-----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, ByLZgMqlcwJzMS7TOIyVUQgT+705Q+wAiZQB1h/p4yNw4KYMY52PfqFrDYY/Mi/t YX3KSALTSMQ4MC6fN20kPA== 0001072613-03-001022.txt : 20030630 0001072613-03-001022.hdr.sgml : 20030630 20030630160250 ACCESSION NUMBER: 0001072613-03-001022 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20021231 FILED AS OF DATE: 20030630 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: 03764470 BUSINESS ADDRESS: STREET 1: ONE BOSTON SCIENTIFIC PL CITY: NATICK STATE: MA ZIP: 01760-1537 BUSINESS PHONE: 5086508000 11-K 1 form11k_12019.txt FORM 11-K (YEAR ENDED 12/31/2002) ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 20549 FORM 11-K (Mark One): |X| Annual report pursuant to Section 15(d) of the Securities Exchange Act of 1934 (No Fee Required) For the fiscal year ended December 31, 2002 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) Retirement Savings 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 SUPPLEMENTAL SCHEDULE BOSTON SCIENTIFIC CORPORATION 401(K) RETIREMENT SAVINGS PLAN YEAR ENDED DECEMBER 31, 2002 BOSTON SCIENTIFIC CORPORATION 401(K) RETIREMENT SAVINGS PLAN AUDITED FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE YEAR ENDED DECEMBER 31, 2002 CONTENTS Report of Ernst & Young LLP, Independent Auditors.......................... 1 AUDITED FINANCIAL STATEMENTS Statements of Net Assets Available for Plan Benefits....................... 2 Statement of Changes in Net Assets Available for Plan Benefits............. 3 Notes to Financial Statements.............................................. 4 SUPPLEMENTAL SCHEDULE Schedule H, Line 4i - Schedule of Assets (Held at End of Year)............. 9 Report of Ernst & Young LLP, Independent Auditors 401(k) Plan Administration and Investment Committee and Participants Boston Scientific Corporation 401(k) Retirement Savings Plan We have audited the accompanying statements of net assets available for plan benefits of the Boston Scientific Corporation 401(k) Retirement Savings Plan (the Plan) as of December 31, 2002 and 2001, and the related statement of changes in net assets available for plan benefits for the year ended December 31, 2002. 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 auditing standards generally accepted in the United States. 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 of the Plan at December 31, 2002 and 2001, and the changes in its net assets available for plan benefits for the year ended December 31, 2002, in conformity with accounting principles generally accepted in the United States. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The accompanying supplemental schedule of assets (held at end of year) as of December 31, 2002, is presented for purposes of additional analysis and is not a required part of the financial statements but is supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedule is the responsibility of the Plan's management. The supplemental schedule has been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, is fairly stated in all material respects in relation to the financial statements taken as a whole. /s/ Ernst & Young LLP Boston, Massachusetts April 22, 2003 1 Boston Scientific Corporation 401(k) Retirement Savings Plan Statements of Net Assets Available for Plan Benefits DECEMBER 31 ----------------------------- 2002 2001 ------------ ------------ ASSETS Investments $328,424,527 $285,569,203 Receivables: Participant contributions 857,790 785,529 Employer contribution 1,899,792 1,438,809 ------------ ------------ Total receivables 2,757,582 2,224,338 ------------ ------------ Net assets available for plan benefits $331,182,109 $287,793,541 ============ ============ SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS. 2 Boston Scientific Corporation 401(k) Retirement Savings Plan Statement of Changes in Net Assets Available for Plan Benefits Year Ended December 31, 2002 Additions to net assets attributed to: Investment Income: Interest $ 2,203,419 Dividends 2,832,564 Net appreciation in fair value of investments 16,492,928 ------------ 21,528,911 Contributions: Participants 32,039,637 Employer 12,891,578 Participant Rollovers 2,536,227 Transfer of funds from other 401(k) plans 3,679,155 ------------ 51,146,597 ------------ Total additions 72,675,508 Deductions from net assets attributed to: Benefits paid to participants 29,205,540 Service fees 81,400 ------------ Total deductions 29,286,940 ------------ Net increase 43,388,568 Net assets available for plan benefits: Beginning of year 287,793,541 ------------ End of year $331,182,109 ============ SEE ACCOMPANYING NOTES TO THE FINANCIAL STATEMENTS. 3 Boston Scientific Corporation 401(k) Retirement Savings Plan Notes To Financial Statements December 31, 2002 1. DESCRIPTION OF THE PLAN The following description of the Boston Scientific Corporation (the Company) 401(k) Retirement Savings Plan (the Plan) provides only general information. Participants should refer to the Summary Plan Description and the Plan for a more complete description of the Plan's provisions, including defined terms. Copies are available from the 401(k) Plan Administration and Investment Committee (the Committee). GENERAL The Plan is a defined contribution plan covering all eligible employees who have completed thirty days of service and have attained twenty-one years of age. It is subject to the provisions of the Employee Retirement Income Security Act of 1974 (ERISA). During 2002, assets totaling $3,679,155 from four Company acquisitions made during 2001 were merged into the Plan. Interventional Technologies, Inc. 