BOSTON SCIENTIFIC CORP - 10-K Annual Report

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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

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FORM 10-K

ANNUAL REPORT PURSUANT TO
SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31, 2001 Commission File No. 1-11083
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BOSTON SCIENTIFIC CORPORATION
(EXACT NAME OF COMPANY AS SPECIFIED IN ITS CHARTER)

DELAWARE 04-2695240
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)

ONE BOSTON SCIENTIFIC PLACE, NATICK, MASSACHUSETTS 01760-1537
(ADDRESS, INCLUDING ZIP CODE, OF PRINCIPAL EXECUTIVE OFFICES)

(508) 650-8000
(COMPANY'S TELEPHONE NUMBER, INCLUDING AREA CODE)

Securities registered pursuant to Section 12(b) of the Act:

COMMON STOCK, $.01 PAR VALUE PER SHARE
(TITLE OF CLASS)

Securities registered pursuant to Section 12(g) of the Act:

NONE

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Indicate by check mark whether the Company (1) has filed all reports required to
be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Company was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.

Yes X No ______
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of Company's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to the
Form 10-K. / /

The aggregate market value of Common Stock held by non-affiliates (persons
other than directors, executive officers, and related family entities) of the
Company was approximately $7.5 billion based on the closing price of the
Common Stock on March 15, 2002.

The number of shares outstanding of the Company's Common Stock as of March
15, 2002 was 402,794,350.

DOCUMENTS INCORPORATED BY REFERENCE

The Company's 2001 Consolidated Financial Statements for the year ended December
31, 2001 which are filed with the Securities and Exchange Commission (the
"Commission") as an exhibit hereto and the Company's 2002 Proxy Statement to be
filed with the Securities and Exchange Commission on or about April 5, 2002 are
incorporated by reference into Parts I, II and III hereof.

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PART I

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ITEM 1. BUSINESS

THE COMPANY

Boston Scientific Corporation (the "Company") is a worldwide developer,
manufacturer and marketer of less-invasive medical devices. The Company's
products are used in a broad range of interventional medical specialties,
including interventional cardiology, electrophysiology, gastroenterology,
neurovascular intervention, pulmonary medicine, interventional radiology,
oncology, urology and vascular surgery. The Company's products are generally
inserted into the human body through natural openings or small incisions in the
skin and can be guided to most areas of the anatomy to diagnose and treat a wide
range of medical problems. These products provide effective alternatives to
traditional surgery by reducing risk, trauma, cost, procedure time and the need
for aftercare.

The Company's history began in the late 1960s when the Company's co-founder,
John Abele, acquired an equity interest in Medi-tech, Inc., a development
company. Medi-tech's initial products, a family of steerable catheters, were
introduced in 1969. They were used in some of the first less-invasive procedures
performed, and versions of these catheters are still being sold today. In 1979,
John Abele joined with Pete Nicholas to form the Company, which indirectly
acquired Medi-tech, Inc. This acquisition began a period of active, focused
marketing, new product development and organizational growth. Since then, the
Company's net sales have increased substantially, growing from $1.8 million in
1979 to almost $2.7 billion in 2001.

The Company's growth has been fueled in part by strategic acquisitions and
alliances designed to improve the ability of the Company to take advantage of
growth opportunities in less-invasive medicine. These acquisitions have helped
the Company to achieve a strategic mass which allows it to offer one of the
broadest product lines in the world for use in less-invasive procedures. The
Company's strategic mass has also enabled it to compete more effectively in, and
better absorb the pressures of, the current health care environment of cost
containment, managed care, large buying groups and hospital consolidations.

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SIGNIFICANT 2001 EVENTS

During 2001, the Company received 22 product approvals and clearances from the
U.S. Food and Drug Administration ("FDA") and 25 CE Mark approvals in Europe.

The Company's internally developed Express(TM) coronary stent was launched in
European and international markets during September 2001. The Express stent is a
laser cut, balloon-expandable stent designed and built to meet the real-world
needs of clinicians. The technology has also been designed so that it may be
leveraged by the Company for use as the platform for additional product
offerings in interventional cardiology, peripheral vascular and neurovascular
interventions.

The Company also made progress during the year on its TAXUS(TM) drug-eluting
coronary stent program. The Company has planned numerous TAXUS trials to test
the safety and efficacy of its new stent technology under a wide range of
clinical conditions in several countries. The Company expects to launch the
TAXUS paclitaxel-eluting stent for the treatment of coronary artery disease.

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During 2001, the Company also completed several strategic acquisitions and
alliances, each intended to further expand the Company's ability to offer its
customers effective, quality medical devices that satisfy their interventional
needs. Over the last year, the Company completed the following acquisitions and
added new or complementary technologies to its already diverse portfolio:

>
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* Cardiac Pathways Corporation Chilli(R) Cooled Ablation Catheter and Realtime Position Management(R)
System technologies broaden existing product line and bring highly
advanced diagnostic and treatment tools to electrophysiology
laboratories.
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* Catheter Innovations, Inc. Expands the Company's technology portfolio in the $500 million venous
access market.
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* Embolic Protection, Inc. Marks the Company's entry into the U.S. embolic protection market with
a proprietary technology for interventional cardiovascular procedures.
Also develops carotid endovascular therapies for the prevention of
stroke.
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* Interventional Technologies, Inc. Unique, proprietary Cutting Balloon(R) device combines the features of
conventional angioplasty with advanced microsurgical procedures.
Additional metallurgy technologies have broad applications to numerous
Company products.
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* Quanam Medical Corporation Broadens Company's drug-delivery portfolio with an additional
implant-based, drug-delivery technology and a family of proprietary
biomaterials.
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* RadioTherapeutics Corporation Expands the Company's oncology technology portfolio with proprietary
radiofrequency-based therapeutic devices in the field of interventional
oncology for the ablation (destruction) of various forms of soft-tissue
lesions (tumors).
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The Company also focused on key clinical trials involving its core technologies
as well as technologies recently acquired. The trials have been designed to
study the safety and efficacy of new products or new uses for existing products.
Significant clinical programs include:

* TAXUS - A series of clinical trials designed to assess the
safety and efficacy of the Company's TAXUS(TM)drug-eluting
stent under a wide range of clinical conditions. Six- and
nine-month follow up results of the TAXUS I trial, a trial
designed to assess the safety of a slow-release dose
formulation paclitaxel-eluting stent, confirmed safety, and
showed zero percent thrombosis and zero percent restenosis.
TAXUS I is the first of several Company-sponsored
paclitaxel-eluting stent clinical trials. The remaining TAXUS
trials are at various stages of completion or have yet to
commence. In March 2002, the Company reported that
preliminary results from its TAXUS II and III trials have
provided further support for the safety of its
paclitaxel-eluting stent. The Company also announced that it
received approval from the FDA to initiate the TAXUS IV
trial, a trial designed to support product commercialization
in the U.S.

* Express(TM)and Express2(TM)coronary stent systems - During
2001, the Company initiated clinical trials in the United
States and Europe to study the safety and efficacy of its
Express and Express2 coronary stent systems. Following the
completion of these trials, in March 2002, the Company filed
an application with the FDA for pre-market approval of these
products. The Express stent is the company's newest
internally developed coronary stent and is designed to
provide outstanding performance by optimizing flexibility,
deliverability and scaffolding characteristics. The Express2
stent system is an Express stent combined with the Company's
advanced Maverick(R)balloon catheter technology and features
a laser-bonded, flexible tip with a long, low profile
designed for easier tracking.

* Filterwire EX(TM) embolic protection device - Two U.S.
clinical trials are in progress, designed to evaluate
the benefits of stenting in conjunction with embolic
protection for the treatment of carotid artery disease and
saphenous vein grafts.

