Document:

exv10w41

Exhibit 10.41

Boston Scientific Corporation

2003 Long-Term Incentive Plan

Performance Share Unit Award Agreement

[     ] 2010

Employee’s Name

EMPLOYEE COPY

PLEASE RETAIN FOR YOUR RECORDS

 

 

BOSTON SCIENTIFIC CORPORATION

INTENT TO GRANT

PERFORMANCE SHARE UNIT AWARD AGREEMENT

     This
Agreement, dated as of the [   ] day of February, 2010 (the “Grant Date”), is between
Boston Scientific Corporation, a Delaware corporation (the “Company”), and the “Participant”, an
employee of the Company or any of its affiliates or subsidiaries. All capitalized terms not
otherwise defined herein shall have the meaning ascribed thereto in either the Company’s 2003
Long-Term Incentive Plan (the “Plan”) or in the Performance Share Program (the “Program”) for the
period beginning January 1, 2010 and ending on December 31, 2012 (the “Performance Period”).

     1. Grant and Acceptance of Award. The Company hereby indicates its award to the
Participant that number of Performance Share Units (the “Units”) set forth on Appendix A to
this Agreement (the “Award”). Each Unit represents the Company’s commitment to issue to the
Participant shares of the Company’s common stock, par value $.01 per share (the “Stock”), subject
to certain eligibility, performance and other conditions set forth herein. The Award is intended
to be granted pursuant to and is subject to the terms and conditions of this Agreement and the
provisions of the Plan and the Program.

     2. Eligibility Conditions upon Award of Units. The Participant hereby acknowledges
the intent of the Company to award Units subject to certain eligibility, performance and other
conditions set forth herein.

     3. Satisfaction of Performance-Based Conditions. Subject to the eligibility
conditions described in Section 7 of this Agreement, except as otherwise provided in Sections 5, 6
and 8 of this Agreement and Appendix B, and the satisfaction of the performance conditions
set forth on Appendix A to this Agreement during the Performance Period, the Company
intends to award shares of Stock hereunder to the Participant at the end of the Performance
Period. Except as set forth in Sections 5, 6 and 8 of this Agreement, no shares of Stock in
settlement of the Units shall be issued to the Participant prior to the end of the Performance
Period.

     4. Participant’s Rights in Stock. The shares of Stock, if and when issued hereunder,
shall be registered in the name of the Participant and evidenced in the manner as the Company may
determine. During the period prior to the issuance of Stock, the Participant will have no rights
of a stockholder of the Company with respect to the Stock, including no right to receive dividends
or vote the shares of Stock underlying each Award.

 

 

     5. Death. In the event that the Participant’s employment with the Company or its
subsidiaries or affiliates is terminated due to death on or after January 1, 2011, but prior to the
end of the Performance Period, shares of Stock shall be issued on a prorated basis based on actual
performance as determined at the first Committee meeting following the Participant’s death. The
number of shares of Stock to be issued under the prorated Award shall be determined by calculating
(a)(i) the number of Units set forth on Appendix A multiplied by (ii) the quotient of the
number of months that the Participant worked during the Performance Period (rounded to the nearest
whole month) divided by 36, and then multiplying the product of (a)(i) and (a)(ii) by (b) either
(i) the Performance Cycle 1 percentile funding amount (if the Participant’s employment is
terminated due to death on or after January 1, 2011, but prior to January 1, 2012) or (ii) the
average of the Performance Cycle 1 and the Performance Cycle 2 percentile performance amount (if
the Participant’s employment is terminated due to death on or after January 1, 2012 but prior to
the end of the Performance Period), as each are calculated in accordance with the terms of the
Program. In the event of the Participant’s death prior to January 1, 2011, the Award shall be
forfeited in its entirety.

