UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment
No. )
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BOSTON SCIENTIFIC CORPORATION
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o | Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing. |
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| re-elect four existing directors; | |
| approve amendments to our Certificate of Incorporation and Bylaws to declassify our Board of Directors; | |
| approve amendments to our Certificate of Incorporation and Bylaws to increase the maximum size of our Board of Directors from 15 to 20 directors; | |
| approve a stock option exchange program for Boston Scientific employees (excluding our executive officers and directors); | |
| vote upon a stockholder proposal to require executive stock retention guidelines; | |
| ratify the appointment of Ernst & Young LLP as our independent auditors for the 2007 fiscal year; and | |
| act upon such other business as may properly come before the annual meeting or any adjournment or postponement of the meeting. |
(1) | To re-elect four existing Class III directors to serve until our 2010 Annual Meeting of Stockholders; provided, however, that if the amendments to our Certificate of Incorporation and Bylaws declassifying the Board of Directors as described below are approved, their term will expire at the 2008 Annual Meeting of Stockholders; | |
(2) | To approve amendments to our Certificate of Incorporation and Bylaws that would declassify the Board of Directors; | |
(3) | To approve amendments to our Certificate of Incorporation and Bylaws that would increase the maximum size of our Board of Directors from 15 to 20 directors; | |
(4) | To approve a stock option exchange program for employees (excluding our executive officers and directors) providing for the exchange of stock options previously granted under our stock plans with an exercise price of $25.00 or more per share for a deferred stock unit (DSU) award (of a smaller number of DSUs than the number of exchanged stock options); | |
(5) | To vote upon a stockholder proposal requiring executive stock retention guidelines; | |
(6) | To ratify the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2007; and | |
(7) | To transact such other business as may properly come before the meeting or any adjournments or postponements of the meeting. |
(1) | FOR the re-election of each of the four existing director nominees; | |
(2) | FOR the amendments to our Certificate of Incorporation and Bylaws to declassify the Board of Directors; | |
(3) | FOR the amendments to our Certificate of Incorporation and Bylaws to increase the maximum size of the Board from 15 to 20 directors; | |
(4) | FOR the stock option exchange program for Boston Scientific employees (excluding our executive officers and directors); | |
(5) | AGAINST the stockholder proposal requiring executive stock retention guidelines; and | |
(6) | FOR the ratification of the appointment of Ernst & Young LLP as our independent auditors for the fiscal year ending December 31, 2007. |
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| mail a written notice revoking your earlier vote to our transfer agent, Mellon Investor Services LLC, Proxy Processing, P.O. Box 3510, South Hackensack, NJ 07606-9210; | |
| submit to our transfer agent a properly completed and signed proxy card with a later date; | |
| vote again telephonically or electronically (available until 11:00 p.m. Eastern Time on May 7, 2007); or | |
| vote in person at the Annual Meeting. |
(1) | For the Election of Directors. With respect to Proposal 1, the four nominees for director receiving the most votes from those shares present or represented at the Annual Meeting will be elected. If you do not vote for a particular nominee, or you withhold authority for one or all nominees, your vote will be counted for purposes of determining whether there is a quorum, but will not count either for or against the nominee. | |
(2) | For the Declassification of the Board of Directors and the Increase in the Size of the Board. With respect to Proposals 2 and 3, the affirmative vote of eighty percent (80%) of our outstanding shares is required to approve the amendments to our Certificate of Incorporation and Bylaws which would provide for the declassification of our Board of Directors and an increase in the maximum size of our Board of Directors. | |
(3) | For All Other Matters. For the approval of the stock option exchange program, the stockholder proposal requiring executive stock retention guidelines and the ratification of the appointment of Ernst & Young LLP as our auditors for the year ending December 31, 2007, the affirmative vote of a majority of shares participating in the voting on such proposal is required for approval. At present, the Board knows of no matters other than these to be presented for stockholder action at the Annual Meeting. A properly executed |
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proxy marked abstain with respect to any of these matters will not be voted for or against the proposal(s), but will be counted for purposes of determining the number of votes cast. Accordingly, an abstention will have the effect of a negative vote. |
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Name |
Ursula M. Burns Age 48 Director since 2002 |
Ursula M. Burns is President of Business Group Operations and Corporate Senior Vice President of Xerox Corporation. Ms. Burns joined Xerox in 1980, subsequently advancing through several engineering and management positions. Ms. Burns served as Vice President and General Manager, Departmental Business Unit from 1997 to 1999, Senior Vice President, Worldwide Manufacturing and Supply Chain Services from 1999 to 2000, Senior Vice President, Corporate Strategic Services from 2000 to October 2001 and President of Document Systems and Solutions Group until her most recent appointment in January 2003. She serves on the boards of directors of American Express Corporation, the National Association of Manufacturers, the FIRST (For Inspiration and Recognition of Science and Technology) Foundation and the Rochester Business Alliance and is a Trustee of the University of Rochester. Ms. Burns earned a B.S. degree from Polytechnic Institute of New York and an M.S. degree in mechanical engineering from Columbia University. | |
Marye Anne Fox Age 59 Director since 2001 |
Marye Anne Fox has been Chancellor of the University of California, San Diego and Distinguished Professor of Chemistry since August 2004. Prior to that, she served as Chancellor of North Carolina State University and Distinguished University Professor of Chemistry from 1998 to 2004. From 1976 to 1998, she was a member of the faculty at the University of Texas, where she taught chemistry and held the Waggoner Regents Chair in Chemistry from 1991 to 1998. She served as the Universitys Vice President for Research from 1994 to 1998. Dr. Fox is the Co-Chair of the National Academy of Sciences Government-University-Industry Research Roundtable and serves on President Bushs Council of Advisors on Science and Technology. She has served as the Vice Chair of the National Science Board. She also serves on the boards of a number of other scientific, technological and civic organizations, and is a member of the boards of directors of Red Hat Corp., Pharmaceutical Product Development, Inc., Burroughs-Wellcome Fund, W.R. Grace Co. and the Camille and Henry Dreyfus Foundation. She has been honored by a wide range of educational and |
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professional organizations, and she has authored more than 350 publications, including five books. Dr. Fox holds a B.S. in Chemistry from Notre Dame College, an M.S. in Organic Chemistry from Cleveland State University, and a Ph.D. in Organic Chemistry from Dartmouth College. | ||
N.J. Nicholas, Jr Age 67 Director since 1994 |
N.J. Nicholas, Jr. is a private investor. Previously, he served as President of Time, Inc. from September 1986 to May 1990 and Co-Chief Executive Officer of Time Warner, Inc. from May 1990 until February 1992. Mr. Nicholas is a director of Xerox Corporation and Time Warner Cable, Inc. He has served as a director of Turner Broadcasting and a member of the Presidents Advisory Committee for Trade Policy and Negotiations and the Presidents Commission on Environmental Quality. Mr. Nicholas is Chairman of the Board of Trustees of Environmental Defense and a member of the Council on Foreign Relations. Mr. Nicholas received an A.B. degree from Princeton University and an M.B.A. degree from Harvard Business School. He is also the brother of Pete Nicholas, Chairman of the Board. | |
John E. Pepper Age 68 Director since 2003 |
John E. Pepper has been a Director of Boston Scientific since 2003 and he previously served as a director of Boston Scientific from November 1999 to May 2001. Mr. Pepper is the Chief Executive Officer and director of the National Underground Railroad Freedom Center. Previously he served as Vice President for Finance and Administration of Yale University from January 2004 to December 2005. Prior to that, he served as Chairman of the executive committee of the board of directors of The Procter & Gamble Company until December 2003. Since 1963, he served in various positions at Procter & Gamble, including Chairman of the Board from 2000 to 2002, Chief Executive Officer and Chairman from 1995 to 1999, President from 1986 to 1995 and director since 1984. Mr. Pepper is Chairman of the board of directors of The Walt Disney Company, and is a member of the executive committee of the Cincinnati Youth Collaborative. Mr. Pepper graduated from Yale University in 1960 and holds honorary doctoral degrees from Yale University, The Ohio State University, Xavier University, Mount St. Joseph College and St. Petersburg University (Russia). |
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Nancy-Ann DeParle Age 50 Director since 2006 |
Nancy-Ann DeParle has been a Director of Boston Scientific since our acquisition of Guidant in April 2006. Since August 2006, Ms. DeParle has been a Managing Director of CCMP Capital Advisors, LLC. Previously, she had been a Senior Advisor for JP Morgan Partners and an Adjunct Professor at The Wharton School of the University of Pennsylvania from 2000 to 2006, and prior to that she served as the Administrator of the Health Care Financing Administration (HCFA) (now the Centers for Medicare and Medicaid Services) from 1997 to 2000. Prior to her role at HCFA, Ms. DeParle was the Associate Director for Health and Personnel at the White House Office of Management and Budget and served as commissioner of the Tennessee Department of Human Services. She also has worked as a lawyer in private practice in Nashville, Tennessee and Washington, DC. Ms. DeParle is a director of Cerner Corporation, DaVita Inc. and Triad Hospitals, Inc. Ms. DeParle is a trustee of the Robert Wood Johnson Foundation and serves on the Medicare Payment Advisory Commission. Ms. DeParle received a B.A. degree from the University of Tennessee, a J.D. from Harvard Law School, and B.A. and M.A. degrees in Politics and Economics from Balliol College of Oxford University, where she was a Rhodes Scholar. | |
Ray J. Groves Age 71 Director since 1999 |
From 2001 to 2005, Ray J. Groves served in various roles at Marsh Inc., including President, Chairman and Senior Advisor, and is a former member of the board of directors of its parent company, Marsh & McLennan Companies, Inc. He served as Chairman of Legg Mason Merchant Banking, Inc. from 1995 to 2001. Mr. Groves served as Chairman and Chief Executive Officer of Ernst & Young for 17 years until his retirement in 1994. Mr. Groves currently serves as a member of the boards of directors of Electronic Data Systems Corporation, Overstock.com and the Colorado Physicians Insurance Company. Mr. Groves is a member of the Council on Foreign Relations. He is a former member of the Board of Governors of the American Stock Exchange and the National Association of Securities Dealers. Mr. Groves is former Chairman of the board of directors of the American Institute of Certified Public Accountants. He is a member and former Chair of the board of directors of The Ohio State University Foundation and a member of the Deans Advisory Council of the Fisher College of Business. He is a former member of the Board of Overseers of The Wharton School of the University of Pennsylvania and served as the Chairman of its Center for the Study of the Service Sector. Mr. Groves is a managing director of the Metropolitan Opera Association and a director of the Collegiate Chorale. Mr. Groves received a B.S. degree from The Ohio State University. | |
Pete M. Nicholas Age 65 Director since 1979 |
Pete M. Nicholas, a co-founder of Boston Scientific, has been Chairman of the Board since 1995. He served as our Chief Executive Officer from 1979 to March 1999 and Co-Chairman of the Board from 1979 to 1995. Prior to joining Boston Scientific, he was corporate director of marketing and general manager of the Medical Products Division at Millipore Corporation, a medical device company, and served in various sales, marketing and general management positions at Eli Lilly and Company. He is currently Chairman Emeritus of the Board of Trustees of Duke University. Mr. Nicholas is also a Fellow of the National Academy of Arts and Sciences and a member of the Trust for that organization. He has also served on several for profit and not-for-profit boards. Mr. Nicholas is a member of the Massachusetts Business Roundtable, |
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Class I Directors (Term Expires 2008) (continued) | ||