BUSINESS STRATEGY

The Company's mission is to improve the quality of patient care and the
productivity of health care delivery through the development and advocacy of
less-invasive medical devices and procedures. The Company seeks to accomplish
this mission through the continuing refinement of existing products and
procedures and the investigation and development of new technologies which can
reduce risk, trauma, cost, procedure time and the need for aftercare. The
Company's strategy has been, and will continue to be, to grow by identifying
those specific therapeutic and

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diagnostic areas which satisfy the Company's mission and by making the
investments necessary to capitalize on these opportunities. During 2001, the
Company executed its growth strategy by enhancing its internal development
programs as well as adding to its existing technology portfolio through external
acquisition and licensing activity. The Company will continue to seek out and
review opportunities for acquisitions and strategic alliances consistent with
its corporate mission.

Key elements of the Company's overall business strategy are as follows:

PRODUCT DIVERSITY. The Company offers products in numerous product categories
which are used by physicians throughout the world in a broad range of diagnostic
and therapeutic procedures. The breadth and diversity of the Company's product
lines permit medical specialists to satisfy many of their less-invasive medical
device requirements from a single source.

INNOVATION. The Company is committed to driving growth through harnessing
technological innovation both in the near and long term. The Company's approach
to enhancing innovation includes a mixture of tactical and strategic initiatives
that are designed to offer sustainable growth. Combining internally developed
products and technologies with those obtained through acquisition and licensing
arrangements allows the Company to focus on and deliver new products currently
in its pipeline as well as strengthen the Company's technology portfolio and
development processes and tools.

CLINICAL EXCELLENCE. The Company's commitment to innovation is further
demonstrated by its rapidly expanding clinical capabilities. The Company's
clinical teams have been organized by therapeutic specialty to better align with
research and development, marketing and sales teams. During 2001, the clinical
teams focused clinical trials that support regulatory requirements and
demonstrate safe and effective clinical performance of products and technologies
with the greatest market potential.

OPERATIONAL EXCELLENCE. The Company believes that improving its supply chain
effectiveness, strengthening its manufacturing processes and optimizing its
plant network will increase operational efficiencies within the organization and
generate savings. By centralizing its operations at the corporate level and
shifting global manufacturing along product lines, the Company will be better
positioned to leverage its existing resources and concentrate on new product
development and launch.

FOCUSED MARKETING. Each of the Company's business groups maintain dedicated
sales forces and marketing teams focusing on physicians who specialize in the
diagnosis and treatment of different medical conditions and offer products to
satisfy their needs. The Company believes that this focused disease state
management enables it to develop highly knowledgeable and dedicated sales
representatives and to foster close professional relationships with physicians.

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ACTIVE PARTICIPATION IN THE MEDICAL COMMUNITY. The Company believes that it has
excellent working relationships with physicians and others in the medical
industry which enable it to gain a detailed understanding of new therapeutic and
diagnostic alternatives, and to respond quickly to the changing needs of
physicians and patients. Active participation in the medical community
contributes to physician understanding and adoption of less-invasive techniques
and the expansion of these techniques into new therapeutic and diagnostic areas.

CORPORATE CULTURE. Management believes that success and leadership evolve from a
motivating corporate culture which rewards achievement, respects and values
individual employees and customers, and has a long-term focus on quality,
technology, integrity and service. The Company believes that its success is
attributable in large part to the high caliber of its employees and the
Company's commitment to respecting the values on which its success has been
based.

PRODUCTS

The Company's products are offered by two dedicated business groups -
Cardiovascular and Endosurgery. The Cardiovascular organization focuses on
products and technologies for use in the Company's interventional cardiology,
interventional radiology, peripheral vascular and neurovascular procedures. The
Endosurgery organization focuses on products and technologies for use growth in
oncology, vascular surgery, endoscopy, urology and gynecology procedures. During
2001, approximately 69% of the Company's net sales were derived from the
Company's Cardiovascular business and approximately 31% from its Endosurgery
business.

The Company's principal Cardiovascular and Endosurgery products are offered in
the following medical areas:

CARDIOVASCULAR

CORONARY REVASCULARIZATION. The Company markets a broad line of products used to
treat patients with atherosclerosis. Atherosclerosis, a coronary vessel disease
and a principal cause of heart attacks, is characterized by a thickening of the
walls of the arteries and a narrowing of arterial lumens (openings) caused by
the progressive development of deposits of plaque. The majority of the Company's
products in this market are used in percutaneous transluminal coronary
angioplasty ("PTCA") and percutaneous transluminal coronary rotational
atherectomy and include PTCA balloon catheters, the Rotablator(R) and
Rotalink(R) rotational atherectomy systems, guide wires, guide catheters and
diagnostic catheters.

During 2001, the Company introduced the Maverick(R) balloon dilatation catheter
for commercial sale in the United States, Japan and certain European markets.
With the needs of clinicians in mind, the Maverick balloon catheter was designed
to provide enhanced crossabililty (the ability

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of the catheter or delivery system to track and get through difficult lesions).
The catheter features TrakTip(TM) technology, a soft tubing that is attached to
the end of the balloon using the Company's patented laser-bonding technology.
The material of the TrakTip is resilient and exceptionally flexible, enhancing
trackability.

During the year, the Company also added the Cutting Balloon(R) catheter, a
balloon angioplasty device that combines features of conventional angioplasty
with advanced microsurgical technology, to its interventional cardiology
product offerings through the Company's acquisition of Interventional
Technologies, Inc. ("IVT").

CORONARY STENTS. The Company markets both balloon-expandable and self-expanding
coronary stent systems. Coronary stents are tiny, metal devices used in the
treatment of coronary artery disease and implanted in patients to prop open
arteries and facilitate blood flow to the heart.

During 2000, the Company expanded its stent development efforts to include an
internally developed stent platform - the Express(TM) stent which was launched
in European and other international markets during September 2001. The Express
stent is a laser-cut balloon-expandable stent that features a new design concept
called Tandem(TM) architecture (the integration of two separate structural
elements into a single design for enhanced deliverability, conformability and
consistent vessel support). Generations of the Express stent are designed to be
leveragable into coronary, peripheral and neurovascular applications. The
Company anticipates launching the Express stent in the United States during the
second half of 2002 pending regulatory approval.

Despite the significant improvement stents offer over traditional balloon
angioplasty for the treatment of coronary artery disease, in-stent restenosis -
the regrowth of diseased tissue into a previously stented artery - continues to
be a serious challenge for clinicians. In-stent restenosis occurs after
approximately 15-20 percent of all stent placements and can reach as high as 50
percent in complex lesions. Many patients with complex coronary artery disease
suffer from in-stent restenosis. The Company believes that the combination of
drugs and coronary stents offers the possibility of a more lasting solution for
coronary artery disease, particularly the occurrence of in-stent restenosis.

Through a strategic alliance with Angiotech Pharmaceuticals, Inc., the Company
holds a co-exclusive license for the use of paclitaxel on intraluminal devices
to inhibit restenosis as well as other applications. Paclitaxel is an active
component of a chemotherapeutic agent and has demonstrated promising results in
pre-clinical studies for reducing the processes leading to restenosis. During
2001, the Company entered into an exclusive agreement with Natural
Pharmaceuticals, Inc. for the supply of paclitaxel for use in a wide range of
drug-delivery devices.

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The Company is currently conducting several clinical trials - known as TAXUS -
involving the Company's drug-eluting stent technology. This TAXUS(TM)
drug-eluting stent is designed to provide direct delivery of paclitaxel through
a polymer on a stent at the desired location with a predictable and controlled
release to reduce restenosis. Six- and nine-month follow up results of the
Company's TAXUS I trial, a trial designed to assess the safety of a slow-release
dose formulation paclitaxel-eluting stent, confirmed safety, and showed zero
percent thrombosis and zero percent restenosis. The Company expects to launch a
paclitaxel-eluting stent in certain international markets during 2002, in Europe
in late 2002 or early 2003 and in the U.S. in late 2003 pending regulatory
approval.

The Company also markets stents and stent delivery systems which incorporate the
NIR(R) balloon-expandable coronary stent, a product developed and manufactured
by Medinol Ltd., Israel with which the Company has an exclusive worldwide
distribution agreement covering stent products.

