement entitles you as a member of our Executive Committee to a lump sum payment of three times your base salary and assumed on-plan incentive bonus if either your employment is terminated (other than for cause) or if your duties are diminished following a change in control of Boston Scientific. Indemnification by Boston Scientific is also extended to key executives for liability arising in the proper performance of one's responsibilities as an executive officer of Boston Scientific. A form of each agreement has been provided to you and shall be executed and effective on your first day of employment.

AIRCRAFT

Boston Scientific will provide you with reasonable and customary personal use of corporate-owned aircraft up to $100,000 per calendar year in aggregate incremental cost to the Company, including standard annual vacations or other personal use as agreed upon, all in accordance with the Company's policies in effect from time to time. All personal use of aircraft will result in imputed income based on U.S. Department of Transportation SIFL rates as required by law, and you will not be reimbursed for any taxes resulting from such imputed income.

RELOCATION

With this offer, you will be eligible for the Tier 5, Executive Officer Relocation Policy (for which purpose, all senior management approvals thereunder have been granted). In addition, for so long as you are employed by Boston Scientific, and to the extent that you have not been promoted to the position of President and Chief Executive Officer after the Hire Date, Boston Scientific will provide you with temporary housing in the Boston Area for up to eighteen months following the Hire Date.

SEVERANCE RELATED TO POSITION

If (x) prior to a “Change in Control” (as defined in the Change in Control Agreement) your employment is involuntarily terminated by the Company (except for “cause” (as defined in Section 4a.(4)(C) of the Company's 2011 Long Term Incentive Plan), or conduct constituting a material act of misconduct in connection with the performance of your duties which upon written notice to you has not been cured within seven (7) days thereafter (to the extent reasonably curable), or as a result of your death or disability) before you have been appointed President and Chief Executive Officer of the Company, or (y) prior to a “Change in Control”, you terminate your employment for “Good Reason” (as defined below): (a) your New Hire DSU's will immediately vest 100% and be delivered to you minus the shares withheld to cover your applicable taxes; provided that, if the New Hire DSUs had not yet then been granted to you, you will receive a lump sum cash payment in the amount of $9,532,570, less applicable withholding taxes); (b) your 2012 Annual Equity Grant will vest in the following manner: (1) Non-Qualified Stock Options will immediately vest 100% and will be exercisable for the remaining term of the grant, (2) DSU's will immediately vest 100% and be delivered to you minus the shares to cover your applicable taxes, and (3) in the event that the triggering event occurs (i) prior to the end of the first performance period, then the PSUs will be immediately forfeited and you will be entitled to receive a cash payment of $900,000, representing 50% of the value of PSU grant date value or (ii) after the end of the first performance period, the PSU's will vest pro-rata based on the results of the applicable performance period(s); (c) you will be entitled to receive a lump sum cash severance payment in an amount equal to two (2) times the sum of your then-prevailing annual base salary plus your target bonus; and (d) to the extent unpaid, you will be paid your Initial Sign-On Bonus.

If your employment is involuntarily terminated by the Company (except for “cause” as defined in the paragraph immediately above, conduct constituting a material act of misconduct in connection with the

 

 


 

 

performance of your duties which upon written notice to you has not been cured within seven (7) days thereafter (to the extent reasonably curable), or as a result of your death or disability) at any time after your appointment as President and Chief Executive Officer, you will be subject to the Company's severance policies applicable to its senior executive team members, except that your New Hire DSU's to the extent unvested will immediately vest 100% and be delivered to you minus the shares withheld to cover your applicable taxes.

Notwithstanding the foregoing, in the event of a Change in Control after the Hire Date, you shall be entitled only to the payments and benefits provided for under your Change in Control Agreement in the event of your termination by the Company or your resignation for “good reason” as provided for under such agreement, and the Company shall not have any obligation to make any of the payments provided for in this section.

For purposes of this Letter:

“Good Reason” shall mean (i) the failure of the Company to appoint you as President and Chief Executive Officer on or before March 21, 2013 or (ii) the appointment by the Company of any individual to the position of Chief Executive Officer on or before March 21, 2013 on other than an interim basis.

To the extent that either (i) the Company is not able to ensure that the terms of this Letter remain outstanding prior to your acceptance, (ii) the Company determines that you are not able to commence employment as of the Hire Date, (iii) the Company determines to cease your active employment after you have commenced employment, or (iv) you are otherwise precluded from commencing such employment, in each case for any reason other than a Lapse Condition and conditioned on your compliance with the terms of this Letter and the Employee Agreement and the absence of conduct that would constitute “cause” hereunder, the Company shall (i) continue to pay you the base salary and PIP (or cash equivalent thereof) provided for in this Letter, (ii) continue to provide you with all benefits provided for in this Letter to the extent while otherwise actively employed you would be eligible for such benefit coverage and to the extent otherwise reasonably practicable (provided that the failure to provide for such benefit coverage or the abridgement of such benefit coverage is not materially adverse to you), and (iii) grant to you and continue all incentive awards to the extent otherwise reasonably practicable (provided that the failure to grant such awards or any abridgement of such awards is not materially adverse to you), and otherwise perform the Company's obligations to you under this Letter as if you were employed and fully engaged in your duties, subject to the Company's authority to terminate this Letter at any time thereafter treating you as though you were employed and immediately terminated by the Company without “cause” (other than in the case of death or disability) under this “Severance Related to Position” section.

All payments, benefits and amounts due you under this section shall be conditioned upon your execution and delivery of a general release in favor of Boston Scientific, in the form attached hereto as Exhibit C. All rights and obligations under this section shall inure to the benefit of your heirs, executors and administrators.

LEGAL CONTRACT WORK

You will be provided reimbursement up to $90,000 for any legal work pertaining to your employment contract.

TAX WITHHOLDING

All amounts of compensation hereunder shall be subject to withholding for applicable income and

 

 


 

 

employment taxes and all Boston Scientific polices related to withholding and deductions.

BACKGROUND VERIFICATION AND WORK AUTHORIZATION

A background verification establishing that you have not been convicted of, or plead guilty or nolo contendere with respect to, any felony, been the subject of an SEC order or action barring you from serving as the CEO of a public company or been the subject of an FDA disbarment action (collectively, a “Disqualifying Event”) shall be a condition to this letter. To comply with the Immigration Reform Control Act of 1986, the Company is required to determine your eligibility for work in the United States.  Therefore, on your first day of employment you will be required to provide documentation to establish your identity and work authorization status.

The Executive represents and warrants that he has not been, and is not currently, the subject of any Disqualifying Event.

EMPLOYMENT AT WILL

Upon acceptance of this offer you will remain an "at will" employee of Boston Scientific. This means that you will be free to resign at any time. Likewise, Boston Scientific will have the right to terminate your employment at any time with or without reason or notice. In each such case, such resignation or termination shall be subject to the terms of this Letter. Acceptance of this offer acknowledges your understanding and acceptance of the "at will" nature of your employment.

PRIOR EMPLOYMENT

By acceptance of this offer, you agree that (1) no proprietary or confidential information, trade secret, copyright or any other intellectual property information belonging to any of your previous employers will be disclosed or used by you during the period of your employment with Boston Scientific, and that no such information in any tangible or electronic form of documents, memoranda, software, drawings, etc. will be retained by you or brought with you to Boston Scientific other than those items explicitly permitted by your previous employers (if any), (2) you have brought to Boston Scientific's attention and provided it with copies of or accurate descriptions of all agreements, covenants or other restrictions, whether in your possession or with respect to which you should have reasonably been aware (taking into account your position and tenure) which may adversely impact your future employment at Boston Scientific under this Letter including, without limitation, non-disclosure, non-competition, non-solicitation, invention assignment agreements or agreements containing future work restrictions, and (3) you will cooperate fully with Boston Scientific and comply with any and all procedures or measures implemented, or given effect, by Boston Scientific for purposes of preventing any unauthorized disclosure or use by you of any proprietary or confidential information belonging to any of your previous employers or otherwise violating any legally enforceable provision of any agreements with any of your prior employers and relating to your post-termination activities. Sub-clause (2) above shall apply only to any such agreement, covenant or restriction referenced thereunder that is not otherwise provided to Boston Scientific and that results in your being bound by court order or settlement to restrictions on your employment with Boston Scientific that (x) are of longer duration or (y) are of a broader scope or other additional material adverse nature than the restrictions reasonably associated with (A) the terms of those agreements, covenants and restrictions that you have brought to Boston Scientific's attention referenced in sub-clause (2) above or (B) any alleged breach of fiduciary, contractual or other statutory obligation owing to your previous employers.