Massachusetts Business High Technology Council, CEOs for Fundamental Change in Education and the Boys and Girls Club of Boston. After college, Mr. Nicholas served as an officer in the U.S. Navy, resigning his commission as lieutenant in 1966. Mr. Nicholas received a B.A. degree from Duke University, and an M.B.A. degree from The Wharton School of the University of Pennsylvania. He is also the brother of N.J. Nicholas, Jr., one of our directors. | ||
Warren B. Rudman Age 76 Director since 1999 |
Senator Warren B. Rudman has been Of Counsel to the international law firm Paul, Weiss, Rifkind, Wharton, and Garrison LLP since January 2003. Previously, he was a partner of that firm since 1992. Prior to joining the firm, he served two terms as a U.S. Senator from New Hampshire from 1980 to 1992. He serves on the boards of directors of Collins & Aikman Corporation and several funds managed by the Dreyfus Corporation. He is the founding co-chairman of the Concord Coalition. Senator Rudman received a B.S. from Syracuse University and an LL.B. from Boston College Law School and served in the U.S. Army during the Korean War. | |
James R. Tobin Age 62 Director since 1999 |
James R. Tobin is our President and Chief Executive Officer. Prior to joining Boston Scientific in March 1999, Mr. Tobin served as President and Chief Executive Officer of Biogen, Inc. from 1997 to 1998 and Chief Operating Officer of Biogen from 1994 to 1997. From 1972 to 1994, Mr. Tobin served in a variety of executive positions with Baxter International, including President and Chief Operating Officer from 1992 to 1994. Previously, he served at Baxter as Managing Director in Japan, Managing Director in Spain, President of Baxters I.V. Systems Group and Executive Vice President. Mr. Tobin currently serves on the boards of directors of Curis, Inc. and Applera Corporation. Mr. Tobin holds an A.B. from Harvard College and an M.B.A. from Harvard Business School. Mr. Tobin also served in the U.S. Navy from 1968 to 1972 where he achieved the rank of lieutenant. |
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Class II Directors (Term Expires 2009) | ||
John E. Abele Age 70 Director since 1979 |
John E. Abele, our co-founder, was our Treasurer from 1979 to 1992, our Co-Chairman from 1979 to 1995 and our Vice Chairman and Founder, Office of the Chairman from February 1995 to March 1996. Mr. Abele is also the owner of The Kingbridge Centre and Institute, a 120-room conference center in Ontario that provides special services and research to businesses, academia and government. He was President of Medi-tech, Inc. from 1970 to 1983, and prior to that served in sales, technical and general management positions for Advanced Instruments, Inc. Mr. Abele serves on the board of directors of Color Kinetics, is the Chairman of the Board of the FIRST (For Inspiration and Recognition of Science and Technology) Foundation and is also a member of numerous not-for-profit boards. Mr. Abele received a B.A. degree from Amherst College. | |
Joel L. Fleishman Age 72 Director since 1992 |
Joel L. Fleishman is a Professor of Law and Public Policy at Duke University where he has served in various administrative positions, including First Senior Vice President, since 1971. Mr. Fleishman is a founding member of the governing board of the Duke Center for Health Policy Research and Education and was the founding director from 1971 to 1983 of Duke Universitys Terry Sanford Institute of Public Policy. He is the director of the Samuel and Ronnie Heyman Center for Ethics, Public Policy and the Professions and the director of the Duke University Philanthropic Research Program. From 1993 to 2001, Mr. Fleishman took a part-time leave from Duke University to serve as President of the Atlantic Philanthropic Service Company, the U.S. program staff of Atlantic Philanthropies. Mr. Fleishman also serves as a member of the Board of Trustees of The John and Mary Markle Foundation, Chairman of the Board of Trustees of the Urban Institute, Chairman of The Visiting Committee of the Kennedy School of Government, Harvard University, and as a director of Polo Ralph Lauren Corporation and the James River Insurance Group. Mr. Fleishman received A.B., M.A. and J.D. degrees from the University of North Carolina at Chapel Hill, and an LL.M. degree from Yale University. | |
Ernest Mario Age 68 Director since 2001 |
Ernest Mario is currently the Chairman of Reliant Pharmaceuticals. From 2003 to 2006, he was also the chief executive officer of Reliant Pharmaceuticals. Prior to joining Reliant Pharmaceuticals in April 2003, he was the Chairman of IntraBiotics Pharmaceuticals, Inc. from April 2002 to April 2003. Dr. Mario also served as Chairman and Chief Executive Officer of Apothogen, Inc., a pharmaceutical company, from January 2002 to April 2002 when Apothogen was acquired by IntraBiotics. Dr. Mario served as the Chief Executive of Glaxo Holdings plc from 1989 until March 1993 and as Deputy Chairman and Chief Executive from January 1992 until March 1993. From 1993 to 1997, Dr. Mario served as Co-Chairman and Chief Executive Officer of ALZA Corporation, a research-based pharmaceutical company with leading drug-delivery technologies, and Chairman and Chief Executive Officer from 1997 to 2001. Dr. Mario presently serves on the boards of directors of Maxygen, Inc., Alexza Pharmaceuticals, Inc. and Pharmaceutical Product Development, Inc. He is also a Trustee of Duke University and Chairman of the Board of the Duke University Health System. He is a past Chairman of the American Foundation for Pharmaceutical Education and serves as an advisor to the pharmacy schools at the University of Maryland, the University of Rhode Island and The Ernest Mario School of Pharmacy at Rutgers University. Dr. Mario holds a B.S. in Pharmacy from Rutgers, and an M.S. and a Ph.D. in Physical Sciences from the University of Rhode Island. |
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Class II Directors (Term Expires 2009) (continued) | ||
Uwe E. Reinhardt Age 69 Director since 2002 |
Uwe E. Reinhardt is the James Madison Professor of Political Economy and Professor of Economics and Public Affairs at Princeton University, where he has taught since 1968. Dr. Reinhardt is a senior associate of the University of Cambridge, England and serves as a Trustee of Duke University and the Duke University Health System, H&Q Healthcare Investors, H&Q Life Sciences Investors and Hambrecht & Quist Capital Management LLC. He is also the Commissioner of the Kaiser Family Foundation Commission on Medicaid and the Uninsured and a member of the boards of directors of Amerigroup Corporation and Triad Hospitals, Inc. Dr. Reinhardt is a member of the Institute of Medicine of the National Academy of Sciences. Dr. Reinhardt received a Bachelor of Commerce degree from the University of Saskatchewan, Canada and a Ph.D. in economics from Yale University. | |
Kristina M. Johnson Age 49 Director since 2006 |
Kristina M. Johnson has been a Director of Boston Scientific since our acquisition of Guidant in April 2006. Dr. Johnson is the Dean of the Pratt School of Engineering at Duke University, a position she has held since July 1999. Previously, she served as a professor in the Electrical and Computer Engineering Department, University of Colorado, from 1994 to 1999 and as associate and assistant professor from 1985. She served as deputy director and later as director of the National Science Foundation Engineering Research Center for Optoelectronics Computing Systems at the University of Colorado, Boulder, from 1992 to 1997. Dr. Johnson is a co-founder of the Colorado Advanced Technology Institute Center of Excellence in Optoelectronics and serves as a director of Minerals Technologies, Inc., AES Corporation and Nortel Corporation. Dr. Johnson also serves on the board of directors of the Society of Photo-Instrumentation Engineers and Duke Childrens Classic to benefit Duke Childrens Hospital. Dr. Johnson was a Fulbright Faculty Scholar in the Department of Electrical Engineering at the University of Edinburgh, Scotland, from 1991 to 1992 and a NATO Post-Doctoral Fellow at Trinity College, Dublin, Ireland, from 1983 to 1985. Dr. Johnson received B.S., M.S. and Ph.D. degrees in electrical engineering from Stanford University. |
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| The director is, or has been within the last three years, an employee of the Company or if the director has an immediate family member who is, or has been within the last three years, an executive officer of the Company. | |
| The director has received, or has an immediate family member who has received, during any 12-month period within the last three years, more than $100,000 in direct compensation from the Company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service). | |
| (A) The director or the directors immediate family member is a current partner of the Companys internal or external auditor; (B) the director is a current employee of such auditing firm; (C) the director has an immediate family member who is a current employee of such auditing firm and who participates in the firms audit, assurance or tax compliance (but not tax planning) practice; or (D) the director or the directors immediate family member was within the last three years (but is no longer) a partner or employee of such auditing firm and personally worked on the Companys audit within that time. | |
| The director or the directors immediate family member is, or has been within the last three years, employed as an executive officer of another company where any of the Companys present executive officers serves or served at the same time on that other companys compensation committee. | |
| The director is a current employee, or the directors immediate family member is a current executive officer, of a company that has made payments to or received payments from the Company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million or 2% of such other companys consolidated gross revenues. |
| Commercial Relationships. The following commercial relationships are not considered material relationships that would impair a directors independence: (i) if a director of the Company is an executive officer or an employee of, or an immediate family member of a director is an executive officer of, another company that does business with the Company and the annual sales to, or purchases from, the Company are less than 1% of the annual revenues of such other company, and (ii) if a director of the Company is an executive officer of another company which is indebted to the Company, or to which the Company is indebted, and the total amount of either companys indebtedness to the other is less than 2% of the total consolidated assets of the company for which he or she serves as an executive officer. | |
| Charitable Relationships. The following charitable relationship will not be considered a material relationship that would impair a directors independence: if a director, or an immediate family member of the director, serves as an executive officer, director or trustee of a charitable organization, and the Companys discretionary charitable contributions to that charitable organization in any single fiscal year are less than 1% (or $500,000, whichever is less) of that charitable organizations annual consolidated gross revenues. |
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| Personal Relationships. The following personal relationship will not be considered to be a material relationship that would impair a directors independence: if a director, or immediate family member of the director, receives from, or provides to, the Company products or services in the ordinary course and on substantially the same terms as those prevailing at the time for comparable products or services provided to unaffiliated third parties. |
| Demonstrated management ability at senior levels in successful organizations; | |
| Current or recent employment in positions of significant responsibility and decision making; | |
| Expertise in leading rapidly growing multi-national organizations; or | |
| Current and prior experience related to anticipated board and committee responsibilities in other areas of importance to the Company. |
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Executive |
Finance |
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Compensation |
Nominating |
and |
Compliance |
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and Human |
and |
Strategic |
and |
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Audit |
Resources |
Governance |
Investment |
Quality |
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Name
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Committee | Committee | Committee | Committee | Committee | |||||||||||||||
Ursula M. Burns
|
* | * | + | |||||||||||||||||
Nancy-Ann DeParle
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* | * | ||||||||||||||||||
Joel L. Fleishman
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+ | * | * | |||||||||||||||||
Marye Anne Fox
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* | * | ||||||||||||||||||
Ray J. Groves
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* | + | ||||||||||||||||||
Kristina M. Johnson
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* | * | ||||||||||||||||||
Ernest Mario
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* | + | * | |||||||||||||||||
N.J. Nicholas, Jr.
|
* | |||||||||||||||||||
John E. Pepper
|
* | * | ||||||||||||||||||
Uwe E. Reinhardt
|
* | * | * | |||||||||||||||||
Warren B. Rudman
|
+ | * | ||||||||||||||||||
James R. Tobin
|
* |
* | Committee Member | |
+ | Committee Chair |
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| Determine and approve (and make recommendations to the Board regarding) our CEOs compensation, based on the performance evaluation by and recommendations of the Chairman of the Board and the Nominating and Governance Committee; | |