     6. Retirement or Disability. In the event that the Participant’s employment with the
Company or its subsidiaries or affiliates is terminated due to Retirement or Disability on or after
January 1, 2011, but prior to the end of the Performance Period, shares of Stock shall be issued on
a prorated basis based on actual performance as determined at the first Committee meeting following
the Participant’s termination of employment due to Retirement or Disability. The number of shares
of Stock to be issued under the prorated Award shall be determined by calculating (a)(i) the number
of Units set forth on Appendix A multiplied by (ii) the quotient of the number of months
that the Participant worked during the Performance Period (rounded to the nearest whole month)
divided by 36, and then multiplying the product of (a)(i) and (a)(ii) by (b) either (i) the
Performance Cycle 1 percentile funding amount (if the Participant’s employment is terminated due to
Retirement or Disability on or after January 1, 2011, but prior to January 1, 2012) or (ii) the
average of the Performance Cycle 1 and the Performance Cycle 2 percentile performance amount (if
the Participant’s employment is terminated due to Retirement or Disability on or after January 1,
2012 but prior to the end of the Performance Period), as each are calculated in accordance with the
terms of the Program. In the event that the Participant terminates his employment due to
Retirement or Disability prior to January 1, 2011, the Award shall be forfeited in its entirety.

     7. Other Termination of Employment — Eligibility Conditions. If the employment of
the Participant with the Company and its affiliates or subsidiaries is terminated or the
Participant separates from the Company and its affiliates or subsidiaries for any reason other than
death, Retirement or Disability, any Units that remain subject to eligibility conditions shall be
void and no Stock shall be issued. Except as set forth in Sections 5, 6 and 8, eligibility to be
issued shares of Stock is conditioned on the Participant’s continuous employment with the Company
through and on the last day of the Performance Period as set forth in Section 3 above.

 

 

     8. Change in Control of the Company. Subject to the terms of any separate Change in
Control or similar agreement to which the Participant is bound, in the event of a Change in Control
of the Company on or after January 1, 2011, but prior to the end of the Performance Period, shares
of Stock shall be issued on a prorated basis based on actual performance as determined by the
Committee immediately prior to the consummation of the Change in Control. The number of shares of
Stock to be issued under the prorated Award shall be determined by calculating (a)(i) the number of
Units set forth on Appendix A multiplied by (ii) the quotient of the number of months
during the Performance Period (rounded to the nearest whole month) prior to the consummation of the
Change in Control divided by 36, and then multiplying the product of (a)(i) and (a)(ii) by (b)
either (i) the Performance Cycle 1 percentile funding amount (if the Change in Control is
consummated on or after January 1, 2011, but prior to January 1, 2012) or (ii) the average of the
Performance Cycle 1 and the Performance Cycle 2 percentile performance amount (if the Change in
Control is consummated on or after January 1, 2012 but prior to the end of the Performance Period),
as each are calculated in accordance with terms of the Program. In the event that Change in
Control occurs prior to January 1, 2011, the Award shall be forfeited in its entirety

     9. Consideration for Stock. The shares of Stock are intended to be issued for no cash
consideration.

     10. Delivery of Stock. The Company shall not be obligated to deliver any shares of
Stock to be awarded hereunder until (i) all federal and state laws and regulations as the Company
may deem applicable have been complied with; (ii) the shares have been listed or authorized for
listing upon official notice to the New York Stock Exchange, Inc. or have otherwise been accorded
trading privileges; and (iii) all other legal matters in connection with the issuance and delivery
of the shares have been approved by the Company’s legal department.

     11. Tax Withholding. The Participant shall be responsible for the payment of any
taxes of any kind required by any national, state or local law to be paid with respect to the Units
or the shares of Stock to be awarded hereunder, including, without limitation, the payment of any
applicable withholding, income, social and similar taxes or obligations. Except as otherwise
provided in this Section 11, upon the issuance of Stock or the satisfaction of any eligibility
condition with respect to the Stock to be issued hereunder, or upon any other event
giving rise to any tax liability, the Company shall hold back from the total number of shares of
Stock to be delivered to the Participant, and shall cause to be transferred to the Company, whole
shares of Stock having a Fair Market Value on the date the Stock is subject to issuance or taxation
an amount as nearly as possible equal to (rounded to the next whole share) the Company’s
withholding, income, social and similar tax obligations with respect to the Stock at such
time. To the extent of the Fair Market Value of the withheld shares, the Participant shall be
deemed to have satisfied the Participant’s responsibility under this Section 11 to pay these
obligations. The Participant shall satisfy the Participant’s responsibility to pay any other
withholding, income, social or similar tax obligations with respect to the Stock, and (subject to
such rules as the Committee may prescribe) may satisfy the Participant’s responsibility to pay

 

