Document:

Exhibit 10.2 - Restricted Stock Award Agreement

Exhibit 10.2

RESTRICTED STOCK AWARD AGREEMENT

October 22, 2013

The parties to this Restricted Stock Award Agreement (this “Agreement”) are Teledyne Technologies Incorporated, a Delaware corporation (the “Company”), and Robert Mehrabian (the “Executive”).

WITNESSETH:

WHEREAS, the Company has adopted the Teledyne Technologies Incorporated Restricted Stock Award Program (the “Program”) for the benefit of eligible employees of the Company and its subsidiaries;

WHEREAS, the terms and conditions of the Program are set forth in administrative rules (the “Rules”) adopted by the Personnel and Compensation Committee of the Board of Directors of the Company on January 22, 2013 pursuant to the authority reserved in Article 12 of the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan (the “Plan”);

WHEREAS, to provide an incentive to the Executive to focus on long-term Company performance, the Company desires to grant shares of the Company’s Common Stock to the Executive subject to certain transfer and forfeiture restrictions set forth in this Agreement, as well as the provisions of the Program, which shall lapse on January 22, 2016 and the attainment of certain Performance Goals (as defined in Paragraph 1.8(b)) for the Performance Cycle (as defined in Paragraph 1.8(a));

WHEREAS, except as may be modified by this Agreement, this award shall be subject to the terms and conditions of the Rules;

NOW, THEREFORE, the parties, intending to be legally bound, agree as follows: 

1.    RESTRICTED SHARES

1.1    Grant of Restricted Shares.

(a)    As of the October 22, 2013 (the “Date of Grant”), the Company grants to the Executive 5,854 shares of Common Stock (the “Restricted Shares”), subject to the restrictions set forth in Paragraph 1.2 of this Agreement, the terms and conditions of the Program and the other terms and conditions contained in this Agreement.  If and when the restrictions set forth in Paragraph 1.2 expire in accordance with the terms of this Agreement without forfeiture of the Restricted Shares, and upon the satisfaction of all other applicable conditions as to the Restricted Shares, such shares shall no longer be considered Restricted Shares for purposes of this Agreement.

(b)    As soon as practicable after the Date of Grant, the Company shall direct that a stock certificate or certificates representing the applicable Restricted Shares be registered in the name of and issued to the Executive.  Such certificate or certificates shall be held in the custody of the Company or its designee until the expiration of the applicable Restricted Period (as defined in Paragraph 1.3).  On or before the date of execution of this Agreement, the Executive has delivered to the Company one or more stock powers endorsed in blank relating to the Restricted Shares.

(c)    Each certificate for the Restricted Shares shall bear the following legend (the “Program Legend”):

The ownership and transferability of this certificate and the shares of stock represented hereby are subject to the terms and conditions (including forfeiture) of the Restricted Stock Award Program under the Teledyne Technologies Incorporated Amended and Restated 2008 Incentive Award Plan and a Restricted Stock Award Agreement entered into between the registered owner and Teledyne Technologies Incorporated.  Copies of such Program and Agreement are on file in the offices of Teledyne Technologies Incorporated, 1049 Camino Dos Rios, Thousand Oaks, CA  91360.

In addition, the stock certificate or certificates for the Restricted Shares shall be subject to such stop-transfer orders and other restrictions as the Company may deem advisable under the rules, regulations, and other requirements of the Securities and Exchange Commission, any stock exchange upon which the Common Stock is then listed, and any applicable federal or state securities law, and the Company may cause a legend or legends to be placed on such certificate or certificates to make appropriate reference to such restrictions.

(d)    As soon as administratively practicable following the expiration of the Restricted Period without a forfeiture of the Restricted Shares, and upon the satisfaction of all other applicable conditions as to the Restricted Shares, including, but not limited to, the payment by the Executive of all applicable withholding taxes, the Company shall deliver or cause to be delivered to the Executive a certificate or certificates for the applicable Restricted Shares which shall not bear the Program Legend.  

1.2    Restrictions.

(a)    The Executive shall have all rights and privileges of a stockholder as to the Restricted Shares, including the right to vote and receive any dividends or other distributions with respect to the Restricted Shares, except that the following restrictions shall apply:

(i)  the Executive shall not be entitled to delivery of the certificate or certificates for the Restricted Shares until the expiration of the Restricted Period without a forfeiture of the Restricted Shares and upon the satisfaction of all other applicable conditions;

(ii)  none of the Restricted Shares may be sold, transferred, assigned, pledged or otherwise encumbered or disposed of during the Restricted Period (other than by will or the laws of descent and distribution), except pursuant to rules adopted by the Committee in accordance with the Program;

(iii)  all shares of Common Stock or cash distributed as a dividend or distribution, if any, with respect to the Restricted Shares prior to the expiration of the Restricted Period shall be delivered to and held by the Company and subject to the same restrictions as the Restricted Shares until the termination of the Restricted Period; and

(iv)  all of the Restricted Shares (and cash dividends) shall be forfeited and returned to the Company and all rights of the Executive with respect to the Restricted Shares shall terminate in their entirety on the terms and conditions set forth in Paragraph 1.4.

(b)    Any attempt to dispose of Restricted Shares or any interest in the Restricted Shares in a manner contrary to the restrictions set forth in this Agreement shall be null, void and ineffective.

1.3    Restricted Period and Lapse of Restrictions.  Subject to the provisions contained in Paragraphs 1.4, 1.6 and 1.7, the restrictions set forth in Paragraph 1.2 shall apply for a period (the “Restricted Period”) beginning on the Date of Grant and ending on January 22, 2016; provided, however, that, subject to the Committee’s discretion under Paragraph 1.7, in no event shall the Restricted Period expire prior to the date that the Committee makes its determinations with respect to the Company’s attainment of the applicable Performance Goals as described in Paragraph 1.4(a).  