| Review, oversee and determine the total compensation package for our other executive officers; | |
| Review and make recommendations to the Board regarding employment, consulting, retirement, severance and change in control agreements, indemnification agreements and other arrangements proposed for our executive officers, including conducting a periodic review to evaluate these arrangements for continuing appropriateness; | |
| Review and make recommendations to the Board regarding the compensation of our directors; and | |
| Adopt and periodically review a comprehensive statement of executive compensation philosophy, strategy and principles. |
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Initial 2006 Peer Group
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Revised 2006 Peer Group
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Baxter Health Care
|
Abbott Laboratories | |||
Becton, Dickson & Company
|
Baxter Health Care | |||
C.R. Bard
|
Becton, Dickinson & Company | |||
Bristol-Myers Squibb
|
Bristol-Myers Squibb | |||
Guidant
|
Eli Lilly and Company | |||
Eli Lilly and Company
|
Johnson & Johnson | |||
Medtronic
|
Medtronic | |||
St. Jude Medical
|
Schering Plough | |||
Stryker
|
St. Jude Medical | |||
Wyeth Pharmaceuticals
|
Stryker | |||
Zimmer Holdings
|
Wyeth Pharmaceuticals |
| Pay for performance: A comparison of the relationship between (1) our CEOs 2005 realizable pay (defined as cash compensation paid to our CEO plus his in-the-money stock option value over the past six years) and (2) 2005 Company performance (defined as total shareholder return, revenue growth and net income growth over the past five years) revealed a close correlation between our CEOs historical pay and the Companys performance. Relative to the Initial 2006 Peer Group, our CEOs realizable pay and Company performance were both positioned in the 75th percentile of the peer group. However, our CEOs pay exhibited significantly more risk than CEO pay at our peers in that his total cash compensation was positioned in the 25th percentile and his in-the-money stock option value was positioned in the 75th percentile. | |
| Capital accumulation and value realized: A comparison of our CEOs 2005 total capital accumulation (comprised of shares owned outright, outstanding stock options, and accrued retirement benefit value) relative to the Initial 2006 Peer Group revealed that our CEO was positioned in the 25th percentile of peers in terms of capital accumulation. In terms of 2005 value realized (value of in-the-money gains realized from stock option exercises), our CEO was positioned in the 75th percentile of the peer group. | |
| Total remuneration: A comparison of our CEOs 2005 total remuneration (comprised of base salary, annual bonus, long-term incentives and benefits) relative to the Initial 2006 Peer Group demonstrated that our CEOs total remuneration fell within the 25th percentile of our peer group. |
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Targeted Market |
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Element
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Role
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Objective
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Position
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Base Salary | Provide stable source of income | Attract and retain talent | Median | |||
Performance Incentive Plan (PIP) | Reward for quarterly and annual goal achievement | Focus talent on annual goals, reward talent | 75th percentile | |||
Annual Equity Incentives | Reward for long-term business building | Focus talent on long-term shareholder value creation; retain and engage talent | 60th percentile |
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Name
|
2005 Base Salary | 2006 Base Salary | % Increase | Effective Date | ||||||||||
Paul A. LaViolette
|
$ | 600,000 | $ | 660,000 | 10.0 | % | 12/27/05 | |||||||
Lawrence C. Best
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$ | 625,000 | $ | 660,000 | 5.6 | % | 12/27/05 | |||||||
Fredericus A. Colen
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$ | 435,000 | $ | 465,000 | 6.9 | %(1) | 12/27/05 | |||||||
Fredericus A. Colen
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$ | 465,000 | $ | 500,000 | 7.5 | %(2) | 5/8/06 | |||||||
Paul W. Sandman
|
$ | 435,000 | $ | 460,000 | 5.7 | % | 12/27/05 |
(1) | Mr. Colen received a 6.9% year-end raise. | |
(2) | Mr. Colen received an additional 7.5% mid-year raise in connection with his assumption of additional responsibilities within our new cardiac rhythm management division after our Guidant acquisition. |
Name
|
2005 Base Salary | 2006 Base Salary | % Increase | Effective Date | ||||||||||
James R. Tobin
|
$ | 900,000 | $ | 927,000 | 3 | % | 2/28/06 |
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Sales and Net Income |
Quality Performance* |
Funded Award |
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Performance Level
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Performance (% of Plan)
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(% of Goals Achieved)
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(% of Target Award)
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Maximum
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Greater than or equal to 105% | Greater than or equal to 100% | 120% | |||||
Target
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98.5-101.5% | 66-85% | 100% | |||||
Threshold
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90% | 50-66% | 50% | |||||
Zero
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Less than 90% | Less than 50% | 0% |
* | Effective for Q3 and Q4 only because of our mid-year decision to emphasize our commitment to quality by making it an integral part of our performance incentive program. |
Sales |
Net Income* |
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Quarter
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($ in millions)
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($ in millions)
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Quality
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First Quarter
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$ | 1,587 | $ | 317 | N/A | |||||
Second Quarter
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$ | 1,622 | $ | 370 | N/A | |||||
Third Quarter
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$ | 1,582 | $ | 285 | Run rate metrics plus training completions | |||||
Fourth Quarter
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$ | 1,608 | $ | 243 | Run rate metrics plus training completions |
* | For purposes of our Performance Incentive Plan, net income is defined as GAAP net income excluding amounts related to the effect of purchase price allocation on assets, merger-related costs, costs associated with Guidants ongoing litigation, stock compensation expense and other special non-operating costs. |
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2006 Target Award |
2006 Actual Award |
Actual as |
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Name
|
($ in thousands) | ($ in thousands) | % of Target | |||||||||
Paul A. LaViolette
|
$ | 561.0 | $ | 616.4 | 109.9% | |||||||
Lawrence C. Best
|
$ | 495.0 | $ | 494.4 | 99.9% | |||||||
Fredericus A. Colen
|
$ | 375.0 | $ | 469.5 | 125.2% | |||||||
Paul W. Sandman
|
$ | 345.0 | $ | 344.6 | 99.9% |
2006 Target Award |
2006 Actual Award |
Actual as |
||||||||||
Name
|
($ in thousands) | ($ in thousands) | % of Target | |||||||||
James R. Tobin
|
$ | 927 | $ | 324.1 | 35 | % |
24
12/31/08 |
12/31/09 |
|||||||||||||||
% of Restrictions |
Measurement |
Measurement |
Total Shares |
|||||||||||||
Share Performance Price
|
that Lapse | Date | Date | Earned | ||||||||||||
$75 and above
|
100 | % | 1,000,000 | 1,000,000 | 2,000,000 | |||||||||||
$60
|
80 | % | 800,000 | 800,000 | 1,600,000 | |||||||||||
$50
|
60 | % | 600,000 | 600,000 | 1,200,000 | |||||||||||
$40
|
40 | % | 400,000 | 400,000 | 800,000 | |||||||||||
$35
|
20 | % | 200,000 | 200,000 | 400,000 | |||||||||||
Below $35
|
0 | % | 0 | 0 | 0 |
25
Performance |
||||||||||||||||||||
Incentive |
Long-Term |
|||||||||||||||||||
Salary Increase | Opportunity | Incentive Award | ||||||||||||||||||
Amount |
Percentage of |
Deferred |
||||||||||||||||||
New Salary | of Increase | Base Salary | Options | Stock Units | ||||||||||||||||
Fred Colen
|
$ | 500,000 | $ | 35,000 | 75 | % | 130,000 | 45,500 |
26
27
28
Type of Grant
|
Eligibility/Purpose
|
Usual Timing (Historically)
|
||
Annual
|
Select exempt employees (based on performance and potential) | Compensation Committee meeting held in December | ||
Promotion
|
Directors/Above (receiving promotions) | Compensation Committee meeting following date of promotion | ||
New Hires
|
Select Directors/Above (based on recruiting requirements) | Later of date of hire or approval by CEO (who has been delegated authority to make such grants by the Compensation Committee) | ||
Special Recognition
|
Select exempt employees (based on extraordinary contributions) | Compensation Committee meeting following achievement (infrequent practice) | ||
Retention
|
Select exempt employees (based on performance/potential and critical need to retain) | Compensation Committee meeting following identified need (infrequent practice) |
29
30
Change in |
||||||||||||||||||||||||||||||||||||
Pension |
||||||||||||||||||||||||||||||||||||
Value and |
||||||||||||||||||||||||||||||||||||
Nonqualified |
||||||||||||||||||||||||||||||||||||
Non-Equity |
Deferred |
|||||||||||||||||||||||||||||||||||
Stock |
Option |
Incentive Plan |
Compensation |
All Other |
||||||||||||||||||||||||||||||||
Name and Principal |
Salary |
Bonus |
Awards |
Awards |
Compensation |
Earnings |
Compensation |
Total |
||||||||||||||||||||||||||||
Position
|
Year | ($)(1) | ($)(2) | ($)(3) | ($)(4) | ($)(5) | ($)(6) | ($)(7) | ($) | |||||||||||||||||||||||||||
James R. Tobin
|
2006 | $ | 922,576 | $0 | $ | 5,102,711 | $ | 1,398,787 | $ | 324,100 | $ | 300,570 | $ | 311,822 | $ | 8,360,566 | ||||||||||||||||||||
President and Chief Executive
Officer
|
||||||||||||||||||||||||||||||||||||
Lawrence C. Best
|
2006 | $ | 660,050 | $0 | $ | 784,098 | $ | 1,422,575 | $ | 494,400 | $ | 327,634 | $ | 51,026 | $ | 3,739,783 | ||||||||||||||||||||
Executive Vice
President Finance & Administration and
Chief Financial Officer
|
||||||||||||||||||||||||||||||||||||
Paul A. LaViolette
|
2006 | $ | 660,000 | $0 | $ | 447,556 | $ | 1,431,543 | $ | 616,400 | $ | 263,334 | $ | 144,726 | $ | 3,563,559 | ||||||||||||||||||||
Chief Operating Officer
|
||||||||||||||||||||||||||||||||||||
Fredericus A. Colen
|
2006 | $ | 488,341 | $0 | $ | 960,206 | $ | 1,547,955 | $ | 469,500 | $ | 198,530 | $ | 108,772 | $ | 3,773,304 | ||||||||||||||||||||
Executive Vice President,
Operations and Technology, CRM and Chief Technology Officer
|
||||||||||||||||||||||||||||||||||||
Paul W. Sandman
|
2006 | $ | 460,027 | $ | 400,000 | $ | 358,242 | $ | 938,726 | $ | 344,600 | $ | 224,265 | $ | 133,797 | $ | 2,859,657 | |||||||||||||||||||
Executive Vice President and
General Counsel
|
(1) | The amount reflected in Mr. Tobins salary column reflects the prorated annual salary Mr. Tobin received in 2006 as a result of an annual base salary increase in late February 2006. In addition, the amount reflected in Mr. Colens salary column reflects a prorated annual salary due to an increase in Mr. Colens base salary in May 2006 in connection with his mid-year assumption of additional responsibilities related to our CRM division. A description of Mr. Tobins and Mr. Colens base salary increases in 2006 can be found in the Compensation Discussion and Analysis beginning on page [ ]. The amounts reflected in this column for the remaining NEOs reflect their salary for the full year. | |
(2) | The amount reflected in this column represents the cash component of a special recognition bonus in connection with the consummation of the Guidant acquisition paid to Mr. Sandman in May 2006. A description of this special recognition bonus can be found under the title Other/Special Recognition Awards in the Compensation Discussion and Analysis beginning on page [ ]. | |
(3) | The amounts included in the Stock Awards column represent the compensation cost we recognized in 2006 related to all outstanding non-option stock awards (deferred stock units awards), as described in Statement of Financial Accounting Standards No. 123(R). For a discussion of the valuation assumptions, see Note L to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2006. Please see the Grants of Plan Based Awards Table for more information regarding the stock awards we granted in 2006. | |
(4) | The amounts included in the Option Awards column represent the compensation cost we recognized in 2006 related to all outstanding option stock awards, as described in Statement of Financial Accounting Standards No. 123(R). For a discussion of the valuation assumptions, see Note L to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2006. Please see the Grants of Plan Based Awards Table for more information regarding the option awards we granted in 2006. | |
(5) | Amounts reflected in this column represent cash payments for our NEOs 2006 performance made in February 2007 under the Boston Scientific Performance Incentive Plan. | |
(6) | The amount shown for each NEO in the Change in Pension Value and Nonqualified Deferred Compensation Earnings column is attributable to the change in the actuarial present value of the accumulated benefit under our Executive Retirement Plan at December 31, 2006, as compared to December 31, 2005. Please see the Pension Benefits Table for more information regarding the accrued benefits for each NEO under this plan. |