FLUID MANAGEMENT. The Company markets a broad line of fluid delivery sets,
pressure monitoring systems, custom kits and accessories that provide for the
injection of contrast and saline, or withdrawal and the disposal of bodily
waste.

ELECTROPHYSIOLOGY. The Company's electrophysiology product offerings include
catheters and systems for use in less-invasive procedures to diagnose and treat
tachyarrhythmias (abnormally fast heart rhythms). The Company markets RF
generators, mapping systems, intracardiac ultrasound and steerable ablation
catheters, many of which incorporate proprietary steering, temperature
monitoring and control technology, as well as a line of diagnostic catheters and
associated accessories. The Chilli(R) cooled ablation catheter and Realtime
Position Management(R) system are important additions to the Company's
electrophysiology product portfolio through the Company's 2001 acquisition of
Cardiac Pathways Corporation. These products are designed for ablating
(neutralizing) the tissue in the heart that is responsible for starting or
maintaining the tachyarrhythmia and for navigating EP catheters within the
heart.

PERIPHERAL VASCULAR INTERVENTION AND VENOUS ACCESS. The Company sells various
products designed to treat patients with peripheral vascular disease (disease
which appears in blood vessels other than in the heart), including a broad line
of medical devices used in percutaneous transluminal angioplasty and
thrombolysis (the catheter-based delivery of clot dissolving agents directly to
the site of a blood clot). Additionally, the Company's peripheral vascular
product line includes balloon catheters, thrombectomy catheters, and stents
(including the Wallstent(R) endoprosthesis). During the year, the Company's
product offerings in its venous access line have increased through the Company's
acquisition of Catheter Innovations, Inc. and now include both valved and
non-valved product offerings.

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EMBOLIC PROTECTION. One of the most promising areas in interventional
medicine is embolic protection. In February of 2001, the Company acquired
Embolic Protection, Inc., a developer and manufacturer of embolic protection
filters, including the FilterWire EX(TM) device. This device is designed to
capture material dislodged into the bloodstream during cardiovascular
interventions, potentially preventing a heart attack or stroke. The
FilterWire EX was introduced for use in coronary, carotid and saphenous vein
graft applications in certain European markets during 2001. The Company also
announced during 2001 that it entered into a series of agreements with
ENDOTEX Interventional Systems, Inc. The Company and ENDOTEX have agreed to
collaborate on clinical trials that will study the use of the ENDOTEX carotid
stent (the NEXSTENT(TM)) in combination with the Company's Filterwire embolic
protection device to treat carotid artery disease. The Company will also
serve as the primary distributor for ENDOTEX in international markets.

CAVAL INTERRUPTION SYSTEMS. The Company markets the Greenfield(R) vena cava
filter system for use in patients who are at risk of developing a pulmonary
embolism due to an existing medical condition or post-surgical complications.
Once the filter is implanted, circulating emboli (blood clots) can be captured
and held by the lattice design of the filter, allowing the clots to dissolve
naturally before they can reach the pulmonary system.

INTRALUMINAL ULTRASOUND IMAGING. The Company markets a family of intraluminal
catheter-directed ultrasound imaging catheters and systems for diagnostic use in
blood vessels, heart chambers and coronary arteries, as well as certain
nonvascular systems.

NEUROVASCULAR INTERVENTIONS. The Company markets a line of micro-guidewires,
micro-catheters, guiding catheters and embolics to treat diseases of the
neurovascular system. The Company also markets the GDC(R) (Guglielmi Detachable
Coil) system to treat and prevent the rupture of cerebral aneurysms that are
otherwise either considered to be inoperable or high risk for surgery. During
2001, the Company exercised a pre-existing option to acquire Smart Therapeutics,
Inc., a company that has developed a stent system for treating "wide neck"
aneurysms, which are among the most difficult to treat. The combination of
Smart's stent and the Company's GDC coil may provide a less-invasive treatment
alternative for patients whose only previous option may have been open surgery.

ENDOSURGERY

ESOPHAGEAL, GASTRIC AND DUODENAL (SMALL INTESTINE) INTERVENTION. The Company
markets a broad range of products to diagnose, treat and palliate a variety of
gastrointestinal diseases and conditions, including those affecting the
esophagus, stomach and colon. Common disease states include esophogitis, gastric
esophageal reflux disease ("GERD"), portal hypertension, peptic ulcers and
esophageal cancer. The Company's products in this area include disposable single
and multiple biopsy forceps, balloon dilatation catheters devices and enteral
feeding devices. The

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Company also markets a family of esophogeal stents designed to offer improved
dilatation force and greater resistance to tumor in-growth. During the first
quarter of 2001, the Company signed an agreement with Enteric Medical
Technologies, Inc. ("EMT") providing for the exclusive distribution of EMT's
Enteryx(TM) liquid polymer technology which is designed to treat symptoms
associated with chronic GERD. The agreement grants the Company exclusive
distribution rights in certain international markets, including most European
countries and Japan, and also includes an exclusive option to purchase EMT.

COLORECTAL INTERVENTION. The Company markets a line of hemostatic catheters,
polypectomy snares, biopsy forceps, enteral stents and dilatation catheters for
the diagnosis and treatment of polyps, inflammatory bowel disease,
diverticulitis and colon cancer.

PANCREATICO-BILIARY INTERVENTION. The Company sells a variety of products to
diagnose, treat and palliate benign and malignant strictures of the
pancreatico-biliary system (the gall bladder, common bile duct, hepatic duct,
pancreatic duct and the pancreas) and to remove stones found in the common bile
duct. The Company's products include diagnostic catheters used with contrast
media, balloon dilatation catheters and sphincterotomes. The Company also
markets self-expanding metal and temporary biliary stents for palliation and
drainage of the common bile duct.

PULMONARY INTERVENTION. The Company markets devices to diagnose, treat and
palliate chronic bronchitis and lung cancer, including pulmonary biopsy forceps,
stents and balloon catheters used to dilate strictures or for tumor management.
Included in this product offering is the Company's Wallgraft(R) Tracheobronchial
Endoprosthesis, a covered Wallstent(R) device designed to treat tracheobronchial
strictures.

URINARY TRACT INTERVENTION. The Company sells a variety of products designed
primarily to treat patients with urinary stone disease, including ureteral
dilatation balloons used to dilate strictures or openings for scope access;
stone baskets used to manipulate or remove the stone; intracorporeal shock wave
lithotripsy devices and holmium laser systems used to disintegrate stones
ureteroscopically; ureteral stents implanted temporarily in the urinary tract to
provide short-term or long-term drainage; and a wide variety of guidewires used
to gain access to a specific site. During 2001, the Company announced its
alliance with ESC Medical Systems, Ltd. (Lumenis, Ltd.), the world's largest
marketer of holmium laser systems used for kidney stone removal. This alliance
will greatly enhance the Company's kidney stone management product offering in
the United States and Japan.

PROSTATE INTERVENTION. For the treatment of Benign Prostatic Hypertrophy
("BPH"), the Company currently markets electro-surgical resection devices
designed to resect large diseased tissue sites and reduce the bleeding
attributable to the resection procedure (a major cause of patient

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morbidity in connection with traditional surgical treatments for BPH) and an
automatic disposable needle biopsy system, designed to take rapid core prostate
biopsies.

URINARY INCONTINENCE AND BLADDER DISEASE. The Company markets a line of
less-invasive devices and dermal sling materials to treat stress urinary
incontinence. This affliction is commonly treated with various surgical
procedures. The Company's Precision Tack(TM) and Precision Twist(TM) devices and
Vesica(R) systems offer less-invasive alternatives for treating incontinence.
The Company has also developed other devices to diagnose and treat bladder
cancer and bladder obstruction.

ONCOLOGY INTERVENTION. The Company markets a broad line of products designed to
treat, diagnose and palliate various forms of cancer. Its current suite of
products include a variety of microcatheters, embolic materials, coils and other
products used to restrict blood supply to targeted organs of other areas of the
body as well as biopsy devices. During 2001, the Company acquired
RadioTherapeutics Corporation, a developer and manufacturer of radiofrequency
based therapeutic devices for the ablation (destruction) of various forms of
soft tissue lesions (tumors).

