exv10w1






Exhibit 10.1




Re: Retention Agreement 




Dear Ray:



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



               The Board has determined that appropriate steps should be taken to reinforce and encourage the
continued attention and dedication of members of the management of the Company, including yourself,
to their assigned duties without distraction in the face of potentially disturbing circumstances
arising from any possible change in control of the Company.



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



     1. Termination Following Change in Control. If a Change in Control occurs, you will be
entitled to the benefits provided in Section 2 hereof upon the subsequent termination of your
employment by the Company without Cause (as defined herein) or by you for Good Reason (as defined
herein) during the two-year period following such Change in Control (the “Covered Period”). Any
purported termination of your employment by the Company or by you shall be communicated by a Notice
of Termination to the other party hereto in accordance with Section 7 hereof. For purposes of this
Agreement, (i) references to termination of employment mean a “separation from service” (as defined
in Section 1.409A-1(h) of the Treasury Regulations) from the Company, and (ii) a “Notice of
Termination” shall mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of your employment under the provision so indicated.



     2. Compensation upon Termination.



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



               (i) Severance Payments.



     (1) Amount of Payment. The Company shall pay you in cash the full amount of any earned but
unpaid base salary through the Date of Termination at the rate in effect at the time of the Notice
of Termination, plus a cash payment for all unused vacation time which you may have accrued as of
the Date of Termination. The Company shall also pay you in cash a pro rata portion of the annual
bonus for the year in which your employment terminates, calculated on the basis of your target
bonus for that year and on the assumption that all performance targets have been or will be
achieved. In addition, the Company shall pay you in a cash lump sum, an amount (the “Severance



 









 







Payment”) equal to three times the sum of (A) your base salary on the Termination Date (without
giving effect to any salary reductions which satisfy the definition of “Good Reason”), (B) the
greater of (x) the most recent bonus paid to you (which shall be deemed to be the sum of (I) the
cash bonus amount most recently paid to you and (II) the value of restricted stock (calculated as
of the date of vesting) issued to you as bonus compensation that vested (other than restricted
stock that vested solely by virtue of the Change in Control) within the immediately preceding year)
plus the value of any other shares of stock issued to you without forfeiture provisions as bonus
compensation within the immediately preceding year and (y) your target bonus in effect for the year
in which the Change in Control occurred (calculated assuming that all performance targets have been
or will be achieved) and (C) $25,000. The Severance Payment shall be in lieu of any other
severance payments which you are entitled to receive under any other severance pay plan or
arrangement sponsored by the Company or any of its subsidiaries;.



     (2) Timing of Payment. Subject to Section 2(b), the Company shall pay the amounts due to you
under this Section 2 (a)(i) within 5 days of the Date of Termination, and in all events such
amounts shall be paid no later than 90 days after the Date of Termination.




	(ii)	 	Benefit Continuation. Subject to your compliance with the non-solicitation and
confidentiality provisions described in Section 5, you and your eligible dependents shall
continue to be eligible to participate during the Benefit Continuation Period (as hereinafter
defined) in the medical, dental, health, life and other welfare benefit plans and arrangements
applicable to you immediately prior to your termination of employment on the same terms and
conditions in effect for you and your dependents immediately prior to such termination;
provided that the provision of such benefits in each calendar year during the Benefit
Continuation Period does not affect the provision of such benefits in any other calendar year
during the Benefit Continuation Period. For purposes of the previous sentence, “Benefit
Continuation Period” means the period beginning on the Date of Termination and ending on the
earlier to occur of (i) the third anniversary of the Date of Termination and (ii) the date
that you and your dependents are eligible for coverage under the plans of a subsequent
employer which provide substantially equivalent or greater benefits to you and your
dependents. The right to participate in the benefit plans under this Section 2(a)(ii) is not
subject to liquidation or exchange for any other benefit;
	 