 

 

 


 

 

INDEMNIFICATION

In addition to your rights under the Indemnification Agreement identified above, Boston Scientific has agreed to indemnify you as provided for in Annex A.

BOSTON SCIENTIFIC REPRESENTATIONS

Boston Scientific represents and warrants to you, as of the date hereof, that; (1) the execution, delivery and performance of this Letter by Boston Scientific has been duly authorized by all necessary corporate action, (2) the officer signing this Letter on behalf of Boston Scientific is duly authorized to do so, and (3) upon the execution and delivery of this irrevocable Letter, and until this Letter lapses according to its terms, this Letter is a valid and binding obligation of Boston Scientific enforceable against it in accordance with its terms.

MISCELLANEOUS

409A Matters

References under this offer to your termination of employment shall be deemed to refer to the date upon which you have experienced a “separation from service” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”). To the extent any reimbursements or in-kind benefits due to you under this offer constitute “deferred compensation” under Section 409A of the Code, any such reimbursements or in-kind benefits shall be paid to you in a manner consistent with Treas. Reg. Section 1.409A-3(i)(1)(iv).

Notwithstanding any provisions of this offer to the contrary, if you are a “specified employee” (within the meaning of Section 409A of the Code and the regulations thereunder and determined pursuant to procedures adopted by Boston Scientific) and you experience a “separation from service” (including, if applicable, in respect of your position as a member of the Board) after the Hire Date and if any portion of the payments or benefits to be received by you upon such a “separation from service” would be considered deferred compensation under Section 409A of the Code, amounts that would otherwise be payable pursuant to this offer during the six-month period immediately following your separation from service and benefits that would otherwise be provided pursuant to this offer during the six-month period immediately following your separation from service shall instead be paid or made available on the earlier of (i) the first business day of the seventh month following the date of your separation from service or (ii) your death.  

Terms, Governing Law and Jurisdiction

You and the Company acknowledge that this offer (together with any attachments hereto and agreements referenced herein) constitutes the entire understanding of the parties with respect to the subject matter hereof and supersedes any other prior agreement or other understanding, whether oral or written, express or implied, between you and the Company concerning, related to or otherwise in connection with, the subject matter hereof and that, following the Hire Date, no such prior agreement or understanding shall be of any further force or effect.  To the extent the terms of this offer are inconsistent with any plan, program, practice or other agreement of the Company and applicable to you, and as in effect from time to time, the terms of this offer shall control unless specifically provided otherwise in writing by reference to this offer and signed by you and Company.

This offer shall be governed by, and construed and enforced in accordance with the substantive laws of the Commonwealth of Massachusetts, without regard to its principles of conflicts of laws.

 

 


 

 

Each of the parties hereto hereby irrevocably consents and submits to the exclusive jurisdiction of the state and federal courts located in Suffolk County, Massachusetts in connection with any proceeding arising out of or relating to this offer or the transactions contemplated hereby and waives any objection to venue in Suffolk County, Massachusetts. In addition, each of the parties hereto hereby waives trial by jury in connection with any claim or proceeding arising out of or relating to this offer or the transactions contemplated hereby.

ACCEPTANCE

This offer letter is contingent upon the following:

 An acceptance no later than September 21, 2011;

 Your signing of the Agreement Concerning Employment.

We believe this opportunity to be a mutually-rewarding one and look forward to your contributions and continued success with Boston Scientific.

Sincerely,

 

 

Pete M. Nicholas

Chairman of the Board

Agreed to and Accepted by: ________________________________    Date: _____________

 

Enclosures

Agreement Concerning Employment (Exhibit A)

New Hire DSU Award (Exhibit B)

Form of Release of Claims (Exhibit C)

The Boston Scientific Corporation Executive Retirement Plan

Current Benefit Plan Literature

 

 


 

 

Annex A

In reliance on your agreements and representations in the section captioned “Prior Employment” (the “Covered Representations”), the Company agrees that (a) if you are made a party, or are threatened to be made a party, to any threatened or actual action, suit or proceeding, whether civil, criminal, administrative, investigative, appellate or other action, suit or proceeding (a “Proceeding”) by Johnson & Johnson or its affiliates (the “Prior Employer”) or (b) if any claim, demand, request, dispute, controversy, threat, discovery request or request for testimony or information (a “Claim”) is made, or threatened to be made, by the Prior Employer, and such Proceeding or Claim results in whole or in part from your alleged breach of any fiduciary, contractual, or other statutory obligation to the Prior Employer arising out of or resulting from (i) discussions related to, or the negotiation, execution or acceptance of, this Letter or (ii) your accepting the position as President, being employed by the Company or performing the duties contemplated under this Letter, then you shall promptly be indemnified and held harmless by the Company to the fullest extent permitted by applicable law against any and all costs, expenses, damages, liabilities and losses (including, without limitation, attorneys' fees, judgments, interest, expense of investigation, penalties, fines, excise taxes or tax penalties, amounts paid or to be paid in settlement or any expenses, including attorneys' fees, incurred by you to enforce your rights under this Annex A).

For the avoidance of doubt, such indemnification and payment shall be provided or paid to you (i) so long as the Company' offer under the Letter has not lapsed without acceptance and (ii) after such acceptance, even if your employment at the Company does not commence as of the Hire Date due to such Proceeding or Claim. All such rights and obligations under this Annex A shall inure to the benefit of your heirs, executors and administrators.

The Company shall promptly advance to you all costs and expenses incurred by you in connection with any such Proceeding or Claim after receiving written notice requesting such an advance. The indemnification rights set forth in this Annex A shall be in addition to (and shall not restrict) any indemnification provisions otherwise applicable to you. You represent that there is no such Proceeding or Claim now actually pending against you which would give rise to the application of these indemnification rights.

You agree that the Company may defend you through lawyers of the Company's choosing; however, in the event that you and the Company both reasonably determine that a conflict of interest prevents the lawyers selected by the Company from representing you against a claim where the Company has agreed to provide your defense, the Company will reimburse (or advance, as provided above) the attorneys' fees you have or will incur by having to engage separate lawyers to defend yourself against that claim. In the event separate counsel must be retained, you agree that the Company shall have the right to approve your choice of counsel, such approval shall not be unreasonably withheld, and that compensation of the separate attorneys shall be for services necessary, at rates which are reasonable and competitive within the locale in which said claim is asserted.

The foregoing indemnification obligations of the Company under this Annex A shall cease to apply (effective prospectively only, and not in respect of any fees or costs incurred or obligations under any judgment or settlement (whether or not final) entered into prior to such date) in the event of your willful misconduct or the date of your initial breach of the Covered Representations.

As a condition of indemnification under this Annex A, (i) you shall give Boston Scientific prompt notice of any Claim, (ii) Boston Scientific shall be given the full opportunity to assume the defense of any such Claim, and (iii) you shall cooperate in good faith in defending any Claim.

The Company's obligations under this Annex A shall survive the termination of your employment

 

 


 

 

with Boston Scientific or any termination of this Agreement by the Company before you commence employment. The Company's obligations under this Annex A shall be the sole and exclusive indemnification provisions and procedures relating to any Claim brought by the Prior Employer.