SURGICAL AND ENDOVASCULAR GRAFTS. The Company designs vascular grafts and
endovascular stent grafts for the treatment of thoracic dissection, dialysis
access, abdominal aortic aneurysms and peripheral vascular occlusive diseases,
including the Exxcel(TM) vascular graft for peripheral indications and dialysis
access and a line of Hemashield(R) grafts and fabrics for peripheral vascular
and cardiovascular indications.

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MARKETING AND SALES

Within its Cardiovascular and Endosurgery groups, the Company markets its
products through six principal operating divisions, each focusing upon
physicians who specialize in the diagnosis and treatment of different medical
conditions and disease states.

Scimed: markets devices to interventional cardiologists,
interventional radiologists and vascular surgeons for the
diagnosis and treatment of coronary and peripheral vascular
disease and other cardiovascular disorders.

EP Technologies: offers a line of electrophysiology catheters and systems for
use by interventional electrophysiologists in the diagnosis
and treatment of tachyarrhythmias.

Target: markets a line of micro-guidewires, micro-catheters, coils,
embolics and other medical devices which aid
neuroradiologists and neurosurgeons in the treatment of
neurovascular diseases.

Medi-tech: markets devices to interventional radiologists and vascular
surgeons who treat abdominal aortic aneurysmal disease,
diseases requiring management of cancerous and non-cancerous
tumors and patients requiring venous access.

Microvasive markets therapeutic, diagnostic and palliative devices,
Endoscopy: which aid gastroenterologists and pulmonologists in
performing flexible endoscopic procedures involving the
digestive tract and lungs.

Microvasive offers a line of therapeutic and diagnostic devices which
Urology: aid urologists and urogynecologists in performing
ureteroscopic and other less-invasive endoscopic procedures
as well as devices to treat urinary incontinence.

A dedicated sales force of approximately 1,200 individuals in 40 countries
internationally and over 800 in the United States market the Company's
products worldwide. Sales in countries where the Company has direct sales
organizations accounted for approximately 99% of the Company's net sales
during 2001. A network of distributors and dealers who offer the Company's
products in approximately 30 countries worldwide accounts for the remaining
sales. The Company also has a dedicated U.S. corporate sales organization
focused principally on selling to major buying groups and large integrated
health care networks.

In 2001, the Company sold its products to over 10,000 hospitals, clinics,
out-patient facilities and medical offices. The Company is not dependent on any
single institution and no single

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institution accounted for more than 10% of the Company's net sales in 2001.
Large group purchasing organizations, hospital networks and other buying groups
are, however, becoming increasingly important to the Company's business. The
trend toward managed care and economically motivated and more sophisticated
buyers in the United States may result in continued pressure on selling prices
of certain products and resulting compression on gross margins. These purchasers
of medical devices also tend to limit the number of suppliers from whom they
purchase medical products. There can be no assurance that these entities will
continue to purchase products from the Company.

The Company markets NIR(R) coronary stent systems which represented
approximately 11% of the Company's 2001 worldwide sales compared to
approximately 15% in 2000. Sales of the NIR(R) coronary stent declined
throughout 2001; sales of the NIR(R) coronary stent in the fourth quarter of
2001 decreased by approximately 50% as compared to NIR(R) coronary stent sales
recorded in the first quarter of 2001. The Company anticipates that its global
NIR(R) coronary stent market share will continue to decline during 2002 as
physician acceptance of the current NIR(R) coronary stent platform continues to
erode. The NIR(R) coronary stent system consists of a NIR(R) coronary stent
developed and manufactured by Medinol Ltd., Israel, and a balloon delivery
system developed and manufactured by the Company. The Company is currently in
litigation with Medinol with respect to the stent supply agreement and the
management of Medinol.

The Company also distributes several other products for third parties, including
an introducer sheath and certain guidewires. None of these other products
represented more than 10% of the Company's 2001 net sales. Leveraging its sales
and marketing strength, the Company expects to continue to seek new
opportunities for distributing complementary products as well as new
technologies. The Company expects that it will continue to enter into
distribution arrangements that include options to acquire technology from third
parties at pre-established future dates. These distribution arrangements allow
the Company to evaluate new technologies prior to acquisition.

INTERNATIONAL OPERATIONS

Maintaining and expanding its international presence is an important component
of the Company's long-term growth plan. Through its international presence, the
Company seeks to increase net sales and market share, leverage relationships
with leading physicians and their clinical research programs, accelerate the
time within which new products can be brought to market and gain access to
worldwide technological developments that may be implemented across its product
lines.

In 2001, international sales accounted for approximately 40% of the Company's
net sales. Net sales, operating income (excluding special charges) and total
assets attributable to significant geographic areas are presented in Note O to
the Company's 2001 Consolidated Financial

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Statements, which are filed with the Securities and Exchange Commission as an
exhibit to this document.

In recent years, the Company has expanded its direct sales presence worldwide
so as to be in a position to take advantage of expanding market
opportunities. As of December 31, 2001, the Company had direct marketing and
sales operations in 40 countries internationally. The Company believes that
it will continue to leverage its infrastructure in markets where commercially
appropriate and to use distributors in those smaller markets where it is not
economical or strategic to establish a direct presence.

The Company has four international manufacturing facilities in Ireland.
Presently, approximately 51% of the Company's products sold internationally are
manufactured at these facilities. The Company also maintains an international
research and development facility in Ireland and a training and research and
development center in Miyazaki, Japan.

The Company's international presence exposes it to certain financial and other
risks. Principal among these is the potentially negative impact of foreign
currency fluctuations on the Company's sales and expenses. Although the Company
engages in nonspeculative hedging transactions that may offset the effect of
fluctuations in foreign currency exchange rates on foreign currency denominated
assets, liabilities, earnings and cash flows, financial exposure may nonetheless
result, primarily from the timing of transactions, forecast volatility and the
movement of exchange rates. International markets are also being affected by
economic pressure to contain reimbursement levels and health care costs. The
Company's ability to benefit from its international expansion may be limited by
risks and uncertainties relating to economic conditions in these regions,
regulatory and reimbursement approvals, competitive offerings, infrastructure
development, rights to intellectual property, and the ability of the Company to
implement its overall business strategy. Any significant changes in the
competitive, political, regulatory or economic environment where the Company
conducts international operations may have a material impact on revenues and
profits.

MANUFACTURING; RAW MATERIALS

The Company designs and manufactures the majority of its products in sixteen
manufacturing sites around the world. During 2000, the Company approved and
committed to a global operations plan consisting of a series of strategic
initiatives designed to increase productivity and enhance innovation. The
plan

16

includes manufacturing process and supply chain programs and a plant
optimization initiative. The manufacturing process and supply chain programs
are designed to lower inventory levels and the cost of manufacturing and to
minimize inventory write-downs. The intent of the plant optimization
initiative is to better allocate the Company's resources by creating a more
effective network of manufacturing and research and development facilities.
The Company is currently in the process of consolidating manufacturing
operations along product lines and shifting significant amounts of production
to the Company's facilities in Miami and Ireland and to contract
manufacturing. The Company's plan includes the discontinuation of
manufacturing activities at three facilities in the U.S., and includes the
planned displacement of approximately 1,800 manufacturing, manufacturing
support and management employees. The Company expects the plan will be
substantially completed during the first half of 2002.

Most components used in the manufacture of the Company's products are readily
fabricated from commonly available raw materials or off-the-shelf items
available from multiple supply sources. The fabricated items are custom made
for the Company to meet its specifications. The Company believes that in most
cases, redundant capacity exists at the suppliers and that alternative
sources of supply are available or could be developed within a reasonable
period of time. Generally, the Company has been able to obtain adequate
supplies of raw materials and components in a timely manner from established
sources. In certain cases, the Company may not be able to quickly establish
additional or replacement suppliers for specific components or materials,
largely due to the FDA approval system and other regulatory requirements and
the complex nature of the manufacturing processes employed by many suppliers.
The reduction or interruption in supply, an inability to develop alternative
sources if required, or a significant increase in the price of raw materials
or components, could adversely affect the Company's operations and financial
condition.

