Document:

Exhibit 10.1

 

MODSYS INTERNATIONAL,
LTD

 

September 15, 2015

 

Matt Bell

c/o Modern Systems Corporation

601 Union Street, Suite 4616

Seattle, WA 98101,

 

Dear Matt,

 

On behalf of the Board of Directors
(the “Board”) of ModSys International, Ltd, a company incorporated in Israel (the “Parent”) and its subsidiaries
including Modern Systems Corporation, a Delaware corporation (“MS-DEL” and collectively with the Parent, the “Company”),
I am pleased to share the following terms for employment:

 

1.            Position;
Role.

 

a.   Officer
Role. You will continue to serve in a full-time capacity as President and CEO for the Company. You will report to the Board.
By signing this letter, you represent and warrant to the Company that you are under no contractual commitments inconsistent with
your obligations to the Company. You agree that to the best of your ability and experience you will at all times loyally and conscientiously
perform all of the duties and obligations of your role which are required of you under this letter and to the reasonable satisfaction
of the Company.

 

b.   Board
Role. In connection with this letter, the Compensation Committee will recommend that the Board elect to serve as a director,
to the extent permissible under the Company’s bylaws and Articles of Association. If so elected to the Board you agree to
serve in such capacity without additional compensation. Further, if a majority of the directors requests you to resign from the
Board and/or any committees of the Board then you shall do so. Further, upon termination of your employment for any reason, the
Board will take a vote and a simple majority will decide if your board position is extended or terminated and to the extent applicable,
from the Board and any committees of the Board.

 

2.            Effective
Date; Term. The terms of this new offer will be effective as of the later of the date of this letter or the date it is executed
by you (referred to as “Effective Date”) and ending on the third anniversary (the “Term”), unless sooner
terminated as required by the Company’s Compensation Policy or under Paragraph 14 of this letter.

 

3.            Salary.
As a resident of the United States (“U.S.”) you will be an employee of MS-DEL. In connection with your position as
President and CEO (not as a Board member), you will continue to be paid a cash salary at a rate of twenty-five thousand U.S. Dollars
($25,000.00) per month, prorated for the actual period of employment which is equivalent to three hundred thousand U.S. dollars
($300,000.00) on an annualized basis and payable pursuant to the Company’s regular payroll policy (“Base Salary”).
This is a salaried exempt position, which is not subject to federal and state minimum wage and overtime laws. You will not be
eligible to receive overtime pay for hours worked in excess of 40 hours per workweek.

 

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4.            Bonus.

 

a.   Yearly
Performance RSUs. You will be eligible for three individual annual bonuses each with
a target amount of fifty thousand (50,000) Restricted Stock Units (each, “Yearly Performance RSUs”) of Parent, with
the Compensation Committee of the Board and you working in good faith and mutually agreeing upon performance criteria consistent
with Sections 2.3.9.2 – 2.3.9.5 of the Company’s Compensation Policy (“Performance Milestones”) promptly
following the execution of this letter. After the second quarter of the new calendar year (commencing in 2016) the Compensation
Committee and/or the Board will review the agreed-upon Performance Milestones and make a good faith determination with respect
to whether you met the Performance Milestones for the previous four quarters (with a shortened first year of review running for
only three quarters from the October 1, 2015 through June 30, 2016). If the annual agreed-upon Performance Milestones are met
then the corresponding annual Performance RSUs (i.e. 50,000 RSUs) will be fully vested as of that date. For avoidance of doubt,
if you do not meet the annual Performance Milestones then you the Annual Performance RSUs for that year will not vest and shall
expire as of the date you are notified of the Compensation Committee’s determination. Except as otherwise provided in this
Paragraph and as specifically approved by the Compensation Committee, the RSUs will be subject to the terms and conditions of
the Parent’s 2007 Award Plan (the “Plan”). The Plan, as amended,
and the applicable RSU award agreement, and vesting of the RSUs is contingent on your continued employment with the Company through
each vesting date. Following the vesting of the RSUs, you will receive one ordinary share of MDSY as payment for each vested RSU
(subject to tax withholding).

 

b.   Bonus
for Sale Transaction of Parent.

 

i.   Subject
to terms and conditions provided in this letter, consistent with Section 2.3.10 of the Company’s Compensation Policy (Special
Bonus) and provided that you remain employed in your current position with the Company immediately prior to the consummation of
a Sale Transaction and provided further that the Sales Proceeds are no less than twenty
five million dollars ($25,000,000), you shall have a contingent right to receive a payment equal to one percent (1%) of
the Sale Proceeds. 