1.4    Forfeiture.  

(a)    If, during the Restricted Period, the Restricted Shares have not been forfeited under Paragraph 1.4(b) as of the end of the Performance Cycle (as defined in Paragraph 1.8(b)), Restricted Shares shall be forfeited, on a proportionate basis as determined by the Committee and as provided below, to extent the Company’s aggregate return to shareholders for the Performance Cycle, as measured by the Company’s Common Stock price, is less than 100% of the performance of the Russell 2000 Index for the Performance Cycle; provided, however, that all of the Restricted Shares shall be forfeited if the Committee determines that the Company’s aggregate return to shareholders for the Performance Cycle, as measured by the Company’s Common Stock price, is not at least 35% of the performance of the Russell 2000 Index for the Performance Cycle.  If the Committee determines that the Company’s aggregate return to shareholders for the Performance Cycle is at least 35% of the performance of the Russell 2000 Index for the Performance Cycle, a portion of the Restricted Shares shall be forfeited that is equal to (i) the aggregate number of Restricted Shares reduced by (ii) the quotient of the aggregate number of Restricted Shares multiplied by the TDY Stock Price-Russell 2000 Percentage (as defined in Paragraph 1.8(c)) (but not more than 100%) (any fractional share resulting from this clause (ii) calculation shall be rounded up to the next whole share). Except as provided in Paragraph 1.4(c), any Restricted Shares which are not forfeited under this Paragraph 1.4(a) shall continue to be subject to the restrictions set forth in Paragraph 1.2 for the remainder of the Restricted Period.  

(b)    Subject to Section 6.02(e) of the Rules, if during the applicable Restricted Period (i) the Executive’s employment with the Company and its subsidiaries terminates for any reason except as otherwise provided in Paragraph 1.4(c), (ii) there occurs a material breach of this Agreement by the Executive or (iii) the Executive fails to meet the tax withholding obligations described in Paragraph 1.5(b), all rights of the Executive to the Restricted Shares shall terminate immediately and be forfeited in their entirety.

(c)    If, during the Restricted Period, the Executive’s employment terminates due to his or her death, disability (as determined in the sole discretion of the Committee) or retirement pursuant to the retirement policy of the Company or its applicable subsidiaries prior to the expiration of the Performance Cycle, the Executive (or the Executive’s beneficiaries) shall continue to hold the Restricted Shares through the expiration of the Performance Cycle.  At that time, the restrictions shall lapse with respect to a portion of the Restricted Shares equal to (i) the number of Restricted Shares that would not be subject to forfeiture under Paragraph 1.4(a) had the Executive remained employed by the Company through the end of the Performance Cycle multiplied by (ii) a fraction, the numerator of which is the number of full months during which the Executive was employed by the Company from the beginning of the Performance Cycle until the date of the Executive’s termination of employment and the denominator of which is the total number of months in the Performance Cycle (any fractional share resulting from this calculation shall be rounded up to the next whole share).  Any remaining Restricted Shares shall be forfeited as of the end of the Performance Cycle.  If all of the Restricted Shares would have been forfeited under Paragraph 1.4(a), then all of the Restricted Shares shall be forfeited under this Paragraph 1.4(c) as of the end of the Performance Cycle.  

(d)    In the event of any forfeiture under this Paragraph 1.4, the certificate or certificates representing the forfeited Restricted Shares shall be cancelled to the extent of any Restricted Shares that were forfeited.

1.5    Withholding.

(a)    The Committee shall determine the amount of any withholding or other tax required by law to be withheld or paid by the Company with respect to any income recognized by the Executive with respect to the Restricted Shares.

(b)    If the Executive timely files an election under Section 83(b) of the Internal Revenue Code and in accordance with Treasury Regulation Section 1.83-2 with respect to the Restricted Shares, the Executive shall meet the applicable tax withholding obligation by paying the appropriate amount in cash to the Company.  If the Executive fails to meet this tax withholding obligation to the satisfaction of the Company on or before the date the Executive files his or her election under Section 83(b), all rights of the Executive to the Restricted Shares shall forthwith terminate and be forfeited in their entirety.

(c)    If the Executive does not file an election under Section 83(b) of the Internal Revenue Code with respect to the Restricted Shares, the Executive shall meet the applicable tax withholding obligation by paying the appropriate amount in cash to the Company or, with the approval of the Committee, by either (i) having the Company retain a number of Restricted Shares having a Fair Market Value (as defined in the Plan) as of the date of such retention, or (ii) delivering to the Company a number of previously acquired shares of Common Stock (other than shares of Common Stock credited to the Executive’s account under a Company sponsored defined contribution plan or shares of Common Stock subject to outstanding, but unexercised stock options) having a Fair Market Value (as defined in the Plan) determined as of the business day preceding the date of delivery to the Company, equal to the amount of such withholding obligation.  If the Executive fails to meet this tax withholding obligation to the satisfaction of the Company, the withholding obligation shall be met as described in clause (i) above.  

(d)    The Committee shall be authorized, in its sole discretion, to establish such rules and procedures relating to the use of shares of Common Stock to satisfy tax withholding obligations as it deems necessary or appropriate to facilitate and promote the conformity of the Executive’s transactions under the Program with Rule 16b-3 under the Securities Exchange Act of 1934, as amended, if such Rule is applicable to transactions by the Executive.

1.6    Change in Control.  Notwithstanding any provision of this Agreement to the contrary, in the event of a Change in Control of the Company during the Restricted Period, all of the Restricted Shares (not otherwise forfeited prior to the Change in Control) shall vest and the applicable restrictions shall lapse immediately.