17

QUALITY ASSURANCE

The Company is committed to providing high quality products to its customers. To
meet this commitment, the Company has implemented state-of-the-art quality
systems and concepts throughout the organization. The Company's quality system
starts with the initial product specification and continues through the design
of the product, component specification process and the manufacturing, sales and
servicing of the product. The quality system is designed to build in quality and
to utilize continuous improvement concepts throughout the product life.

Certain of the Company's operations are certified under ISO 9001, ISO 9002, ISO
13485, ISO 13488, EN46001 and EN46002 international quality system standards.
ISO 9002 requires, among other items, an implemented quality system that applies
to component quality, supplier control and manufacturing operations. In
addition, ISO 9001 and EN46001 require an implemented quality system that
applies to product design. These certifications can be obtained only after a
complete audit of a company's quality system by an independent outside auditor.
Maintenance of these certifications requires that these facilities undergo
periodic reexamination. During 2001, the Company established an initiative to
become ISO 14000 certified. This initiative will continue until our facilities
become certified.

COMPETITION

The Company encounters significant competition across its product lines and in
each market in which its products are sold from various entities, some of which
may have greater financial and marketing resources than the Company. The
Company's primary competitors include C.R. Bard, Inc., Cook, Inc., Guidant
Corporation, Tyco International, Johnson & Johnson (including its subsidiary,
Cordis Corporation), and Medtronic, Inc. (including its subsidiary, Medtronic
AVE, Inc.), as well as a wide range of companies which sell a single or limited
number of competitive products.

In addition, the worldwide coronary stent market is dynamic and highly
competitive, with significant market share volatility. Technology and
competitive offerings, particularly the earlier introduction of drug-eluting
stents by the Company's competitors, may negatively impact the Company's
revenues. The Company also faces competition from non-medical device companies,
such as pharmaceutical companies, which may offer non-surgical alternative
therapies for disease states which are currently treated using the Company's
products.

The Company believes that its products compete primarily on the basis of their
ability to safely and effectively perform diagnostic and therapeutic procedures
in a less-invasive manner, ease of product use, product reliability and
physician familiarity. In the current environment of managed care, economically
motivated buyers, consolidation among health care providers, increased
competition and declining reimbursement rates, the Company has also been
increasingly required

18

to compete on the basis of price. The Company believes that its continued
competitive success will depend upon its ability to create or acquire
scientifically advanced technology, apply its technology cost-effectively across
product lines and markets, develop or acquire proprietary products, attract and
retain skilled development personnel, obtain patent or other protection for its
products, obtain required regulatory approvals, and manufacture and successfully
market its products either directly or through outside parties.

RESEARCH AND DEVELOPMENT

Enhancements of existing products or expansions of existing product lines, which
are typically developed within the Company's manufacturing and marketing
operations, contribute to each year's sales growth. The Company believes that
streamlining and coordinating its technology pipeline and new product
development is essential to its ability to stimulate growth and maintain
leadership positions in its markets. By centralizing platform technology
development at the corporate level, the Company is able to pursue technologies
that can be leveraged across multiple markets. The Company's approach to new
product design and development is through focused, cross functional efforts. The
Company believes that its formal process for technology and product development
aids in its ability to offer innovative and manufacturable products in a
consistent and timely manner. Involvement of the R&D, clinical, quality,
regulatory, manufacturing and marketing teams early in the process is the
cornerstone of a product development cycle. This collaboration allows the team
to concentrate resources on the most viable and profitable new products and
technologies and get them to market in a timely manner.

In 2001, the Company expended approximately $275 million on research and
development, representing approximately 10% of the Company's 2001 net sales. The
investment in research and development dollars reflects spending on new product
development programs as well as regulatory compliance and clinical research. The
increase in research and development is primarily due to increased funding for
the development of, and the clinical trials related to, new products, including
the Company's Express(TM) coronary stent platform, its TAXUS(TM) drug-eluting
stent program, its carotid program and programs acquired in connection with the
Company's business combinations consummated in 2001. In 2002, the Company
expects to increase its investment in research and development over 2001 levels
in order to fund the development of new products and to expand clinical trials,
including the Company's Taxus drug-eluting stent program, carotid program and
Express coronary stent platform.

In addition to internal development, the Company works with hundreds of leading
research institutions, universities and clinicians around the world in
developing, evaluating and clinically testing its products.

The Company believes its future success will depend upon the strength of its
development efforts. There can be no assurance that the Company will realize
financial benefit from its

19

development programs, will continue to be successful in identifying, developing
and marketing new products or enhancing its existing products, or that products
or technologies developed by others will not render the Company's products or
technologies non-competitive or obsolete.

REGULATION

The medical devices manufactured and marketed by the Company are subject to
regulation by numerous regulatory bodies, including the FDA and comparable
international regulatory agencies. These agencies require manufacturers of
medical devices to comply with applicable laws and regulations governing the
development, testing, manufacturing, labeling, marketing and distribution of
medical devices. Devices are generally subject to varying levels of regulatory
control, the most comprehensive of which requires that a clinical evaluation
program be conducted before a device receives approval for commercial
distribution.

In the United States, permission to distribute a new device generally can be met
in one of two ways. The first process requires that a pre-market notification
(the "510(k) Submission") be made to FDA to demonstrate that the device is as
safe and effective, that is, substantially equivalent to a legally marketed
device that is not subject to pre-market approval ("PMA"). Applicants must
compare this device to one or more similar devices commercially available in the
United States and make and support their substantial equivalency claims. A
legally marketed device is a device that (i) was legally marketed prior to May
28, 1976, (ii) has been reclassified from Class III to Class II or I, or (iii)
has been found to be substantially equivalent to a device following a 510(k)
Submission. The legally marketed device(s) to which equivalence is drawn is
known as the "predicate" device(s). Applicants must submit descriptive data and,
when necessary, performance data to establish that the device is substantially
equivalent to a predicate device. If clinical data from human experience are
required to support a 510(k) Submission, these data must be gathered in
compliance with investigational device exemption ("IDE") regulations for
investigations performed in the United States. The FDA must issue an order
finding substantial equivalence before commercial distribution can occur.
Changes to existing devices which do not significantly affect safety or
effectiveness can generally be made by the Company without additional 510(k)
Submissions.

The second process requires that an application for PMA be made to the FDA to
demonstrate that the device is safe and effective for its intended use as
manufactured. This approval process applies to certain Class III devices. In
this case, two steps of FDA approval are generally required before marketing in
the United States can begin. First, the Company must comply with IDE regulations
in connection with any human clinical investigation of the device in the United
States. Second, the FDA must review the Company's PMA application which
contains, among other things, clinical information acquired under the IDE. The
FDA will approve the PMA application if it finds that there is a reasonable
assurance that the device is safe and effective for its intended purpose.

20

The FDA can ban certain medical devices, detain or seize adulterated or
misbranded medical devices, order repair, replacement or refund of these
devices, and require notification of health professionals and others with regard
to medical devices that present unreasonable risks of substantial harm to the
public health. The FDA may also enjoin and restrain certain violations of the
Food, Drug and Cosmetic Act and the Safe Medical Devices Act pertaining to
medical devices, or initiate action for criminal prosecution of such violations.

International sales of medical devices manufactured in the United States that
are not approved by the FDA for use in the United States, or are banned or
deviate from lawful performance standards, are subject to FDA export
requirements. The Export Reform Act of 1996 has simplified the process of
exporting devices which have not been approved for sale in the United States.
Exported devices are subject to the regulatory requirements of each country to
which the device is exported. In many foreign countries, all regulated medical
products are treated as drugs and the majority of the Company's products are
expected to be so regulated in these countries. Frequently, regulatory approval
may first be obtained in a foreign country prior to application in the United
States to take advantage of differing regulatory requirements. The Company has
completed CE Mark registrations for substantially all of its products in
accordance with the implementation of various medical device directives in the
European Union.