 

ii.   For
this purposes of this Paragraph 4(b):

 

		1.	“Sale
                                         Proceeds” means the fair market value of the gross consideration received by the
                                         Company or its stockholders (e.g. cash, equity or a combination thereof) from a Sales
                                         Transaction; and

 

		2.	“Sales
                                         Transaction” means the sale or disposition of all or substantially all the Company's
                                         assets in one transaction from a third party or parties, taking into account such factors
                                         as the Board deems appropriate immediately prior to the consummation thereof. 

 

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5.            Restricted
Stock Units. The Compensation Committee will recommend to the Board that the Parent
grant you an award of one hundred thousand (100,000) Restricted Share Units of Parent (the “2015 RSU Grant”). Subject
to approval by the Board, the 2015 RSU Grant will be granted on the first regularly scheduled grant date after the Effective Date.
The 2015 RSU Grant will vest at any time after the 12 month anniversary of the date of grant, upon the earlier to occur of (i)
a Sales Transaction or (ii) your termination of employment by the Company for any reason other than for Breach of Trust (as defined
in the SOA (as defined below)) and provided such termination constitutes a “separation
from service” (within the meaning of Treasury Regulation Section 1.409A-1(h)) (each a “Triggering Event”), 1/36
of the RSUs will vest upon such Triggering Event for each full month of service, measured from the Effective Date through the
date of the Triggering Event.

 

Except as otherwise provided in this
Paragraph 5 the 2015 RSU grant will be on similar terms as provided in the Award Agreement between the parties dated September
6, 2012 (the “2012 Award Agreement”). Following vesting of the foregoing RSUs, you will receive one ordinary share
of MDSY as payment for each vested RSU (subject to tax withholding).

 

6.            Repricing
of Existing Restricted Stock Options. Whereas, subject to the terms of the Stock Option Agreement dated April 25, 2012 (the
“SOA”), and in accordance with generally accepted accounting principles, the Company has agreed to a one-time offer
to reprice 270,000 of your existing three hundred thousand (300,000) options to purchase Ordinary Shares in the Company (the “Existing
Options”) under the SOA. The remaining 30,000 Existing Options will be forfeited upon your acceptance of the repriced options.
The exercise price of the repriced options will be equal to the fair market value on the date of grant. Please check with your
tax advisor as the Company takes no responsibility for any adverse consequences arising from the repricing. You have until 5:00
PM Pacific Time of the second day following the Effective Date to notify the Compensation Committee that you wish to reprice your
Existing Options. For example, if the Effective Date is Tuesday, September 15, 2015 then your written notice must be received
by the Compensation Committee by 5 PM Pacific Time on Thursday, September 17, 2015.

 

7.            Benefits;
Vacation & Holidays. You will be eligible for all standard Company benefits, including health, dental, vision, life and
disability insurance. Health, dental, and vision insurance, 401(k) retirement savings plan and life insurance will be effective
the first day of the first of the month following thirty (30) days of benefit eligible employment,
Disability insurance will be effective on the first of the month following ninety
(90) days of benefit eligible employment. Employee matching for 401(k) contributions will be based on the Company’s
then-current plan documents. Your grant of three (3) weeks of vacation per year, accruing at a rate of five (5) hours per payroll
period, will continue as-is based on your original date of hire. In addition, U.S. employees observe eleven (11) standard holidays
and are given four (4) "floating" holidays. Company holidays are subject to change. Scheduling of vacation and personal
time should be arranged between you and the Board.

 

8.            Withholding
Taxes. All forms of compensation referred to in this letter are subject to applicable withholding and payroll taxes.

 

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9.            Proprietary
Information and Inventions Agreement. As a condition of your employment, you will be required to sign our Parent’s standard
Proprietary Information and Inventions Agreement for employees (“PIIA”), a copy of which is attached. It is fundamental
policy of the Company that it does not hire employees or consultants in order to obtain access to trade secrets or proprietary
information of any of their former employers. By accepting this job offer, you represent that (i) you will not violate the terms
of any non-competition, non-disclosure and non-solicitation agreements to which you may be bound by any prior employer and (ii)
you will not use any files or materials in connection with your employment with the Company that are trade secrets of or proprietary
information to another firm. Further, you acknowledge and agree to the restrictive covenants and other provisions set forth in
the PIAA during your employment and thereafter as provided, the terms of which are fully incorporated herein.