1.7    Committee’s Discretion.  Notwithstanding any provision of this Agreement to the contrary, the Committee shall have discretion under Section 6.02(e) of the Rules to adjust the Performance Cycle or waive the Restricted Period or any other restrictions or conditions with respect to all or a portion of the Restricted Shares at any time.

1.8    Defined Terms.  Capitalized terms used but not defined in this Agreement shall have the meanings set forth in the Program or the Plan, as the case may be.  Except as expressly elsewhere in this Agreement, for purposes of this Agreement, the capitalized terms set forth below shall have the following meanings: 

(a)    “Fair Market Value” for the purposes of Paragraph 1.8(e) of this Agreement means, on any date, the average of the high and low quoted sales prices of a share of Common Stock, as reported on the Composite Tape for the New York Stock Exchange Listed Companies on such date or, if there were no sales on such date, on the last date preceding such date on which a sale was reported.

(b)    “Performance Cycle” shall specifically refer to the period commencing October 22, 2013 through December 31, 2015, including any adjustments to such Cycle made by the Committee.  

(c)    “Performance Goals” shall refer to the goal of the Company’s aggregate return to shareholders, as measured by its Common Stock price, being equal to or exceeding the performance of the Russell 2000 Index during the Performance Cycle.

(d)    “Russell 2000 Index Performance” means the quotient of (i) the Russell 2000 Index at December 31, 2015 divided by (ii) the Russell 2000 Index at October 22, 2013. 

(e)    “TDY Stock Price Performance” shall the quotient of (i) the Fair Market Value of a share of the Company’s Common Stock at December 31, 2015 is divided by (ii) the Fair Market Value of a share of the Company’s Common Stock at October 22, 2013.

(f)    “TDY Stock Price-Russell 2000 Index Percentage” shall mean the quotient of (i) the TDY Stock Price Performance divided by (ii) the Russell 2000 Index Performance.

2.    REPRESENTATION OF THE EXECUTIVE

The Executive hereby represents to the Company that the Executive has read and fully understands the provisions of this Agreement and the Program and his or her decision to participate in the Program is completely voluntary.

3.    NOTICES

All notices or communications under this Agreement shall be in writing, addressed as follows:

To the Company:

Teledyne Technologies Incorporated
1049 Camino Dos Rios
Thousand Oaks, CA  91360
Attention:  Senior Vice President, General Counsel and Secretary
        
            
To the Executive:
        
5388 Baseline Avenue, 
Santa Ynez, California 93460    

        

Any such notice or communication shall be (a) delivered by hand (with written confirmation of receipt) or sent by a nationally recognized overnight delivery service (receipt requested) or (b) be sent certified or registered mail, return receipt requested, postage prepaid, addressed as above (or to such other address as such party may designate in writing from time to time), and the actual date of receipt shall determine the time at which notice was given.

		
	4.
	ASSIGNMENT; BINDING AGREEMENT

This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the assigns and successors of the Company, but neither this Agreement nor any rights hereunder shall be assignable or otherwise subject to hypothecation by the Executive.

5.    ENTIRE AGREEMENT; AMENDMENT; TERMINATION

This Agreement represents the entire agreement of the parties with respect to the subject matter hereof.  The provisions of the Plan and the Rules are incorporated in this Agreement in their entirety.  In the event of any conflict between the provisions of this Agreement and the Plan or the Rules, the provisions of the Plan or the Rules, as the case may be, shall control.  The Agreement may be amended at any time by written agreement of the parties hereto; provided, however, that the Committee shall have the authority to amend this Agreement in any respect that it deems appropriate in its sole discretion.

		
	6.
	GOVERNING LAW

This Agreement and its validity, interpretation, performance and enforcement shall be governed by the laws of the State of Delaware other than the conflict of laws provisions of such laws.

		
	7.
	SEVERABILITY

If, for any reason, any provision of this Agreement is held to be prohibited or invalid, such invalidity shall not affect any other provision of this Agreement not held so invalid, but such provision shall be deemed amended to accomplish the objectives of such provision as originally written to the fullest extent permitted by law, and each such other provision shall to the full extent consistent with law continue in full force and effect.  If any provision of this Agreement shall be held invalid in part, such invalidity shall in no way affect the rest of such 

provision not held so invalid, and the rest of such provision, together with all other provisions of this Agreement, shall to the full extent consistent with law continue in full force and effect.

		
	8.
	NO RIGHT TO CONTINUED EMPLOYMENT OR PARTICIPATION; EFFECT ON OTHER PLANS

This Agreement shall not confer upon the Executive any right with respect to continuance of employment by the Company or its subsidiaries or continuance of participation under the Program, nor shall it interfere in any way with the right of the Company and its subsidiaries to terminate the Executive’s employment at any time.  Income realized by the Executive pursuant to this Agreement shall not be included in the determination of benefits under any benefit plan of the Company in which the Executive may be enrolled or for which the Executive may become eligible unless otherwise specifically determined by resolution of the Board.  Participation in the Program during the Performance Cycle or Restricted Period shall not entitle the Executive to participate in the Program during any other Performance Cycle or Restricted Period.

		
	9.
	NO STRICT CONSTRUCTION

No rule of strict construction shall be implied against the Company, the Committee or any other person in the interpretation of any of the terms of the Program, this Agreement or any rule or procedure established by the Committee.

10.    USE OF THE WORD “EXECUTIVE”

Wherever the word “Executive” is used in any provision of this Agreement under circumstances where the provision should logically be construed to apply to the executors, the administrators, or the person or persons to whom the Restricted Shares may be transferred by will or the laws of descent and distribution, the word “Executive” shall be deemed to include such person or persons.

11.    FURTHER ASSURANCES

The Executive agrees, upon demand of the Company or the Committee, to do all acts and execute, deliver and perform all additional documents, instruments and agreements (including, without limitation, stock powers with respect to shares of Common Stock issued as a dividend or distribution on Restricted Shares) which may be reasonably required by the Company or the Committee, as the case may be, to implement the provisions and purposes of this Agreement and the Program.

