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BSX > SEC Filings for BSX > Form 8-K on 1-Nov-2012All Recent SEC Filings

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Form 8-K for BOSTON SCIENTIFIC CORP


1-Nov-2012

Change in Directors or Principal Officers, Other Events, Financial Stateme


ITEM 5.02. DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS; COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.

5.02 (c), (d) Appointment of Michael F. Mahoney as President and Chief Executive Officer and Member of Board of Directors

On November 1, 2012, Boston Scientific Corporation (the Company) announced the promotional appointment of Michael F. Mahoney from President of the Company to President and Chief Executive Officer of the Company effective on that date. The appointment follows a previously disclosed approximate one-year transition period that was designed to accommodate Mr. Mahoney's post-employment obligations to his former employer.

Mr. Mahoney, 47, served as President of the Company from October 17, 2011 to November 1, 2012. In that capacity, he was specifically responsible for the Company's Cardiac Rhythm Management and Endoscopy (GI and Pulmonary) businesses, as well as certain corporate functions. Prior to joining the Company, he was Worldwide Chairman of the Medical Devices and Diagnostics division of Johnson & Johnson from January 2011 to September 2011 overseeing 50,000 employees and seven franchises. Prior to assuming this position, Mr. Mahoney served as Worldwide Group Chairman of Johnson & Johnson's DePuy franchise, an orthopedics and neurosciences business, from April 2007 through January 2011. From January 2001 through March 2007, Mr. Mahoney served as President and Chief Executive Officer of Global Healthcare Exchange, a provider of supply chain solutions and services that bring together hospitals, manufacturers, distributors and GPOs. Mr. Mahoney built his early career at General Electric Medical Systems, where he spent 12 years in a variety of advancing leadership roles for domestic and global businesses in CT, MRI, X-ray, Healthcare IT, and Nuclear Medicine, culminating in the role of General Manager of the Healthcare Information Technology business. Mr. Mahoney earned a B.B.A. in Finance from the University of Iowa and a M.B.A. from Wake Forest University.

Effective concurrent with the effective date of his appointment as President and Chief Executive Officer of the Company and in his capacity as such, Mr. Mahoney was appointed to the Company's Board of Directors to hold office until the 2013 Annual Meeting of Stockholders and until his successor has been elected and qualified. As an employee of the Company, Mr. Mahoney is not eligible to receive standard director compensation.

Pursuant to the terms of his previously disclosed offer letter dated September 6, 2011, Mr. Mahoney will receive a promotional bonus of $750,000 within 30 days following his appointment as President and Chief Executive Officer of the Company, which bonus is subject to reimbursement if Mr. Mahoney should voluntarily leave the Company prior to the first anniversary of his promotion.

The description of Mr. Mahoney's offer letter does not purport to be complete and is subject to and qualified in its entirety by reference to the full text thereof. The offer letter, as supplemented and amended, is included in this filing as Exhibit 10.1 and is incorporated herein by reference. Except as described herein, there are no arrangements or understandings between Mr. Mahoney and any other persons pursuant to which Mr. Mahoney was elected a director or officer of the Company.

5.02 (b), (e) Retirement of William H. Kucheman as Interim Chief Executive Officer and Member of Board of Directors

On November 1, 2012, the Company announced the retirement of William H. Kucheman as interim Chief Executive Officer of the Company and from the Company's Board of Directors, in each case effective on November 1, 2012 to coincide with the effective date of Mr. Mahoney's promotional appointment as President and Chief Executive Officer of the Company and, in his capacity as such, Mr. Mahoney's appointment to the Company's Board of Directors.

Effective upon his retirement as interim Chief Executive Officer of the Company on November 1, 2012, Mr. Kucheman was appointed as Senior Advisor of the Company, an executive level position he is expected to hold through year-end. Pursuant to his letter agreement dated October 30, 2012, in his capacity as Senior Advisor Mr. Kucheman will continue


to receive an annualized base salary of $900,000 and remain eligible for an incentive award under the Company's 2012 Annual Bonus Plan at an incentive target of 120% of his annual base salary and in accordance with the terms of such plan. As a member of the executive committee, he will remain eligible for executive level benefits while serving as Senior Advisor of the Company.

Following his tenure as Senior Advisor, it is expected that Mr. Kucheman will provide consulting services to the Company for a one-year period commencing on January 1, 2013. Mr. Kucheman's consulting agreement provides that the Company will pay him for consulting services at a rate of $4,500 per day, or $2,250 per half day, not to exceed a maximum of fifty two (52) days. The consulting agreement also provides for the reimbursement of necessary and reasonable expenses, including travel expenses, and includes other terms and conditions, such as standard confidentiality provisions customary for agreements of this nature.