 

10.          Outside
Activities. While you render services to the Company, you will not engage in any other gainful employment, business or activity
without the written consent of the Company, which consent will not be unreasonably withheld. While you render services to the
Company, you also will not assist any person or organization in competing with the Company, in preparing to compete with the Company
or in hiring any employees of the Company.

 

11.          No
Conflicts. You represent that your performance of all the terms of this letter agreement will not breach any other agreement
to which you are a party.

 

12.          Contingencies.
Your acceptance of this offer, commencement and continuation of employment with the Company is and remains contingent upon the
successful completion and satisfactory outcome of a background, reference, drug/alcohol and credit check, as determined at the
sole discretion of the Company; your submission of proof, satisfactory to the Company, of your identity and your legal authorization
to work in the United States (if you fail to submit this proof, federal law prohibits us from hiring you), and the execution and
delivery of the PIIA to an officer of the Company.

 

13.          Employment
at Will. Your employment with the Company will be “at will,” meaning that either you or the Company will be entitled
to terminate your employment at any time and for any reason, with or without cause. You will not be entitled to receive any payments
under this letter or any policy or plan of Company as in effect from time to time that provides for payment of amounts on termination
of employment other than any and all previously earned, but as of yet unpaid, salary, and reimbursement of business expenses and
fringe benefits as of yet unpaid, by reason of Company electing not to renew or extend the terms provided for herein.

 

14.          Termination
of Employment. 

 

a.   Voluntary
Termination by You. At any time during the Term, you may terminate employment hereunder by giving the Company one hundred
and eighty (180) days’ prior written notice of the effective date of your last day of employment (“Employee Notice
Period”). During the Employee Notice Period you will be entitled to the same benefits including vesting as you had in place
prior to such notice (except for (i) Early Termination (as defined below), (ii) a Breach of trust or (iii) as otherwise provided
for in an agreement for the 2015 RSU Grant). The Company may, in its sole discretion, waive all or any part of the Employee Notice
Period and consider your termination effective on any such earlier date as it determines. Also, the Company may, in its sole discretion,
remove you from any assigned duties, assign you to other duties, or require you to remain away from its offices, during all or
any part of the Employee Notice Period or elect to accelerate your Base Salary for the remainder of the Employee Notice Period
and pay it to you in lieu thereof through the Company’s standard payroll process. In no event shall the payments made in
connection with the Employee Notice Period continue beyond your last day of employment if you voluntary elect to terminate early
(“Early Termination”) or exceed the amount that you would have received had your employment continued through expiration
of the Term.

 

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b.   Termination
for Convenience During the Term. The Company may terminate your employment hereunder for convenience at any time during the
Term of this Agreement by giving you three hundred and sixty five (365) days’ written notice (“Employer Notice Period”)
provided, however, the Company may, in its sole discretion, remove you from any assigned duties, mutually agree on other duties,
or require you to remain away from its offices, during all or any part of the Employer Notice Period or elect to accelerate your
Base Salary for the remainder of the Employer Notice Period and pay it to you in lieu thereof through the Company’s standard
payroll process. In no event shall the payments made in connection with the Employer Notice Period exceed the amount that you
would have received had your employment continued through expiration of the Term. For the sake of clarity all vesting will continue
during the Employer Notice Period except (i) for Early Termination, (ii) for a Breach of Trust or (iii) as otherwise provided
for in an agreement for the 2015 RSU Grant.

 

c.   Other
Obligations. A termination of employment pursuant to this Paragraph 14 will not affect any rights that you may have pursuant
to any agreement, policy, plan, program or arrangement of Company providing employee benefits, which rights will be governed by
the terms thereof, including the SOA and Plan; provided that to the extent that you are eligible to receive payments or benefits
by reason of termination of employment pursuant to any other severance agreement or employee plan (collectively, “Other
Severance Agreements”), the amounts otherwise receivable under Paragraph 14 will be reduced by the amounts actually paid
and benefits actually provided pursuant to the Other Severance Agreements, but not below zero, to avoid duplication of payments
so that the total amount payable or value of benefits receivable hereunder and under the Other Severance Agreements is not any
more or less than the amounts so payable or value so receivable had such benefits been paid in full under the arrangement that
provides the greatest total payments and benefits.