 

 

 

 


 

 

Boston Scientific Corporation

One Boston Scientific Place

Natick, MA 01760-1537

 

 

September 13, 2011

Michael F. Mahoney

324 Rumstick Road

Barrington, RI 02806

 

Dear Michael:

Reference is hereby made to that certain offer letter (the “Offer Letter”) dated September 6, 2011 delivered to you by Boston Scientific Corporation (“Boston Scientific” or the “Company”). This letter agreement supplements the Offer Letter as specifically provided below.

Effective as of the date hereof, (A) the “Hire Date” (as used in the Offer Letter) shall mean October 17, 2011 or such other date as the Company and you may mutually agree, (B) references to “Protocol” in the Offer Letter shall mean that certain Conflicting Products Protocol Agreement between you and the Company (as may be in effect from time to time), (C) the Company agrees to pay you an additional supplementary cash payment of $69,230.77 (less applicable withholding taxes), which will be paid at the time of your first paycheck, subject to your continued employment with Boston Scientific at such time, (D) the Company agrees that, at such time when you are paid any prorated bonus amount to which you are entitled under the Offer Letter in respect of the Company's 2011 Performance Incentive Plan (such amount, “Paid 2011 Prorated Bonus Amount”), you will receive an additional cash payment equal to the difference between (x) the prorated bonus amount to which you would have been entitled under the Offer Letter in respect of the Company's 2011 Performance Incentive Plan if your Hire Date were September 21, 2011 (and not October 17, 2011), and (y) the Paid 2011 Prorated Bonus Amount, and (E) you agree that no payments, benefits or amounts shall be due you pursuant to the first of two clauses (ii) of the second-to-last paragraph under the “Severance Related to Position” section of the Offer Letter as a result of the change to the Hire Date provided for in clause (A) herein.

Except as specifically amended hereby, the Offer Letter is and remains unmodified and in full force and effect.

Sincerely,

 

Pete M. Nicholas

Chairman of the Board

Agreed to and Accepted by: ________________________________    Date: _____________

 

 

 


 

 

Conflicting Products Protocol Agreement

 

 

1.

Boston Scientific Corporation and its affiliates (collectively, the “Company”) and the undersigned executive (the “Executive”) agree to the following Conflicting Products Protocol Agreement (the “Protocol”) with respect to the Executive's rendering of services as President in connection with certain “Conflicting Products” (as defined below). Executive acknowledges and agrees that the Company has relied upon his agreement to, and continued compliance with, the Protocol in connection with his commencement of employment, and continued employment, with the Company.

 

2.

Reference is made to the agreement with his former employer that Executive has brought to the attention of the Company which contains certain post-termination restrictions, dated March 22, 2007 (the “Agreement”).

 

3.

The Executive's position as President has been structured so that he supervises only the operating divisions set forth on Annex A (the “Annex A Businesses”) and commences supervision of those divisions according to the schedule set forth in Annex A. The Company has limited the Executive's product responsibilities to the Annex A Businesses. The Executive acknowledges that: (i) the senior executives overseeing the business operations of all businesses other than the Annex A Businesses (the “Other Businesses”) shall report to Hank Kucheman, as CEO (or his successor), and those senior executives shall have responsibility for the Company Products associated with their business units; (ii) Executive shall not supervise any employees of the Other Businesses; (iii) for so long as he is President, Executive shall report to the CEO; and (iv) Executive shall have no responsibilities with respect to the Other Businesses as specified in Section 5.

 

4.

In addition to the structure described in Section (3), above, as an additional precautionary measure, the Company and Executive have agreed to this Protocol, which is designed to ensure, through insulation and recusal mechanisms, that the Executive does not apply confidential information from his prior employer to which he had access during his prior employment to enhance the marketability or use of any Company product, process, machine, invention or service in existence or under development (“Company Products”) that resemble or compete with any product, process, machine, invention or service of his former employer upon which the Executive worked or for which Executive had management or oversight responsibility (“Conflicting Products”).

 

5.

The Company is a diversified company comprised of business units that are responsible for Company Products that are not Conflicting Products. During the Protocol Period, the Executive shall only have, with respect to any Company Products, operational responsibilities related to products that are not Conflicting Products and which are associated with the Annex A Businesses. Specifically, Executive shall not render services directly or indirectly during the Protocol Period in connection with any Other Businesses, meaning that he shall not: (a) have any operating responsibilities regarding products of Other Businesses; (b) participate in any strategic or product development decisions with respect to such Other Businesses; or (c) be involved in the marketing or sale of products by any Other Businesses. If the Company seeks to add to the Annex A Businesses any other business unit (or portion thereof) that produces Company Products that the Company contends are not Conflicting Products, or add to Annex A any new products or businesses that may subsequently be acquired and that the Company contends are not, or do not produce, Conflicting Products, the

 

 


 

 

Company shall notify Johnson & Johnson in advance in writing. Johnson & Johnson shall respond in writing within two weeks of receipt of such notice (the “Notice Period”) as to whether it objects to any such proposed change to Annex A. Executive shall not render services with respect to such additional products or business units until after the expiration of the Notice Period. The limitations set forth in this Section 5 shall be referred to as the “Section (5) Restrictions.”

 

As used herein, “Protocol Period” shall mean the period commencing on the Executive's employment date and continuing for so long as the Executive remains employed by the Company, but in any case not to extend past November 1, 2012.

 

Notices pursuant to this Section 5 shall be delivered via U.S. mail and either facsimile or e-mail to Anne O. Martinson, Esq., Senior Counsel, Law Department, Johnson & Johnson, One Johnson & Johnson Plaza, New Brunswick, NJ 08933, with a copy to Glenn A. Clark, Esq. and Edwin F. Chociey, Jr., Esq., Riker, Danzig, Scherer, Hyland & Perretti LLP, Headquarters Plaza, One Speedwell Avenue, Morristown, NJ 07962.

 

6.

The Company shall notify members of its senior executive team of the existence and terms of this Protocol and the Section (5) Restrictions, and instruct them (i) that the Executive shall not be asked or in any manner permitted to engage in activities or provide counsel or advice in contravention of the Section (5) Restrictions and (ii) to take appropriate measures to ensure that the Executive shall not receive e-mails, correspondence and other communications in contravention of the Section (5) Restrictions. The Executive shall at all times take all necessary action to comply with his Section (5) Restrictions as well as his other obligations hereunder, and in particular, the Executive shall affirmatively recuse himself from, and cease to have any further participation with respect to any business activity, meetings or communications in contravention of the Section (5) Restrictions.

 

7.

The Company has designated its Chief Compliance Officer, Jean Lance (or her successor), as the “Compliance Representative” to address any questions from the Executive or members of the Company's management regarding the Protocol. The Executive agrees to cooperate fully with the Compliance Representative and to take all necessary action recommended by the Compliance Representative in connection with the implementation and oversight of the Protocol, including compliance with any guidelines or other directives communicated by the Compliance Representative. The Compliance Representative shall not report, directly or indirectly, to Mahoney.

 

8.

This Protocol shall not be modified, amended or terminated in any manner without the prior written consent of the Company, the Executive and Johnson & Johnson. Except as provided for herein, or with respect to any communications between the Company and Johnson & Johnson regarding the Agreement, the terms of this Protocol shall be kept confidential.

 

 

Boston Scientific Corporation

 

 

By:______________________

 

 

 

 

 

 


 

 

Executive

 

 

By:_______________________

 

 

Dated: September __, 2011

 

Annex A Businesses

 

Products Associated with the following business operations:

 

1.

Cardiac Rhythm Management - responsibilities to commence October 17, 2011.

 

2.

Endoscopy - responsibilities to commence October 17, 2011.

 

3.