31
(7) | The amounts reflected in the All Other Compensation column are comprised of the following components: |
Company |
||||||||||||||||||||||||
Match |
Personal Use |
Term Life |
Other Life |
Total |
||||||||||||||||||||
(401(k) |
Executive |
of Corporate |
Insurance |
Insurance |
All Other |
|||||||||||||||||||
Plan)(a) | Allowance(b) | Aircraft(c) | Premium(d) | Premium(e) | Compensation(f) | |||||||||||||||||||
James R. Tobin
|
$ | 13,200 | $ | 25,000 | $ | 264,265 | $ | 7,920 | | $ | 311,822 | |||||||||||||
Lawrence C. Best
|
$ | 13,200 | $ | 25,000 | $ | 6,229 | $ | 5,160 | | $ | 51,026 | |||||||||||||
Paul A. LaViolette
|
$ | 13,200 | $ | 25,000 | | | $ | 105,872 | $ | 144,726 | ||||||||||||||
Fredericus A. Colen
|
$ | 13,200 | $ | 25,000 | | | $ | 60,798 | $ | 108,772 | ||||||||||||||
Paul W. Sandman
|
$ | 8,800 | $ | 25,000 | | | $ | 98,691 | $ | 133,797 |
(a) | The amounts reflected in this column represent our matching contributions allocated to each of the NEOs under our 401(k) Retirement Savings Plan. All contributions to this 401(k) Retirement Savings Plan as well as any matching contributions are fully vested upon contribution. | |
(b) | We provide executive officers an executive benefits package that includes, in addition to regular employee benefits, an allowance in the amount of $25,000 in lieu of other perquisites typically paid by other companies. For additional information about our Executive Allowance Plan, see the Compensation Discussion and Analysis section titled Executive Allowance Plan on page [ ]. | |
(c) | The amounts reflected in the Personal Use of Corporate Aircraft column represent the incremental costs to us for Mr. Tobins and Mr. Bests personal use of the corporate aircraft. We calculate a portion of the incremental cost to us by dividing the number of miles the corporate aircraft has flown per month by the associated monthly variable operating costs for the corporate aircraft. This dollar per mile amount is then multiplied by the number of miles flown for personal use of the aircraft during the month. Since the corporate aircraft is used predominately for business travel, we do not include the monthly fixed costs to operate the corporate aircraft, such as pilot salary, general taxes and insurance, for purposes of this incremental cost calculation. Our incremental cost does not include amounts attributable to the NEO for increased income taxes we incurred in 2006 as a result of disallowed deductions related to that personal use under IRS rules. For 2006, the reflected amounts exclude $386,280 of disallowed deduction attributable to Mr. Tobin and $5,550 attributable to Mr. Best. | |
(d) | Amounts in this column represent the imputed income attributable to Mr. Tobin and Mr. Best for term life insurance. | |
(e) | Amounts in this column represent amounts paid to each of the NEOs to fund premiums for universal life insurance and imputed income related to our termination of a previously established split dollar life insurance program. The amounts reflected include a gross-up amount to cover related tax obligations: $46,910 for Mr. LaViolette, $30,395 for Mr. Colen and $44,877 for Mr. Sandman. | |
(f) | This column also includes incidental amounts that fall below the required disclosure thresholds. |
32
All Other |
||||||||||||||||||||||||||||||||||||||||||||
All Other |
Option |
|||||||||||||||||||||||||||||||||||||||||||
Stock |
Awards: |
Exercise |
Grant Date |
|||||||||||||||||||||||||||||||||||||||||
Estimated Future Payouts Under |
Awards: |
Number of |
or Base |
Fair Value |
||||||||||||||||||||||||||||||||||||||||
Non-Equity Incentive Plan |
Estimated Future Payouts Under |
Number of |
Securities |
Price of |
of Stock and |
|||||||||||||||||||||||||||||||||||||||
Awards(1) | Equity Incentive Plan Awards |
shares of |
Underlying |
Option |
Option |
|||||||||||||||||||||||||||||||||||||||
Grant |
Threshold |
Target |
Maximum |
Threshold |
Target |
Maximum |
Stock or |
Options |
Awards |
Awards |
||||||||||||||||||||||||||||||||||
Name
|
Date | ($) | ($) | ($) | (#) | (#) | (#) | Units (#)(2) | (#)(2) | ($/Sh) | ($) | |||||||||||||||||||||||||||||||||
James R. Tobin
|
$ | 0 | $ | 927,077 | $ | 2,224,985 | ||||||||||||||||||||||||||||||||||||||
2/28/06 | (3) | 200,000 | 2,000,000 | $ | 15,419,512 | |||||||||||||||||||||||||||||||||||||||
2/28/06 | (4) | 250,000 | $ | 6,105,000 | ||||||||||||||||||||||||||||||||||||||||
Lawrence C. Best
|
$ | 0 | $ | 495,038 | $ | 1,188,091 | ||||||||||||||||||||||||||||||||||||||
5/17/06 | (5) | 27,200 | $ | 560,320 | ||||||||||||||||||||||||||||||||||||||||
5/17/06 | (5) | 79,800 | $ | 20.60 | $ | 587,328 | ||||||||||||||||||||||||||||||||||||||
Paul A. LaViolette
|
$ | 0 | $ | 561,000 | $ | 1,346,400 | ||||||||||||||||||||||||||||||||||||||
Fredericus A. Colen
|
5/8/06 | (6) | $ | 0 | $ | 375,000 | $ | 900,000 | 45,500 | $ | 997,815 | |||||||||||||||||||||||||||||||||
5/8/06 | (6) | 130,000 | $ | 21.93 | $ | 1,017,900 | ||||||||||||||||||||||||||||||||||||||
Paul W. Sandman
|
5/17/06 | (5) | $ | 0 | $ | 345,020 | $ | 828,048 | 8,700 | $ | 179,220 | |||||||||||||||||||||||||||||||||
5/17/06 | (5) | 25,500 | $ | 20.60 | $ | 187,680 |
(1) | These columns reflect threshold, target and maximum payout levels under our Performance Incentive Plan for 2006 performance. The actual amount earned by each NEO is reported under the Non-Equity Incentive Plan Compensation column in the Summary Compensation Table. Additional information about our Performance Incentive Plan is included in the Compensation Discussion and Analysis section of this proxy statement beginning on page [ ]. | |
(2) | These columns reflect the number of deferred stock units and stock options granted under our 2003 Long-Term Incentive Plan during 2006. These awards are also described in the Outstanding Equity Awards at Fiscal Year-End Table below. | |
(3) | On February 28, 2006, Mr. Tobin was awarded an opportunity to receive up to 2,000,000 performance-based deferred stock units, 50% of which would be issued on December 31, 2008 in the event that shares of our common stock reach specified prices per share as set forth below and 50% of which would be issued on December 31, 2009 in the event that shares of our common stock reach specified prices per share as set forth below (units that do not vest on December 31, 2008 may vest on December 31, 2009 if the specified prices per share have been reached): |
% of |
12/31/08 |
12/31/09 |
||||||||||||||
Restrictions |
Measurement |
Measurement |
Total Shares |
|||||||||||||
Share Performance Price
|
that Lapse | Date | Date | Earned | ||||||||||||
$75 and above
|
100 | % | 1,000,000 | 1,000,000 | 2,000,000 | |||||||||||
$60
|
80 | % | 800,000 | 800,000 | 1,600,000 | |||||||||||
$50
|
60 | % | 600,000 | 600,000 | 1,200,000 | |||||||||||
$40
|
40 | % | 400,000 | 400,000 | 800,000 | |||||||||||
$35
|
20 | % | 200,000 | 200,000 | 400,000 | |||||||||||
Below $35
|
0 | % | 0 | 0 | 0 |
(4) | On February 28, 2006, Mr. Tobin was also awarded 250,000 deferred stock units, 50% of which will vest on December 31, 2008 and 50% of which will vest on December 31, 2009, contingent on his continued employment as of each of those dates. The shares will be issued to Mr. Tobin during the seventh month following his cessation of employment with us. | |
(5) | In May 2006, several employees, including Mr. Best and Mr. Sandman, received a special recognition bonus as a result of the completion of the Guidant acquisition. Mr. Best and Mr. Sandman were each awarded a specified number of stock options that vest in four equal annual installments beginning on May 17, 2007 (the first anniversary of the date of grant) and a specified number of deferred stock units that vest in four equal annual installments beginning on May 17, 2008 (the second anniversary of the date of grant). A description of this special recognition bonus can be found under the title Other/Special Recognition Awards in the Compensation Discussion and Analysis beginning on page [ ]. | |
(6) | In connection with Mr. Colens assumption of increased responsibilities related to our CRM division, in May 2006, he was awarded 45,500 deferred stock units that vest in four equal annual installments beginning on May 8, 2008 (the second anniversary of the date of grant) and 130,000 options to purchase our common stock that vest in four equal annual installments beginning on May 8, 2007 (the first anniversary of the date of grant). |
33
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||||||
Incentive |
||||||||||||||||||||||||||||||||||||
Plan Awards: |
||||||||||||||||||||||||||||||||||||
Equity |
Market |
|||||||||||||||||||||||||||||||||||
Equity |
Incentive |
or Payout |
||||||||||||||||||||||||||||||||||
Incentive |
Plan Awards: |
Value of |
||||||||||||||||||||||||||||||||||
Plan Awards: |
Market |
Number of |
Unearned |
|||||||||||||||||||||||||||||||||
Number |
Value of |
Unearned |
Shares, |
|||||||||||||||||||||||||||||||||
Number of |
Number of |
of Securities |
Number of |
Shares or |
Shares, |
Units or |
||||||||||||||||||||||||||||||
Securities |
Securities |
Underlying |
Shares or |
Units of |
Units or |
Other |
||||||||||||||||||||||||||||||
Underlying |
Underlying |
Unexercised |
Option |
Units of |
Stock that |
Other |
Rights |
|||||||||||||||||||||||||||||
Unexercised |
Unexercised |
Unearned |
Exercise |
Option |
Stock that |
Have Not |
Rights |
That Have |
||||||||||||||||||||||||||||
Options (#) |
Options (#) |
Options |
Price |
Expiration |
Have Not |
Vested |
That Have |
Not Vested |
||||||||||||||||||||||||||||
Name
|
Exercisable | Unexercisable | (#) | ($) | Date | Vested (#) | (#)(1) | Not Vested (#) | ($)(1) | |||||||||||||||||||||||||||
James R. Tobin
|
2,000,000 | $ | 17.00 | 3/17/09 | ||||||||||||||||||||||||||||||||
180,000 | $ | 14.1563 | 5/9/10 | |||||||||||||||||||||||||||||||||
130,000 | $ | 8.50 | 7/25/10 | |||||||||||||||||||||||||||||||||
450,000 | $ | 6.125 | 12/6/10 | |||||||||||||||||||||||||||||||||
90,000 | $ | 12.50 | 12/17/11 | |||||||||||||||||||||||||||||||||
150,000 | 50,000 | (4) | $ | 21.78 | 2/25/13 | |||||||||||||||||||||||||||||||
150,000 | 50,000 | (5) | $ | 33.80 | 12/16/13 | |||||||||||||||||||||||||||||||
56,250 | 168,750 | (6) | $ | 34.29 | 1/3/15 | |||||||||||||||||||||||||||||||
250,000 | (2) | $ | 4,295,000 | |||||||||||||||||||||||||||||||||
200,000 | (3) | $ | 3,436,000 | |||||||||||||||||||||||||||||||||
Lawrence C. Best
|
600,000 | $ | 12.4063 | 5/5/07 | ||||||||||||||||||||||||||||||||
56,000 | $ | 10.3907 | 12/19/07 | |||||||||||||||||||||||||||||||||
1,000,000 | $ | 18.7657 | 7/21/08 | |||||||||||||||||||||||||||||||||
30,000 | $ | 12.4375 | 12/13/08 | |||||||||||||||||||||||||||||||||
40,000 | $ | 17.875 | 4/19/09 | |||||||||||||||||||||||||||||||||
120,000 | $ | 14.1563 | 5/9/10 | |||||||||||||||||||||||||||||||||
120,000 | $ | 8.50 | 7/25/10 | |||||||||||||||||||||||||||||||||
60,000 | $ | 12.50 | 12/17/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 21.255 | 12/9/12 | |||||||||||||||||||||||||||||||||
45,000 | 15,000 | (9) | $ | 34.79 | 12/11/13 | |||||||||||||||||||||||||||||||
15,000 | 45,000 | (6) | $ | 34.29 | 1/3/15 | |||||||||||||||||||||||||||||||
125,000 | (10) | $ | 26.89 | 7/1/15 | ||||||||||||||||||||||||||||||||
79,800 | (11) | $ | 20.60 | 5/17/16 | ||||||||||||||||||||||||||||||||
50,000 | (7) | $ | 859,000 | |||||||||||||||||||||||||||||||||
27,200 | (8) | $ | 467,296 | |||||||||||||||||||||||||||||||||
Paul A. LaViolette
|
340,000 | $ | 12.4063 | 5/5/07 | ||||||||||||||||||||||||||||||||
56,000 | $ | 10.3907 | 12/19/07 | |||||||||||||||||||||||||||||||||
30,000 | $ | 12.4375 | 12/23/08 | |||||||||||||||||||||||||||||||||
80,000 | $ | 17.8750 | 4/19/09 | |||||||||||||||||||||||||||||||||
120,000 | $ | 14.1563 | 5/9/10 | |||||||||||||||||||||||||||||||||
120,000 | $ | 8.50 | 7/25/10 | |||||||||||||||||||||||||||||||||
250,000 | $ | 6.125 | 12/6/10 | |||||||||||||||||||||||||||||||||
60,000 | $ | 12.50 | 12/17/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 21.255 | 12/9/12 | |||||||||||||||||||||||||||||||||
56,250 | 18,750 | (9) | $ | 34.79 | 12/11/13 | |||||||||||||||||||||||||||||||
25,000 | 75,000 | (6) | $ | 34.29 | 1/3/15 | |||||||||||||||||||||||||||||||
250,000 | (10) | $ | 26.89 | 7/1/15 | ||||||||||||||||||||||||||||||||
100,000 | (7) | $ | 1,718,000 |
34
Option Awards | Stock Awards | |||||||||||||||||||||||||||||||||||
Equity |
||||||||||||||||||||||||||||||||||||
Incentive |
||||||||||||||||||||||||||||||||||||
Plan Awards: |
||||||||||||||||||||||||||||||||||||
Equity |
Market |
|||||||||||||||||||||||||||||||||||
Equity |
Incentive |
or Payout |
||||||||||||||||||||||||||||||||||
Incentive |
Plan Awards: |
Value of |
||||||||||||||||||||||||||||||||||
Plan Awards: |
Market |
Number of |
Unearned |
|||||||||||||||||||||||||||||||||
Number |
Value of |
Unearned |
Shares, |
|||||||||||||||||||||||||||||||||
Number of |
Number of |
of Securities |
Number of |
Shares or |
Shares, |
Units or |
||||||||||||||||||||||||||||||
Securities |
Securities |
Underlying |
Shares or |
Units of |
Units or |
Other |
||||||||||||||||||||||||||||||
Underlying |
Underlying |
Unexercised |
Option |
Units of |
Stock that |
Other |
Rights |
|||||||||||||||||||||||||||||
Unexercised |
Unexercised |
Unearned |
Exercise |
Option |
Stock that |
Have Not |
Rights |
That Have |
||||||||||||||||||||||||||||
Options (#) |
Options (#) |
Options |
Price |
Expiration |
Have Not |
Vested |
That Have |
Not Vested |
||||||||||||||||||||||||||||
Name
|
Exercisable | Unexercisable | (#) | ($) | Date | Vested (#) | (#)(1) | Not Vested (#) | ($)(1) | |||||||||||||||||||||||||||
Fredericus A. Colen
|
10,000 | $ | 7.9050 | 2/27/11 | ||||||||||||||||||||||||||||||||
25,000 | $ | 8.99 | 7/17/11 | |||||||||||||||||||||||||||||||||