 

15.          Remedies.
In addition to any other remedies provided, the parties agree that compliance with Paragraphs 9 and 14(a) of this Agreement and
the PIIA are necessary to protect the business and goodwill of Company, and that any breach of such Paragraphs and the PIIA will
result in irreparable and continuing harm to Company, for which monetary damages may not provide adequate relief. Accordingly,
in the event of any actual or threatened breach of Paragraphs 9 and 14(a) and the PIIA by you, Company and you agree that (i)
Company shall be entitled to all appropriate remedies, including but not limited to temporary restraining orders and injunctions
enjoining or restraining such actual or threatened breach and (ii) Company may cease providing consideration provided to you under
this letter. Executive hereby consents to the issuance of an injunction by any court of competent jurisdiction, without the need
for posting any bond. Withholding Authorization. In addition to any remedies set forth in this letter, to the fullest extent permitted
under the laws of the State of Employment, you authorize Company to withhold from any severance payments otherwise due to you
and from any other funds held for your benefit by Company, any damages or losses sustained by Company as a result of any material
breach or other material violation of this Agreement by Executive, pending resolution of the underlying dispute.

 

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16.          Amendment.
This letter agreement may not be amended or modified except by an express written agreement signed by you and a duly authorized
officer of the Company.

 

17.          Entire
Agreement. This letter contains all of the terms of your employment with the Company and supersedes any prior understandings
or agreements, whether oral or written, between you and the Company, except as documented in this letter. It is specifically understood
and accepted that immediately prior to the effectiveness of this letter that the Company has fulfilled all of its obligations
to you related to your employment and this letter supersedes all oral and written employment offers and agreements between you
and the Company to the Effective Date other than any RSUs granted in 2012 Award Agreement
or options to purchase Ordinary Shares in the SOA, as well as all conflicting provisions of Company’s human resources
and other policies set by the Company. Notwithstanding the foregoing, your confidentiality and other restrictive covenant obligations,
as set forth herein, are in addition to, and not in limitation or substitution of, any similar or related obligations under Company
policy or applicable law you have.

 

We hope that you find the foregoing
terms acceptable. This offer, if not accepted, will expire at the close of business (PST) on October 1, 2015. Please
indicate your acceptance of our offer by signing one copy of this letter and returning to our US Headquarters at Modern Systems
Corporation, 601 Union Street, Suite 4616, Seattle, WA 98101, or via email at dfrench@modernsystems.com. Should you have any questions,
please don't hesitate to contact me.

 

	Yours Sincerely,	 
	 	 	 
	Carla Corkern	 
	 	 	 
	By:	/s/ Carla Corkern	 
	Title:	Audit Committee Chairperson	 
	Date:	10/1/15

	 

 

I
have read and accept this employment offer:

 

	/s/ Matt Bell	 
	Matt Bell	 
	Date:
    	10/1/15	 

 

 

- 6 -Exhibit 10.1

 

	

    	
2016   Boston Scientific Annual Bonus Plan

Performance   Period January 1 - December 31

September    2015

 
    

 

I.                                        Establishment and Purpose of the Plan

 

Boston Scientific Corporation has established the Boston Scientific Corporation Annual Bonus Plan (“Plan”).    As explained in detail below, the Plan basically works as follows. For each Performance Year, there is an Aggregate Bonus Pool, which is the sum of the bonus targets of all eligible participants.  After the end of the Performance Year, the Committee determines the percentage of the pool that will be paid out as bonus for the year, based on the Company’s performance as to Sales and Adjusted Earnings Per Share and its attainment of quality goals.  The percentage will be between 50% and 150%. The payable portion of the pool is then separated into an Assigned Bonus Pool for each Business Group, Region and Unit, based on their performance as to their respective Scorecards.  The Compensation Management System then allocates the Assigned Bonus Pools among the managers, who evaluate the performance of the participants under their management and determine, for each participant, the percentage (between 0% and 200%) of the participant’s Target Annual Bonus that will be the participant’s Bonus Award for the Performance Year.

 

The Plan’s purpose is to align the Company’s interests and your interests as a Plan participant by providing incentive compensation for the achievement of Company and individual performance objectives.  For covered employees, the Plan is established under section 4.a.(8) of the Boston Scientific Corporation 2011 Long-Term Incentive Plan and is intended to qualify for the performance-based compensation exception under Code section 162(m).

 

The capitalized words and terms that are used throughout the Plan are defined in the Glossary in Article IX.

