-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, IptKTW2xnkmk3sX4T4lvFs19yLjergIQGksP47RWJc1ZP+x80punOrWH+SofGSza 3sYpgGYHUkjZylZ/AgihTQ== 0000910647-96-000095.txt : 19960705 0000910647-96-000095.hdr.sgml : 19960705 ACCESSION NUMBER: 0000910647-96-000095 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960703 SROS: NYSE FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOSTON SCIENTIFIC CORP CENTRAL INDEX KEY: 0000885725 STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS & APPARATUS [3841] IRS NUMBER: 042695240 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: 1934 Act SEC FILE NUMBER: 001-11083 FILM NUMBER: 96590663 BUSINESS ADDRESS: STREET 1: ONE BOSTON SCIENTIFIC PL CITY: NATICK STATE: MA ZIP: 01760-1537 BUSINESS PHONE: 5086508000 11-K 1 BODY OF FORM 11-K SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K ANNUAL REPORT PURSUANT TO SECTION 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 (Mark One): [X] Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (Fee Required) For the fiscal year ended December 31, 1995 OR [ ] Transition report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the transition period from to Commission file number: 1-11083 A. Full title of the plan and the address of the plan, if different from that of the issuer named below: Boston Scientific Corporation 401(k) Savings Plan (f/k/a Boston Scientific Corporation Long-Term Savings and Security Plan) B. Name of issuer of the securities held pursuant to the plan and the address of its principal executive office: Boston Scientific Corporation One Boston Scientific Place Natick, MA 01760-1537 AUDITED FINANCIAL STATEMENTS AND SCHEDULES BOSTON SCIENTIFIC CORPORATION LONG-TERM SAVINGS AND SECURITY PLAN Years ended December 31, 1995 and 1994 Boston Scientific Corporation Long-Term Savings and Security Plan Audited Financial Statements and Schedules Years ended December 31, 1995 and 1994 CONTENTS Report of Independent Auditors...............................................1 Audited Financial Statements Statements of Net Assets Available for Plan Benefits.........................2 Statements of Changes in Net Assets Available for Plan Benefits .............3 Notes to Financial Statements................................................4 Schedules Schedule of Assets Held for Investment Purposes..............................9 Schedule of Reportable Transactions ........................................10 Report of Independent Auditors 401(k) Plan Committee Boston Scientific Corporation Long-Term Savings and Security Plan We have audited the accompanying statements of net assets available for benefits of Boston Scientific Corporation Long-Term Savings and Security Plan (the Plan) as of December 31, 1995 and 1994, and the related statements of changes in net assets available for benefits for the years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits at December 31, 1995 and 1994, and the changes in net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the financial statements taken as a whole. The accompanying supplemental schedules of assets held for investment purposes as of December 31, 1995, and reportable transactions for the year then ended, are presented for purposes of complying with the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974, and are not a required part of the financial statements. The Fund Information in the statement of changes in net assets available for benefits is presented for the purpose of additional analysis rather than to present the changes in net assets available for benefits of each fund. The supplemental schedules and Fund Information have been subjected to the auditing procedures applied in our audit of the 1995 financial statements and, in our opinion, are fairly stated in all material respects in relation to the 1995 financial statements taken as a whole. ERNST & YOUNG LLP June 14, 1996 Boston Scientific Corporation Long-Term Savings and Security Plan Statements of Net Assets Available for Plan Benefits
DECEMBER 31 1995 1994 ----------- ----------- ASSETS Investments, at fair value: Money market assets $ 332,884 $ 321,301 Investment funds 30,946,607 21,692,040 Participants' notes receivable 1,252,842 908,315 ------------------------- 32,532,333 22,921,656 Receivables: Contributions receivable from participants 198,815 137,392 Contributions receivable from Plan Sponsor 134,301 112,506 Due from Fidelity Capital Appreciation Fund 4,432,662 ------------------------- Total assets 37,298,111 23,171,554 LIABILITIES Accrued expenses 12,878 5,424 ------------------------- Total liabilities 12,878 5,424 ------------------------- Net assets available for plan benefits $37,285,233 $23,166,130 =========================