	(iii)	 	Legal Fees and Expenses. The Company shall also pay you in cash all legal fees and
expenses, if any, incurred by you in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this Agreement if such expenses
are incurred on or prior to the December 31 of the second calendar year following the calendar
year in which the Date of Termination occurs, such payment(s) to be made on or before the
December 31 of the third calendar year following the calendar year(s) in which the Date of
Termination occurs; provided, however, that the amount of the payments and reimbursements
under this Section 2(a)(iii) shall not exceed $100,000; and provided, further, that no such
legal fees or expenses shall be reimbursed if it is determined by the applicable arbitral
panel or other tribunal that your claim is entirely without merit. Furthermore, nothing shall
prohibit the arbitral panel or other tribunal from awarding legal fees in excess of $100,000
if, in the interests of fairness and equity, the arbitral panel or other tribunal deems such
award appropriate. The right to receive payments and reimbursements under this Section
2(a)(iii) is not subject to liquidation or exchange for any other benefit.




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



     (c) No Mitigation. You shall not be required to mitigate the amount of any payment or
benefit provided for in this Section 2 by seeking other employment or otherwise.



     3. Equity Incentive Awards.



     (a) Options. All options granted to you under the Company’s equity incentive plans
will immediately become exercisable upon a Change in Control (as defined herein).



     (b) Restricted Stock Awards. All restricted stock awards will immediately become free
from restriction upon a Change in Control (as defined herein).



     4. Successors; Binding Agreement.



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



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



     5. Nonsolicitation; Confidentiality



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



     (b) Confidentiality. On and after the date of this Agreement, you will not, except in
the performance of your obligations to the Company hereunder or as may otherwise be approved in
advance by the Board, directly or indirectly, disclose or use (except for the direct benefit of the
Company) any confidential information that you may learn or have learned by reason of your
association with the Company, any customer or client of the Company or any of their respective
subsidiaries and affiliates. The term “confidential information” includes all data, analyses,
reports, interpretations, forecasts, documents and information in any form concerning or otherwise
reflecting information and concerning the Company and its affairs, including, without limitation,
with respect to clients, products, policies, procedures, methodologies, trade secrets and other
intellectual property, systems, personnel, confidential reports, technical information, financial
information, business transactions, business plans, prospects or opportunities, but shall exclude
any portion of such information that (i) was acquired by you prior to your employment by, or other
association with, the Company or any affiliated or predecessor entity, (ii) is or becomes generally
available to the public or is generally known in the industry or industries in which the Company or
any customer or client of the Company operates, in each case other than as a result of disclosure
by you in violation of this Section 5 or (iii) you are required to disclose under any applicable
laws, regulations or directives of any government agency, tribunal or authority having jurisdiction
in the matter or under subpoena or other process of law. As used in this Section 5, an “affiliate”
of a person or entity is a person or entity in control of, controlled by, or in common control
with, such first person or entity.



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



    
          “Cause” shall mean the willful engaging by you in criminal or fraudulent acts or gross



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



          “Change in Control” shall mean the happening of any of the following:



     (a) The acquisition, other than from the Company, by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act”)) of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either (i) the then outstanding shares of common stock of the
Company (the “Outstanding Company Common Stock”) or (ii) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Company Voting Securities”); provided, however, that any acquisition by (x) any
non-corporate shareholder of the Company as of the effective date of the initial registration of an
offering of Stock under the Securities Act of 1933, (y) the Company or any of its affiliates or
subsidiaries, or any employee benefit plan (or related trust) sponsored or maintained by the
Company or any of its subsidiaries or (z) any corporation with respect to which, following such
acquisition, more than 60% of, respectively, the then outstanding shares of common stock of such
corporation and combined voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such acquisition in substantially the same proportion as their ownership,
immediately prior to such acquisition, of the Outstanding Common Stock and Company Voting
Securities, as the case may be, shall not constitute a Change in Control of the Company; or