 

II.                                   Eligibility and Participation

 

You are eligible to participate in the Plan for a Performance Year if you satisfy all of the following eligibility criteria:

 

·                  You are either a Regular Exempt Employee or an Eligible International Employee;

 

·                  You are not eligible for commissions under any sales compensation plan of the Company;

 

·                  You are not eligible to participate in any other incentive plan or program of the Company (unless the written terms of that plan or program expressly permit participation in both that plan or program and the Plan); and

 

·                  You complete at least two full months of Eligible Service during the Performance Year.

 

If you are eligible to participate in the Plan for only part of the Performance Year (for example, because you change positions or business units during the Performance Year), then you may participate in the Plan on a prorated basis for the Performance Year, provided that you complete at least two full months of Eligible Service during the Performance Year (and, if you are an executive officer covered by Code section 162(m), your participation in the Plan for the Performance Year would not be inconsistent with Code section 162(m)).  If you are eligible for prorated participation, the Bonus Award, if any, otherwise payable to you for the Performance Year will be prorated based on your percentage of time in an eligible position during the Performance Year.

 

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III.                              Target Annual Bonus

 

For each Performance Year in which you are eligible to participate, you will be assigned a Target Annual Bonus, which will be a specified percentage of your annual base salary, determined based on your position.  The Bonus Award, if any, that you ultimately receive for the Performance Year will be a percentage of your Target Annual Bonus, determined pursuant to Article IV. The Aggregate Bonus Pool for a Performance Year will be the sum of the Target Annual Bonuses of all employees who are eligible to participate in the Plan for the Performance Year.

 

IV.                               Steps For Determining Bonus Awards

 

Bonus Awards for a Performance Year will be determined pursuant to the following steps:

 

Step One: Establish performance goals, quality goals and the Corporate Performance Scale

 

On or before March 31 of a Performance Year, the Committee will establish performance goals for each of the Plan’s Performance Metrics and quality goals for the Performance Year.  The Performance Metrics are Sales and Adjusted Earnings Per Share.  The Committee will also establish the Corporate Performance Scale for the Performance Year, which will be set forth in a separate schedule.

 

Step Two:  Measure achievement and determine Total Annual Bonus

 

After the end of the Performance Year, the Committee will evaluate the Company’s financial performance results for the Performance Year and determine the extent to which the performance goals were attained.  The Committee will adopt a written resolution as to the extent of the attainment of the performance goals with respect to each of the Performance Metrics.  Based on the extent to which the performance goals were attained, the Chief Executive Officer will make a recommendation to the Committee, consistent with the Corporate Performance Scale, as to the Applicable Percentage of the Aggregate Bonus Pool to be paid by the Company as the Total Annual Bonus for the Performance Year.  Taking into account the Chief Executive Officer’s recommendation and any other factors that the Committee, in its discretion, deems appropriate, the Committee will approve an Applicable Percentage for the Performance Year, which must be consistent with the Corporate Performance Scale.  The Committee retains the right to reduce the Total Annual Bonus for the Performance Year based on the Committee’s Quality Assessment.  In no event, however, will the Total Annual Bonus be less than 50% of the Annual Bonus Pool for the Performance Year.

 

Step Three: Allocate the Total Annual Bonus

 

The Chief Executive Officer will make a recommendation to the Committee as to how the Total Annual Bonus for the Performance Year should be allocated among the Business Groups and Regions, based on their overall and relative performance against their respective applicable Scorecards for the Performance Year.  Taking into account the Chief Executive Officer’s recommendation and any other factors that the Committee, in its discretion, deems appropriate, the Committee will approve an allocation of the Total Annual Bonus among the Business Groups and Regions for the Performance Year.  The portion of the Total Annual Bonus allocated to a Business Group or Region (its Assigned Bonus Pool) will be a percentage of the total Target Annual Bonuses of all its employees who participate in the Plan for the Performance Year.  If a Business Group or Region has Units, the leader of the Business Group or Region will divide the Assigned Bonus Pool among the Units, based on their overall and relative performance against each Unit’s applicable Scorecard for the Performance Year, so that each Unit will then have its own Assigned Bonus Pool.  A Business Group or Region that does not have Units (for example, Corporate) will have a single Assigned Bonus Pool.

 

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Step Four: Determine participants’ individual Bonus Awards

 

Once the Assigned Bonus Pool is determined for each Business Group, Region, or Unit, the amount of the Assigned Bonus Pool will be entered into the Compensation Management System, which allocates a portion of the Assigned Bonus Pool to each manager of Plan participants.  Each manager will evaluate the performance of each participant under his or her management and enter into the Compensation Management System a rating percentage, from 0% to 200%, for each evaluated participant.  The rating percentage that your manager assigns to you will, in turn, determine the percentage of your Target Annual Bonus that will be your Bonus Award for the Performance Year.