 

the tax obligations described in the immediately preceding sentence, by so indicating to the
Company or its designee in writing at least one (1) business day prior to the date the shares of
stock are subject to issuance and by paying the amount of these tax obligations in cash to the
Company or its designee within fifteen (15) business days following the date the Units vest or by
making other arrangements satisfactory to the Committee for payment of these obligations. In no
event shall whole shares be withheld by or delivered to the Company in satisfaction of tax
withholding requirements in excess of the maximum statutory tax withholding required by law. The
Participant agrees to indemnify the Company against any and all liabilities, damages, costs and
expenses that the Company may hereafter incur, suffer or be required to pay with respect to the
payment or withholding of any taxes. The obligations of the Company under this Agreement, the Plan
and the Program shall be conditional upon such payment or arrangements, and the Company shall, to
the extent permitted by law, have the right to deduct any such taxes from any payment of any kind
otherwise due to the Participant.

     12. Investment Intent. The Participant acknowledges that the acquisition of the Stock
to be issued hereunder is for investment purposes without a view to distribution thereof.

     13. Limits on Transferability. Until the eligibility conditions of this Award have
been satisfied and shares of Stock have been issued in accordance with the terms of this Agreement
or by action of the Committee, the Units awarded hereunder are not transferable and shall not be
sold, transferred, assigned, pledged, gifted, hypothecated or otherwise disposed of or encumbered
by the Participant. Transfers of shares of Stock by the Participant are subject to the Company’s
Stock Trading Policy.

     14. Award Subject to the Plan and the Program. The Award to be made pursuant to this
Agreement is made subject to the Plan and the Program. The terms and provisions of the Plan and
the Program, as each may be amended from time to time are hereby incorporated herein by reference.
In the event of a conflict between any term or provision contained in this Agreement and a term or
provision of the Plan or the Program, the applicable terms and conditions of the Plan or Program
will govern and prevail. However, no amendment of the Plan or the Program after the date hereof
may adversely alter or impair the issuance of the Stock to be made pursuant to this Agreement.

     15. No Rights to Continued Employment. The Company’s intent to issue the shares of
Stock hereunder shall not confer upon the Participant any right to continued employment or other
association with the Company or any of its affiliates or subsidiaries; and this Agreement shall not
be construed in any way to limit the right of the Company or any of its subsidiaries or affiliates
to terminate the employment or other association of the Participant with the Company or to change
the terms of such employment or association at any time.

     16. Legal Notices. Any legal notice necessary under this Agreement shall be addressed
to the Company in care of its General Counsel at the principle executive

 

 

offices of the Company and to the Participant at the address appearing in the personnel records of
the Company for such Participant or to either party at such other address as either party may
designate in writing to the other. Any such notice shall be deemed effective upon receipt thereof
by the addressee.

     17. Governing Law. The interpretation, performance and enforcement of this Agreement
shall be governed by the laws of The Commonwealth of Massachusetts (without regard to the conflict
of laws principles thereof) and applicable federal laws.

     18. Headings. The headings contained in this Agreement are for convenience only and
shall not affect the meaning or interpretation of this Agreement.

     19. Counterparts. This Agreement may be executed in any number of counterparts, each
of which shall be deemed to be an original and all of which together shall be deemed to the one and
the same instrument.

[remainder of page intentionally left blank]

 

 

SIGNATURE PAGE

     IN WITNESS WHEREOF, the Company, by its duly authorized officer, and the Participant have
executed and delivered this Agreement as a sealed instrument as of the date and year first above
written.

	 	 	 	 	 	 	 
	 	 	PARTICIPANT:	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 

	 	 	 	 

      <<Employee Name>>
	 	 
	 
	 	 	 	 	 	 
	 

	 	Signature	 	 	 	 
	 

	 	 	 	 

	 	 
	 	 	BOSTON SCIENTIFIC CORPORATION	 	 
	 
	 	 	 	 	 	 
	 	 	J. Raymond Elliott

President and Chief Executive Officer	 	 

 

 

APPENDIX A

PLAN: 2003 LONG-TERM INCENTIVE PLAN

Number of Performance Share Units:                     

The Performance Share Units will pay out in shares of Stock in a range of 0% to 260% of the number
of Performance Share Units as follows:

	 	 	 
	TSR Performance	 	 
	Percentile Rank	 	Units Vesting
	100th Percentile
	 	260%
	95th Percentile
	 	240%
	80th Percentile
	 	150%
	55th Percentile
	 	100%
	30th Percentile
	 	50%
	Below 30th Percentile
	 	0%