        

IN WITNESS WHEREOF, the parties have duly executed this Agreement, as of the day and year first above written.

TELEDYNE TECHNOLOGIES INCORPORATED

	
		
	By:
	/s/ Charles Crocker

	Name:
	Charles Crocker

	Title:
	Chair, Personnel and Compensation Committee of the Board of Directors

EXECUTIVE

	
	
	/s/ Robert Mehrabian

	Robert MehrabianExhibit 10.1

 

Duplicate Original 1 of 2

 

TRANSITION AND SEPARATION AGREEMENT

 

This Transition and Separation Agreement (the “Agreement”) is made as of its latest date of execution between Boston Scientific Corporation (“Boston Scientific”, “BSC”, or the “Company”) and Jeffrey D. Capello (“you”).  Except as expressly provided herein, this Agreement and the Release (as defined below) supersede and cancel any prior employment agreements or arrangements you may have entered into with BSC except for (i) the Agreement Concerning Employment for U.S. Employees (“Employment Agreement”) attached hereto as Attachment 1, which you entered into by electronic acknowledgment on May 31, 2012, and (ii) the Directors and Officers Indemnification Agreement (“Directors and Officers Indemnification Agreement”) attached hereto as Attachment 2. Your obligations under the Employment Agreement shall be in addition or complementary to and shall not be superseded by this Agreement.  However, if there is any conflict in terms between this Agreement and the Employment Agreement, the terms of this Agreement prevail.

 

WHEREAS,  you are transitioning from your role as Executive Vice President and Chief Financial Officer (“CFO”) of the Company to a role as a Senior Advisor; and

 

WHEREAS, the Company desires you to continue your service as CFO for the remainder of 2013 and seeks your assistance as a Senior Advisor through May 15, 2014;

 

NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

 

1.                                      TRANSITION TO SENIOR ADVISOR

 

(a)                                 Transition from CFO.  Effective December 31, 2013 (the “Transition Date”), you shall transition from your position as CFO and member of the Executive Committee and from any other positions that you then hold with Boston Scientific or any affiliate.  Such actions shall be considered to be resignations from such positions.  Immediately thereafter, you shall become a Senior Advisor to the Company until the Separation Date, as defined in Paragraph 1(e), below.  If so requested by the Company, you shall sign any resignation document reasonably requested by the Company to confirm any such actions, provided such document is not inconsistent with anything set forth in this Agreement.

 

(b)                                 Duties and Salary as a Senior Advisor.  Your duties as a Senior Advisor shall be any duties reasonably assigned to you by the Company’s President and Chief Executive Officer (the “CEO”) that are appropriate for an individual of your knowledge and experience in the industry.  Your base salary as a Senior Advisor shall be at your current annual base salary of Six Hundred Ten Thousand Twenty-Nine Dollars and Sixteen Cents ($610,029.16), and will be payable on a bi-weekly basis, less withholding for taxes and other applicable deductions,

 

 

assuming full-time status.  Nothing herein shall be construed as requiring you to come into the office during your employment as a Senior Advisor except upon request by the CEO with reasonable advance notice.

 

(c)                                  Full-Time Status.  Unless otherwise provided in writing by the CEO, you shall devote your working time during your employment as a Senior Advisor to your assigned responsibilities for the Company, except that you may engage in charitable or other nonprofit activities or serve as an advisor, consultant, director or trustee of any noncompetitive public or private for-profit organizations (in accordance with Company policies), provided that such services and activities are disclosed in writing to the CEO and the Company does not reasonably object to such services and activities.

 

(d)                                 Classification.  You shall continue to be classified as an employee of the Company during the period you serve as a Senior Advisor (the “Transition Period”).  The transition of your position from CFO to Senior Advisor shall not be considered to result in a termination of your employment for any purpose, including without limitation, for employee benefits or equity vesting.

 

(e)                                  Separation Date.  Your last date of employment shall be May 15, 2014, or the date of your earlier resignation on or after January 1, 2014, or termination for Cause under Paragraph 3, below (in each case, the “Separation Date”).

 

2.                                      PAYMENTS BY BSC

 

(a)  Separation Pay. Within thirty (30) days following the Separation Date, and subject to your execution of the general release of claims in the form attached hereto as Attachment 3 (the “Release”) no earlier than the Separation Date but within twenty-one (21) days following the Separation Date and non-revocation thereof, you will receive a lump sum payment representing your base salary of Six Hundred Ten Thousand Twenty-Nine Dollars and Sixteen Cents ($610,029.16), prorated from the Separation Date through December 31, 2014, less withholding for taxes and other applicable deductions as required by law, if any (“Separation Pay”).  You expressly acknowledge that as of your Separation Date, you are not eligible for any payments or benefits in addition to those described in this Agreement including under any existing BSC severance pay plan.

 

(b)  Outplacement Assistance. Boston Scientific agrees to provide you with outplacement assistance provided by the firm of Lee, Hecht, Harrison, in an amount not to exceed Twenty Five Thousand Dollars ($25,000).  In the event you choose not to utilize this outplacement assistance, you are not entitled to a cash payment in lieu of such services.

 

(c)  Accrued Vacation and Salary. BSC will pay you, as soon as administratively practicable on or after the Separation Date, but in no event later than BSC’s next regular pay date: (i) all accrued but unused vacation time through the Separation Date under applicable BSC policy and in accordance with applicable state law and (ii) all accrued but unpaid salary through

 

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the Separation Date.  You are entitled to these payments regardless of whether you execute this Agreement or the Release.