28,174 | $ | 12.50 | 12/17/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 21.255 | 12/9/12 | |||||||||||||||||||||||||||||||||
45,000 | 15,000 | (9) | $ | 34.79 | 12/11/13 | |||||||||||||||||||||||||||||||
15,000 | 45,000 | (6) | $ | 34.29 | 1/3/15 | |||||||||||||||||||||||||||||||
100,000 | (10) | $ | 26.89 | 7/1/15 | ||||||||||||||||||||||||||||||||
130,000 | (12) | $ | 21.93 | 5/8/16 | ||||||||||||||||||||||||||||||||
40,000 | (7) | $ | 687,200 | |||||||||||||||||||||||||||||||||
45,500 | (13) | $ | 781,690 | |||||||||||||||||||||||||||||||||
Paul W. Sandman
|
320,000 | $ | 12.4063 | 5/5/07 | ||||||||||||||||||||||||||||||||
30,000 | $ | 12.4375 | 12/23/08 | |||||||||||||||||||||||||||||||||
40,000 | $ | 17.875 | 4/19/09 | |||||||||||||||||||||||||||||||||
100,000 | $ | 14.1563 | 5/9/10 | |||||||||||||||||||||||||||||||||
25,000 | $ | 8.50 | 7/25/10 | |||||||||||||||||||||||||||||||||
50,000 | $ | 12.50 | 12/17/11 | |||||||||||||||||||||||||||||||||
120,000 | $ | 21.255 | 12/9/12 | |||||||||||||||||||||||||||||||||
45,000 | 15,000 | (9) | $ | 34.79 | 12/11/13 | |||||||||||||||||||||||||||||||
15,000 | 45,000 | (6) | $ | 34.29 | 1/3/15 | |||||||||||||||||||||||||||||||
100,000 | (10) | $ | 26.89 | 7/1/15 | ||||||||||||||||||||||||||||||||
25,500 | (11) | $ | 20.60 | 5/17/16 | ||||||||||||||||||||||||||||||||
40,000 | (7) | $ | 687,200 | |||||||||||||||||||||||||||||||||
8,700 | (8) | $ | 149,466 |
(1) | The amounts reflected as Market Payout Value are based on the closing price of our common stock ($17.18) on December 29, 2006, the last business day of 2006, as reported on the New York Stock Exchange. | |
(2) | Mr. Tobin was awarded 250,000 deferred stock units, 50% of which will vest on December 31, 2008, and 50% of which will vest on December 31, 2009, contingent on his continued employment as of each of those dates. The shares will be issued to Mr. Tobin during the seventh month following cessation of his employment with us. See further description of this award in the Grants of Plan Based Awards table above and the Compensation Discussion and Analysis beginning on page [ ]. | |
(3) | Mr. Tobin was awarded an opportunity to receive up to 2,000,000 performance-based deferred stock units that will vest in equal installments on each of December 31, 2008 and 2009, provided certain performance conditions have been satisfied. In accordance with SEC rules, the number of unearned shares represents the lowest award level which has not yet been earned. The number of shares reflected in this column reflects the threshold award level since the minimum performance condition has not yet been satisfied. See further description of this award in the Grants of Plan Based Awards table above and the Compensation Discussion and Analysis beginning on page [ ]. | |
(4) | These stock options vested on February 25, 2007. | |
(5) | These stock options will vest on December 16, 2007. | |
(6) | These stock options vest in three equal annual installments beginning on January 3, 2007. | |
(7) | These deferred stock units vest in five equal annual installments beginning on July 1, 2007 (the second anniversary of the date of the award). | |
(8) | These deferred stock units vest in four equal annual installments beginning on May 17, 2007 (the second anniversary of the date of the award). | |
(9) | These stock options will vest on December 11, 2007. | |
(10) | These stock options will vest in five equal annual installments beginning on July 1, 2007 (the second anniversary of the grant date). | |
(11) | These stock options will vest in four equal annual installments beginning on May 17, 2007 (the first anniversary of the grant date). | |
(12) | These stock options will vest in four equal annual installments beginning on May 8, 2007 (the first anniversary of the grant date). | |
(13) | These deferred stock units will vest in four equal annual installments beginning on May 8, 2008 (the second anniversary of the date of the award). |
35
Number of Years of |
Present Value of |
Payments During |
||||||||||||
Credited Service |
Accumulated |
Last Fiscal Year |
||||||||||||
Name
|
Plan Name (1) | (#)(2) | Benefits ($)(3)(4) | ($) | ||||||||||
James R. Tobin
|
BSC Executive Retirement Plan | 7.79 | $ | 1,504,568 | $ | 0 | ||||||||
Lawrence C. Best
|
BSC Executive Retirement Plan | 14.42 | $ | 1,980,149 | $ | 0 | ||||||||
Paul A. LaViolette
|
BSC Executive Retirement Plan | 12.96 | $ | 1,274,165 | $ | 0 | ||||||||
Fredericus A Colen
|
BSC Executive Retirement Plan | 7.38 | $ | 687,439 | $ | 0 | ||||||||
Paul W. Sandman
|
BSC Executive Retirement Plan | 13.67 | $ | 1,310,118 | $ | 0 |
(1) | We maintain an Executive Retirement Plan which covers executive officers. The plan provides retiring executive officers with a lump sum benefit (payable on the 181st day following retirement) equal to 2.5 months of salary for each completed year of service, up to a maximum of 36 months. Participants may retire with unreduced benefits once the retirement conditions have been satisfied. Mr. Tobin, Mr. Best and Mr. Sandman are currently eligible for retirement under the plan. For further discussion of our Executive Retirement Plan, please refer to the Compensation Discussion and Analysis beginning on page [ ]. | |
(2) | The number of years of credited service reflect the NEOs actual service with us. We do not credit additional years of service under the plan. Rather, the plan provides that the number of years of credited service is calculated through the executive officers last day worked. Partially completed years of service will be pro-rated based on calendar days, and calculated to the second decimal point. | |
(3) | The amounts reflected in this column represent the benefit the NEO has accrued based upon his salary and the number of years of credited service as of December 31, 2006. | |
(4) | The amounts attributable to Mr. LaViolette and Mr. Colen in this column have been discounted from the earliest retirement age to December 31, 2006, using a discount rate of 5.75%. Mr. LaViolette and Mr. Colen are not currently entitled to receive these benefits because they have not met the 55 years of age threshold for retirement under this plan. |
Executive |
Registrant |
|||||||||||||||||||
Contributions |
Contributions |
Aggregate |
Aggregate |
Aggregate |
||||||||||||||||
in the Last |
in the Last |
Earnings in |
Withdrawals/ |
Balance at Last |
||||||||||||||||
Fiscal Year |
Fiscal Year |
Last Fiscal |
Distributions |
Fiscal Year End |
||||||||||||||||
Name
|
($) | ($) | Year ($)(1) | ($) | ($) | |||||||||||||||
James R. Tobin
|
| | $ | 2,536 | | $ | 18,746 | |||||||||||||
Lawrence C. Best
|
| | $ | 3,454 | | $ | 25,536 | |||||||||||||
Paul A. LaViolette
|
| | $ | 3,454 | | $ | 25,536 | |||||||||||||
Fredericus A. Colen
|
| | $ | 1,748 | | $ | 15,260 | |||||||||||||
Paul W. Sandman
|
| | $ | 3,872 | | $ | 26,103 |
(1) |
We have a 401(k) Excess Benefit
Plan, which is a non-qualified deferred compensation plan for
executive officers. The amounts reflected in this column
represent earnings during 2006 under our 401(k) Excess Benefit
Plan as a result of our one-time special 401(k) contribution in 2004. The amounts are not included in the Summary Compensation Table under the column titled Change in Pension Value and Nonqualified Deferred Compensation Earnings since the earnings were neither above market nor preferential. Our Excess Benefit Plan is generally a mirror of our 401(k) Retirement Savings Plan in terms of investment choices except that executive officers may not elect the BSC Stock Fund or the Vanguard Retirement Savings Trust as investment vehicles under this plan. The investment elections are made by each individual participant and may be changed on a daily basis. A lump sum cash payment is available to the participant only upon retirement or termination of employment. Distributions to participants are made within six months following retirement or termination of employment. For a further description of our 401(k) Excess Benefit Plan, see the section titled 401(k) Excess Benefit Plan in the Compensation Discussion and Analysis beginning on page [ ]. |
36
Involuntary |
Termination |
|||||||||||||||||||||||||||
Voluntary |
Termination |
Following |
||||||||||||||||||||||||||
Termination |
Termination |
without |
Change in |
|||||||||||||||||||||||||
For Cause(1) | (2) | Cause(3) | Control(4) | Disability | Death | Retirement | ||||||||||||||||||||||
PAYMENTS DUE UPON
TERMINATION:
|
||||||||||||||||||||||||||||
Cash Severance
|
||||||||||||||||||||||||||||
Base Salary
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,781,231 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Bonus
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,781,231 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Pro-rata Target Bonus(5)
|
$ | 0 | $ | 927,077 | $ | 927,077 | $ | 927,077 | $ | 927,077 | $ | 927,077 | $ | 927,077 | ||||||||||||||
Total Cash Severance
|
$ | 0 | $ | 927,077 | $ | 927,077 | $ | 6,489,539 | $ | 927,077 | $ | 927,077 | $ | 927,077 | ||||||||||||||
Benefits &
Perquisites
|
$ | 0 | ||||||||||||||||||||||||||
Executive Retirement Plan(6)
|
$ | 0 | $ | 1,504,568 | $ | 1,504,568 | $ | 1,504,568 | $ | 0 | $ | 1,504,568 | $ | 1,504,568 | ||||||||||||||
Severance Pay Plan(7)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Health and Welfare Benefits
|
$ | 0 | $ | 0 | $ | 0 | $ | 34,718 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Post-Termination Life Insurance
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,880 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Allowance
|
$ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Life Payment(8)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Benefits &
Perquisites
|
$ | 0 | $ | 1,504,568 | $ | 1,504,568 | $ | 1,617,166 | $ | 0 | $ | 1,504,568 | $ | 1,504,568 | ||||||||||||||
280G Tax
Gross-Up
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Long-Term Incentives
|
||||||||||||||||||||||||||||
Value of Accelerated Stock
Options(9)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Value of Accelerated Deferred Stock
Units(10)
|
$ | 0 | $ | 0 | $ | 0 | $ | 4,295,000 | $ | 4,295,000 | $ | 4,295,000 | $ | 0 | ||||||||||||||
Value of Accelerated Performance
Shares(11)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Value of Accelerated Equity
Grants
|
$ | 0 | $ | 0 | $ | 0 | $ | 4,295,000 | $ | 4,295,000 | $ | 4,295,000 | $ | 0 | ||||||||||||||
Total Value: All
Benefits
|
$ | 0 | $ | 2,431,645 | $ | 2,431,645 | $ | 12,401,705 | $ | 5,222,077 | $ | 6,726,645 | $ | 2,431,645 |
37
Involuntary |
Termination |
|||||||||||||||||||||||||||
Termination |
Termination |
Following |
||||||||||||||||||||||||||
For |
Voluntary |
without |
Change in |
|||||||||||||||||||||||||
Cause(1) | Termination(2) | Cause(3) | Control(4) | Disability | Death | Retirement | ||||||||||||||||||||||
PAYMENTS DUE UPON
TERMINATION:
|
||||||||||||||||||||||||||||
Cash Severance
|
||||||||||||||||||||||||||||
Base Salary
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,980,150 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Bonus
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,485,113 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Pro-rata Target Bonus(5)
|
$ | 0 | $ | 495,038 | $ | 495,038 | $ | 495,038 | $ | 495,038 | $ | 495,038 | $ | 495,038 | ||||||||||||||
Total Cash Severance
|
$ | 0 | $ | 495,038 | $ | 495,038 | $ | 3,960,301 | $ | 495,038 | $ | 495,038 | $ | 495,038 | ||||||||||||||
Benefits &
Perquisites
|
||||||||||||||||||||||||||||
Executive Retirement Plan(6)
|
$ | 0 | $ | 1,980,149 | $ | 1,980,149 | $ | 1,980,149 | $ | 0 | $ | 1,980,149 | $ | 1,980,149 | ||||||||||||||
Severance Pay Plan(7)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Health and Welfare Benefits
|
$ | 0 | $ | 0 | $ | 0 | $ | 45,181 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Post-Termination Life Insurance
|
$ | 0 | $ | 0 | $ | 0 | $ | 2,880 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Allowance
|
$ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Life Payment(8)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Benefits &
Perquisites
|
$ | 0 | $ | 1,980,149 | $ | 1,980,149 | $ | 2,103,210 | $ | 0 | $ | 1,980,149 | $ | 1,980,149 | ||||||||||||||
280G Tax
Gross-Up
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Long-Term Incentives
|
||||||||||||||||||||||||||||
Value of Accelerated Stock
Options(9)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Value of Accelerated Deferred Stock
Units (10)
|
$ | 0 | $ | 1,042,826 | $ | 1,042,826 | $ | 1,326,296 | $ | 1,326,296 | $ | 1,326,296 | $ | 1,042,826 | ||||||||||||||
Value of Accelerated Performance
Shares
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Value of Accelerated Equity
Grants
|
$ | 0 | $ | 1,042,826 | $ | 1,042,826 | $ | 1,326,296 | $ | 1,326,296 | $ | 1,326,296 | $ | 1,042,826 | ||||||||||||||
Total Value: All
Benefits
|
$ | 0 | $ | 3,518,013 | $ | 3,518,013 | $ | 7,389,807 | $ | 1,821,333 | $ | 3,801,483 | $ | 3,518,013 |
38
Involuntary |
Termination |
|||||||||||||||||||||||||||
Termination |
Termination |
Following |
||||||||||||||||||||||||||
For |
Voluntary |
without |
Change in |
|||||||||||||||||||||||||
Cause(1) | Termination(2) | Cause(3) | Control(4) | Disability | Death | Retirement | ||||||||||||||||||||||
PAYMENTS DUE UPON
TERMINATION:
|
||||||||||||||||||||||||||||
Cash Severance
|
||||||||||||||||||||||||||||
Base Salary
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,980,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Bonus
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,683,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Pro-rata Target Bonus(5)
|
$ | 0 | $ | 0 | $ | 0 | $ | 561,000 | $ | 561,000 | $ | 561,000 | $ | 0 | ||||||||||||||
Total Cash Severance
|