The process of obtaining clearance to market products is costly and
time-consuming in virtually all of the major markets in which the Company sells
products and can delay the marketing and sale of new products. Countries around
the world have recently adopted more stringent regulatory requirements which are
expected to add to the delays and uncertainties associated with new product
releases, as well as the clinical and regulatory costs of supporting such
releases. No assurance can be given that any of the Company's new medical
devices will be approved on a timely basis, if at all.

In addition, regulations regarding the development, manufacture and sale of
medical devices are subject to future change. The Company cannot predict what
impact, if any, such changes might have on its business. Failure to comply with
regulatory requirements could have a material adverse effect on the Company's
business, financial condition and results of operations.

The Company is also subject to environmental laws and regulations both in the
United States and abroad. The operations of the Company, like those of other
medical device companies, involve the use of substances regulated under
environmental laws, primarily in manufacturing and sterilization processes. The
Company believes that compliance with environmental laws will not have a
material impact on its financial position, results of operations, or liquidity.
Given the scope and nature of these laws, there can, however, be no assurance
that environmental laws will not have a material impact on the Company.

21

THIRD-PARTY COVERAGE AND REIMBURSEMENT

The Company's products are purchased by hospitals, doctors and other health care
providers who are reimbursed for the health care services provided to their
patients by third-party payors, such as governmental programs (e.g., Medicare
and Medicaid), private insurance plans and managed care programs. Third party
payors may deny coverage for certain technologies based on assessment criteria
as determined by the third-party payor. Also, third-party payors are
increasingly adjusting reimbursement rates and challenging the prices charged
for medical products and services. There can be no assurance that the Company's
products will be automatically covered by third-party payors, that reimbursement
will be available or, if available, that the third-party payors' coverage
policies will not adversely affect the Company's ability to sell its products
profitably.

PROPRIETARY RIGHTS AND PATENT LITIGATION

The Company relies on a combination of patents, trademarks, trade secrets and
non-disclosure agreements to protect its intellectual property. The Company
generally files patent applications in the United States and foreign countries
where patent protection for its technology is appropriate and available. The
Company holds more than 2,400 United States patents (many of which have foreign
counterparts) and has more than 4,500 patent applications pending worldwide that
cover various aspects of its technology. In addition, the Company holds
exclusive and non-exclusive licenses to a variety of third party technologies
covered by patents and patent applications. There can be no assurance that
pending patent applications will result in issued patents, that patents issued
to or licensed by the Company will not be challenged or circumvented by
competitors, or that such patents will be found to be valid or sufficiently
broad to protect the Company's technology or to provide the Company with a
competitive advantage. The Company relies on non-disclosure and non-competition
agreements with employees, consultants and other parties to protect, in part,
trade secrets and other proprietary technology. There can be no assurance that
these agreements will not be breached, that the Company will have adequate
remedies for any breach, that others will not independently develop equivalent
proprietary information or that third parties will not otherwise gain access to
the Company's trade secrets and proprietary knowledge.

There has been substantial litigation regarding patent and other intellectual
property rights in the medical device industry, particularly in the areas in
which the Company competes. The Company has defended, and will likely continue
to defend, itself against claims and legal actions alleging infringement of the
patent rights of others. Adverse determinations in any patent litigation could
subject the Company to significant liabilities to third parties, could require
the Company to seek licenses from third parties and could, if licenses are not
available, prevent the Company from manufacturing, selling or using certain of
its products, some of which could have a material adverse effect on the Company.
Additionally, the Company may find it necessary to initiate

22

litigation to enforce its patent rights, to protect its trade secrets or
know-how and to determine the scope and validity of the proprietary rights of
others. Patent litigation can be costly and time-consuming, and there can be no
assurance that the Company's litigation expenses will not be significant in the
future or that the outcome of litigation will be favorable to the Company.
Accordingly, the Company may seek to settle some or all of its pending
litigation. Settlement may include cross-licensing of the patents which are the
subject of the litigation as well as other intellectual property of the Company
and may involve monetary payments to or from third parties.

OTHER LITIGATION

The testing, marketing and sale of human health care products entails an
inherent risk of product liability claims. The Company is involved in various
lawsuits arising in the normal course of business from product liability
claims, and product liability claims may be asserted in the future relative
to events not known to management at the present time. The Company has
insurance coverage which management believes is adequate to protect against
product liability losses as could otherwise materially affect the Company's
financial position. However, there can be no assurance that product liability
claims will not exceed such insurance coverage limits or that such insurance
will be available in the future on commercially reasonable terms, if at all.

See the "Legal Proceedings" section below and Note L - Commitments and
Contingencies to the Company's 2001 Consolidated Financial Statements
(Exhibit 13.1 filed herewith) for a further discussion of patent and other
litigation and proceedings involving the Company.

EMPLOYEES

As of December 31, 2001, the Company had approximately 14,400 employees,
including approximately 8,500 in operations, 1,700 in administration, 1,200
in research and development and 3,000 in selling, marketing, distribution and
related administrative support. Of these employees, approximately 3,300 were
employed in the Company's international operations. The Company believes that
the continued success of its business will depend, in part, on its ability to
attract and retain qualified personnel.

SEASONALITY

Worldwide sales do not reflect any significant degree of seasonality, however
customer purchases have been lighter in the third quarter of prior years than in
other quarters. This reflects, among other factors, lower demand during summer
months, particularly in European countries.

23

CAUTIONARY STATEMENT FOR PURPOSES OF THE SAFE HARBOR PROVISIONS OF THE PRIVATE
SECURITIES LITIGATION REFORM ACT OF 1995

The Cautionary Statement for Purposes of the Safe Harbor Provisions of the
Private Securities Litigation Reform Act of 1995 appearing on pages 11
through 12 of the Company's 2001 Consolidated Financial Statements (Exhibit
13.1 filed herewith) is incorporated herein by reference.

ITEM 2. PROPERTIES

The Company's world headquarters are located in Natick, Massachusetts. It
maintains regional headquarters in Tokyo, Japan; Paris, France and Singapore.
As of December 31, 2001, the Company's worldwide facilities (including
administration, research, manufacturing, distribution and sales and marketing
space) totaled approximately 5.3 million square feet, of which approximately
76% was owned by the Company and the balance was leased. As of December 31,
2001, the Company's principal technology centers were located in
Massachusetts, Indiana, Minnesota, New Jersey, Florida, California,
Washington, Utah, New York and Ireland, and its distribution centers were
located in Massachusetts, The Netherlands, Japan and Singapore. As of
December 31, 2001, the Company maintained sixteen manufacturing facilities,
twelve in the United States and four in Ireland. Many of these manufacturing
facilities produce and manufacture products for more than one of the
Company's divisions and include research facilities. The Company believes
that its facilities are adequate to meet its current needs and continues to
assess its plant network strategy.

ITEM 3. LEGAL PROCEEDINGS

Note L - Commitments and Contingencies to the Company's 2001 Consolidated
Financial Statements, appearing on pages 28 through 33 thereto (Exhibit 13.1
filed herewith), is incorporated herein by reference. The following
paragraphs update the disclosure appearing in Note L.

RECENT PATENT LITIGATION ACTIVITY

On March 20, 21 and 22, 1997, the Company (through its subsidiaries) filed
additional suits against Johnson & Johnson (through its subsidiaries) in Sweden,
Italy and Spain, respectively, seeking a declaration of noninfringement for the
NIR(R) stent relative to one of the European patents licensed to Ethicon, Inc.,
a subsidiary of Johnson & Johnson, in Sweden, Italy and Spain and a declaration
of invalidity in Italy and Spain. In Italy, a technical expert was appointed by
the court and a hearing was held January 30, 2002. Both parties have an
opportunity to comment on the expert report with briefs to be filed by April 15,
2002. The next hearing is scheduled for May 8, 2002.