Neuromodulation - responsibilities to commence August 1, 2012.

 

 

 

 

 

 

EX-10.100 16 exhibit10100-mahoneyofferl.htm MAHONEY OFFER LETTER AMENDMENT

EXHIBIT 10.100

 

One Boston Scientific Place

Natick, MA 01760-1537

508.650.8000

February 14, 2012

Michael Mahoney

324 Rumstick Road 
Barrington, RI 02806

 

Dear Mike:

This letter agreement supplements your Offer Letter (“Offer Letter”) dated September 6, 2011 that was delivered to you by Boston Scientific Corporation (“Boston Scientific” or the “Company”).

2012 Annual Equity Grant

The Offer Letter provides that during the normal annual executive review process in 2012, you will be granted an equity award having a total value of $7,200,000 on the effective date of grant (“2012 Annual Equity Grant”). The total value of your 2012 Annual Equity Grant remains unchanged. However, as you know, in December 2011, the Compensation Committee of the Board of Directors adopted a new Performance Share Program to align the Company’s executive compensation program with the interests of shareholders and to reinforce the concept of pay for performance by providing incentives for the achievement of key business performance objectives which are critical to the success of Boston Scientific (the Free Cash Flow Performance Share Program”). As a result, the Offer Letter is amended to reflect the change in the mix of equity awards comprising the 2012 Annual Equity Grant, as follows:

Non-Qualified Stock Options:                     25%

Deferred Stock Units (DSUs):                     25%

Total Shareholder Return Performance Share Units (TSR PSUs):    25%

Free Cash Flow Performance Share Units (FCF PSUs):        25%

Except as specifically amended hereby, the Offer Letter is and remains unmodified and in full force and effect.

Sincerely,

 

Hank Kucheman

Chief Executive Officer

 

 

 

Agreed to and Accepted by: _____________________________Date:___________________

 

 

 

 

 

EX-10.2 4 exhibit102_hankkuchemanoff.htm KUCHEMAN OFFER LETTER

 

EXHIBIT 10.2

 

 

September 06, 2011

 

Mr. William “Hank” Kucheman

Four Battery Wharf

Residence #4305

Boston, MA 02109

 

Dear Hank:

 

Based on your past accomplishments with Boston Scientific, we are very pleased to offer you the position of Chief Executive Officer, on an interim basis, reporting directly to the Board of Directors, effective upon the retirement of J. Raymond Elliott as President and Chief Executive Officer of Boston Scientific (“Effective Date”). As part of this offer, we are recommending your nomination (subject to Board approval) to Boston Scientific's Board of Directors. We also look forward to your continued contributions as a member of Boston Scientific's Executive Committee. The terms and conditions of your offer, commencing as of the Effective Date, are as follows.

 

TERM OF APPOINTMENT

Your appointment as Chief Executive Officer is on an interim basis. You will serve in this capacity (unless precluded by death or disability) until such time as Michael F. Mahoney is appointed as Chief Executive Officer, or your successor is otherwise duly elected and qualified by the Board of Directors, or until your earlier resignation or removal.

 

BASE SALARY

Your base salary will be $34,615.39, currently payable bi-weekly, equivalent to $900,000 on an annualized basis. Your performance and compensation will be reviewed on an annual basis.

 

PERFORMANCE INCENTIVE PLAN

The Boston Scientific performance year currently runs from January 1st through December 31st of each year. The Performance Incentive Plan (PIP) provides employees with the opportunity for a variable financial incentive in recognition of performance in a given year. Your annual target incentive will be increased to 120% of base salary. Your actual award will be based on your achievement of individual goals and the Company's achievement of corporate performance goals. Under the current Plan, you must be an active employee on the date of payment to receive any award pay-out under the Plan.

 

EXECUTIVE ALLOWANCE PLAN

As a member of the Executive Committee, you continue to be eligible to participate in the Boston Scientific Executive Allowance Plan. Under this Plan, you will receive $25,000 annually in lieu of certain other perquisites. This payment is subject to applicable withholdings and is typically payable in two equal installments of $12,500 each in the last pay periods of the months of June and December (A copy of Boston Scientific's Executive Allowance Plan is enclosed for your review.)

 

EXECUTIVE RETIREMENT PLAN

As a member of the Executive Committee, you will continue to be eligible for benefits under the Boston Scientific Executive Retirement Plan. As a member of the Executive Committee, if you “Retire” from

 

 


 

 

Boston Scientific (as that term is defined in our Executive Retirement Plan), you may be eligible to receive certain benefits provided in that Plan, including a lump sum payment equal to 2.5 months of base salary times your years of service, subject to a maximum benefit of 36 months. A copy of Boston Scientific's Executive Retirement Plan is attached for your information.

 

BOSTON SCIENTIFIC CHANGE IN CONTROL AND INDEMNIFICATION AGREEMENTS

Your current Change in Control and indemnification agreements will continue to apply. In general, the Change in Control agreement entitles you as a member of our Executive Committee to a lump sum payment of three times your base salary and assumed on-plan incentive bonus if either your employment is terminated (other than for cause) or if your duties are diminished following a change in control of Boston Scientific. Indemnification by Boston Scientific is also extended to key executives for liability arising in the proper performance of one's responsibilities as an executive officer of Boston Scientific. A form of each agreement will be provided to you.

 

2012 ANNUAL EQUITY GRANT

As part of this offer the Compensation Committee has determined that during the normal annual executive review process you will be granted an equity award having a total value of $3,000,000 on the effective date of grant (“2012 Annual Equity Grant”). This award is inclusive of Boston

Scientific annual equity to be granted to you under the 2012 Long Term Incentive Program. The total award will consist of $1,500,000 in Non-Qualified Stock Options (50% of total grant), $750,000 in Deferred Stock Units (DSUs) (25% of total grant) and $750,000 in Performance Share Units (PSUs) (25% of total grant). These awards will be made pursuant to the 2011 Boston Scientific Long Term Incentive Plan and are expected to be provided with the standard vesting provisions, except that the proposed grants would not have a one-year service requirement in order to vest upon your Retirement (as defined in the 2011 Long Term Incentive Program.)  Our Long Term Incentive Plans are designed to share the rewards of the business with individuals who most significantly contribute to the achievement of the Company's strategic and operating goals. The effective date of grant will be the date on which 2012 long-term incentive awards are made to senior executives of Boston Scientific generally under the 2012 Long Term Incentive Program, which under our policies is generally on the date of approval or the first open trading day following the date of approval, should the date of grant be in a closed trading window.

 

DEFERRED STOCK UNITS

An award of Deferred Stock Units reflects Boston Scientific's commitment to grant to you a number of shares of Boston Scientific common stock (less applicable tax and other withholdings), to be issued to you in five equal annual increments beginning on the first anniversary of the date of the grant.  The number of DSUs to be awarded will be calculated using the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. This award is also subject to all provisions of the 2011 Long Term Incentive Plan and Deferred Stock Unit Agreement and is expected to be provided with the standard vesting provisions, except that the proposed grants would not have a one year service requirement in order to vest upon your Retirement (as defined in the 2011 Long Term Incentive Program).  In accordance with the 2011 Long Term Incentive Plan, Deferred Stock Unit Agreement and your Change in Control Agreement, as applicable, upon your Retirement, Disability, death or a Change in Control of Boston Scientific (as those terms are defined in the 2011 Long Term Incentive Plan or Change in Control Agreement, as applicable), we will issue to you or your beneficiary (as the case may be), any shares of Boston Scientific stock to be awarded to you under your DSU grants described in this offer that remain subject to eligibility conditions.