$ | 0 | $ | 0 | $ | 0 | $ | 4,224,000 | $ | 561,000 | $ | 561,000 | $ | 0 | ||||||||||||||
Benefits &
Perquisites
|
||||||||||||||||||||||||||||
Executive Retirement Plan(6)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Severance Pay Plan(7)
|
$ | 0 | $ | 0 | $ | 660,000 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Health and Welfare Benefits
|
$ | 0 | $ | 0 | $ | 15,369 | $ | 46,107 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Post-Termination Life Insurance
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Allowance
|
$ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Life Payment(8)
|
$ | 0 | $ | 96,467 | $ | 96,467 | $ | 96,467 | $ | 96,467 | $ | 0 | $ | 96,467 | ||||||||||||||
Total Benefits &
Perquisites
|
$ | 0 | $ | 96,467 | $ | 771,836 | $ | 217,574 | $ | 96,467 | $ | 0 | $ | 96,467 | ||||||||||||||
280G Tax
Gross-Up
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Long-Term Incentives
|
||||||||||||||||||||||||||||
Value of Accelerated Stock
Options(9)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Value of Accelerated Deferred Stock
Units(10)
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,718,000 | $ | 1,718,000 | $ | 1,718,000 | $ | 0 | ||||||||||||||
Value of Accelerated Performance
Shares
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Value of Accelerated Equity
Grants
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,718,000 | $ | 1,718,000 | $ | 1,718,000 | $ | 0 | ||||||||||||||
Total Value: All
Benefits
|
$ | 0 | $ | 96,467 | $ | 771,836 | $ | 6,159,574 | $ | 2,375,467 | $ | 2,279,000 | $ | 96,467 |
39
Involuntary |
Termination |
|||||||||||||||||||||||||||
Termination |
Termination |
Following |
||||||||||||||||||||||||||
For |
Voluntary |
without |
Change in |
|||||||||||||||||||||||||
Cause(1) | Termination(2) | Cause(3) | Control(4) | Disability | Death | Retirement | ||||||||||||||||||||||
PAYMENTS DUE UPON
TERMINATION:
|
||||||||||||||||||||||||||||
Cash Severance
|
||||||||||||||||||||||||||||
Base Salary
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,500,033 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Bonus
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,125,025 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Pro-rata Target Bonus(5)
|
$ | 0 | $ | 0 | $ | 0 | $ | 375,008 | $ | 375,008 | $ | 375,008 | $ | 0 | ||||||||||||||
Total Cash Severance
|
$ | 0 | $ | 0 | $ | 0 | $ | 3,000,066 | $ | 375,008 | $ | 375,008 | $ | 0 | ||||||||||||||
Benefits &
Perquisites
|
||||||||||||||||||||||||||||
Executive Retirement Plan(6)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Severance Pay Plan(7)
|
$ | 0 | $ | 0 | $ | 291,673 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Health and Welfare Benefits
|
$ | 0 | $ | 0 | $ | 11,573 | $ | 34,718 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Post-Termination Life Insurance
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Allowance
|
$ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Life Payment(8)
|
$ | 0 | $ | 58,029 | $ | 58,029 | $ | 58,029 | $ | 58,029 | $ | 0 | $ | 58,029 | ||||||||||||||
Total Benefits &
Perquisites
|
$ | 0 | $ | 58,029 | $ | 361,275 | $ | 167,747 | $ | 58,029 | $ | 0 | $ | 58,029 | ||||||||||||||
280G Tax
Gross-Up
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Long-Term Incentives
|
||||||||||||||||||||||||||||
Value of Accelerated Stock
Options(9)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Value of Accelerated Deferred Stock
Units(10)
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,468,890 | $ | 1,468,890 | $ | 1,468,890 | $ | 0 | ||||||||||||||
Value of Accelerated Performance
Shares
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Value of Accelerated Equity
Grants
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,468,890 | $ | 1,468,890 | $ | 1,468,890 | $ | 0 | ||||||||||||||
Total Value: All
Benefits
|
$ | 0 | $ | 58,029 | $ | 361,275 | $ | 4,636,703 | $ | 1,901,927 | $ | 1,843,898 | $ | 58,029 |
40
Involuntary |
Termination |
|||||||||||||||||||||||||||
Voluntary |
Termination |
Following |
||||||||||||||||||||||||||
Termination |
Termination |
Without |
Change in |
|||||||||||||||||||||||||
For Cause(1) | (2) | Cause (3) | Control(4) | Disability | Death | Retirement | ||||||||||||||||||||||
PAYMENTS DUE UPON
TERMINATION:
|
||||||||||||||||||||||||||||
Cash Severance
|
||||||||||||||||||||||||||||
Base Salary
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,380,081 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Bonus
|
$ | 0 | $ | 0 | $ | 0 | $ | 1,035,061 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Pro-rata Target Bonus(5)
|
$ | 0 | $ | 345,020 | $ | 345,020 | $ | 345,020 | $ | 345,020 | $ | 345,020 | $ | 345,020 | ||||||||||||||
Total Cash Severance
|
$ | 0 | $ | 345,020 | $ | 345,020 | $ | 2,760,162 | $ | 345,020 | $ | 345,020 | $ | 345,020 | ||||||||||||||
Benefits &
Perquisites
|
||||||||||||||||||||||||||||
Executive Retirement Plan(6)
|
$ | 0 | $ | 1,310,118 | $ | 1,310,118 | $ | 1,310,118 | $ | 0 | $ | 1,310,118 | $ | 1,310,118 | ||||||||||||||
Severance Pay Plan(7)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Health and Welfare Benefits
|
$ | 0 | $ | 0 | $ | 0 | $ | 46,107 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Post-Termination Life Insurance
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Allowance
|
$ | 0 | $ | 0 | $ | 0 | $ | 75,000 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Executive Life Payment(8)
|
$ | 0 | $ | 82,600 | $ | 82,600 | $ | 82,600 | $ | 82,600 | $ | 0 | $ | 82,600 | ||||||||||||||
Total Benefits &
Perquisites
|
$ | 0 | $ | 1,392,718 | $ | 1,392,718 | $ | 1,513,825 | $ | 82,600 | $ | 1,310,118 | $ | 1,392,718 | ||||||||||||||
280G Tax
Gross-Up
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Long-Term
Incentives
|
||||||||||||||||||||||||||||
Value of Accelerated Stock
Options(9)
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Value of Accelerated Deferred Stock
Units(10)
|
$ | 0 | $ | 0 | $ | 0 | $ | 836,666 | $ | 836,666 | $ | 836,666 | $ | 609,890 | ||||||||||||||
Value of Accelerated Performance
Shares
|
$ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | $ | 0 | ||||||||||||||
Total Value of Accelerated Equity
Grants
|
$ | 0 | $ | 0 | $ | 0 | $ | 836,666 | $ | 836,666 | $ | 836,666 | $ | 609,890 | ||||||||||||||
Total Value: All
Benefits
|
$ | 0 | $ | 1,737,738 | $ | 1,737,738 | $ | 5,110,653 | $ | 1,264,286 | $ | 2,491,804 | $ | 2,347,628 |
(1) | Employees, including executive officers, are not entitled to any benefits upon termination for Cause. All unvested stock options and deferred stock units will be forfeited as of the date of termination, and any vested but unexercised stock options will also be forfeited upon the date of termination. | |
(2) | Amounts reflected in this column represent benefits payable to the NEO upon the voluntary termination of a NEO. | |
(3) | Amounts reflected in this column represent benefits payable to the NEO upon the involuntary termination of a NEO other than termination for Cause or termination resulting from a Change in Control. | |
(4) | Amounts reflected in this column represent benefits payable under our Retention Agreements. For a further description of our Retention Agreements, see the Compensation Discussion and Analysis beginning on page [ ]. | |
(5) | Amounts reflected in the Pro-Rata Target Bonus row represent amounts earned and accrued under our Performance Incentive Plan. Under our plan, these amounts will be paid on a pro-rated basis through the date of termination, disability, death or retirement. For a further description of our Performance Incentive Plan, see the Compensation Discussion and Analysis beginning on page [ ]. | |
(6) | Amounts reflected in the Executive Retirement Plan row represent amounts earned under our Executive Retirement Plan, provided the NEO has reached the age of retirement under the plan (the sum of the executive officers age and years of service equal 65, provided the executive officer is at least 55 years old and has completed at least 5 years of service with the Company). For a further description of our Executive Retirement Plan, see the Compensation Discussion and Analysis beginning on page [ ]. | |
(7) | Amounts reflected in the Severance Pay Plan row represent amounts the NEO would be entitled to receive under the Boston Scientific Severance Pay Plan. For a further description of our Severance Pay Plan, please refer to the Compensation Discussion and Analysis beginning on page [ ]. | |
(8) | The amounts reflected in the Executive Life Payment row represent amounts the NEO is entitled to receive for Executive Life Insurance in lieu of Company-paid life insurance including a gross-up amount to cover related tax obligations. These payments continue to the earlier of death or a specified number of years. The annual premium, the amount of gross-up related to tax obligations and the number of years remaining under each policy are listed below: |
Name
|
Annual Premium
|
2006 Tax Gross-Up
|
Remaining Years under Universal Life Policy
|
|||||||||
Paul LaViolette
|
$ | 49,557 | $ | 46,910 | 15 | |||||||
Fredericus A. Colen
|
$ | 27,634 | $ | 30,395 | 11 | |||||||
Paul W. Sandman
|
$ | 37,723 | $ | 44,877 | 5 |
(9) | The amounts related to acceleration of stock options represent the value of unvested and accelerated in-the-money stock options as of December 31, 2006. At December 31, 2006, the NEOs do not have any in-the-money unvested stock options. Vested stock options would remain exercisable under the same conditions as all other participants in our equity program. | |
(10) | The amounts related to acceleration of deferred stock units represent the value of the number of accelerated deferred stock units as of December 31, 2006, calculated by multiplying the number of accelerated deferred stock units by the closing price of our common stock on December 29, 2006. | |
(11) | In the event of termination resulting from Disability, Death, Involuntary Termination without Cause or Termination Following a Change in Control, the number of shares to be issued to Mr. Tobin at that time under his performance share award will be determined in accordance with the performance criteria described in the Compensation Discussion and Analysis beginning on page [ ]. |
41
Number of |
||||||||||||
Number of |
Securities Remaining |
|||||||||||
Securities to Be |
Available for Future |
|||||||||||
Issued upon Exercise |
Weighted Average |
Issuance under Equity |
||||||||||
of Outstanding |
Exercise Price of |
Compensation Plans |
||||||||||
Options, |
Outstanding Options, |
(Excluding Securities |
||||||||||
Warrants and Rights |
Warrants and Rights |
Reflected in Column (a)) |
||||||||||
Plan Category
|
(a) | (b) | (c) | |||||||||
Equity compensation plans approved
by security holders(1)
|
61,879,504 | $ | 20.27 | (2) | 42,052,732 | |||||||
Equity compensation plans not
approved by security holders(3)
|
0 | $ | 0 | 0 | ||||||||
Total
|
61,879,504 | $ | 20.27 | (2) | 42,052,732 | |||||||
(1) | Amounts include outstanding options under our 1992, 1995, 2000 and 2003 Long-Term Incentive Plans and our 1992 Non-Employee Directors Stock Option Plan. The amount in column (c) includes 18,904,551 shares available for purchase by employees under our Global Employee Stock Ownership Plan, which are not available for grant in any other form. Our 1992 Long-Term Incentive and 1992 Non-Employee Directors Stock Option Plans expired on March 31, 2002 and our 1995 Long-Term Incentive Plan expired on May 9, 2005, after which time grants were only issued under our 2000 and 2003 Long-Term Incentive Plans. Amounts in column (a) also include 9,875,069 shares awarded under our 2000 and 2003 Long-Term Incentive Plans in the form of deferred stock units and restricted stock. | |
(2) | This weighted average exercise price does not include outstanding deferred stock units and restricted stock. | |
(3) | We have acquired a number of companies over the past several years, including Guidant Corporation in 2006. From time to time, we have assumed the acquired companys incentive plan(s), including the outstanding options and warrants, if any, granted under the plan(s). No further options are granted under these plans beyond those assumed in connection with the acquisitions. Assumed options that terminate prior to expiration are not available for re-grant. As of December 31, 2006, the aggregate number of shares to be issued under these assumed plans totaled 31,026,316. The weighted average exercise price of these options is $13.79. |
42
| An annual retainer of $60,000; | |
| An annual grant of the number of shares of restricted stock determined by dividing $80,000 by the fair market value of our stock on the date of grant; | |
| An annual fee of $20,000 for the Chair of the Audit Committee; and | |
| An annual fee of $10,000 for each Chair of committees other than the Audit Committee. |
43
Fees Earned |
Option |
|||||||||||||||||||
or Paid in |
Stock Awards |
Awards |
All Other |
|||||||||||||||||
Name (1)
|
Cash ($)(3) | ($)(4) | ($)(5) | Compensation($)(6) | Total ($) | |||||||||||||||
John E. Abele
|
$ | 60,000 | $ | 101,195 | $ | 8,802 | $ | 1,214,165 | $ | 1,384,162 | ||||||||||
Ursula M. Burns
|
$ | 66,250 | $ | 90,801 | $ | 15,509 | $ | 0 | $ | 172,560 | ||||||||||
Nancy-Ann DeParle(2)
|
$ | 45,000 | $ | 19,391 | $ | 0 | $ | 0 | $ | 64,391 | ||||||||||
Joel L. Fleishman
|
$ | 80,000 | $ | 126,001 | $ | 15,509 | $ | 0 | $ | 221,510 | ||||||||||
Marye Anne Fox
|
$ | 60,000 | $ | 135,953 | $ | 15,509 | $ | 0 | $ | 211,462 | ||||||||||
Ray J. Groves
|
$ | 67,500 | $ | 99,836 | $ | 15,509 | $ | 0 | $ | 182,845 | ||||||||||
Kristina M. Johnson(2)
|
$ | 45,000 | $ | 11,617 | $ | 0 | $ | 0 | $ | 56,617 | ||||||||||
Ernest Mario
|
$ | 67,500 | $ | 126,001 | $ | 15,509 | $ | 0 | $ | 209,010 | ||||||||||
N.J. Nicholas, Jr.