 

 

APPENDIX B

Nature of Grant. In accepting the grant, I acknowledge that:

(1) the Plan is established voluntarily by the Company, is discretionary in nature and may be
modified, amended, suspended or terminated by the Company at any time;

(2) this Award is does not create any contractual or other right to receive future awards, or other
benefits in lieu of an award, even if awards have been given repeatedly in the past, and all
decisions with respect to future awards, if any, will be at the sole discretion of the Company;

(3) this Award is not part of normal or expected compensation or salary for any purposes,
including, but not limited to, calculating any severance, termination, bonuses, retirement benefits
or similar payments;

(4) the future value of the Stock is unknown and cannot be predicted with certainty; and

(5) in consideration of the Award, no claim or entitlement to compensation or damages shall arise
from termination of the Award resulting from termination of my employment by the Company (for any
reason whatsoever and whether or not in breach of local labor laws) and I irrevocably release the
Company from any such claim that may arise; if, notwithstanding the foregoing, any such claim is
found by a court of competent jurisdiction to have arisen, then, by accepting this Award, I shall
be deemed irrevocably to have waived my entitlement to pursue such claim.

Data Privacy. I hereby explicitly and unambiguously consent to the collection, use and
transfer, in electronic or other form, of my personal data as described herein by and among, as
applicable, the Company and its subsidiaries and affiliates for the exclusive purpose of
implementing, administering and managing my participation in the Plan.

I understand that the Company holds certain personal information about me, including, but not
limited to, my name, home address and telephone number, date of birth, social insurance number or
other identification number, salary, nationality, job title, any shares of stock or directorships
held in the Company, details of all options or any other entitlement to shares of stock awarded,
canceled, exercised, vested, unvested or outstanding in my favor, for the purpose of implementing,
administering and managing the Plan (“Data”). I understand that Data may be transferred to any
third parties assisting in the implementation, administration and management of the Plan, that
these recipients may be located in my country or elsewhere, and that the recipient’s country may
have different data privacy laws and protections than my country. I understand that I may request
a list with the names and addresses of any potential recipients of the Data by contacting my local
human resources representative. I authorize the recipients to receive, possess, use, retain and
transfer the Data, in electronic or other form, for the purposes of implementing, administering and
managing my participation in the Plan, including any requisite transfer of such Data as may be
required to a broker or other third party with whom I may elect to deposit any shares of stock
acquired upon exercise of the option. I understand that Data will be held only as long as is
necessary to implement, administer and manage my participation in the Plan. I understand that I
may, at any time, view Data, request additional information about the storage and processing of
Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any
case without cost, by contacting in writing my local human resources representative. I understand,
however, that refusing or withdrawing my consent may affect my ability to participate in the Plan.
For more information on the consequences of my refusal to consent or withdrawal of consent, I
understand that I may contact my local human resources representative.

Electronic Delivery of Documents. The Company may, in its sole discretion, decide to
deliver any documents related to the option granted under and participation in the Plan or future
options that may be granted under the Plan by electronic means or to request my consent to
participate in the Plan by electronic means. I hereby consent to receive such documents by
electronic delivery and, if requested, to agree to participate in the Plan through an on-line or
electronic system established and maintained by the Company or another third party designated by
the Company.exv10w66

\

Exhibit
10.66

UNITED STATES DISTRICT COURT

DISTRICT OF MINNESOTA

Crim. No. : 10-___ (___)

	 	 	 	 	 	 	 
	UNITED STATES OF AMERICA,

	 	 	)	 	 	PLEA AGREEMENT AND
	                    Plaintiff,

	 	 	)	 	 	SENTENCING STIPULATIONS
	          v.

	 	 	)	 	 	 
	GUIDANT LLC,

	 	 	)	 	 	 
	formerly d/b/a

	 	 	)	 	 	 
	GUIDANT CORPORATION,

	 	 	)	 	 	 
	                    Defendant.

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 
	 

	 	 	)	 	 	 

     The United States of America and Guidant LLC (“Defendant” or “Guidant”), an Indiana limited
liability company, formerly doing business as Guidant Corporation, an Indiana corporation, and
which is a wholly-owned subsidiary of Boston Scientific Corporation, hereby enter into the
following Plea Agreement pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure
and agree to resolve this case on the following terms and conditions. Any reference to the United
States or the Government in this agreement shall mean the Office of the United States Attorney for
the District of Minnesota and the Office of Consumer Litigation of the Civil Division of the United
States Department of Justice.