 

NON-QUALIFIED STOCK OPTIONS 

The option grant will provide you with the opportunity to purchase shares of Boston Scientific common

 

 


 

 

stock.  The number of stock options will be calculated using a Black Scholes calculation of the value of the options on the effective date of grant.  The exercise price will be equal to the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. The option grant will vest in four equal annual installments beginning on the first anniversary of the date of grant and will expire on the 10th anniversary of the grant date.  The option grant will be subject to the provisions of the 2011 Long Term Incentive Plan and Non-Qualified Stock Option Agreement and is expected to be provided with the standard vesting provisions, except that the proposed grants would not have a one year service requirement in order to vest upon your Retirement (as defined in the 2011 Long Term Incentive Program).  In accordance with the 2011 Long Term Incentive Plan, Non-Qualified Stock Option Agreement and your Change in Control Agreement, as applicable, any unvested stock options will accelerate upon your Retirement, Disability, death or a Change in Control of Boston Scientific (as those terms are defined in the 2011 Long Term Incentive Plan or Change in Control Agreement, as applicable) and in those scenarios would remain exercisable until the expiration of the stated term of the stock option.

 

PERFORMANCE SHARE PROGRAM (PSP) AWARD 

The PSP award reflects Boston Scientific's commitment to grant to you a number of shares of Boston Scientific common stock (less applicable tax and other withholdings), subject to certain performance, eligibility and other conditions, and will fully vest at the end of a three year period beginning on the effective date of the grant.  The target number of Performance Share Units (PSU) to be awarded to you will be calculated using the Fair Market Value (closing price) of Boston Scientific common stock on the effective date of grant. The actual number of shares delivered to you at the end of the vesting period will be based on Boston Scientific's stock performance over the three year period as compared to the S&P HealthCare Index and in accordance therewith may be earned at less than, at or greater than the target number of shares awarded. This award is also subject to all provisions of the 2011 Long Term Incentive Plan, the Performance Share Program and the Performance Share Unit Award Agreement, and are expected to be provided with the standard vesting provisions, except that the proposed grants would not have a one year service requirement in order to vest upon your Retirement (as defined in the 2011 Long Term Incentive Program).  In accordance with the 2011 Long Term Incentive Plan, Performance Share Program, Performance Share Unit Award Agreement and your Change in Control Agreement, as applicable, upon your Retirement, Disability, or death (as those terms are defined in the 2011 Long Term Incentive Plan, Performance Share Program and Change in Control Agreement, as applicable), we will issue to you or your beneficiary (as the case may be), the number of shares of Boston Scientific stock in accordance with the terms set forth in the Performance Share Program and the Change in Control Agreement, as applicable.

 

AIRCRAFT

Boston Scientific will provide you with reasonable and customary personal use of corporate-owned aircraft up to $100,000 per calendar year in aggregate incremental cost to the Company, including standard annual vacations or other personal use as agreed upon, all in accordance with the Company's policies in effect from time to time. All personal use of aircraft will result in imputed income based on U.S. Department of Transportation SIFL rates as required by law, and you will not be reimbursed for any taxes resulting from such imputed income.

 

EMPLOYMENT AT WILL

Upon acceptance of this offer you will remain an "at will" employee of Boston Scientific. This means that you will be free to resign at any time. Likewise, Boston Scientific will have the right to terminate your employment at any time with or without reason or notice. Acceptance of this offer acknowledges your understanding and acceptance of the "at will" nature of your employment.

 

 

 


 

 

 

ACCEPTANCE

This offer letter is contingent upon the following:

 An acceptance date of no later than September 13, 2011;

 Your immediate signing of the 2011 Agreement Concerning Employment.

 

Hank, we believe this opportunity to be a mutually-rewarding one and look forward to your contributions and continued success with Boston Scientific.

 

Sincerely,

 

 

 

 

Pete M. Nicholas

Chairman of the Board

 

Agreed to and Accepted by: ________________________________    Date: _____________

William “Hank” Kucheman

 

Enclosures

Agreement Concerning Employment

Boston Scientific Executive Allowance Plan

The Boston Scientific Corporation Executive Retirement Plan

 

 

 

 

EX-10.102 17 exhibit10102-kuchemanoffer.htm KUCHEMAN OFFER LETTER AMENDMENT

EXHIBIT 10.102

 

One Boston Scientific Place

Natick, MA 01760-1537

508.650.8000

February 14, 2012

William Kucheman

Four Battery Wharf 
Residence #4305 
Boston, MA 02109

 

Dear Hank:

This letter agreement supplements your Offer Letter (“Offer Letter”) dated September 6, 2011 that was delivered to you by Boston Scientific Corporation (“Boston Scientific” or the “Company”).

2012 Annual Equity Grant

The Offer Letter provides that during the normal annual executive review process in 2012, you will be granted an equity award having a total value of $3,000,000 on the effective date of grant (“2012 Annual Equity Grant”). The total value of your 2012 Annual Equity Grant remains unchanged. However, as you know, in December 2011, the Compensation Committee of the Board of Directors adopted a new Performance Share Program to align the Company’s executive compensation program with the interests of shareholders and to reinforce the concept of pay for performance by providing incentives for the achievement of key business performance objectives which are critical to the success of Boston Scientific (the Free Cash Flow Performance Share Program”). As a result, the Offer Letter is amended to reflect the change in the mix of equity awards comprising the 2012 Annual Equity Grant, as follows:

Non-Qualified Stock Options:                     25%

Deferred Stock Units (DSUs):                     25%

Total Shareholder Return Performance Share Units (TSR PSUs):    25%

Free Cash Flow Performance Share Units (FCF PSUs):        25%

Except as specifically amended hereby, the Offer Letter is and remains unmodified and in full force and effect.

Sincerely,

 

Pete M. Nicholas

Chairman of the Board

 

 

 

Agreed to and Accepted by: _____________________________ Date:___________________

 

 

 

 

 

5


 

 

 

 

EX-10.3 4 exhibit3.htm EX-10.3

EXHIBIT 10.3

Form of Executive Committee
Change in Control Agreement

(Date)

[Name of Executive]
[Address of Executive]

Re: Change in Control Agreement

Dear [Name of Executive]:

Boston Scientific Corporation (the “Company”) considers it essential to the best interests of its stockholders to foster the continuous employment of key management personnel. Further, the Board of Directors of the Company (the “Board”) recognizes that the possibility of a change in control exists, and that such possibility, and the uncertainty and questions that it may raise among management, may result in the departure or distraction of management personnel to the detriment of the Company and its stockholders.

The Board has determined that appropriate steps should be taken to reinforce and encourage the continued attention and dedication of members of the management of the Company, including yourself, to their assigned duties without distraction in the face of potentially disturbing circumstances arising from any possible change in control of the Company. In connection with (and as an additional inducement for) entering into this letter agreement (the “Agreement”) in substitution for and termination of your current Retention Agreement, dated as of       , 200       (the “Retention Agreement”), you will be granted a nonqualified stock option award by the Company having a value of $15,000, and an exercise price equal to the closing price of Company common stock, as of the date that such award is granted.

In order to induce you to remain in the employ of the Company, the Company agrees that you shall receive the severance benefits set forth in this Agreement in the event your employment with the Company is terminated subsequent to a Change in Control (as defined herein) under the circumstances described below.

1. Term of the Agreement. Sections 2, 3, 4, 5 and 6 of this Agreement shall only be applicable if a Change in Control occurs during the period beginning on [ ], 2009 (the “Effective Date”) and ending on the earlier of the (i) third anniversary of the Effective Date and (ii) termination of your employment with the Company for any reason prior to a Change in Control (the “Term”). If a Change in Control does not occur during the Term, this Agreement will automatically terminate at the end of the Term.