401(k) Plan $2,878,310 RadioTherapeutics Corporation 401(k) Plan 483,160 Catheter Innovations, Inc. 401(k) Retirement Savings Plan 237,683 Quanam Medical Corporation 401(k) Plan 80,002 ---------- $3,679,155 ========== CONTRIBUTIONS A participant may contribute between 1% and 15% of his or her pre-tax annual compensation, as defined in the Plan document, up to established federal limits. In addition, a participant may contribute between 1% and 10% of his or her compensation on an after-tax basis each year. Effective January 1, 2003, the Plan was amended to allow non-highly compensated employees, to contribute between 1% and 25% of his or her annual pre-tax compensation. The Company's matching contribution shall be equal to (i) 100% of the elective pre-tax contributions made on behalf of the participant for the period which do not exceed 2% of the participant's compensation for such period, plus (ii) 50% of the elective pre-tax contributions made on behalf of the participant for the period which exceed 2% but do not exceed 4% of the participant's compensation. The Plan also provides for an investment fund to hold shares of Pfizer Inc. (Pfizer) common stock transferred from the Pfizer Savings and Investment Plan for former Schneider employees. The Company acquired Schneider Worldwide in September 1998. No contributions can be made to this fund and any earnings on this fund will be allocated to a participant's current investment elections under the Plan. A participant can transfer amounts out of the Pfizer stock fund to other investment funds within the Plan. 4 Boston Scientific Corporation 401(k) Retirement Savings Plan Notes To Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) At the discretion of the Board of Directors of the Company, the Company may make an additional discretionary contribution. Employees with three of 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 (20% vesting after each year). No additional discretionary contribution was made in 2002. PARTICIPANT ACCOUNTS AND VESTING A participant can allocate his or her account among various investment funds. Each participant's account is credited with the participant's contribution, the Company's contribution and an allocation of Plan earnings. Each participant is fully vested in his or her account, except as discussed above regarding discretionary contributions. The benefit to which a participant is entitled is the benefit included in the participant's account. PARTICIPANT LOANS A participant may borrow from his or her account a minimum of $1,000 up to a maximum equal to the lesser of $50,000 or 50 percent of his or her account balance. Loan terms range up to 5 years or up to 10 years for the purchase of a primary residence. However, participants of the defined contribution plans of acquired companies may retain the loan terms granted under their former plans. Loans are secured by the balance in the participant's account and bear interest at a rate commensurate with local prevailing rates as determined by the Committee. Principal and interest are repaid ratably through payroll deductions. PAYMENT OF BENEFITS Upon termination of service, a participant receives a lump-sum amount equal to the value of his or her account. Effective May 1, 2002, the Plan no longer allows annuity and installment forms of distributions for participants who terminated employment on or after May 1, 2002 or terminated their employment before May 1, 2002, but had not yet begun receiving their Plan benefits by that date. If a terminated participant's account is valued at and remains in excess of $5,000 (minus any rollover amounts), he or she has the option of leaving the funds invested in the Plan until attaining the age of 62. While employed at the Company, a participant may withdraw all or a portion of his or her 401(k) account to the extent necessary to meet a financial hardship, as defined in the Plan. The Plan also allows withdrawals from after-tax and rollover accounts, for any reason, and allows disabled participants, as defined in the Company's group long-term disability contract, to take withdrawals at any time regardless of age. Participants may also make withdrawals for any reason after attaining age 59 1/2. 5 Boston Scientific Corporation 401(k) Retirement Savings Plan Notes To Financial Statements (continued) 1. DESCRIPTION OF THE PLAN (CONTINUED) PLAN TERMINATION Although it has not expressed any intent to do so, the Company has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES BASIS OF ACCOUNTING The accounting records of the Plan are maintained on the accrual basis. INVESTMENT VALUATION AND INCOME RECOGNITION The Plan's investments are stated at fair value. Shares of registered investment companies are valued at quoted market prices, which represent the net asset value of shares held by the Plan at year-end. Units of the Retirement Savings Trust are valued at net asset value at year-end. Securities listed on a registered stock exchange are valued by the Plan Administrator at the last reported sales price on the last business day of the Plan year. Participant notes receivable are valued at cost, which approximates fair value. Purchases and sales of investments are recorded on a trade-date basis. Interest income is accrued when earned. Dividend income is recorded on the ex-dividend date. Capital gain distributions are included in dividend income. USE OF ESTIMATES The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of additions and deductions during the reporting period. Actual results could differ from these estimates. 