 

If participants leave the Company before the Payment Date and, as a result, do not earn their Bonus Awards for the Performance Year, their Bonus Awards will be reallocated by the Chief Executive Officer, in his or her discretion, to other participants who are employed on the Payment Date and will become part of the Bonus Awards paid to those other participants.  As provided in Article V, all Bonus Awards for a Performance Year (including those reallocated pursuant to the previous sentence) will be paid to eligible participants no later than March 15 of the following year.

 

Special Rules with Respect to Executive Officers

 

Notwithstanding any other provision of the Plan, the Committee retains sole and complete discretion to determine the eligibility of, and any Bonus Award payable to, each executive officer covered by Code section 162(m). The maximum Bonus Award payable with respect to a Performance Year to an executive officer covered by Code section 162(m) is $3,250,000.

 

V.                                    Payment Conditions

 

Payment Date and Form of Payment. Bonus Awards in the United States will be made by March 15 of the year following the Performance Year for which the Bonus Awards are made. Bonus Awards outside the United States will be processed as soon as administratively possible in each region following the end of the Performance Year and after the Committee has adopted its written resolution as to the attainment of performance goals pursuant to Article IV.  Your Bonus Award, if any, will be paid in a single lump sum payment.

 

Required Employment on the Payment Date.  Except as otherwise expressly provided in this Article V, to be eligible to receive payment of any Bonus Award, you must be employed by the Company on the Payment Date for that Bonus Award.  In other words, except as expressly provided in this Article V, if you cease employment with Boston Scientific Corporation and all of its Affiliates before the Payment Date, you will not be eligible to receive any Bonus Award that would otherwise have been payable to you if you had been a Company employee on that date.  Conversely, if you are an employee of the Company on the Payment Date, you will be entitled to your Bonus Award, if any, even if you are not actively performing duties on that date.  For example, if you are not required to report to work during a notification period applicable under a Company severance or separation plan, but you are still a Company employee during that period, and the Payment Date occurs during your notification period, you will remain eligible to receive your Bonus Award.

 

Exception Under Written Company Plan or Agreement.  If you are specifically exempted, under a written Company plan or agreement, from the requirement to be employed on the Payment Date, you may remain eligible for payment of your Bonus Award, depending on the terms of the applicable written plan or agreement.  In such cases, the terms of such written plan or agreement will govern in all respects.

 

Layoff.  Also notwithstanding any other provision of the Plan, if you are a participant and your employment ceases prior to the Payment Date by reason of Layoff, you may be eligible for payment of part or all of your Bonus Award, depending on the terms and conditions of the applicable severance pay plan, if any, for the country in which you are employed at the time of

 

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layoff. In the event that there is no country-specific severance plan for the country in which you are employed at the time of your Layoff, applicable law will apply.

 

Retirement. Also notwithstanding any other provision of the Plan, if you are a participant and your employment ceases prior to the Payment Date for a Bonus Award but after September 30 of the Performance Year to which the Bonus Award pertains, and you had at least nine months of Eligible Service in the Performance Year, you will be entitled to a prorated portion of the Bonus Award, if any, that would otherwise be paid you if, as of the date of your cessation of employment, (1) you had attained age 55, (2) you had accrued at least five years of service with the Company and (3) the sum of your age and years of service as of your date of cessation of employment equals or exceeds 65.  In such a case, proration will be based on the percentage of time in the Performance Year during which you were employed and eligible to participate in the Plan.  The prorated Bonus Award, if any, will be paid on the Payment Date.

 

Death.  If your employment ceases prior to the Payment Date by reason of your death, but you otherwise met all eligibility criteria specified in Article II, your estate may receive a prorated portion of the Bonus Award, if any, that would have been paid had you lived to the Payment Date.  In such a case, proration will be based on the percentage of time in the Performance Year during which you were employed and eligible to participate in the Plan.  The prorated Bonus Award, if any, will be paid on the Payment Date.

 

Adjustment for Changes in Standard Hours.  Also notwithstanding any other provision of the Plan, if you are a participant and have a change in standard hours (part-time to full-time, full-time to part-time) during a Performance Year, your Bonus Award, if any, for the Performance Year will be based on the full-time equivalent Target Annual Bonus and your average annualized base salary for the Performance Year.  Except as provided in the preceding sentence, all Bonus Awards will be based on your salary and incentive target as of December 31 of the Performance Year.