The description of Mr. Kucheman's letter agreement and consulting agreement does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of such agreements. Mr. Kucheman's letter agreement and consulting agreement are included in this filing as Exhibits 10.2 and 10.3, respectively, and are incorporated herein by reference.

5.02 (e) Compensatory Arrangements of Certain Officers

(i) 2013 Annual Bonus Plan

On October 30, 2012, upon the recommendation of the Executive Compensation and Human Resources Committee (the Compensation Committee), the Board of Directors of the Company approved the Company's 2013 Annual Bonus Plan effective for the performance period January 1, 2013 through December 31, 2013.

As part of the Company's overall compensation program, the 2013 Annual Bonus Plan provides an annual cash incentive opportunity for eligible salaried personnel (including the Company's named executive officers meeting the eligibility criteria) based on the achievement of certain performance metrics. The 2013 Annual Bonus Plan is substantially similar to the Company's 2012 Annual Bonus Plan, as amended and restated, and provides:

for a single bonus pool (the Total Annual Bonus) that will be based on the Company's performance measured against achievement of corporate-level performance metric goals for adjusted earnings per share and global sales on a constant currency basis (Global sales);

the Total Annual Bonus (i) will be capped at 95% of the aggregate annual bonus pool target (the Aggregate Annual Target) in the event that the performance for Global sales is below 95% of the Company's approved performance goal for that metric; and (ii) will have a ceiling of 150% and a floor of 50% of the Aggregate Annual Target, with the Company's Board of Directors having discretion to terminate, suspend or modify the plan and to reduce the Total Annual Bonus based on the Company's performance relative to its quality objectives and performance of its quality systems;

the Total Annual Bonus will be allocated among corporate, global operations and each participating business, regional and country unit (each, a participating unit) based on each participating unit's overall and relative performance measured against its achievement of that unit's predetermined "Scorecard" performance metrics and goals and taking into consideration, as appropriate, other factors; such allocation will be a percentage of the annual bonus pool target for each participating unit (representing the total target annual bonuses of all eligible employees for the year within that unit) (each such allocated amount, an Assigned Bonus Pool); and

the Assigned Bonus Pool for each participating unit will then be allocated among all managers of plan participants within that participating unit. Such managers will then evaluate the performance of the participants under their management and determine, for each participant, the percentage (between 0% and 200%) of the participant's target annual bonus that will be used to determine the participant's bonus award.


This description of the 2013 Annual Bonus Plan does not purport to be complete and is subject to and qualified in its entirety by reference to the full text of such plan. A copy of the 2013 Annual Bonus Plan is included in this filing as Exhibit 10.4 and incorporated herein by reference.

(ii) 2013 Performance Share Programs

On October 30, 2012, upon the recommendation of the Compensation Committee, the Board of Directors of the Company approved the adoption of two performance share programs, the Boston Scientific Corporation Total Shareholder Return Performance Share Program for 2013 (the 2013 TSR PSP) and the Boston Scientific Corporation Free Cash Flow Performance Share Program for 2013 (the 2013 FCF PSP). These programs are substantially similar to the performance share programs for 2012 and represent an important component of the overall mix of the Company's . . .



ITEM 8.01. OTHER EVENTS.

A copy of the Company's press release dated November 1, 2012 announcing certain of the events described under Item 5.02 above is included in this filing as Exhibit 99.1 and incorporated herein by reference.



ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS.

(d) Exhibits (# compensatory plans or arrangements)

Exhibit No. Description

10.1        Form of Offer Letter, dated September 6, 2011, between Boston
            Scientific Corporation and Michael F. Mahoney, as supplemented
            September 13, 2011 (incorporated herein by reference to Exhibit 10.1,
            Current Report on Form 8-K dated September 13, 2011, File No.
            1-11083); Form of Amendment, dated February 14, 2012, to Offer Letter
            dated September 6, 2011 between Boston Scientific Corporation and
            Michael F. Mahoney, as supplemented September 13, 2011 (incorporated
            herein by reference to Exhibit 10.100, Annual Report on Form 10-K for
            the fiscal year ended December 31, 2011, File No. 1-11083)#

10.2        Letter Agreement, dated October 30, 2012, between William H. Kucheman
            and Boston Scientific Corporation#

10.3        Form of Consulting Agreement between William H. Kucheman and Boston
            Scientific Corporation#
10.4        Boston Scientific Corporation 2013 Annual Bonus Plan, effective as of
            January 1, 2013#
10.5        Boston Scientific Corporation 2013 Total Shareholder Return
            Performance Share Program#
10.6        Boston Scientific Corporation 2013 Free Cash Flow Performance Share
            Program#
99.1        Press Release issued by Boston Scientific Corporation, dated November
            1, 2012


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