|
$ | 60,000 | $ | 135,953 | $ | 15,509 | $ | 0 | $ | 211,462 | ||||||||||
Pete M. Nicholas
|
$ | 210,000 | $ | 149,754 | $ | 13,203 | $ | 1,436,448 | $ | 1,809,405 | ||||||||||
John E. Pepper
|
$ | 60,000 | $ | 135,953 | $ | 15,509 | $ | 0 | $ | 211,462 | ||||||||||
Uwe E. Reinhardt
|
$ | 60,000 | $ | 126,001 | $ | 15,509 | $ | 0 | $ | 201,510 | ||||||||||
Warren B. Rudman
|
$ | 80,000 | $ | 99,836 | $ | 15,509 | $ | 0 | $ | 195,345 |
(1) | James R. Tobin, a director and our President and Chief Executive Officer, is an employee and is not included in this table. Mr. Tobins compensation is discussed in our Compensation Discussion and Analysis beginning on page [ ] and is included in the Summary Compensation Table beginning on page [ ]. | |
(2) | Ms. DeParle and Ms. Johnson were elected as directors in May 2006. | |
(3) | The following non-employee directors elected to defer all or a portion of their 2006 annual cash retainers in the form of common stock equivalent units in accordance with our Deferred Compensation Plan available to non-employee directors: |
2006 Cash |
Common Stock |
|||||||
Name
|
Deferred | Equivalent Units | ||||||
Ursula M. Burns
|
$ | 66,250 | 3,514 | |||||
Marye Anne Fox
|
$ | 30,000 | 1,572 | |||||
Ray J. Groves
|
$ | 67,500 | 3,564 | |||||
Kristina M. Johnson
|
$ | 11,250 | 636 | |||||
Ernest Mario
|
$ | 67,500 | 3,564 | |||||
N.J. Nicholas, Jr.
|
$ | 60,000 | 3,143 | |||||
John E. Pepper
|
$ | 60,000 | 3,143 | |||||
Warren B. Rudman
|
$ | 75,000 | 3,985 |
In addition, Marye Anne Fox elected to defer a portion of her 2006 cash retainer under the Moodys investment option provided under the Deferred Compensation Plan. |
44
(4) | Under our director compensation program, each non-employee director, except the Chairman of the Board, was granted a restricted stock award on July 25, 2006 in an amount of shares equal to the grant date fair value of $80,000, or 4,782 shares. Our Chairman of the Board was also granted a restricted stock award on July 25, 2006 in an amount of shares equal to the grant date fair value of $120,000, or 7,173 shares. The restricted stock awards vest upon the expiration of each directors current term of office. The amounts reflected in this column represent the amount of expense we recognized for each of the directors awards. |
Name
|
Grant Date | Number of Shares | Vesting Date | |||||||||
John E. Abele
|
7/25/06 | 4,782 | May 2009 | |||||||||
Ursula M. Burns
|
5/11/04 | 2,000 | May 8, 2007 | |||||||||
5/10/05 | 2,000 | May 8, 2007 | ||||||||||
7/25/06 | 4,782 | May 8, 2007 | ||||||||||
Nancy-Ann DeParle
|
7/25/06 | 4,782 | May 2008 | |||||||||
Joel L. Fleishman
|
7/25/06 | 4,782 | May 2009 | |||||||||
Marye Anne Fox
|
5/11/04 | 2,000 | May 8, 2007 | |||||||||
5/10/05 | 2,000 | May 8, 2007 | ||||||||||
7/25/06 | 4,782 | May 8, 2007 | ||||||||||
Ray J. Groves
|
5/10/05 | 2,000 | May 2008 | |||||||||
7/25/06 | 4,782 | May 2008 | ||||||||||
Kristina M. Johnson
|
7/25/06 | 4,782 | May 2009 | |||||||||
Ernest Mario
|
7/25/06 | 4,782 | May 2009 | |||||||||
N.J. Nicholas, Jr.
|
5/11/04 | 2,000 | May 8, 2007 | |||||||||
5/10/05 | 2,000 | May 8, 2007 | ||||||||||
7/25/06 | 4,782 | May 8, 2007 | ||||||||||
Pete M. Nicholas
|
5/10/05 | 3,000 | May 2008 | |||||||||
7/25/06 | 7,173 | May 2008 | ||||||||||
John E. Pepper
|
5/11/04 | 2,000 | May 8, 2007 | |||||||||
5/10/05 | 2,000 | May 8, 2007 | ||||||||||
7/25/06 | 4,782 | May 8, 2007 | ||||||||||
Uwe Reinhardt
|
7/25/06 | 4,782 | May 2009 | |||||||||
Warren B. Rudman
|
5/10/05 | 2,000 | May 2008 | |||||||||
7/25/06 | 4,782 | May 2008 |
Name
|
No. of Shares | |||
Ursula M. Burns
|
4,782 | |||
Marye Anne Fox
|
4,782 | |||
Ray J. Groves
|
4,782 | |||
Kristina M. Johnson
|
4,782 | |||
Ernest Mario
|
4,782 | |||
N.J. Nicholas, Jr.
|
4,782 | |||
John E. Pepper
|
4,782 | |||
Warren B. Rudman
|
4,782 |
(5) | No stock options were granted to non-employee directors in 2006. The amounts in this column reflect the expenses related to stock options granted in prior periods and recognized in our 2006 financial statements as described in Statement of Financial Accounting Standards No. 123(R). For a discussion of the valuation assumptions, see Note L to our consolidated financial statements included in our annual report on Form 10-K for the year ended December 31, 2006. Aggregate total numbers of stock option awards outstanding are shown below. |
Outstanding |
||||||||||||||||
Grant |
Expiration |
Exercise |
Stock Options |
|||||||||||||
Name
|
Date | Date | Price | (Exercisable) | ||||||||||||
John E. Abele
|
5/5/97 | 5/5/07 | $ | 12.41 | 181,000 | |||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Ursula M. Burns
|
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | |||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Nancy-Ann DeParle
|
| | | | ||||||||||||
Joel L. Fleishman
|
5/5/97 | 5/5/07 | $ | 12.31 | 8,000 | |||||||||||
5/5/98 | 5/5/08 | $ | 18.34 | 8,000 | ||||||||||||
5/4/99 | 5/4/09 | $ | 20.63 | 8,000 | ||||||||||||
5/8/01 | 5/8/11 | $ | 7.765 | 4,000 | ||||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Marye Anne Fox
|
10/31/01 | 10/31/11 | $ | 11.38 | 4,000 | |||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 |
45
Outstanding |
||||||||||||||||
Grant |
Expiration |
Exercise |
Stock Options |
|||||||||||||
Name
|
Date | Date | Price | (Exercisable) | ||||||||||||
Ray J. Groves
|
5/4/99 | 5/4/09 | $ | 20.63 | 8,000 | |||||||||||
5/8/01 | 5/8/11 | $ | 7.765 | 4,000 | ||||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Kristina M. Johnson
|
| | | | ||||||||||||
Ernest Mario
|
10/31/01 | 10/31/11 | $ | 11.38 | 4,000 | |||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
N.J. Nicholas, Jr.
|
5/5/98 | 5/5/08 | $ | 18.34 | 8,000 | |||||||||||
5/4/99 | 5/4/09 | $ | 20.63 | 8,000 | ||||||||||||
5/8/01 | 5/8/11 | $ | 7.765 | 4,000 | ||||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Pete M. Nicholas
|
5/5/97 | 5/5/07 | $ | 12.31 | 960,000 | |||||||||||
12/19/97 | 12/19/07 | $ | 10.39 | 56,000 | ||||||||||||
12/23/98 | 12/23/08 | $ | 12.44 | 30,000 | ||||||||||||
5/9/00 | 5/9/10 | $ | 14.16 | 180,000 | ||||||||||||
7/25/00 | 7/25/10 | $ | 8.50 | 180,000 | ||||||||||||
12/6/00 | 12/6/10 | $ | 6.13 | 784,500 | ||||||||||||
12/17/01 | 12/17/11 | $ | 12.5 | 70,000 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 1,000 | ||||||||||||
John E. Pepper
|
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | |||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Uwe Reinhardt
|
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | |||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 | ||||||||||||
Warren B. Rudman
|
5/9/00 | 5/9/10 | $ | 14.16 | 8,000 | |||||||||||
5/8/01 | 5/8/11 | $ | 7.765 | 4,000 | ||||||||||||
5/7/02 | 5/7/12 | $ | 12.34 | 4,000 | ||||||||||||
5/6/03 | 5/6/13 | $ | 23.255 | 4,000 | ||||||||||||
5/11/04 | 5/11/14 | $ | 39.30 | 1,334 | ||||||||||||
5/10/05 | 5/10/15 | $ | 29.75 | 666 |
(6) | The numbers reflected in this column includes all other compensation received by the following directors in 2006: |
Annual |
Long |
Executive |
||||||||||||||||||||||||||
Founders |
Medical |
Term |
Charitable |
Life |
Other |
|||||||||||||||||||||||
Name
|
Benefits(a) | Benefits(a) | Care(a) | Donation(a) | Insurance(b) | Perquisites(c) | Total(d) | |||||||||||||||||||||
John E. Abele
|
$ | 150,000 | $ | 12,731 | $ | 8,603 | $ | 1,000,000 | $ | 41,394 | 0 | $ | 1,214,165 | |||||||||||||||
Pete M. Nicholas
|
$ | 225,000 | $ | 11,119 | $ | 12,744 | $ | 1,000,000 | $ | 163,106 | $ | 23,049 | $ | 1,436,448 |
(a) | Amounts included in these columns reflect payments to each of our founders upon their retirement as employees as described below. | |
(b) | Amounts in this column attributable to Mr. Abele include imputed income and a gross-up amount of $17,282 to cover related tax obligations related to the termination of a previously established split dollar life insurance program. Amounts attributable to Mr. Pete Nicholas include amounts to fund premiums for universal life insurance and imputed income related to the termination of a previously established split dollar life insurance program and a gross up amount of $72,822 to cover related tax obligations. | |
(c) | This column includes amounts paid for transportation services for Mr. Pete Nicholas. | |
(d) | This column also includes incidental amounts that fall below the required disclosure thresholds. |
46
| Mr. Nicholas receives an annual payment of $225,000 for life, and medical coverage under our benefit policies for as long as he remains a director or director emeritus. We will continue to fund his existing long-term care insurance and executive life insurance. Mr. Nicholas will continue to have the use of an office at our Natick headquarters or other Boston Scientific facilities and secretarial and administrative support, on an as-needed basis. We will also make a one-time charitable donation of up to $1 million to any qualified charitable organization designated by Mr. Nicholas; and | |
| Mr. Abele receives an annual payment of $150,000 for life, and medical coverage under our benefit policies for as long as he remains a director or director emeritus. We will continue to fund his existing long-term care insurance and executive life insurance. Mr. Abele will continue to have the use of an office at our Natick headquarters or other Boston Scientific facilities and secretarial and administrative support, on an as-needed basis. We will also make a one-time charitable donation of up to $1 million to any qualified charitable organization designated by Mr. Abele. |
47
Name
|
Title
|
|
James R. Tobin
|
Director, President and Chief Executive Officer | |
Donald S. Baim
|
Senior Vice President and Chief Medical and Scientific Officer | |
Mark C. Bartell
|
Senior Vice President, Global Sales & Marketing, CRM | |
Lawrence C. Best
|
Executive Vice President, Finance and Administration and Chief Financial Officer | |
Brian R. Burns
|
Senior Vice President, Quality | |
Fredericus A. Colen
|
Executive Vice President, Operations and Technology, CRM and Chief Technology Officer | |
Paul Donovan
|
Senior Vice President, Corporate Communications | |
James Gilbert
|
Group President, Cardiovascular | |
Jeffrey H. Goodman
|
Executive Vice President, International | |
William Kucheman
|
Senior Vice President and Group President, Interventional Cardiology | |
Paul A. LaViolette
|
Chief Operating Officer | |
William F.