6 Boston Scientific Corporation 401(k) Retirement Savings Plan Notes To Financial Statements (continued) 3. INVESTMENTS The following investments represent 5 percent or more of the Plan's net assets. DECEMBER 31, -------------------------- 2002 2001 ------------ ------------ Boston Scientific Corporation Common Stock Fund $125,927,566 $ 77,771,753 Vanguard 500 Index Fund 45,208,343 52,724,101 Vanguard U.S. Growth Fund 25,837,900 37,240,298 Vanguard Retirement Savings Trust 39,867,734 24,363,100 Pfizer Common Stock -- 23,376,027 Vanguard Wellington Fund 21,594,882 19,508,308 During 2002, the Plan's investments (including gains and losses on investments bought and sold, as well as held during the year) appreciated in value by $16,492,928 as follows: Mutual funds $(37,575,587) Common stock 54,068,515 ------------ $ 16,492,928 ============ 4. TRANSACTIONS WITH PARTIES-IN-INTEREST The Plan invests in shares of mutual funds managed by an affiliate of Vanguard Fiduciary Trust Company (Vanguard). Vanguard acts as trustee for only those investments as defined by the Plan. Transactions in such investments qualify as party-in-interest transactions, which are exempt from the prohibited transaction rules. Fees for legal, accounting and other services rendered during the year by parties-in-interest were paid by the Company. 7 Boston Scientific Corporation 401(k) Retirement Savings Plan Notes To Financial Statements (continued) 5. INCOME TAX STATUS During 2002, the Plan was amended and restated effective January 1, 2001. The Plan has received a determination letter from the Internal Revenue Service dated March 4, 2002, stating that the Plan is qualified under Section 401(a) of the Internal Revenue Code (the Code) and, therefore, the related trust is exempt from taxation. Once qualified, the Plan is required to operate in conformity with the Code to maintain its qualification. The Plan Sponsor has indicated that it will take the necessary steps, if any, to maintain the Plan's qualified status. 6. SUBSEQUENT EVENT Subsequent to year-end, assets totaling $144,052 from a Company acquisition made during 2002 were merged into the Plan. 8 Boston Scientific Corporation 401(k) Retirement Savings Plan EIN #04-2695240 Plan #001 Schedule H, Line 4i - Schedule of Assets (Held at End of Year) December 31, 2002 Current Identity of Issue Shares or Units Value - ----------------- --------------- ------------ INVESCO: Dynamics Fund 717,875 $ 7,652,546 * Vanguard Group: 500 Index Fund 557,096 45,208,343 Total Bond Market Index Fund 1,372,792 14,249,585 International Growth Fund 1,041,422 12,663,686 U.S. Growth Fund 2,142,446 25,837,900 Wellington Fund 879,270 21,594,882 Windsor II Fund 563,768 11,726,370 Retirement Savings Trust 39,867,734 39,867,734 * Boston Scientific Corporation Common Stock Fund 2,961,608 125,927,566 Pfizer Common Stock Fund 471,782 14,422,381 T. Rowe Small-Cap Stock Fund-Advisor Class 16,196 347,249 * Participants' notes receivable 5.25% - 10.75% 8,926,285 ------------ $328,424,527 ============ * Indicates party-in-interest to the Plan. 9 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) Retirement Savings Plan Date: June 30, 2003 By: /s/ Lawrence C. Best ------------------------------- Lawrence C. Best Member, 401(k) Plan Administration and Investment Committee EX-23.1 3 exh23-1_12019.txt ERNST & YOUNG CONSENT EXHIBIT 23.1 ------------ CONSENT OF INDEPENDENT AUDITORS We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-89772) pertaining to the Boston Scientific Corporation 401(k) Retirement Savings Plan of our report dated April 22, 2003, with respect to the financial statements and schedule of the Boston Scientific Corporation 401(k) Retirement Savings Plan included in this Annual Report (Form 11-K) for the year ended December 31, 2002. /s/ ERNST & YOUNG LLP Boston, Massachusetts June 24, 2003 EX-99.1 4 exh99-1_12019.txt CERTIFICATION EXHIBIT 99.1 ------------ CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 11-K of the Boston Scientific Corporation 401(k) Retirement Savings Plan (the "Plan") for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned member of the 401(k) Plan Administration and Investment Committee hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that based on his knowledge: (1) the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. By: /s/ Robert G. MacLean ------------------------------------------ Robert G. MacLean Member, 401(k) Plan Administration and Investment Committee Boston Scientific Corporation 401(k) Retirement Savings Plan Dated: June 30, 2003 EX-99.2 5 exh99-2_12019.txt CERTIFICATION EXHIBIT 99.2 ------------ CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350 AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002 In connection with the Annual Report on Form 11-K of the Boston Scientific Corporation 401(k) Retirement Savings Plan (the "Plan") for the period ending December 31, 2002 as filed with the Securities and Exchange Commission on the date hereof (the "Report"), the undersigned member of the 401(k) Plan Administration and Investment Committee hereby certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 that based on his knowledge: (1) the Report fully complies with the requirements of Section 13 (a) or 15 (d) of the Securities Exchange Act of 1934; and (2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Plan. By: /s/ Lawrence C. Best --------------------------------------------- Lawrence C. Best Member, 401(k) Plan Administration and Investment Committee Boston Scientific Corporation 401(k) Retirement Savings Plan Dated: June 30, 2003 -----END PRIVACY-ENHANCED MESSAGE-----