2. Termination Following a Change in Control. If a Change in Control occurs at any time during the Term, you will be entitled to the benefits provided in Section 3 hereof upon the subsequent termination of your employment by the Company without Cause (as defined herein) or by you for Good Reason (as defined herein) during the two-year period following such Change in Control (the “Covered Period”). Any purported termination of your employment by the Company or by you shall be communicated by a Notice of Termination to the other party hereto in accordance with Section 8 hereof. For purposes of this Agreement, (i) references to termination of employment mean a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company, and (ii) a “Notice of Termination” shall mean a written notice which shall indicate the specific termination provision or provisions in this Agreement relied upon and shall set forth in general terms the facts and circumstances claimed to provide a basis for termination of your employment under the provision so indicated.

3. Compensation Upon Termination.

(a) Severance Benefits. If your employment by the Company shall be terminated during the Covered Period by the Company without Cause or by you for Good Reason, then you shall be entitled to the following benefits:

(i) Severance Payments.

(1) Amount of Payment. The Company shall pay you in cash the full amount of any earned but unpaid base salary through the Date of Termination at the rate in effect at the time of the Notice of Termination, plus a cash payment for all unused vacation time which you may have accrued as of the Date of Termination. The Company shall also pay you in cash a pro rata portion of the annual bonus for the year in which your employment terminates, calculated on the basis of your target bonus for that year and on the assumption that all performance targets have been or will be achieved. In addition, the Company shall pay you in a cash lump sum, an amount (the “Severance Payment”) equal to three times the sum of (A) your base salary on the Termination Date (without giving effect to any salary reductions which satisfy the definition of “Good Reason”), (B) the greater of (x) the most recent bonus paid to you (which shall be deemed to be the sum of (I) the annual cash bonus amount most recently paid to you and (II) the grant date fair value of any equity awards granted to you in lieu of annual bonus compensation within the immediately preceding year) and (y) your target bonus in effect for the year in which the Change in Control occurred (calculated assuming that all performance targets have been or will be achieved) and (C) $25,000. The Severance Payment shall be in lieu of any other severance payments which you are entitled to receive under any other severance pay plan or arrangement sponsored by the Company or any of its subsidiaries.

(2) Timing of Payment. Subject to Section 3(b), the Company shall pay the amounts due to you under this Section 3(a)(i) on the 60th day following the Date of Termination, provided that you execute, and do not revoke, a Release Agreement in the form attached as Exhibit A hereto.

(ii) Benefit Continuation. Subject to your compliance with the non-solicitation and confidentiality provisions described in Section 6, you and your eligible dependents shall continue to be eligible to participate during the Benefit Continuation Period (as hereinafter defined) in the medical, dental, health, life and other welfare benefit plans and arrangements applicable to you immediately prior to your termination of employment on the same terms and conditions in effect for you and your dependents immediately prior to such termination; provided that the provision of such benefits in each calendar year during the Benefit Continuation Period does not affect the provision of such benefits in any other calendar year during the Benefit Continuation Period. For purposes of the previous sentence, “Benefit Continuation Period” means the period beginning on the Date of Termination and ending on the earlier to occur of (i) the third anniversary of the Date of Termination and (ii) the date that you and your dependents are eligible for coverage under the plans of a subsequent employer which provide substantially equivalent or greater benefits to you and your dependents. The right to participate in the benefit plans under this Section 3(a)(ii) is not subject to liquidation or exchange for any other benefit;

(iii) Legal Fees and Expenses. The Company shall also pay you in cash all legal fees and expenses, if any, incurred by you in contesting or disputing any such termination or in seeking to obtain or enforce any right or benefit provided by this Agreement if such expenses are incurred on or prior to the December 31 of the second calendar year following the calendar year in which the Date of Termination occurs, such payment(s) to be made on or before the December 31 of the third calendar year following the calendar year(s) in which the Date of Termination occurs; provided, however, that the amount of the payments and reimbursements under this Section 3(a)(iii) shall not exceed $100,000; and provided, further, that no such legal fees or expenses shall be reimbursed if it is determined by the applicable arbitral panel or other tribunal that your claim is entirely without merit. Furthermore, nothing shall prohibit the arbitral panel or other tribunal from awarding legal fees in excess of $100,000 if, in the interests of fairness and equity, the arbitral panel or other tribunal deems such award appropriate. The right to receive payments and reimbursements under this Section 3(a)(iii) is not subject to liquidation or exchange for any other benefit.

(b) Specified Employee. Notwithstanding anything to the contrary in this Agreement, if you are a “specified employee” as hereinafter defined at the time of the Date of Termination, any and all amounts payable in connection with your termination of employment (including amounts payable under this Section 3) that constitute deferred compensation subject to Section 409A of the Code, as determined by the Executive Compensation and Human Resources Committee (the “Committee”) in its sole discretion, and that would (but for this sentence) be payable within six months following the Date of Termination, shall instead be paid on the date that follows the Date of Termination by six months and one day (the “Specified Employee Payment Date”). The provision of benefits pursuant to Section 3(a)(ii) that constitute deferred compensation under Section 409A of the Code will not be provided in-kind during the first six months following the Date of Termination, but rather will be continued by your payment of any applicable premiums for which you will be reimbursed on the Specified Employee Payment Date. The provision of in-kind benefits will commence on the Specified Employee Payment Date in accordance with Section 3(a)(ii). For purposes of this Agreement, the term “specified employee” means an individual who is determined by the Committee to be a specified employee as defined in Section 409A(a)(2)(B)(i) of the Code. The Committee may, but need not, elect in writing, subject to the applicable limitations under Section 409A of the Code, any of the special elective rules prescribed in Section 1.409A-1(i) of the Treasury Regulations for purposes of determining “specified employee” status. Any such written election shall be deemed part of this Agreement.

(c) No Mitigation. You shall not be required to mitigate the amount of any payment or benefit provided for in this Section 3 by seeking other employment or otherwise.

(d) Reduction of Severance Payments if Reduction Would Result in Greater After-Tax Amount. Notwithstanding anything herein to the contrary, in the event that you receive any payments or distributions, whether payable or distributed or distributable pursuant to the terms of this Agreement or otherwise, that constitute “parachute payments” within the meaning of Section 280G of the Code, and the net after-tax amount of the parachute payment, including any applicable excise taxes under Section 4999 of the Code, is less than the net after-tax amount if your aggregate payment were three times your “base amount” (as defined in Section 280G(b)(3) of the Code) less $1.00, then the Severance Payments shall be sufficiently reduced to ensure that the aggregate value of the amounts constituting the parachute payment will equal three times your base amount, less $1.00. The determinations to be made with respect to this Section 3(d) shall be made by an Accounting Firm.

4. Equity Incentive Awards.

(a) Options. All outstanding options granted to you under the Company’s equity incentive plans shall vest and become exercisable if your employment is terminated without Cause or you resign your employment for Good Reason during the Covered Period; provided, however, that if the surviving or acquiring entity does not provide for the substitution or assumption of the outstanding options, your outstanding options shall immediately become exercisable upon a Change in Control. If no such termination or resignation occurs during the Covered Period and the outstanding options are substituted or assumed, your outstanding options shall continue to vest pursuant to the terms of the Company’s equity incentive plans or applicable award agreement.

(b) Restricted Stock and Deferred Stock Unit Awards. All restricted stock and deferred stock unit awards granted to you under the Company’s equity incentive plans shall become free from restriction if your employment is terminated without Cause or you resign your employment for Good Reason during the Covered Period; provided, however, that if the surviving or acquiring entity does not provide for the substitution or assumption of outstanding restricted stock or deferred stock unit awards, your outstanding restricted stock and deferred stock unit awards shall immediately become free from restriction upon a Change in Control. If no such termination or resignation occurs during the Covered Period and the outstanding restricted stock or deferred stock unit awards are substituted or assumed, your restricted stock and deferred stock unit awards shall continue to vest in accordance with the terms of the Company’s equity incentive plans or applicable award agreement.

 

5.

 

Successors; Binding Agreement.