See accompanying notes. Boston Scientific Corporation Long-Term Savings and Security Plan Statement of Changes in Net Assets Available for Plan Benefits Years ended December 31, 1995 and 1994
1995 ------------------------------------------------------------------------------------------------------ Fidelity Capital Fidelity Fidelity Appreci- Scudder Vanguard BSC A/R, Loans Combined Income Balanced Magellan ation Global Index Stock and Other Total Fund Fund Fund Fund Fund Trust Fund Balances ----------- ---------- ---------- ------------ ---------- ---------- ---------- ---------- ---------- Additions to net assets attributed to: Investment income: Interest and dividend income $ 1,732,897 $ 337,447 $ 217,402 $ 768,516 $ 332,574 $ 76 $ 411 $ 3,799 $ 72,672 Realized gains on sale of investments 556,923 25,755 191,858 290,139 49,171 Appreciation in fair value of investments 5,013,051 440,608 2,283,439 2,289,004 ------------------------------------------------------------------------------------------------------ 7,302,871 337,447 683,765 3,243,813 622,713 76 411 2,341,974 72,672 ------------------------------------------------------------------------------------------------------ Contributions: Contributions and roll- overs from participants 6,485,343 1,130,224 944,006 2,250,209 949,283 25,729 46,366 1,123,605 15,921 Contributions from Plan Sponsor 1,528,040 296,761 246,361 531,004 202,920 21,447 37,162 192,385 ------------------------------------------------------------------------------------------------------ 8,013,383 1,426,985 1,190,367 2,781,213 1,152,203 47,176 83,528 1,315,990 15,921 ------------------------------------------------------------------------------------------------------ Total additions 15,316,254 1,764,432 1,874,132 6,025,026 1,774,916 47,252 83,939 3,657,964 88,593 ------------------------------------------------------------------------------------------------------ Deductions from net assets attributed to: Benefits paid to participants 1,197,151 318,297 198,418 371,557 194,550 54,905 59,424 Realized losses on sale of investments Depreciation in fair value of investments ------------------------------------------------------------------------------------------------------ Total deductions 1,197,151 318,297 198,418 371,557 194,550 54,905 59,424 ------------------------------------------------------------------------------------------------------ Loans, transfers and other activity, net (56,048) (2,973,120) (1,020,525) (4,693,408) 2,637,625 4,489,875 1,300,243 315,358 ------------------------------------------------------------------------------------------------------ Net increase (decrease) in net assets available for plan benefits 14,119,103 1,390,087 (1,297,406) 4,632,944 (3,113,042) 2,684,877 4,573,814 4,903,302 344,527 Net assets available for plan benefits: Beginning of year 23,166,130 5,415,263 4,434,376 8,570,595 3,113,042 724,539 908,315 ------------------------------------------------------------------------------------------------------ End of year $37,285,233 $6,805,350 $3,136,970 $13,203,539 $2,684,877 $4,573,814 $5,627,841 $1,252,842 ====================================================================================================== 1994 ----------------------------------------------------------------------------------- Fidelity Fidelity Fidelity Capital BSC A/R, Loans Combined Income Balanced Magellan Appreciation Stock and Other Total Fund Fund Fund Fund Fund Balances ----------- ---------- ---------- ---------- ------------ -------- ---------- Additions to net assets attributed to: Investment income: Interest and dividend income $ 1,048,128 $ 263,569 $ 129,830 $ 289,701 $ 311,429 $ 111 $ 53,488 Realized gains on sale of investments 24,406 1,108 23,298 Appreciation in fair value of investments 151,997 151,997 --------------------------------------------------------------------------------- 1,224,531 263,569 129,830 289,701 312,537 175,406 53,488 --------------------------------------------------------------------------------- Contributions: Contributions and roll- overs from participants 4,760,556 866,540 992,455 1,924,706 786,033 190,822 Contributions from Plan Sponsor 1,277,577 262,230 271,899 496,560 198,607 48,281 --------------------------------------------------------------------------------- 6,038,133 1,128,770 1,264,354 2,421,266 984,640 239,103 --------------------------------------------------------------------------------- Total additions 7,262,664 1,392,339 1,394,184 2,710,967 