FACTS

     The Government and Guidant agree to the following facts:

 

 

Background

     For purposes of this Plea Agreement, the “relevant period” is April 16, 2002 through June 17,
2005. All relevant conduct during the relevant period was undertaken by Guidant before it was
acquired by Boston Scientific on April 22, 2006. During the relevant period, Guidant was a
corporation organized and existing under the laws of the State of Indiana doing business as Guidant
Corporation with its principal place of business in Indianapolis, Indiana. During the relevant
period, Guidant, through the operation of several subsidiaries and affiliated entities, including
Cardiac Pacemakers, Inc. and Guidant Sales Corporation, engaged in the development, manufacture,
processing, packaging, sale, marketing, and interstate distribution of medical devices including:

	 	•	 	The Ventak Prizm 2 DR, Model 1861, implantable cardioverter-defibrillator (“ICD”)
	 
	 	•	 	The Contak Renewal 1, Model H135, cardiac resynchronization therapy-defibrillator
(“CRT-D”); and
	 
	 	•	 	The Contak Renewal 2, Model H155, cardiac resynchronization therapy-defibrillator.

     These devices were Class III medical devices within the meaning of 21 U.S.C. § 321 and 21
U.S.C. § 360c and must be approved by FDA prior to their being marketed in the United

2

 

States. The Ventak Prizm 2 DR was approved by FDA on or about August 4, 2000. The Contak
Renewal 1 was approved by FDA on or about December 20, 2002.

Facts Supporting Count One

     The FDCA and its implementing regulations required manufacturers of Class III medical devices
to submit various reports and notifications to the FDA. Guidant was required, pursuant to 21
C.F.R. § 814.84(b) and the conditions of approval for these devices to annually submit to FDA a
post-approval report identifying any changes it made to the Prizm 2 and Renewal 1.

     On or about November 13, 2002, Guidant implemented a change to the Ventak Prizm 2 DR which
involved the application of additional insulation and which corrected a device flaw that had
resulted in several devices short-circuiting when attempting to deliver therapy. Such short
circuiting, also known as “arcing,” could render the device unable to provide life-saving therapy
when needed.

     On or about August 19, 2003, Guidant submitted its periodic post-approval report on the Ventak
Prizm 2 DR to FDA as required by 21 C.F.R. § 814.84(b) and the conditions of approval of the
device’s PMA. In that required report to FDA, Guidant described the November 13, 2002, change to
the Ventak Prizm 2 DR as one which:

3

 

	 	•	 	Did not affect the safety and efficacy of the device; and
	 
	 	•	 	Did not affect device performance.

     These statements by Guidant were materially false and misleading because the engineering
change Guidant executed did, in fact, affect the safety, efficacy, and performance of the Ventak
Prizm 2 DR. In fact, there have been no reports that any devices manufactured after that change
experienced such an arcing failure. Guidant’s submission of the Prizm 2 annual report to FDA on
August 19, 2003 was thus in violation of 21 U.S.C. § 333(q)(2), prohibiting the submission of any
required report to FDA that is false or misleading in any material respect.

Facts Supporting Count Two

     On or about June 21, 2004, J.R., a patient in Spain with a Renewal 1 device implanted in his
chest was examined by his treating physician, during which a wireless communications link between
his implanted device and a portable computer (similar to a laptop) was established through a
process called “interrogation.”

     The interrogation of J.R.’s Renewal resulted in the computer screen displaying a bright-yellow
colored warning screen which stated:

4

 

WARNING: A shorted condition on the shocking leads

has been detected.

A LOW shocking lead impedance has been recorded.

Please evaluate lead integrity.

Select “Reset Fault” to continue.

The screen directed the physician to “evaluate lead integrity” and did not mention the Renewal
device with regard to the “shorted condition.”

     Having detected no problem with the leads, the physician sent J.R. home. A week later, on
or about June 29, 2004, J.R. suffered a cardiac arrest at home, resulting in his death. During his
cardiac arrest, J.R.’s Renewal short circuited and failed to deliver effective therapy. On or
about July 5, 2004, Guidant personnel in Arden Hills, Minnesota, learned of J.R.’s death in Spain.
This was the fourth Renewal arcing event of which Guidant was aware.