(a) Assumption By Successor. The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business or assets of the Company to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. Failure of the Company to obtain such assumption and agreement prior to the effectiveness of any such succession shall be a breach of this Agreement and shall entitle you to compensation from the Company in the same amount and on the same terms as you would be entitled hereunder if you had terminated your employment for Good Reason following a Change in Control, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the Date of Termination. As used in this Agreement, “the Company” shall mean the Company as hereinbefore defined and any successor to its business or assets which assumes and agrees to perform this Agreement by operation of law, by agreement or otherwise.

(b) Enforceability By Beneficiaries. This Agreement shall inure to the benefit of and be enforceable by your personal or legal representatives, executors, administrators, successors, heirs, distributees, devisees and legatees. If you should die while any amount would still be payable to you hereunder if you had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance with the terms of this Agreement to your devisee, legatee or other designee or, if there is no such designee, to your estate.

6. Nonsolicitation; Confidentiality.

(a) Nonsolicitation. For two years following your Date of Termination, you shall not, without the prior written consent of the Company, directly or indirectly, as a sole proprietor, member of a partnership, stockholder or investor, officer or director of a corporation, or as an employee, associate, consultant, independent contractor or agent of any person, partnership, corporation or other business organization or entity other than the Company: (i) solicit or endeavor to entice away from the Company or any of its affiliates or subsidiaries, any person or entity who is, or, during the then most recent 12-month period, was, employed by, or had served as an agent or key consultant of, the Company or any of its subsidiaries, or (ii) solicit or endeavor to entice away from the Company or any of its subsidiaries any person or entity who is, or was within the then most recent 12-month period, a customer or client (or reasonably anticipated (to your general knowledge or the public’s general knowledge) to become a customer or client) of the Company or any of its subsidiaries.

(b) Confidentiality. On and after the date of this Agreement, you will not, except in the performance of your obligations to the Company hereunder or as may otherwise be approved in advance by the Board, directly or indirectly, disclose or use (except for the direct benefit of the Company) any confidential information that you may learn or have learned by reason of your association with the Company, any customer or client of the Company or any of their respective subsidiaries and affiliates. The term “confidential information” includes all data, analyses, reports, interpretations, forecasts, documents and information in any form concerning or otherwise reflecting information and concerning the Company and its affairs, including, without limitation, with respect to clients, products, policies, procedures, methodologies, trade secrets and other intellectual property, systems, personnel, confidential reports, technical information, financial information, business transactions, business plans, prospects or opportunities, but shall exclude any portion of such information that (i) was acquired by you prior to your employment by, or other association with, the Company or any affiliated or predecessor entity, (ii) is or becomes generally available to the public or is generally known in the industry or industries in which the Company or any customer or client of the Company operates, in each case other than as a result of disclosure by you in violation of this Section 6 or (iii) you are required to disclose under any applicable laws, regulations or directives of any government agency, tribunal or authority having jurisdiction in the matter or under subpoena or other process of law. As used in this Section 6, an “affiliate” of a person or entity is a person or entity in control of, controlled by, or in common control with, such first person or entity.

7. Definitions. For purposes of this Agreement, the following capitalized words shall have the meanings set forth below:

Accounting Firm” shall mean the then-current independent auditors of the Company or, if such firm is unable or unwilling to perform such calculations, such other national accounting firm as shall be designated by agreement between you and the Company.

Cause” shall mean the willful engaging by you in criminal or fraudulent acts or gross misconduct that is demonstrably and materially injurious to the Company, monetarily or otherwise. No act or failure to act on your part shall be deemed “willful” unless done, or omitted to be done, by you not in good faith and without reasonable belief that your action or omission was in the best interest of the Company. Notwithstanding the foregoing, you shall not be deemed to have been terminated for Cause unless and until there shall have been delivered to you a copy of a resolution duly adopted by the affirmative vote of not less than three quarters of the entire membership of the Board at a meeting of the Board called and held for such purpose (after reasonable notice to you and an opportunity for you, together with your counsel, to be heard before the Board), finding that in the good faith opinion of the Board you were guilty of conduct set forth above in the first sentence of this subsection and specifying the particulars thereof in detail.

Change in Control” shall mean 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 Company who owned 10% or more of the Outstanding Company Common Stock 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 affiliates or 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 50% 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 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, 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) Consummation of a reorganization, merger, consolidation or similar transaction involving the Company (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 50% 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

(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 50% 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 directions 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.

Notwithstanding the foregoing, with respect to any amounts payable under this Agreement that are subject to Section 409A of the Code where the payment is to be accelerated in connection with the Change in Control, no event(s) set forth above shall constitute a Change in Control for purposes of the Agreement unless such event(s) also constitutes a “change in the ownership”, “change in the effective control” or a “change in the ownership of a substantial portion of the assets” of the Company as defined under Section 409A of the Code.

Code” shall mean the Internal Revenue Code of 1986, as amended, and any successor provisions thereto.

Date of Termination” shall be the date on which you experience a “separation from service” (as defined in Section 1.409A-1(h) of the Treasury Regulations) from the Company upon the termination of your employment by the Company without Cause or by you for Good Reason. Such Date of Termination shall be the date specified in the Notice of Termination (which, in the case of a termination by the Company without Cause shall not be less than 30 days, and in the case of a resignation by you for Good Reason shall not be less than 30 nor more than 60 days from the date such Notice of Termination is given); provided, that if within 30 days after any Notice of Termination is given the party receiving such Notice of Termination notifies the other party that a dispute exists concerning the termination, the Date of Termination shall be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding arbitration award, or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or the time for appeal therefrom having expired and no appeal having been perfected); provided, further, that the Date of Termination shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence. Notwithstanding the pendency of any such dispute, the Company will continue to pay you your full compensation in effect when the notice giving rise to the dispute was given, continue you as a participant in all compensation, benefit, and insurance plans and perquisites in which you were participating when the notice giving rise to the dispute was given and the Company will not require that you provide any services to the Company, until the dispute is finally resolved in accordance with this Subsection. Amounts paid under this Subsection are in addition to all other amounts due under this Agreement and shall not be offset against or reduce any other amounts due under this Agreement.

Good Reason” shall mean, without your express written consent, any of the following:

(a) The assignment to you of any duties inconsistent with your status as an executive officer of the Company or an adverse alteration in the nature or status of your duties, responsibilities, authorities, reporting relationships or titles from those in effect immediately prior to the Change in Control;

(b) A reduction by the Company in your annual base salary as in effect on the date hereof or as the same may be increased from time to time; a failure by the Company to increase your salary at a rate commensurate with that of other key executives of the Company; a reduction in your annual bonus (expressed as a percentage of base salary) below the target in effect for you immediately prior to the Change in Control; or any adverse change in your long-term incentive opportunities in comparison to those in effect prior to the Change in Control;

(c) The relocation of your principal place of work to any location (other than the Company’s main headquarters) that is more than 50 miles from your principal place of work on the date of the Change in Control (except for required travel on the Company’s business to an extent substantially consistent with your customary business travel obligations in the ordinary course of business prior to the Change in Control), or in the event you consent to any such relocation, the Company’s failure to provide you with all of the benefits of the Company’s relocation policy as in operation immediately prior to the Change in Control;

(d) The failure by the Company to continue in effect any compensation plan, including, but not limited to, incentive or deferred compensation plans, in which you participate or the failure by the Company to continue your participation therein on at least as favorable a basis, both in terms of the amount of benefits provided and the level of your participation relative to other participants, as existed at the time of the Change in Control;

(e) The failure by the Company to continue to provide you with benefits at least as favorable as those enjoyed by you under any of the Company’s retirement, life insurance, medical, health and accident, disability or savings plans in which you were participating at the time of the Change in Control; the taking of any action by the Company that would directly or indirectly reduce any of such benefits or deprive you of any perquisite enjoyed by you at the time of the Change in Control including without limitation, the use of a car, secretary, office space, telephones, expense reimbursement and club dues; or the failure by the Company to provide you with the number of paid vacation days to which you are entitled on the basis of years of service with the Company in accordance with the Company’s normal vacation policy in effect at the time of the Change in Control;