24

On April 14, 2000, the Company (through its subsidiaries) and Medinol filed suit
for patent infringement against Johnson & Johnson, Cordis Corporation, a
subsidiary of Johnson & Johnson ("Cordis") and a subsidiary of Cordis alleging
that a patent owned by Medinol and exclusively licensed to the Company is
infringed by Cordis' BX Velocity(TM) stent delivery system. The complaint was
filed in the U.S. District Court for the District of Delaware seeking monetary
and injunctive relief. The Minnesota action was transferred to the U.S. District
Court for the District of Delaware and consolidated with the Delaware action
filed by the Company. A trial was held in August 2001 on both actions. On
September 7, 2001, a jury found that Cordis' BX Velocity, Crown, and MINICrown
stents do not infringe the patents, and that the asserted claims of those
patents are invalid. The jury also found that Cordis' CORINTHIAN stent infringes
a valid Medinol patent claim and awarded the Company and Medinol $8.3 million in
damages. Post-trial briefing motions were held through December 2001 and on
January 25, 2002, the court entered final judgment on the Corinthian stent in
favor of the Company. A post-trial hearing was held on February 26, 2002.
Judgment has not yet been entered by the Court.

On February 14, 2002, the Company and certain of its subsidiaries filed suit for
patent infringement against Medtronic, Inc. ("Medtronic"), Medtronic AVE, Inc.,
a subsidiary of Medtronic, Johnson & Johnson and Cordis alleging certain balloon
catheters, stent delivery systems and guide catheters sold by Medtronic and
Medtronic AVE infringe six U.S. patents owned by the Company and certain balloon
catheters, stent delivery systems and guide catheters sold by Johnson & Johnson
and Cordis infringe five U.S. patents owned by the Company. The complaint was
filed in the U.S. District Court for the Northern District of California seeking
monetary and injunctive relief.

On February 14, 2002, Scimed Life Systems, Inc. ("Scimed") filed suit for patent
infringement against Medtronic and Medtronic AVE alleging Medtronic AVE's
Guardwire Plus(TM) product infringes one U.S. patent owned by the Company. The
complaint was filed in the U.S. District Court for the District of Delaware
seeking monetary and injunctive relief.

On February 14, 2002, Scimed and Corvita Corporation, a subsidiary of the
Company filed suit for patent infringement against Medtronic and Medtronic AVE
alleging Medtronic's AneuRx product infringes seven U.S. patents owned by the
Company. The complaint was filed in the U.S. District Court for the District of
Delaware seeking monetary and injunctive relief.

On September 10, 2001, the Company delivered a Notice of Dispute to Cook Inc.
("Cook") asserting that Cook breached the terms of a certain License Agreement
among Angiotech Pharmaceuticals, Inc., Cook and the Company (the "Agreement").
On October 10, 2001, pursuant to the terms of the Agreement, the Company filed a
demand for arbitration with the American Arbitration Association. On October 11,
2001, Guidant and its subsidiary, Advanced Cardiovascular Systems, Inc. (ACS),
and Cook filed suit against the Company relating to the Agreement. The suit was
filed in the U.S. District Court for the Southern District of Indiana and

25

sought declaratory and injunctive relief. The parties subsequently negotiated an
agreement under which the dispute would be litigated on an expedited basis in
the Northern District of Illinois without Guidant or ACS as parties. On December
13, 2001, the Indiana case was dismissed and Cook filed a similar suit in the
U.S. District Court for the Northern District of Illinois seeking declaratory
and injunctive relief. The Company answered the complaint on December 26, 2001,
denying the allegations and filed counterclaims seeking declaratory and
injunctive relief. On February 28, 2002, the Court dismissed certain claims and
set June 6, 2002 to rule on summary judgment motions.

On April 5, 2001, Medinol filed a complaint against the Company and certain of
its current and former employees alleging breaches of contract, fraud and other
claims. Medinol supplies NIR(R) stents exclusively to the Company. The suit was
filed in the U.S. District Court for the Southern District of New York seeking
monetary and injunctive relief. On April 26, 2001, Medinol amended its complaint
to add claims alleging misappropriation of trade secrets in relation to the
Company's Express(TM) stent development program. Medinol seeks monetary and
injunctive relief, as well as an end to the Company's right to distribute
Medinol stents and access to certain Company intellectual property. On April 30,
2001, the Company answered and countersued Medinol and its principals, charging
them with fraud, multiple breaches of contract, unfair and deceptive practices
and defamation. The Company seeks monetary and injunctive relief. During the
last quarter of 2001, the Court dismissed several of the individuals and claims
from the case. A trial date has not yet been set. On February 28, 2002, the
Company received from Medinol, a letter purporting to terminate the supply
agreement between the two companies alleging breaches of the supply agreement by
the Company. The Company intends to challenge Medinol's assertion that the
supply agreement has been terminated.

On June 11, 2001, the Company filed suit in the Jerusalem District Court in
Israel against Medinol and its controlling shareholders, alleging among other
things, loss of faith among Medinol's shareholders, breach of duty by Medinol
management and misappropriation of corporate opportunities, including trade
secrets and intellectual property. The suit seeks, among other things, monetary
relief and costs. Preliminary motions were heard on October 29, 2001. On March
14, 2002, the Court accepted jurisdiction with respect to certain claims and
ruled that certain claims fall within the jurisdiction of the New York Court.

The Company is involved in various lawsuits from time to time. In
management's opinion, the Company is not currently involved in any legal
proceedings other than those specifically identified above or in Note L -
Commitments and Contingencies to the Company's 2001 Consolidated Financial
Statements which, individually or in the aggregate, could have a material
effect on the financial condition, operations or cash flows of the Company.

ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.

26

DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The Directors and executive officers of the Company as of December 31, 2001 were
as follows:

At the Company's 2002 Annual Meeting of Stockholders, stockholders will be asked
to vote for the election of Ursula M. Burns and Uwe E. Reinhardt, Ph.D. as new
members of the Board of Directors of the Company.

27

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Company has standing Audit, Executive Compensation
and Human Resources, Strategic Investment and Governance Committees. Joseph A.
Ciffolillo, Joel L. Fleishman, Lawrence L. Horsch and Ernest Mario currently
serve on the Audit Committee. Joel L. Fleishman, Marye Anne Fox, Ray J. Groves,
Lawrence L. Horsch and Senator Warren B. Rudman currently serve on the Executive
Compensation and Human Resources Committee. Marye Anne Fox, Ernest Mario, N.J.
Nicholas, Jr. and James R. Tobin currently serve on the Strategic Investment
Committee. Joel L. Fleishman, Ray J. Groves, Peter M. Nicholas, and Senator
Warren B. Rudman currently serve on the Corporate Governance Committee. A
description of the committees of the Board of Directors of the Company is set
forth in the Company's definitive Proxy Statement to be filed with the
Commission on or about April 5, 2002 and is incorporated herein by reference.

BIOGRAPHICAL SUMMARIES

John E. Abele, a co-founder of the Company, has been a Director of the Company
since 1979, Founder Chairman since 1995 and Co-Chairman from 1979 to 1995. Mr.
Abele held the position of Treasurer from 1979 to 1992 and Vice Chairman and
Founder, Office of the Chairman from February 1995 to March 1996. He was
President of Medi-tech, Inc. from 1970 to 1983, and prior to that served in
sales, technical and general management positions for Advanced Instruments, Inc.
Mr. Abele is the Vice Chairman of the Board and Treasurer of the FIRST (For
Inspiration and Recognition of Science and Technology) Foundation and is also a
member of numerous not-for-profit boards. Mr. Abele received a B.A. degree from
Amherst College.

Lawrence C. Best joined the Company in August 1992 as Senior Vice
President--Finance & Administration and Chief Financial Officer. Previously, Mr.
Best had been a partner at Ernst & Young, certified public accountants, since
1981. From 1979 to 1981, Mr. Best served a two year term as a Professional
Accounting Fellow in the Office of Chief Accountant at the Securities and
Exchange Commission in Washington, D.C. Mr. Best received a B.B.A. degree from
Kent State University.