 

(d)  Bonus. You will receive a bonus payment under the 2013 Boston Scientific Annual Bonus Plan (“2013 Bonus Plan”). Your bonus payment shall be at your previously established incentive target percentage of eighty percent (80%) of your base salary, modified by and subject to bonus funding to be determined in the ordinary course but only to the extent consistent with any such modifications and/or determinations made with respect to the bonuses of BSC executives participating in the Corporate Business Group under the 2013 Bonus Plan.  For the avoidance of doubt, the calculation of the bonus payment referenced in the previous sentence shall not be subject to adjustment based on any determination regarding your individual performance.  The bonus is payable at the same time and in the same manner as all other participants in the 2013 Bonus Plan. In order to receive the 2013 bonus payment, you must be an employee of the Company as of the bonus payout date, which shall be no later than March 15, 2014. You acknowledge that you will not be eligible for consideration for any bonus payments under any other or future Boston Scientific annual bonus plan, including without limitation the 2014 Annual Bonus Plan.

 

(e)  Attorney’s fees. Boston Scientific will reimburse you for legal fees you expend in connection with this Agreement in an amount up to Twenty-Five Thousand Dollars ($25,000).

 

3.                                      TERMINATION FOR CAUSE

 

BSC shall not have the right to terminate your employment prior to May 15, 2014 other than for Cause.  Cause shall be defined herein under the definition in the 2011 Long Term Incentive Plan. In the event of your termination for Cause under this Paragraph, you shall not be entitled to Separation Pay under Paragraph 2(a), and the Company reserves all forfeiture and recoupment rights under any other Company plans or policies.

 

4.                                      TERMINATION OF EMPLOYMENT BENEFITS

 

(a)  Your participation in BSC’s Medical/Dental/Vision Plans and Healthcare Flexible Spending Account (as well as the participation of any of your dependents who were covered by such Plans or Account just prior to the Separation Date) shall continue through the Separation Date, on the same terms and conditions as such coverage and/or participation is made available from time to time to active BSC employees generally.  You may continue your participation in BSC’s Medical/Dental/Vision Plans and Healthcare Flexible Spending Account for eighteen (18) (or possibly more) months as provided under the Consolidated Omnibus Budget and Reconciliation Act of 1986 (“COBRA”), should you be eligible for and elect it.  During the time of such participation, you will be responsible for making timely payments for the then applicable costs and fees.  BSC shall directly pay, or reimburse you, for that portion of the premium for you and your covered dependents for an amount equal to the employer costs of COBRA from the Separation Date through December 31, 2014 (i.e., such monthly installments

 

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shall be at the same level at which BSC makes contributions for such coverage on behalf of similarly situated, active employees).  To enable BSC to comply with its obligation to provide notification of your rights to continue Medical/Dental/Vision Plan and/or Healthcare Flexible Spending Account participation, you agree to inform BSC of any change in address, dependent or marital status. You also acknowledge that you understand that the terms of BSC’s Medical/Dental/Vision Plans and Healthcare Flexible Spending Account offered to BSC employees generally may change from time to time, and that your coverage and/or participation and associated costs will be subject to any such change.

 

(b)  You further agree and acknowledge that your participation in all other Company benefits and benefit plans in which you are currently enrolled, including but not limited to Accidental Death and Dismemberment (AD&D), Business Travel Accident, Life Insurance, and Short-Term and Long-Term Disability Plans, shall continue through the Separation Date on the same terms and conditions as such coverage and/or participation is made available from time to time to active BSC employees generally, except that as of the Transition Date, you will no longer be eligible to participate in the Company’s Executive Retirement Plan and your Change in Control Agreement shall terminate.  To the extent permitted by the plans, you will be given the same rights to continue your coverage on a non-group basis as afforded to other employees and/or officers who have separated from employment.

 

5.                                      STOCK OPTIONS, DEFERRED STOCK UNITS AND PERFORMANCE SHARE UNITS

 

You expressly agree and acknowledge that you will no longer be eligible to receive any new long term equity incentive awards under Boston Scientific’s Long Term Incentive Plans and related programs, including without limitation the 2014 Long Term Incentive Program. Nothing in this Agreement is intended to modify the Company’s or your rights and obligations (and restrictions on such rights and obligations) with respect to awards of stock options, deferred stock units and/or performance share units made to you under Boston Scientific’s Long Term Incentive Plans and related programs, including without limitation your right to exercise vested stock options for twelve (12) months from the Separation Date and your forfeiture of all stock options, deferred stock units and performance share units that, in each instance, have not vested on or before the Separation Date.  The terms of all applicable award agreements and plan documents remain in effect with respect to such awards, and for avoidance of doubt, you must be an employee of the Company as of any vesting dates in order for vesting to occur.

 

Notwithstanding the foregoing, (a) with respect to the performance share units awarded to you under the Boston Scientific 2012 and 2013 Free Cash Flow Performance Share Programs (respectively, the “2012 FCF Program” and the “2013 FCF Program”) and provided that with respect to such performance share units awarded under the 2013 FCF Program the Separation Date is after December 31, 2013: (i) Boston Scientific will waive the requirement that you be employed by the Company on December 31, 2014 and December 31, 2015, respectively, to be eligible to receive shares of Boston Scientific common stock in respect of such performance share units as to which the performance criteria under such programs have been satisfied and (ii)

 