 

No Guarantee of a Bonus Award.  Nothing in this Plan guarantees that any Bonus Award will be made to any individual.  Receipt of a Bonus Award in one year does not guarantee eligibility in any future year.

 

VI.                               Incentive Compensation Recoupment Policy

 

General Recoupment Policy.  To the extent permitted by governing law, the Board, in its discretion, may seek reimbursement of a Bonus Award paid to you if you are a Current Executive Officer or Former Executive Officer and you, in the judgment of the Board, commit misconduct or a gross dereliction of duty that results in a material violation of Company policy and causes significant harm to the Company while serving in your capacity as Executive Officer.  Further, in such case:

 

·                                          if you are a Current Executive Officer, the Board may seek reimbursement of all or a portion of the Bonus Award paid to you during the one-year period preceding the date on which such misconduct or dereliction of duty was discovered by the Company, or

 

·                                          if you are a Former Executive Officer, the Board may seek reimbursement of all or a portion of the  Bonus Award paid to you during the one-year period preceding the last date on which you were a Current Executive Officer.

 

Restatement of Financial Results.  To the extent permitted by governing law, if you are an Executive Officer, the Board will seek reimbursement of a Bonus Award paid to you in the event of a restatement of the Company’s financial results that reduced a previously granted Bonus Award’s size or payment.  In that event, the Board will seek to recover the amount of the Bonus Award paid to you that exceeded the amount that would have been paid based on the restated financial results.

 

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Provisions Required by Law.  If the Company subsequently determines that it is required by law to apply a “clawback” or alternate recoupment provision to a Bonus Award, under the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, then such clawback or recoupment provision also shall apply to the Bonus Award, as applicable, as if it had been included on the date the Plan was established and the Company shall notify you of such additional provision.

 

VII.                          Termination, Suspension or Modification and Interpretation of the Plan

 

The Board may terminate, suspend or modify (and if suspended, may reinstate with or without modification) all or part of the Plan at any time, with or without notice to participants.  The Committee has sole authority over administration and interpretation of the Plan, and the Committee retains its right to exercise discretion as it sees fit.

 

The Committee reserves the exclusive right to determine eligibility to participate in this Plan and to interpret all applicable terms and conditions, including eligibility criteria, performance objectives and payment conditions, for the Company’s executive officers.  The Committee delegates to the Company’s highest human resources officer the authority to administer, and determine eligibility to participate in, the Plan and interpret all applicable terms and conditions for employees who are not executive officers of the Company.  The determinations and interpretations of the Committee and its delegates will be conclusive.

 

All Bonus Awards are paid from the Company’s general assets.  No trust, account or other separate collection of amounts will be established for the payment of Bonus Awards under the Plan.  Bonus Awards are unfunded obligations of the Company, so if and when a Bonus Award becomes due, a participant’s rights to payment are no greater than the rights of a general unsecured creditor.

 

VIII.                     Other

 

This document sets forth the terms of the Plan and is not intended to be a contract or employment agreement between you or any other participant and the Company.  As applicable, it is understood that both you and the Company have the right to terminate your employment with the Company at any time, with or without cause and with or without notice, in acknowledgement of the fact that your employment relationship with the Company is “at will.”

 

IX.                              Glossary

 

As used in the Plan, the following words and terms, when capitalized, have the following meanings:

 

Adjusted Earnings Per Share means, with respect to a Performance Year, Adjusted Net Income divided by weighted average shares outstanding for the Performance Year (determined in accordance with generally accepted accounting principles).

 

Adjusted Net Income means the Company’s GAAP Net Income (as defined for purposes of the Boston Scientific Corporation 2011 Long-Term Incentive Plan) excluding goodwill and intangible asset impairments, acquisition, divestiture, and purchased research and development charges, restructuring expenses, certain tax-related items, and certain litigation and amortization expenses.

 

Affiliate means any corporation, trust, partnership, or any other entity that is considered to be a single employer with Boston Scientific Corporation under Code sections 414(b), (c), (m), or (o), such as a wholly-owned (or at least 80%-owned) subsidiary of Boston Scientific Corporation.

 

Aggregate Bonus Pool means, with respect to a Performance Year, the sum of the Target Annual Bonuses of all employees who are eligible to participate in the Plan for the Performance Year.