     (b) Individuals who, as of the effective date of the initial registration of an offering of
Stock under the Securities Act of 1933, constitute the Board (the “Incumbent Board”) cease for any
reason to constitute at least a majority of the Board, provided that any individual becoming a
director subsequent to such effective date whose election or nomination for election by the
Company’s shareholders, was approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election contest relating to the election of
the Directors of the Company (as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under the Exchange Act); or



     (c) Consummation of a reorganization, merger, consolidation or similar transaction involving
the Company (a “Business Combination”), in each case, with respect to which all or



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substantially all of the individuals and entities who were the respective beneficial owners of the
Outstanding Company Common Stock and Company Voting Securities immediately prior to such Business
Combination do not own beneficially, directly or indirectly, more than 60% of, respectively, the
then outstanding shares of common stock and the combined voting power of the then outstanding
voting securities entitled to vote generally in the election of directors, as the case may be, of
the corporation resulting from such Business Combination in substantially the same proportion as
their ownership immediately prior to such Business Combination of the Outstanding Company Common
Stock and Company Voting Securities, as the case may be; or



     (d) A complete liquidation or dissolution of the Company or a sale or other disposition of all
or substantially all of the assets of the Company other than to a corporation with respect to
which, following such sale or disposition, more than 60% of, respectively, the then outstanding
shares of common stock and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directions is then owned beneficially, directly or
indirectly, by all or substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company Voting Securities
immediately prior to such sale or disposition in substantially the same proportion as their
ownership of the Outstanding Company Common Stock and Company Voting Securities, as the case may
be, immediately prior to such sale or disposition.


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




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



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



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and insurance plans and perquisites in which you were participating when the notice giving
rise to the dispute was given, until the dispute is finally resolved in accordance with this
Subsection. Amounts paid under this Subsection are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under this Agreement.



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



     (a) A meaningful and detrimental alteration in your position or in the nature or status of
your responsibilities (including those as a director of the Company, if any) from those in effect
immediately prior to the Change in Control;



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



     (c) The relocation of the office of the Company where you are employed at the time of the
Change in Control (the “CIC Location”) to a location which is more than 50 miles away from the CIC
Location or the Company’s requiring you to be based more than 50 miles away from the CIC Location
(except for required travel on the Company’s business to an extent substantially consistent with
your customary business travel obligations in the ordinary course of business prior to the Change
in Control);



     (d) The failure by the Company to continue in effect any incentive or deferred compensation
plan in which you participate or the failure by the Company to continue your participation therein
on at least as favorable a basis, both in terms of the amount of benefits provided and the level of
your participation relative to other participants, as existed at the time of the Change in Control;



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



     (f) The failure of the Company to pay you any amounts of salary, bonus or expense
reimbursement then owed to you or the failure of the Company to adhere to its payroll and other
compensation schedules in place just prior to the Change in Control;



     (g) The failure of the Company to obtain a satisfactory agreement from any successor



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



     (h) Any purported termination of your employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 1 (and, if applicable, the requirements set out
in the definition of “Cause” above); for purposes of this Agreement, no such purported termination
shall be effective.



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



     8. Miscellaneous. No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing. No waiver by
either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. No agreements or representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party that are not expressly set forth in this
Agreement and this Agreement shall supersede all prior agreements, negotiations, correspondence,
undertakings and communications of the parties, oral or written, with respect to the subject matter
hereof. The validity, interpretation, construction and performance of this Agreement shall be
governed by the laws of the Commonwealth of Massachusetts.



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



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



     11. Arbitration. Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Boston in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the arbitrator’s award
in any court having jurisdiction; provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.



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



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


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




Sincerely,




BOSTON SCIENTIFIC CORPORATION




	 	 	 	 	 
	By:
	 	 	 	 
	 

	 	 

Peter M. Nicholas, Chairman of the Board
	 	 






The foregoing is accepted and agreed to.




    
              
            
            
             
              

J. Raymond Elliott




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