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any shares of Boston Scientific common stock to be issued in respect of such performance share units as to which the performance criteria under such program have been satisfied shall be prorated  for the number of months worked during the respective Service Periods (as defined by 2012 FCF Program and 2013 FCF Program) and shall be delivered or otherwise made available to you in settlement thereof at the same time and in the same manner as other participants in such programs, but in any event no later than January 15, 2015 and January 15, 2016, respectively, and  (b) with respect to the performance share units awarded to you under the Boston Scientific 2012 and 2013 Total Shareholder Return Performance Share Programs (respectively, the “2012 TSR Program” and the “2013 TSR Program”) and provided that with respect to such performance share units awarded under the 2013 TSR Program the Separation Date is after December 31, 2013: (i) Boston Scientific will waive the requirement that you be employed by the Company on December 31, 2014 and December 31, 2015, respectively, to be eligible to receive shares of Boston Scientific common stock in respect of such performance share units as to which the performance criteria under such programs have been satisfied and (ii) any shares of Boston Scientific common stock to be issued in respect of such performance share units as to which the performance criteria under such programs have been satisfied shall be prorated  for the number of months worked during the respective Performance Periods (as defined by the 2012 TSR Program and the 2013 TSR Program) and shall be delivered or otherwise made available to you in settlement thereof at the same time and in the same manner as other participants in such programs, but in any event no later than March 15, 2015 and March 15, 2016, respectively.  For the avoidance of doubt, the prorations discussed in this paragraph shall be based on the number of months of your employment during the Service Period or Performance Period, as applicable, over 36 (the number of months in the Service Period or Performance Period, as applicable), rounded to the nearest whole month.  For example, assuming a Separation Date of May 15, 2014, the prorations contemplated by this paragraph shall be based on the ratio of (i) 29 to 36, with respect to the 2012 FCF Program and the 2012 TSR Program and (ii) 17 to 36, with respect to the 2013 FCF Program and the 2013 TSR Program.  BSC agrees that it will provide, annually and for illustrative purposes only, (with the first such schedule being provided on or prior to the date of this Agreement) a schedule of the awards that you are eligible to earn under the 2012 FCF Program, 2013 FCF Program, 2012 TSR Program and 2013 TSR Program, including those for which the Company performance criteria have been satisfied.  On or before January 31 of each of 2014, 2015 and 2016, BSC will provide you with the total shareholder return performance for BSC and the control group under the 2012 TSR Program and 2013 TSR Program for the previous calendar year.

 

6.                                      EXPENSE REIMBURSEMENT

 

BSC will reimburse you in accordance with usual BSC policy for all unreimbursed business travel and other out-of-pocket expenses incurred by you through the Separation Date in the performance of your duties as an employee of BSC.  Such expenses must be submitted in accordance with BSC policies.  You are entitled to these payments regardless of whether you execute this Agreement or the Release.

 

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7.                                      RELEASE BY EMPLOYEE

 

You hereby release and forever discharge BSC and its subsidiaries, affiliates, predecessors, successors, and assigns and the Directors, officers, shareholders, employees, representatives and agents of each of the foregoing (collectively “Releasees”) of and from the following as of the date of your execution of this Agreement:

 

(a)                                 Any and all claims, demands, and liabilities whatsoever of every name and nature (other than those arising directly out of this Agreement and/or the Directors and Officers Indemnification Agreement referenced below, and those you may have for workers compensation benefits, equity, BSC’s 401(k) plan and deferred compensation plan, that, in each instance, are vested as of the Separation Date, or under COBRA or unemployment compensation), including (without limitation) any claim in the nature of so-called whistleblower complaints to the extent permitted by applicable law, and any and all claims, demands and liabilities with respect to your employment or the terms and conditions or notice of termination or termination of your employment, benefits or compensation which you have against Releasees, or ever had;

 

(b)                                 As included in the above, without limitation, all claims known or unknown for tortious injury, breach of contract (other than claims for breach of this Agreement and/or the Directors and Officers Indemnification Agreement referenced below), and wrongful discharge (including without limitation, any claim for constructive discharge), all claims for infliction of emotional distress, all claims for slander, libel, or defamation of character, all claims of retaliation, and all claims for attorneys’ fees, as related to your employment, or the terms and conditions or notice of termination or termination of your employment, benefits, or compensation; and

 

(c)                                  You specifically release and forever discharge Releasees from any and all claims based upon any allegation of employment discrimination, including (without limitation) discrimination on the basis of race, color, sex, sexual orientation, age, religion, disability, genetic testing or national origin; provided that this sentence shall not have any effect on your ability to participate in any investigation or proceedings conducted by the Equal Employment Opportunity Commission (“EEOC,” which term hereinafter shall be deemed to refer to the EEOC or any state or local fair employment practices agency); provided, however, that you do release your right to secure damages for any alleged discriminatory, harassing or retaliatory treatment.

 

(d)   In accordance with the Older Workers Benefit Protection Act, you expressly acknowledge and agree that, by entering into this Agreement, you are waiving any and all rights or claims that you may have under the Age Discrimination in Employment Act of 1967 (“ADEA”), as amended, arising on or before the date you execute this Agreement.  You further expressly acknowledge and agree that you have been given the opportunity, if you so desire, to consider this Agreement for twenty-one (21) days before executing it.  In the event that you execute the Agreement within less than twenty-one (21) days of the date of its delivery to you, you acknowledge that such decision was entirely voluntary and that you had the opportunity to

 

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consider this Agreement for the entire twenty-one (21) day period.  You agree that any modifications, material or otherwise, made to this Agreement do not restart or affect in any manner the original twenty-one (21) day consideration period.  BSC acknowledges that for a period of seven (7) days from the date of the execution of this Agreement, you shall retain the right to revoke this Agreement by written notice to Boston Scientific c/o Wendy Carruthers, Sr. Vice President, Human Resources, One Boston Scientific Place, Natick, MA 01760-1527, or her successor, and that this express Agreement shall not become effective or enforceable until the date such revocation period expires (the “Effective Date”).  Therefore, no BSC obligations will be met and payments called for by BSC under Paragraph 2, other than Paragraph 2(c) hereto, shall not be made until after the Effective Date.