     As Guidant personnel investigated the Renewal arcing problem in late 2004, they learned that
arcing to the pulse generator prompted the warning screen to appear in all of the device
malfunctions except one instance in which the arcing damage prevented the device from
communicating any information.

     On or about March 2, 2005, after learning of eight more Renewal arcing events, Guidant sent a
“Product Update” entitled “Shorted Shock Lead Warning Screen” via commercial interstate

5

 

carrier to all physicians in the United States treating patients with Guidant CRM devices.
Guidant intended the Product Update to mitigate the risk to health posed by malfunctioning Renewal
devices.

     The Product Update advised physicians that the yellow warning screen warned of a potentially
serious problem, but did not mention any of the twelve Renewal arcing incidents of which Guidant
was aware at the time of its distribution, including the death in Spain. It also did not advise
that the warning screen’s appearance indicated that the device may not function as intended.

     Guidant’s distribution of the Product Update was a medical device correction within the
meaning of 21 U.S.C. § 360i and 21 C.F.R. § 806.2, which Guidant undertook to reduce a risk to
health posed by the Contak Renewal 1 CRT-D.

     Pursuant to 21 U.S.C. § 360i and 21 C.F.R. § 806.10, Guidant was required to submit a written
report to FDA notifying it of the correction within ten working days of the correction’s
initiation. Guidant failed to furnish such notification as required by law in violation of 21
U.S.C. § 333(q)(1)(B).

     On or about June 17, 2005, Guidant formally communicated to physicians and the public about
the arcing problems with the Ventak Prizm 2 DR and Contak Renewal 1 medical devices, including
information regarding the connection between the Renewal

6

 

arcing and the yellow warning screen, which was the subject of the Product Update.

AGREEMENTS AND STIPULATIONS

     1. Pursuant to Rule 7(b) of the Federal Rules of Criminal Procedure, Guidant will waive
indictment and plead guilty to an Information alleging the following offenses:

     a. Count One of the Information will charge Guidant with violating the Federal Food,
Drug, and Cosmetic Act by making materially false and misleading statements on reports
required to be filed with the United States Food and Drug Administration in violation of 21
U.S.C § 331(q)(2), a misdemeanor pursuant to 21 U.S.C. § 333(a)(1).

     b. Count Two of the Information will charge Guidant with violating the Federal Food,
Drug, and Cosmetic Act by failing to promptly notify the United States Food and Drug
Administration of a correction it made to a medical device to reduce a risk to health posed
by the device, in violation of 21 U.S.C. §§ 331(q)(1) and 360i(g), a misdemeanor pursuant to
21 U.S.C. § 333(a)(1).

     2. Guidant will make a factual admission of guilt to the Court in accordance with Rule 11 of
the Federal Rules of Criminal Procedure.

     3. Guidant understands that by pleading guilty, it will waive its right to have any issues
decided that it could have raised through pretrial motions.

     4. Guidant further understands that by pleading guilty it is waiving its right to have a trial
by jury and that at such

7

 

trial the Government would have to prove each element of the charged offenses beyond a
reasonable doubt before Guidant could be found guilty.

     5. Guidant knowingly and voluntarily waives the right to file any appeal, any collateral
attack, or any other writ or motion, including but not limited to an appeal under 18 U.S.C. § 3742,
that challenges the conviction, sentence, or any other matter relating to this prosecution, whether
such right to appeal or collateral attack arises under 18 U.S.C. § 3742, 28 U.S.C. § 1291, 28
U.S.C. § 2255, or any other provision of law.

     6. Guidant understands that the statutory maximum penalty which may be imposed against it upon
conviction for each count in violation of 21 U.S.C. § 331 is a fine in an amount equal to the
greatest of:

     a. $1,000 (21 U.S.C. § 333(a)(1));

     b. $500,000 (18 U.S.C. § 3571(c));

     c. Twice the gross pecuniary gain Guidant derived from the crime (18 U.S.C. § 3571(d);
or

     d. Twice the gross pecuniary loss caused by the crime (18 U.S.C. § 3571(d)).

     7. Pursuant to Rule 11(c)(1)(C) of the Federal Rules of Criminal Procedure, the United States
and Guidant agree that the appropriate disposition of this case is, and agree to recommend jointly
that the Court impose a sentence requiring Guidant to pay to the United States a criminal fine of
$253,962,251

8

 

pursuant to 18 U.S.C. § 3571(d), payable in full not later than the later of June 30, 2010 or 10
business days after the court approves the parties’ plea agreement.