(f) The failure of the Company to pay you any amounts of salary, bonus, benefits or expense reimbursement then owed to you or the failure of the Company to adhere to its payroll and other compensation schedules in place just prior to the Change in Control, including, but not limited to, the failure to pay any installment of deferred compensation under any deferred compensation plan or program of the Company, within seven (7) days of the date the compensation is due;

(g) The failure of the Company to obtain a satisfactory agreement from any successor to assume and agree to perform this Agreement, as contemplated in Section 5 hereof or, if the business of the Company for which your services are principally performed is sold at any time after a Change in Control, the purchaser of such business shall fail to agree to provide you with the same or a comparable position, duties, compensation and benefits (as described in subsections (d) and (e) above) as provided to you by the Company immediately prior to the Change in Control; or

(h) Any purported termination of your employment which is not effected pursuant to a Notice of Termination satisfying the requirements of Section 2 (and, if applicable, the requirements set out in the definition of “Cause” above); for purposes of this Agreement, no such purported termination shall be effective.

Your right to terminate your employment for Good Reason will not be affected by your incapacity due to physical or mental illness. Your continued employment will not constitute a waiver of rights with respect to any act or failure to act that constitutes Good Reason.

Payment” means (i) any amount due or paid to you under this Agreement, (ii) any amount that is due or paid to you under any plan, program or arrangement of the Company and its subsidiaries, and (iii) any amount or benefit that is due or payable to you under this Agreement or under any plan, program or arrangement of the Company and its subsidiaries not otherwise covered under clause (i) or (ii) hereof which must reasonably be taken into account under Section 280G of the Code and the Regulations in determining the amount of the “parachute payments” received by you, including, without limitation, any amounts which must be taken into account under the Code and Regulations as a result of (x) the acceleration of the vesting of Options, restricted stock or other equity awards, (y) the acceleration of the time at which any payment or benefit is receivable by you or (z) any contingent severance or other amounts that are payable to you.

Regulations” shall mean the proposed, temporary and final regulations under Section 280G of the Code or any successor provision thereto.

Taxes” shall mean the federal, state and local income taxes to which you are subject at the time of determination, calculated on the basis of the highest marginal rates then in effect, plus any additional payroll or withholding taxes to which you are then subject.

8. Notice. For the purpose of this Agreement, notices and all other communications provided for in the Agreement shall be in writing and shall be deemed to have been duly given when delivered or mailed by United States registered mail, return receipt requested, postage prepaid, addressed to, the Chief Executive Officer or the General Counsel, Boston Scientific Corporation, One Boston Scientific Place, Natick, MA 01760-1537, or to you at the address set forth on the signature page of this Agreement or to such other address as either party may have furnished to the other in writing in accordance herewith, except that notice of change of address shall be effective only upon receipt.

9. Miscellaneous. No provision of this Agreement may be modified, waived or discharged unless such waiver, modification or discharge is agreed to in writing. No waiver by either party hereto at any time of any breach by the other party hereto of, or compliance with, any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party that are not expressly set forth in this Agreement and this Agreement shall supersede all prior agreements, negotiations, correspondence, undertakings and communications of the parties, oral or written, including, without limitation, the Retention Agreement, with respect to the subject matter hereof. The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Massachusetts.

10. Validity. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

11. Counterparts. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original but all of which together will constitute one and the same instrument.

12. Arbitration. Any dispute or controversy arising under or in connection with this Agreement shall be settled exclusively by arbitration in Boston in accordance with the rules of the American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award in any court having jurisdiction; provided, however, that you shall be entitled to seek specific performance of your right to be paid until the Date of Termination during the pendency of any dispute or controversy arising under or in connection with this Agreement. You shall be entitled to legal fees and expenses relating to an arbitration in accordance with the terms of Section 3(a)(iii) of this Agreement.

13. No Contract of Employment. Nothing in this Agreement shall be construed as giving you any right to be retained in the employ of the Company.

14. Headings. The headings contained in this Agreement are intended solely for convenience and shall not affect the rights of the parties to this Agreement.

If this letter sets forth our agreement on the subject matter hereof, kindly sign and return to the Company the enclosed copy of this letter which will then constitute our agreement on this subject.

Sincerely,

BOSTON SCIENTIFIC CORPORATION

By
J. Raymond Elliott
President and Chief Executive Officer

The foregoing is accepted and agreed to.

[Name of Executive]

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EXHIBIT A

RELEASE AGREEMENT

I am a party to an agreement with Boston Scientific Corporation (the “Company”), dated     ,       , 20      , entitled Change in Control Agreement (the “Change in Control Agreement”). I acknowledge that this is the Release Agreement required by the Company pursuant to Section 3(a)(i)(2) of the Change in Control Agreement as a condition of my eligibility for the Severance Payment (as defined in the Change in Control Agreement) (the “Consideration”).

1. Release of Claims. In consideration of and in exchange for the commitment of the Company to provide the Consideration, I, for myself, my heirs, administrators, executors and assigns agree to release and forever discharge the Company and its subsidiaries, affiliated companies, successors and assigns, and the current and former employees, officers, directors, shareholders (but only in their capacity as shareholders of the Company) and agents of each of the foregoing (the “Released Parties”), from any and all claims, agreements, obligations, injuries, damages, causes of action, debts or liabilities (together “Claims”), including, without limitation, Claims under the Civil Rights Act of 1866, Title VII of the Civil Rights Act of 1964, the Age Discrimination in Employment Act of 1967 (“ADEA”), the Civil Rights Act of 1991, the Americans with Disabilities Act of 1990, the Family and Medical Leave Act of 1993, and any other federal, state, local or foreign law, that I may have, may have ever had or may possess in the future, whether known or unknown, against any of the Released Parties, arising out of (i) my employent relationship with and service as an employee, officer or director of the Company, and the termination of such relationship or service, and (ii) any event, condition, circumstance or obligation that occurred, existed or arose on or prior to the date hereof; provided, however, that I do not release, discharge, or waive any rights to payments and benefits under the Change in Control Agreement that are contingent upon my execution of this Release Agreement.

2. Consideration of Release Agreement. I understand that I have had the opportunity, in accordance with ADEA, if I so desired, to take up to twenty-one (21) days to consider this Release Agreement. I agree that any modifications, material or otherwise, made to this Release Agreement do not restart or affect in any manner the original twenty-one (21) day consideration period. I further acknowledge that I have been advised to consult with an attorney prior to executing this Release Agreement.

3. Revocation Period. I understand that, in accordance with ADEA, I will have seven (7) days following my signing of this Release Agreement in which to revoke this Release Agreement by a written notice to be received by the Company’s Executive Vice President of Human Resources no later than the end of such seven-day period. I understand that this Release Agreement shall not become effective until the revocation period has expired.

4. Receipt of Payment. I acknowledge that I have received payment for all salary, vacation pay and other compensation due to me based on my employment with the Company to and including the most recent regular payroll date of the Company preceding the date of my signing the Release Agreement.

5. No Admission. I understand and agree that this Release Agreement is not to be construed as an admission of liability by the Released Parties.

6. Miscellaneous Provisions. I agree that this Release Agreement shall be subject to Sections 8, 9, 10, 11, 12 and 14 of the Change in Control Agreement.

7. Full Review of Release Agreement. My signature below confirms that I have carefully read and reviewed this Release Agreement. I fully understand all of its terms and conditions and have not relied upon any other representation by the Company or the employees or agents of the Company concerning the terms of this Release Agreement. I execute and deliver this Release Agreement freely and voluntarily.

UNDERSTOOD, ACCEPTED AND AGREED

[INSERT NAME]

     
Name:
Date:

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