 

8.                                      RELEASE BY BSC

 

BSC hereby releases and forever discharges you of and from the following as of the date of your execution of this Agreement: Any and all claims, demands, and liabilities whatsoever of every name and nature (other than those arising directly out of this Agreement) with respect to your employment and/or service as an officer, or your separation from employment and/or service as an officer, which it has against you, or ever had, as a result of any facts or circumstances that occurred or existed or of which BSC had notice or about which, with usual and customary diligence BSC would have known, at any time to the date of BSC’s execution of this Agreement; provided, that notwithstanding the foregoing, BSC does not release any and all forfeiture and recoupment rights under any annual bonus plans or equity incentive plans or agreements; and, provided, further, that, notwithstanding the foregoing, BSC does not release you from any civil claims based on any facts and/or omissions that satisfy the elements of a criminal offense or claims arising out of your deliberate misconduct that resulted in material injury to BSC, provided, however, that BSC hereby represents that it knows of no such claims.

 

9.                                      NO DAMAGES SOUGHT

 

You represent and state that you have not sought and will not seek or accept any damages or individualized relief in connection with any complaints or charges filed against Releasees with any local, state or federal agency or court, and you agree that if any complaint or charge is filed on your behalf, you shall take all reasonable steps necessary to refuse any damages or individualized relief in connection therewith.

 

10.                               INDEMNIFICATION

 

You shall have all rights to indemnification with respect to legal claims and legal expenses that are available to current and former officers of BSC under the Certificate of Incorporation and Bylaws of BSC and to you under your Directors and Officers Indemnification Agreement, attached hereto as Attachment 2.

 

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11.                               NO LIABILITY ADMITTED

 

You and BSC acknowledge that neither the execution of this Agreement nor the performance of any of its terms shall constitute an admission by you or BSC of any wrongdoing by any of the Releasees or by you.

 

12.                               RESTRICTIVE COVENANTS AND OTHER OBLIGATIONS

 

You acknowledge that you are subject to restrictions on post-employment activities and obligations with respect to the protection of confidential and proprietary information and the return of BSC property under the Employment Agreement as set forth in Attachment 1 hereto.

 

13.                               NONDISCLOSURE OF CONFIDENTIAL INFORMATION

 

In addition to the Employment Agreement, you agree that you shall keep entirely secret and confidential, and shall not disclose to any person or entity, in any fashion or for any purpose whatsoever, any information that is (i) not available to the general public, and/or (ii) not generally known outside BSC, regarding Releasees (other than information related to persons for which neither you nor BSC or its subsidiaries or affiliates had a duty or obligation to maintain the confidentiality of), to which you have had access or about which you heard in the course of performing your duties for BSC, including, without limitation, any information relating to any of the Releasees’ business; their plans, strategies, prospects or objectives; their technology, processes or specifications; their manufacturing, distribution, procurement, sales and support practices and operations; their financial conditions and results of their operations; their operational strengths and weaknesses; and their personnel and compensation policies, procedures and transactions.  Notwithstanding the foregoing, the obligations described in the previous sentence shall not apply to information (i) that is or becomes generally known to or available for use by the public through no act or fault on your part, or (ii) that is required to be disclosed by an order of a court of competent jurisdiction or by applicable law or  regulation; provided, however, that if you are so required to disclose such confidential information, you shall, to the extent permitted by law and reasonable under the circumstances and at BSC’s expense, (A) provide BSC an opportunity to seek to prevent the disclosure of, or to obtain a protective order for, such confidential information by giving BSC advance notice of such disclosure and (B) make such required disclosures in consultation with BSC and cooperate with BSC as reasonably requested.

 

14.                               NO DETRIMENTAL COMMUNICATIONS

 

You agree that you will not make or cause to be disclosed any negative, adverse or derogatory statements to any media outlet, industry group, financial institution or current or former employee, consultant, client or customer of the Releasees regarding any of the Releasees or about any of the Releasees’ products or services, business affairs, financial condition or prospects for the future.  Furthermore, you hereby represent to BSC that you have made no such communication, and you acknowledge that BSC relies upon this representation in agreeing to enter into this Agreement.  BSC likewise agrees that neither it nor any of its directors or executive officers will make or cause to be disclosed any negative, adverse or derogatory

 

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statements to any media outlet, industry group, financial institution, current or former employee, consultant, client or customer of the Releasees, or a third party that is your prospective employer, client or business associate regarding you.  Furthermore, BSC hereby represents to you that none of its executive officers has made any such communication, and BSC acknowledges that you rely upon this representation in agreeing to enter into this Agreement.  BSC acknowledges that the parties shall mutually agree on talking points to be used when responding to third party inquiries.

 

15.                               FUTURE ASSISTANCE

 

BSC may seek your assistance, cooperation or truthful testimony in connection with any investigation, litigation, patent application or prosecution, or intellectual property or other proceeding arising out of matters within your knowledge and/or related to your position as an employee of BSC, and in any such instance, you shall provide such assistance, cooperation or truthful testimony and BSC shall pay your reasonable costs and expenses in connection therewith.

 

16.                               CONFIDENTIALITY

 

You acknowledge and understand that the terms of this Agreement may be filed in accordance with the rules and regulations of the Securities and Exchange Commission and may therefore become publicly available.