     8. The parties agree that while Sections 8C2.2 through 8C2.9 of the United States Sentencing
Guidelines (“U.S.S.G.”) do not apply to organizational defendants for misdemeanor violations of the
Food, Drug and Cosmetic Act, see U.S.S.G. § 8C2.1, the agreed upon fine is consonant with
those guidelines and takes into account the defendant’s conduct under 18 U.S.C. §§3553 and 3572, as
follows:

     a. The pecuniary gain to the defendant from the offense is calculated under the
sentencing guidelines to be $144,410,693.

     b. Taking into account the nature and circumstances of the offense, among other
factors, and the appropriate multiplier, the resulting criminal fine is $253,962,251.

     c. This agreed-upon fine falls below the statutory maximum as set forth by 18 U.S.C.
§ 3571(d) (twice the gross gain or loss). The parties further agree that disgorgement is
not necessary and that this fine amount will result in a reasonable sentence taking into
consideration all of the factors set forth in 18 U.S.C. §§ 3553(a) and 3572.

     9. As part of the disposition of this matter, Guidant agrees to a criminal forfeiture to the
United States in the amount of $42,079,675. The fine and forfeiture shall be payable not later than
the later of June 30, 2010 or 10 business days after the court approves the plea agreement. The
United States

9

 

will not seek additional recovery for its investigatory costs and other expenses incurred in
connection with the criminal investigation and prosecution.

     10. Guidant understands that the Court will order it to pay a $250 special assessment,
pursuant to 18 U.S.C. § 3013, in addition to any fine imposed.

     11. The United States and Guidant jointly submit this Plea Agreement, together with the record
that will be created at the plea and sentencing hearings, will provide sufficient information
concerning Guidant, the crime charged in this case, and Guidant’s role in the crime to enable the
meaningful exercise of sentencing authority by the Court under 18 U.S.C. § 3553. Accordingly,
neither the United States nor Guidant contends that a presentence investigation and report is
required in this matter.

     12. The United States contends that had this case gone to trial, it would have presented
evidence to prove that the pecuniary gain Guidant derived from or the loss resulting from the
charged offenses is sufficient to justify the recommended sentence set forth in this paragraph,
pursuant to 18 U.S.C. § 3571(d). For purposes of this plea and sentencing, Guidant waives any
right to contest this calculation.

10

 

     13. The United States and Guidant understand that the Court retains complete discretion to
accept or reject the recommended sentence provided for in this Plea Agreement.

     a. If the Court does not accept the recommended sentence, the United States and Guidant
agree that this Plea Agreement, except for Paragraphs 13(b) and 13(c) below, shall be
rendered void.

     b. If the Court does not accept the recommended sentence, Guidant will be free to
withdraw its guilty plea pursuant to Fed. R. Crim. P. 11(c)(5) and (d) and to withdraw from
all other provisions of this agreement.

     c. In addition, Guidant agrees that, if it withdraws its guilty plea pursuant to this
paragraph of the Plea Agreement, Guidant may thereafter be prosecuted for any criminal
violation of which the United States has knowledge arising out of this investigation,
notwithstanding the expiration of any applicable statute of limitations during the period
between the date of Guidant’s execution of this Plea Agreement and sixty (60) days after
Guidant’s withdrawal of its guilty plea. In that event, Guidant agrees that it will not
raise the expiration of any statute of limitations as a defense to any such prosecution,
except to the extent that the statute of limitations would have been a defense pursuant to
the terms of the Tolling Agreements between the government and Guidant, and this paragraph.

     14. Upon acceptance of the guilty plea called for by this Plea Agreement and the imposition
of the recommended sentence, the United States agrees that it will not bring further criminal
charges against Guidant LLC or any of its related corporate entities including Cardiac Pacemakers,
Inc., Guidant Sales Corporation, and Boston Scientific Corporation for any act or offense committed
before the date of this Plea Agreement with

11

 

regard to the issues relating to or arising from the June 17, 2005 Class I Recall of the Ventak
Prizm 2 DR, Contak Renewal 1, and Contak Renewal 2 devices. The non-prosecution provisions of this
paragraph are binding on the Office of the United States Attorney for the District of Minnesota,
the Office of Consumer Litigation of the Civil Division of the United States Department of Justice,
and the United States Attorney’s Offices for each of the other judicial districts of the United
States. The non-prosecution terms of this paragraph apply only to criminal matters and do not
apply to any violation of the federal tax or securities laws, to any crime of violence, or to any
action or prosecution by state or local authorities. Attached as Exhibit ___to this Plea Agreement
is a copy of the letter to the United States Attorney for the District of Minnesota from the
Assistant Attorney General, Criminal Division, United States Department of Justice, authorizing
this agreement.