McConnell, Jr.
|
Senior Vice President, Administration, CRM | |
Stephen F. Moreci
|
Senior Vice President and Group President, Endosurgery | |
Kenneth J. Pucel
|
Executive Vice President, Operations | |
Lucia L. Quinn
|
Executive Vice President, Human Resources | |
Paul W. Sandman
|
Executive Vice President, Secretary and General Counsel |
48
Number of |
||||||||||||
Shares |
Percent of |
|||||||||||
Beneficially |
Shares |
|||||||||||
Name and Address
|
Owned | Outstanding | ||||||||||
Pete M. Nicholas
|
92,686,695(1 | ) | 6.3 | % | ||||||||
c/o Boston Scientific
Corporation
One Boston Scientific Place Natick, MA 01760 |
||||||||||||
Promerica, L.P
|
80,718,018(2 | ) | 5.5 | % | ||||||||
Pete M. Nicholas, General Partner
|
||||||||||||
c/o The Bollard Group
One Joy Street Boston, MA 02108 |
(1) | Includes 80,718,018 shares of common stock held by Promerica, L.P., separately presented, a family limited partnership of which Pete M. Nicholas is general partner and as to which he is deemed to have beneficial ownership, 3,350,086 shares held jointly by Pete M. Nicholas and his spouse, with whom he shares voting and investment power, 10,173 shares of restricted stock subject to certain forfeiture provisions granted pursuant to our 2003 Long-Term Incentive Plan, as to which Mr. Nicholas has sole voting but not investment power, and 2,261,500 shares subject to exercisable options granted pursuant to our 1995 and 2000 Long-Term Incentive Plans. Also includes 152,000 shares held by Pete M. Nicholas, Llewellyn Nicholas and Anastasios Parafestas, as trustees of an irrevocable trust for the benefit of Mr. N. J. Nicholas, Jr.s children as to which Pete M. Nicholas disclaims beneficial ownership. Excludes 1,315,001 shares of stock held by Ruth V. Lilly Nicholas and N. J. Nicholas, Jr., as Trustees of an irrevocable trust for the benefit of Pete M. Nicholas children and spouse, as to which Pete M. Nicholas disclaims beneficial ownership. Mr. Nicholas maintains margin securities accounts at brokerage firms, and the positions held in such margin accounts, which may from time to time include shares of our common stock, are pledged as collateral security for the repayment of debit balances, if any, in the accounts. As of December 31, 2006, Mr. Nicholas held 5,867,347 shares of our common stock in such accounts. | |
(2) | These shares are also included in the shares held by Pete M. Nicholas, separately presented, because as general partner of Promerica, L.P., Mr. Nicholas is deemed to have beneficial ownership of these shares. Promerica, L.P. maintains a credit line account and a margin securities account at brokerage firms, and the positions held in such accounts, which may from time to time include shares of our common stock, are pledged as collateral security for the repayment of debit balances, if any, in the accounts. As of December 31, 2006, Promerica, L.P. held an aggregate of 80,718,018 shares of our common stock in such accounts. |
49
Number of Shares |
Percent of |
|||||||
Name
|
Beneficially Owned | Shares Outstanding | ||||||
John E. Abele(1)
|
58,753,886 | 4.0 | % | |||||
Ursula M. Burns(2)
|
36,282 | * | ||||||
Nancy-Ann DeParle(3)
|
54,782 | |||||||
Joel L. Fleishman(4)
|
164,099 | * | ||||||
Marye Anne Fox(5)
|
38,096 | * | ||||||
Ray J. Groves(6)
|
59,949 | * | ||||||
Kristina M. Johnson(7)
|
60,009 | |||||||
Ernest Mario(8)
|
202,282 | * | ||||||
N.J. Nicholas, Jr.(9)
|
1,531,583 | * | ||||||
Pete M. Nicholas(10)
|
92,686,695 | 6.3 | % | |||||
John E. Pepper(11)
|
58,182 | * | ||||||
Uwe E. Reinhardt(12)
|
51,782 | * | ||||||
Warren B. Rudman(13)
|
49,782 | * | ||||||
James R. Tobin(14)
|
3,422,227 | * | ||||||
Lawrence C. Best(15)
|
2,461,869 | * | ||||||
Fredericus A. Colen(16)
|
343,674 | * | ||||||
Paul A. LaViolette(17)
|
1,330,956 | * | ||||||
Paul W. Sandman(18)
|
796,766 | * | ||||||
All directors and executive
officers as a group (29 persons)(19)
|
164,872,047 | 11.0 | % |
* | Reflects beneficial ownership of less than one percent (1%) of our outstanding common stock. | |
(1) | Includes 3,540,500 shares of stock held by a charitable trust of which Mr. Abele shares voting and investment control, 6,782 shares of restricted stock subject to certain forfeiture provisions granted pursuant to our 2003 Long-Term Incentive Plan, as to which Mr. Abele has sole voting but not investment power, 361,438 shares of common stock held by a trust of which Mr. Abele shares voting and investment control and 181,666 shares subject to exercisable options granted pursuant to our 1995 Long-Term Incentive Plan. Also includes 400,000 shares held by Mary S. Abele, Mr. Abeles spouse, with respect to which Mr. Abele disclaims beneficial ownership. Mr. Abele maintains a credit line account and a margin securities account at brokerage firms, and the positions held in such accounts, which may from time to time include shares of our common stock, are pledged as collateral security for the repayment of debit balances, if any, in the accounts. As of December 31, 2006, Mr. Abele held an aggregate of 45,471,288 shares of our common stock in such accounts. | |
(2) | Includes 10,000 shares of common stock subject to exercisable options granted pursuant to our 2000 Long-Term Incentive Plan and 12,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 8,410 common stock equivalents which Ms. Burns has deferred pursuant to our Deferred Compensation Program offered to non-employee directors. | |
(3) | Includes 50,000 shares of common stock subject to exercisable options granted pursuant to legacy Guidant stock option plans assumed by Boston Scientific and 4,782 shares of restricted stock subject to certain tax withholding and forfeiture provisions, granted pursuant to our 2003 Long-Term Incentive Plan, as to which Ms. DeParle has sole voting but not investment power. | |
(4) | Includes 46,000 shares of common stock subject to exercisable options granted pursuant to our 1992 Non-Employee Directors Stock Option and 2000 Long-Term Incentive Plans, and 8,742 shares of restricted stock, subject to certain tax withholding and forfeiture provisions, granted pursuant to our 2000 and 2003 Long-Term Incentive Plans, as to which Mr. Fleishman has sole voting but not investment power and 4,000 shares of restricted stock granted pursuant to our 2000 Long-Term Incentive Plan and deferred pursuant to our Deferred Compensation Program offered to non-employee directors. Excludes 12,750 shares held by a charitable foundation of which Mr. Fleishman is the president and as to which Mr. Fleishman disclaims beneficial ownership. Mr. Fleishman maintains margin securities accounts at brokerage firms, and the positions held in such margin accounts, which may from time to time include shares of our common stock, are pledged as collateral security for the repayment of debit balances, if any, in the accounts. As of December 31, 2006, Mr. Fleishman held 105,317 shares of our common stock in such accounts. | |
(5) | Includes 14,000 shares of common stock subject to exercisable options granted pursuant to our 1992 Non-Employee Directors Stock Option and 2000 Long-Term Incentive Plans, 704 shares owned by Dr. Foxs spouse as to which she disclaims beneficial ownership and |
50
16,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 8,581 common stock equivalents which Dr. Fox has deferred under our Deferred Compensation Program offered to non-employee directors. | ||
(6) | Includes 30,000 shares of common stock subject to exercisable options granted pursuant to our 1992 Non-Employee Directors Stock Option and 2000 Long-Term Incentive Plans and 20,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 22,232 common stock equivalents which Mr. Groves has deferred under our Deferred Compensation Program offered to non-employee directors. | |
(7) | Includes 55,227 shares of common stock subject to exercisable options granted pursuant to legacy Guidant stock option plans assumed by Boston Scientific and 4,782 shares of restricted stock granted pursuant to our 2003 Long-Term Incentive Plan. Excludes 636 common stock equivalents which Dr. Johnson has deferred under our Deferred Compensation Program offered to non-employee directors. | |
(8) | Includes 3,333 shares of common stock subject to exercisable options granted pursuant to our 2000 Long Term Incentive Plan, 20,000 shares held by a self-directed IRA, 50,000 shares held by Mario Family Partners, a family limited partnership of which Dr. Mario is general partner and is deemed to have beneficial ownership, 16,700 shares held by Dr. Marios spouse as to which he disclaims beneficial ownership and 20,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 12,528 common stock equivalents which Dr. Mario has deferred under our Deferred Compensation Program offered to non-employee directors. | |
(9) | Includes 23,334 shares of common stock subject to exercisable options granted pursuant to our 1992 Non-Employee Directors Stock Option and 2000 Long-Term Incentive Plans, 62,466 shares of stock held by N. J. Nicholas, Jr., as sole trustee of a revocable trust and 1,315,001 shares of stock held by Ruth V. Lilly Nicholas and N. J. Nicholas, Jr., as trustees of an irrevocable trust for the benefit of Pete M. Nicholas children and spouse as to which N. J. Nicholas, Jr. disclaims beneficial ownership, 75,000 shares held in an IRA, 35,000 shares held in a charitable trust of which Mr. Nicholas is a trustee and to which Mr. Nicholas disclaims beneficial ownership and 20,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 152,000 shares held by Pete M. Nicholas, Llewellyn Nicholas and Anastasios Parafestas, as Trustees of an irrevocable trust for the benefit of N. J. Nicholas, Jr.s children as to which N. J. Nicholas, Jr. disclaims beneficial ownership and 26,393 common stock equivalents which N. J. Nicholas, Jr. has deferred pursuant to our Deferred Compensation Program offered to non-employee directors. |
(10) | Includes 80,718,018 shares of common stock held by Promerica, L.P., a family limited partnership of which Pete M. Nicholas is general partner and as to which he is deemed to have beneficial ownership, 3,350,086 shares held jointly by Pete M. Nicholas and his spouse, with whom he shares voting and investment power, 10,173 shares of restricted stock subject to certain forfeiture provisions granted pursuant to our 2003 Long-Term Incentive Plan, as to which Pete M. Nicholas has sole voting but not investment power, and 2,261,500 shares subject to exercisable options granted pursuant to our 1995 and 2000 Long-Term Incentive Plans. Also includes 152,000 shares held by Pete M. Nicholas, Llewellyn Nicholas and Anastasios Parafestas, as trustees of an irrevocable trust for the benefit of N.J. Nicholas, Jr.s children as to which Pete M. Nicholas disclaims beneficial ownership. Excludes 1,315,001 shares of stock held by Ruth V. Lilly Nicholas and N. J. Nicholas, Jr., as Trustees of an irrevocable trust for the benefit of Pete M. Nicholas children and spouse, as to which Pete M. Nicholas disclaims beneficial ownership. | |
(11) | Includes 6,000 shares of common stock subject to exercisable options granted pursuant to our 2000 Long-Term Incentive Plan, 4,000 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans subject to certain forfeiture provisions, as to which Mr. Pepper has sole voting but not investment power, 2,400 shares owned by Mr. Peppers spouse as to which he disclaims beneficial ownership and 4,782 shares of restricted stock granted pursuant to our 2003 Long-Term Incentive Plan. Excludes 3,143 common stock equivalents which Mr. Pepper has deferred under our Deferred Compensation Program offered to non-employee directors. | |
(12) | Includes 10,000 shares of common stock subject to exercisable options granted pursuant to our 2000 Long-Term Incentive Plan and 4,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plan subject to certain forfeiture provisions, as to which Dr. Reinhardt has sole voting but not investment power. Also includes 14,000 shares of stock held jointly by Dr. Reinhardt and his spouse, with whom he shares voting and investment control. | |
(13) | Includes 22,000 shares of common stock subject to exercisable options granted pursuant to our 1992 Non-Employee Directors Stock Option and 2000 Long-Term Incentive Plans, 1,000 shares of stock owned by Senator Rudmans spouse as to which he disclaims beneficial ownership and 20,782 shares of restricted stock granted pursuant to our 2000 and 2003 Long-Term Incentive Plans. Excludes 21,535 common stock equivalents which Senator Rudman has deferred under our Deferred Compensation Program offered to non-employee directors. | |
(14) | Includes 3,312,500 shares of common stock subject to exercisable options granted pursuant to our 1995, 2000 and 2003 Long-Term Incentive Plans. Also includes 9,727 shares held in Mr. Tobins 401(k) account. | |
(15) | Includes 2,221,000 shares of common stock subject to exercisable options granted pursuant to our 1995, 2000 and 2003 Long-Term Incentive Plans and 8,680 shares held in Mr. Bests 401(k) account. | |
(16) | Includes 258,174 shares of common stock subject to exercisable options granted pursuant to our 1995, 2000 and 2003 Long-Term Incentive Plans. | |
(17) | Includes 1,282,250 shares of common stock subject to exercisable options granted pursuant to our 1995, 2000 and 2003 Long-Term Incentive Plans and 12,412 shares held in Mr. LaViolettes 401(k) account. | |
(18) | Includes 760,000 shares of common stock subject to exercisable options granted pursuant to our 1995, 2000 and 2003 Long-Term Incentive Plans and 2,900 shares of stock held by Mr. Sandman as custodian for his child as to which he disclaims beneficial ownership. The balance (except four shares) is held jointly by Mr. Sandman and his spouse, with whom he shares voting and investment control. | |
(19) | Please refer to footnotes 1 through 18 above. Includes 13,133,852 shares of common st |