 

17.                               RECOUPMENT OF SEPARATION PAY

 

In the event of a final determination by a court of competent jurisdiction that there has been a breach by you of a material obligation under this Agreement or the Employment Agreement, and following advance notice (to the extent reasonable under the circumstances) by BSC of the breach and an opportunity to cure, to the extent such breach is susceptible to cure in the sole discretion of BSC, you shall repay to BSC the Separation Pay, and shall be liable, moreover, for any damages which a court may finally determine and shall be subject to injunctive relief damages, and any other relief which a court may award; provided that this sentence shall not have any effect on your ability to participate in any investigation or proceedings conducted by the EEOC; provided, however, that you do release your right to secure damages for any alleged discriminatory, harassing or retaliatory treatment.  In addition, for the one-year period following the Separation Date, the Company will have the right to require you to repay the full amount of the Separation Pay to the Company, if it is finally determined by a court of competent jurisdiction that, within such one-year period, BSC reasonably had “Cause” for termination, as defined in the 2011 Long Term Incentive Plan.  BSC hereby represents that it knows of no facts or circumstances that would constitute “Cause” for your termination.

 

Notwithstanding anything to the contrary this Agreement, you acknowledge and agree that any and all forfeiture and recoupment rights under any annual bonus plans or equity incentive plans or agreements remain in full force and effect.  For the avoidance of doubt, BSC’s

 

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rights to repayment of the Separation Pay shall be pursuant to and governed solely by the terms of this Agreement.

 

18.                               GOVERNING LAW; SEVERABILITY

 

This Agreement is entered into and shall be construed under the laws of the State of Massachusetts. In the event any provision of this Agreement is determined to be illegal or unenforceable by a duly authorized court of competent jurisdiction, then the remainder of this Agreement shall not be affected thereby, it being the intention of the parties that each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law.  You acknowledge and agree that you will forfeit the amounts paid or payable under Paragraph 2(a) if you challenge the validity of the release.

 

19.                               WAIVERS; AMENDMENTS

 

The failure of either party to require the performance of any term or obligation of this Agreement, or the waiver by either party of any breach of this Agreement, shall not prevent any subsequent enforcement of such term or obligation and shall not be deemed a waiver of any subsequent breach.  No modification, alteration, or change or waiver of any provision of this Agreement shall be effective unless in writing and signed by both parties wherein specific reference is made to this Agreement.

 

20.                               NO OTHER INDUCEMENTS

 

This Agreement sets forth the entire understanding of the parties in connection with its subject matter.  Any and all prior negotiations are merged in this Agreement.  Neither of the parties has made any settlement, representation or warranty in connection with the issues addressed in this Agreement (except those expressly set forth in this Agreement) which has been relied upon by the other party, or which acted as an inducement for the other party to enter into this Agreement.

 

21.                               PERSONS BOUND BY THE AGREEMENT

 

This Agreement shall be binding upon and inure to the benefit of you and to the benefit of each of the Releasees and their respective successors and assigns.

 

22.                               ASSIGNMENT OF INTERESTS

 

You warrant that you have not assigned, or transferred or purported to assign or transfer any claim against Releasees.

 

23.                               PREVAILING PARTY ENTITLED TO FEES

 

In the event that any action or proceeding is initiated to enforce or interpret the provisions of this Agreement, or to recover for a violation of the Agreement, the prevailing party

 

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in any such action or proceeding shall be entitled to its costs (including reasonable attorneys’ fees).

 

24.                               SECTION 409A OF THE CODE

 

This Agreement is intended, to the greatest extent permitted under law, to comply with the short-term deferral exemption and the separation pay exemption provided in Section 409A of the Internal Revenue Code of 1986, as amended, and the regulations and other interpretative guidance issued thereunder (“Section 409A”) such that no benefits or payments under this Agreement are subject to Section 409A.  Notwithstanding anything herein to the contrary, the timing of any payments under this Agreement shall be made consistent with such exemption.  Your right to receive a series of installment payments under this Agreement, if any, shall be treated as a right to receive a series of separate payments.  To the extent applicable, this Agreement shall be interpreted in accordance with Section 409A, including without limitation any such regulations or other guidance that may be issued after the Separation Date.  Notwithstanding any provision of this Agreement to the contrary, in the event that the Company determines that any amounts payable hereunder may be subject to Section 409A, the Company may, to the extent permitted under Section 409A cooperate in good faith to adopt such amendments to this Agreement or adopt other appropriate policies and procedures, including amendments and policies with retroactive effect, that the Company determines are necessary or appropriate to avoid the imposition of taxes under Section 409A; provided, however, that this paragraph shall not create an obligation on the part of the Company to adopt any such amendment, policy or procedure or take any such other action, nor shall the Company have any liability for failing to do so.  To the extent that any reimbursements payable pursuant to this Agreement are subject to the provisions of Section 409A, such reimbursements shall be paid to you no later than December 31 of the year following the year in which the expense was incurred, the amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year, and your right to reimbursement under this Agreement will not be subject to liquidation or exchange for another benefit.

 

25.                               TAXES.  You understand and agree that all payments under this Agreement will be subject to appropriate tax withholding and other deductions as required by law, if any.

 

(The remainder of this page is left intentionally blank.)

 

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25.                               REPRESENTATION

 

BSC hereby advises you to consult an attorney of your choice before executing this Agreement.  You represent that, prior to executing this Agreement; you were advised to and had the opportunity to review the provisions of this Agreement with counsel of your choice.

 

The parties have read the foregoing Agreement and know its contents, and know that its terms are contractual and legally binding.  The parties further agree that they enter this Agreement voluntarily and that they have not been pressured or coerced in any way into signing this Agreement.

 

IN WITNESS WHEREOF, the parties hereby agree.

 

 

	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Jeffrey D. Capello
    	
 
    	
Date
    
	
 
    	
 
    
	
 
    	
 
    
	
BOSTON   SCIENTIFIC CORPORATION
    	
 
    
	
 
    	
 
    
	
 
    	
 
    
	
By:
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
Michael F. Mahoney
    	
 
    	
Date
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
President and CEO
    	
 
    	
 
    

 

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Attachment 1: Agreement Concerning Employment

 

Attachment 2: Directors and Officers Indemnification Agreement

 

Attachment 3: General Release of Claims

 

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