1,297,177 414,509 53,488 --------------------------------------------------------------------------------- Deductions from net assets attributed to: Benefits paid to participants 860,025 228,652 224,241 258,858 114,582 12,466 21,226 Realized losses on sale of investments 22,030 12,434 9,596 Depreciation in fair value of investments 996,664 339,546 406,044 251,074 --------------------------------------------------------------------------------- Total deductions 1,878,719 228,652 576,221 674,498 365,656 12,466 21,226 --------------------------------------------------------------------------------- Loans, transfers and other activity, net 154,452 (172,174) (348,078) 385,548 913 (20,661) --------------------------------------------------------------------------------- Net increase (decrease) in net assets available for plan benefits 5,383,945 1,318,139 645,789 1,688,391 1,317,069 402,956 11,601 Net assets available for plan benefits: Beginning of year 17,782,185 4,097,124 3,788,587 6,882,204 1,795,973 321,583 896,714 --------------------------------------------------------------------------------- End of year $23,166,130 $5,415,263 $4,434,376 $8,570,595 $3,113,042 $724,539 $908,315 =================================================================================
See accompanying notes. Boston Scientific Corporation Long-Term Savings and Security Plan Notes to Financial Statements December 31, 1995 1. BOSTON SCIENTIFIC CORPORATION ACQUISITIONS During 1995, Boston Scientific Corporation (BSC or the Company) completed five strategic acquisitions. The Company merged the defined contribution plan of one of the acquired companies into the BSC Long-Term Savings and Security Plan (the Plan) during the 1995 Plan year. The defined contribution plan of another of the acquired companies is expected to be terminated in the third quarter of 1996, and the participants of which began contributing to the Plan during 1995. The defined contribution plan of another of the acquired companies was merged into the Plan on January 1, 1996. The defined contribution plans of the other two acquired company are expected to be merged into the Plan during the 1997 Plan year. 2. SIGNIFICANT ACCOUNTING POLICIES The accounting records of the Plan are maintained on the accrual basis. Investments are stated at fair value. Shares of mutual funds are valued at quoted market prices which represent the net asset value of shares held by the fund. Securities listed on a registered stock exchange are valued by the Plan Administrator, NYL Benefit Services Company, at the last reported sales price on the last business day of the year. Any unlisted securities are valued at their closing bid price. The participant notes receivable are valued at cost which approximates fair value. The net appreciation (depreciation) on investments represents the difference between the current value and costs of investments in the aggregate. The realized gain or loss on investments is the difference between the proceeds received and the cost of investments sold. The income fund includes guaranteed investment contracts issued by banks, insurance companies or other financial institutions pursuant to amounts deposited and interest at such fixed, variable or other rates specified under the terms of the agreement. Assets are valued at fair market value. A unit method will be used to determine the equitable share of each participating trust in the fund. Certain prior year amounts have been reclassified to conform to the current year's presentation. 3. DESCRIPTION OF THE PLAN The Plan is a defined contribution plan covering all eligible employees who have completed 6 months of service and have attained 21 years of age. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). A participant may contribute between 2% and 15% of his or her pretax annual compensation each year. Boston Scientific Corporation's matching contribution is 50% of the participant's contribution, up to 4% of eligible compensation, as defined. At the discretion of the Board of Directors of Boston Scientific Corporation, the Company may also make an additional discretionary contribution. Employees with three or more years of credited service on December 31, 1992 will be fully vested in such amounts and all other employees will become fully vested in such amounts after five years of credited service. No additional discretionary contribution was made in 1995 or 1994. A participant can allocate his or her account among various alternative investment funds. Each participant's account is credited with the participant's contribution, Boston Scientific