     15. Guidant’s decision to enter into this Plea Agreement and to tender a plea of guilty is
freely and voluntarily made and is not the result of force, threats, assurances, promises, or
representations other than the representations contained in this Plea Agreement. The United States
has made no promises or representations to Guidant as to whether the Court will accept or reject
the recommendations contained within this Plea Agreement.

12

 

     16. This Plea Agreement constitutes the entire agreement between the United States and Guidant
concerning the disposition of the criminal charges in this case. This Plea Agreement cannot be
modified except in writing, signed by the United States and Guidant.

     17. Guidant will acknowledge acceptance of this Plea Agreement by the signature of its counsel
and of an authorized corporate officer. Guidant shall provide to the United States for attachment
as Exhibit ___to this Plea Agreement a notarized resolution of Guidant’s Board of Directors,
authorizing the corporation to enter a plea of guilty, and authorizing a corporate officer to
execute this agreement.

     Dated this ___day of February, 2010.

13

 

SIGNATURES FOR THE UNITED STATES OF AMERICA

	 	 	 	 	 
	TONY WEST
	 	 	 	 
	Assistant Attorney General
	 	 	 	 
	Civil Division
	 	 	 	 
	U.S. Department of Justice
	 	 	 	 
	 
	 
	 	 	 	 
	 

EUGENE M. THIROLF

	 	 

FRANK J. MAGILL, JR.
	 	 
	Director

	 	(MN Lic. No. 168476)	 	 
	Office of Consumer Litigation

	 	Attorney for the United States	 	 
	U.S. Department of Justice

	 	Acting Under Authority Conferred by 28 U.S.C.

 § 515	 	 
	 

	 	 	 	 
	 
	 	 	 	 
	 

	 	 	 	 
	ROSS S. GOLDSTEIN

	 	ROBERT M. LEWIS	 	 
	Trial Attorney

	 	(MN Lic. No. 0249488)	 	 
	Office of Consumer Litigation

	 	Assistant U.S. Attorney	 	 
	U.S. Department of Justice
	 	 	 	 
	 
	 
	 	 	 	 
	 

MATTHEW S. EBERT

	 	 	 	 
	Trial Attorney
	 	 	 	 
	Office of Consumer Litigation
	 	 	 	 
	U.S. Department of Justice
	 	 	 	 

     Dated this       day of February, 2010.

14

 

SIGNATURES FOR GUIDANT LLC

 GUIDANT LLC

	 	 	 	 	 
	 

	 	 

	 	 
	By: TIMOTHY A. PRATT
	 	Date	 	 
	Vice President and
	 	 	 	 
	General Counsel
	 	 	 	 
	Guidant LLC
	 	 	 	 
	 
	 	 	 	 
	 

	 	 

	 	 
	JOHN M. DOWD

	 	Date	 	 
	Akin Gump Strauss Hauer & Feld LLP
	 	 	 	 
	Counsel for Guidant LLC
	 	 	 	 
	 
	 
	 	 	 	 
	 

LARRY E. TANENBAUM

	 	 

Date
	 	 
	Akin Gump Strauss Hauer & Feld LLP
	 	 	 	 
	Counsel for Guidant LLC
	 	 	 	 
	 
	 
	 	 	 	 
	 

DOUGLAS A. KELLEY

	 	 

Date
	 	 
	(MN Lic. No. 0054525)
	 	 	 	 
	Kelley & Wolter, P.A.
	 	 	 	 
	Counsel for Guidant LLC
	 	 	 	 
	 
	 
	 	 	 	 
	 

DANIEL M. SCOTT

	 	 

Date
	 	 
	(MN Lic. No. 0098395)
	 	 	 	 
	Kelley & Wolter, P.A.
	 	 	 	 
	Counsel for Guidant LLC
	 	 	 	 

15

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