 

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Applicable Percentage means, with respect to a Performance Year, a percentage, determined by the Committee in accordance with the Corporate Performance Scale, which cannot be less than 50% or more than 150%.  The Applicable Percentage is used to determine the portion of the Aggregate Bonus Pool that the Company will pay out as the Total Annual Bonus for the Performance Year.

 

Assigned Bonus Pool means, with respect to a Business Group, Region, or Unit for a Performance Year, the portion of the Total Annual Bonus assigned to the Business Group, Region, or Unit to be paid as Bonus Awards for the Performance Year to eligible participants who worked for the Business Group, Region, or Unit during the Performance Year.

 

Board means the Board of Directors of Boston Scientific Corporation.

 

Bonus Award means, with respect to a participant for a Performance Year, the annual incentive bonus, if any, payable to the participant for the Performance Year, subject to the terms and conditions of the Plan.

 

Business Group means a functional or product-based area of the Company’s business, as designated by the Chief Executive Officer from time to time.

 

Chief Executive Officer means the Chief Executive Officer of Boston Scientific Corporation.

 

Code means the Internal Revenue Code of 1986, as amended, and its interpretive rules and regulations.

 

Committee means the Executive Compensation and Human Resources Committee of the Board.

 

Company means Boston Scientific Corporation and its Affiliates.

 

Compensation Management System means the software tool used by the Company for various compensation management purposes.

 

Corporate Performance Scale means, with respect to a Performance Year, the schedule used to determine, based on the extent of attainment of the performance goals for the Performance Year, the Applicable Percentage of the Aggregate Bonus Pool to be paid as the Total Annual Bonus for the Performance Year.  The Corporate Performance Scale must provide that the Applicable Percentage for a Performance Year cannot be less than 50%.

 

Current Executive Officer means any individual currently designated as an “officer” by the Board for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

 

Eligible International Employee means an international, international operations, or expatriate employee of the Company working in a position designated by the Company as eligible to participate in the Plan.

 

Eligible Service means periods in which you are considered, under the rules and procedures of the Company, to be in active service as a Regular Exempt Employee or Eligible International Employee (including, but not limited to, time away from work for approved vacation, recognized holidays, and FMLA leave).

 

Executive Officer means any Current Executive Officer or Former Executive Officer.

 

Former Executive Officer means any individual previously (but not currently) designated as an “officer” by the Board for purposes of Section 16 of the Securities Exchange Act of 1934, as amended.

 

Layoff means a layoff or similar involuntary termination from employment that renders you eligible for severance pay under a Company severance plan or applicable law.

 

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Payment Date means, with respect to a Performance Year, the date on which Bonus Awards for the Performance Year are paid to participants, which will be no later than March 15 of the following year.

 

Performance Metrics means Sales and Adjusted Earnings Per Share.

 

Performance Year means the 12-month period beginning on January 1 and ending on the following December 31.

 

Plan means the Boston Scientific Annual Bonus Plan, which is set forth in this document, as it may be amended from time to time.

 

Quality Assessment means the process undertaken by the Committee following the end of each Performance Year, to evaluate the Company’s progress made toward achievement of its quality objectives and the performance of the Company-wide quality system.

 

Region means a geographic region, as designated by the Chief Executive Officer from time to time, comprising a portion of the Company’s international business.

 

Regular Exempt Employee means an employee of the Company who is on the Company’s United States payroll and (1) classified by the Company as a regular full-time or regular part-time Employee; (2) performs a job that the Company has determined to be exempt from the minimum wage and overtime requirements of the Fair Labor Standards Act of 1938, as amended (FLSA); and (3) is not any of the following:

 

·                  classified by the Company as an intern, summer student, co-op employee, or similar short-term employee; or

 

·                  classified by the Company as a consultant, temporary or defined-term employee (such as temporary fellowship program employees), or similar category of limited-term employment, regardless of their work schedule or number of hours worked.

 

Sales means “BSC Global Sales” as that term is defined for purposes of the Boston Scientific Corporation 2011 Long-Term Incentive Plan, which measures sales using constant currency rates.

 

Scorecard means, with respect to a Performance Year, the tool used to establish performance measures and objectives with respect to a Business Group, Region, or Unit for the Performance Year.

 

Target Annual Bonus has the meaning given to that term in Article III.

 

Total Annual Bonus represents, with respect to a Performance Year, the total dollars to be paid out by the Company to all participating employees as Bonus Awards for the Performance Year.

 

Unit means a business unit of Business Group or Region, such as a plant or division (for a Business Group) or a country or group of countries (for a Region); the Units of a Business Group or Region may change from time to time.

 

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