Corporation's contribution and an allocation of plan earnings. The allocations of earnings are based upon each participant's account balance in relation to all participants' account balances. Each participant is immediately fully vested in his or her account. The benefit to which a participant is entitled is the benefit included in the participant's account. Vested balances related to terminated participants approximated $5,052,000 at December 31, 1995. A participant may borrow from his or her fund account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50% of his or her account balance. Loan terms range up to 5 years. However, participants of the defined contribution plans of the acquired companies may retain the loan terms granted under their respective plans. Loan terms related to these participants range up to 5 years or up to 10 years for the purchase of a primary residence. The loan is secured by the balance in the participant's account and bears interest at a rate commensurate with local prevailing rates as determined by the Plan Administrator. Interest rates on loans outstanding at December 31, 1995 ranged from 6.3% to 13.5%. Principal and interest is paid ratably through payroll deductions. Upon retirement or termination of service, a participant either receives a lump-sum amount equal to the value of his or her account or, if a participant's balance is greater than $3,500, he or she has the option of leaving the funds invested in the Plan. A participant may withdraw all or a portion of his or her contributions to the extent necessary to meet a financial hardship. Although it has not expressed any intent to do so, Boston Scientific Corporation has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. The foregoing description of the Plan provides only general information. Participants should refer to the "Summary Plan Description" for a more complete description of the Plan's provisions. Copies are available from the 401(k) Plan Committee. 4. INVESTMENTS PNC Bank (the Trustee) holds the funds to manage, invest and reinvest in accordance with provisions of the trustee's agreements. The fair values, as determined by quoted market prices, of individual investments that represent 5% or more of the Plan's net assets are as follows:
1995 1994 ---------------------------------------------------- NUMBER OF NUMBER OF SHARES FAIR VALUE SHARES FAIR VALUE ---------------------------------------------------- Bankers Trust Income Fund 6,592,690 $ 6,592,690 5,287,141 $5,287,141 Fidelity Balanced Fund 411,576 5,564,507 356,423 4,380,436 Fidelity Magellan Fund 157,552 13,546,287 127,960 8,547,737 Fidelity Capital Appreciation Fund 183,905 2,815,586 BSC Stock Fund 106,458 5,243,123 38,050 661,140
The balances per the Statements of Changes in Net Assets Available for Plan Benefits reflect participant balances, by fund, and do not necessarily reflect invested balances due to pending transfers. 5. TRANSACTIONS WITH PARTIES-IN-INTEREST Fees for legal, accounting and other services rendered during the year by parties-in-interest were paid by the Boston Scientific Corporation. These fees were based on customary and reasonable rates for such services. During 1995, Boston Scientific Corporation did not declare any dividends and accordingly, the Plan did not receive common stock dividends as a result of its BSC Stock Fund investment. 6. INCOME TAX STATUS The Internal Revenue Service has determined and informed the Company by letter dated July 9, 1992, that the Plan and related trust are designed in accordance with applicable sections of the Internal Revenue Code (IRC). The Company intends to file for a new determination letter during the 1997 plan year following the mergers of the defined contribution plans described in Footnotes 1 and 8. The Plan administrator and the Plan's tax counsel believe that the Plan is designed and is currently being operated in compliance with the applicable requirements of the IRC. 7. RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500 The accompanying financial statements have been prepared in accordance with generally accepted accounting principles, whereas the Form 5500 was prepared in accordance with the rules of ERISA. ERISA requires the calculation of realized gains (losses) to be based upon the difference between the proceeds from the asset sale and the fair value at the beginning of the year (or the purchase price if acquired during the year), whereas generally accepted accounting principles requires the calculation to be based on historical cost. The table below sets forth a reconciliation of the differences.
NET APPRECIATION IN FAIR REALIZED VALUE OF GAIN INVESTMENTS --------------------------- Balance per the Form 5500 $ 3,274,646 $ 2,295,328 Adjustments to reflect different calculation methods (2,717,723) (2,717,723) -------------------------- Balance per accompanying financial statements $ 556,923 $ 5,013,051 ==========================
The above differences have no impact on the Plan's net assets available for plan benefits as it represents a reclassification within investment income only. 8. SUBSEQUENT EVENTS During the first quarter of 1996, the Company completed two strategic acquisitions. The Company presently intends to merge the defined contribution plan of one of the acquired companies into the Plan during the 1996 Plan year and the other acquired company plan during the 1997 Plan year. The Plan was amended and restated effective January 1, 1996 and renamed the Boston Scientific Corporation 401(k) Savings Plan. Boston Scientific Corporation Long-Term Savings and Security Plan Schedule of Assets Held for Investment Purposes December 31, 1995
CURRENT SHARES OR UNITS COST VALUE --------------- ----------- ----------- Bankers Trust: Income Fund 6,592,690 $ 6,592,690 $ 6,592,690 Fidelity Funds: Balanced Fund 411,576 5,177,575 5,564,507 Magellan Fund 157,552 11,194,648 13,546,287 Boston Scientific Corporation:* Stock Fund 106,458 2,808,597 5,243,123 PNC Bank: Money Market Account 332,884 332,884 Participants' notes receivable with terms up to 10 years at interest rates of 6.3% to 13.5% 1,252,842 1,252,842 ------------------------- $27,359,236 $32,532,333 ========================= * Indicates party-in-interest to the Plan
Boston Scientific Corporation Long-Term Savings and Security Plan Schedule of Reportable Transactions Year Ended December 31, 1995
PURCHASE SELLING COST OF FAIR VALUE ON IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSETS PRICE PRICE ASSET TRANSACTION DATE GAIN - --------------------------- ---------------------- -------- ---------- ---------- ---------------- -------- Category (i)--A single transaction in excess of 5% of plan assets Fidelity Investments Fidelity Capital Appreciation Fund $4,432,662 $4,263,597 $4,432,662 $169,065
There were no category (ii) or (iv) reportable transactions during 1995. Boston Scientific Corporation Long-Term Savings and Security Plan Schedule of Reportable Transactions Year Ended December 31, 1995
TOTAL NUMBER OF TRANSACTIONS MADE BY THE PLAN DURING THE YEAR TOTAL DOLLAR TOTAL DOLLAR ----------------- VALUE OF VALUE OF IDENTITY OF PARTY INVOLVED DESCRIPTION OF ASSETS PURCHASES SALES PURCHASES SALES GAIN - --------------------------- --------------------- --------- ----- ------------ ------------ -------- Category (iii)--Series of transactions in excess of 5% of plan assets U.S. Bankers Trust Income Fund 42 38 $2,171,135 $ 865,586 Fidelity Investments Fidelity Balanced Fund 32 28 1,513,587 795,879 $ 25,755 Fidelity Investments Fidelity Magellan Fund 35 27 3,870,320 1,347,067 191,858 Fidelity Investments Fidelity Capital Appreciation Fund 33 27 1,840,398 5,022,032 290,139 Boston Scientific Corporation* BSC Stock Fund 87 56 4,595,810 2,352,002 49,171 * Represents a party-in-interest.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the trustee (or other persons who administer the employee benefit plan) have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. Boston Scientific Corporation 401(k) Savings Plan {f/k/a Boston Scientific Corporation Long-Term Savings and Security Plan) Date: July 2, 1996 By: /s/ Lawrence C. Best ----------------------------------------- Lawrence C. Best Plan Administrator and Senior Vice President- Finance and Administration and Chief Financial Officer of Boston Scientific Corporation EX-23 2 EXHIBIT 23--CONSENT OF ERNST & YOUNG LLP CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-89772) pertaining to the Long-Term Savings and Security Plan of Boston Scientific Corporation of our report dated June 14, 1996, with respect to the financial statements and schedules of the Boston Scientific Corporation Long-Term Savings and Security Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1995. ERNST & YOUNG LLP Boston, Massachusetts June 27, 1996 -----END PRIVACY-ENHANCED MESSAGE-----