Joseph A. Ciffolillo joined the Company in 1983 as President of Medi-tech,
Inc. During his tenure at the Company, he also served as President of
Microvasive, Inc. and as Executive Vice President and Chief Operating Officer
from 1989 until his retirement in 1996. In 1992, Mr. Ciffolillo became a
director of the Company. Previously, Mr. Ciffolillo spent twenty years with
Johnson & Johnson where he held a number of management positions including
Executive Vice President, Codman and President, Johnson & Johnson Orthopedic
Company, a company of which he was also a co-founder. Mr. Ciffolillo is a
member of the Spray Venture Fund Investment Committee and a member of the
Board of Directors of MedSource Technologies, Inc. He also serves on a number
of for-profit and not-for-profit boards. Mr. Ciffolillo is Chairman of the
Advisory Board of the Health Science Technology Division of Harvard
University and the Massachusetts

28

Institute of Technology. Mr. Ciffolillo received his B.A. from Bucknell
University where he also serves as a Member of the Board of Trustees.

Fred A. Colen was appointed to the Executive Committee of the Company as Senior
Vice President and Chief Technology Officer in July 2001. Mr. Colen joined the
Company in 1999 as Vice President of Research and Development of Scimed and in
February 2001, he was appointed Senior Vice President, Cardiovascular Technology
of Scimed. Prior to joining the Company, Mr. Colen was Executive Vice President
of Quality/Speed to Market at St. Jude Medical - CRMD Division from 1996 where
he was responsible for St. Jude's global bradycardia research and development
and product planning operations. Mr. Colen received an M.S. in Electrical
Engineering, Medical Technology from Technical University, RWTH Aachen, Germany.

Paul Donovan joined the Company in March 2000 as Vice President, Corporate
Communications. Most recently, Mr. Donovan was the Executive Director of
External Affairs at Georgetown University Medical Center, where he directed
media, government and community relations as well as employee communications
since 1998. From 1997 to 1998, Mr. Donovan was Chief of Staff at the United
States Department of Commerce. From 1993 to 1997, Mr. Donovan served as Chief of
Staff to Senator Edward M. Kennedy and from 1989 to 1993 as Press Secretary to
Senator Kennedy. Mr. Donovan received a B.A. degree from Dartmouth College.

Joel L. Fleishman joined the Company as a Director in October 1992. Mr.
Fleishman served as President of The Atlantic Philanthropies from September 1993
until January 2001, when he became Senior Advisor of that organization. He is
also Professor of Law and Public Policy and has served in various administrative
positions, including First Senior Vice President, at Duke University, since
1971. Mr. Fleishman is a founding member of the governing board of the Duke
Center for Health Policy Research and Education and was the founding director of
Duke University's Terry Sanford Institute of Public Policy. He is the director
of the Samuel and Ronnie Heyman Center for Ethics, Public Policy and the
Professions. Mr. Fleishman also serves as Chairman of the Board of Trustees of
The John and Mary Markle Foundation, Vice-Chairman of the Board of Trustees of
the Urban Institute and as a director of Polo Ralph Lauren Corporation. Mr.
Fleishman received A.B., M.A. and J.D. degrees from the University of North
Carolina at Chapel Hill, and an LL.M. degree from Yale University.

Marye Anne Fox became a director of the Company in October 2001. Dr. Fox is
Chancellor of North Carolina State University and Professor of Chemistry. From
1976 to 1998, she was a member of the faculty at the University of Texas, where
she taught chemistry and held the Waggoner Regents Chair in Chemistry from 1991
to 1998. She served as the University's Vice President for Research from 1994 to
1998. Dr. Fox is the Co-Chair of the National Academy of Sciences'
Government-University-Industry Research Roundtable and serves on President
Bush's Council of Advisors on Science and Technology. She has served as the Vice
Chair of the National Science Board. She also serves on the boards of a number
of other scientific,

29

technological and civic organizations, and is a member of the Board of Directors
of Red Hat Corp. and the Camille and Henry Dreyfus Foundation. Dr. Fox also
serves on the Board of Directors of W.R. Grace Co., a specialty chemical company
that filed a petition for reorganization under Chapter 11 of the Federal
Bankruptcy Code in April 2001. She has been honored by a wide range of
educational and professional organizations, and she has authored more than 350
publications, including five books. Dr. Fox holds a B.S. in Chemistry from Notre
Dame College, an M.S. in Organic Chemistry from Cleveland State University, and
a Ph.D. in Organic Chemistry from Dartmouth College.

Ray J. Groves joined the Company as a Director in May 1999. Mr. Groves is
President and Chief Operating Officer of Marsh Inc., a subsidiary of Marsh &
McLennan Companies, Inc. He served as Chairman of Legg Mason Merchant Banking,
Inc. from 1995 to 2001. Mr. Groves served as Chairman and Chief Executive
Officer of Ernst & Young for 17 years until his retirement in 1994. Mr. Groves
currently serves as a member of the Boards of Directors of American Water Works
Company, Inc., Electronic Data Systems Corporation and Marsh & McLennan
Companies, Inc. Mr. Groves serves on the Boards of Trustees of the New York
State Public Policy Institute and is a member of the Council on Foreign
Relations. He is a former member of the Board of Governors of the American Stock
Exchange and the National Association of Securities Dealers. Mr. Groves is
former Chairman of the Board of Directors of the American Institute of Certified
Public Accountants. He is a member and former Chair of the Board of Directors of
The Ohio State University Foundation and a member of the Dean's Advisory Council
of the Fisher College of Business. He is a former member of the Board of
Overseers of The Wharton School, University of Pennsylvania and served as the
Chairman of its Center for the Study of the Service Sector. Mr. Groves is a
managing director, a member of the executive committee and Secretary-Treasurer
of the Metropolitan Opera Association. Mr. Groves received a B.S. degree from
The Ohio State University.

Lawrence L. Horsch joined the Company as a Director in February 1995.
Previously, he had been Chairman of the Board of SCIMED Life Systems, Inc. from
1977 to 1994, director from 1977 to 1995 and Acting Chief Financial Officer from
1994 to 1995. Since 1990, Mr. Horsch has served as Chairman of Eagle Management
& Financial Corp., a management consulting firm. He was Chairman and Chief
Executive Officer of Munsingwear, Inc., from 1987 to 1990. Mr. Horsch also
serves on several private company boards. Mr. Horsch received a B.A. degree from
the University of St. Thomas and an M.B.A. degree from Northwestern University.

Paul A. LaViolette joined the Company as President, Boston Scientific
International, and Vice President--International in January 1994. In February
1995, Mr. LaViolette was elected to the position of Senior Vice President and
Group President--Nonvascular Businesses. In October 1998, Mr. LaViolette was
appointed President, Boston Scientific International, and in February 2000
assumed responsibility for the Company's Scimed, EPT and Target businesses as
Group President, Cardiovascular. In March, 2001, he also assumed the position
of President, SCIMED.

30

Prior to joining the Company, he was employed by C.R. Bard, Inc. in various
capacities, including President, U.S.C.I. Division, from July 1993 to
November 1993, President, U.S.C.I. Angioplasty Division, from January 1993 to
July 1993, Vice President and General Manager, U.S.C.I. Angioplasty Division,
from August 1991 to January 1993, and Vice President U.S.C.I. Division, from
January 1990 to August 1991. Mr. LaViolette received his B.A. degree from
Fairfield University and an M.B.A. degree from Boston College.

Robert G. MacLean joined the Company as Senior Vice President--Human Resources
in April 1996. Prior to joining the Company, he was Vice President--Worldwide
Human Resources for National Semiconductor Corporation in Santa Clara,
California from October 1992 to March 1996. Mr. MacLean has held various human
resources management positions in the U.S. and Europe during his career. Prior
to his business endeavors, he was Economics Professor at the University of the
Pacific. Mr. MacLean received his B.A. and M.A. degrees and completed his
doctoral studies in economics from Stanford University.

Ernest Mario became a director of the Company in October 2001. Dr. Mario is
the Founder of Apothogen, Inc., a pharmaceutical development company and has
served as a senior executive of a number of major international companies.
From 1993 to 1997, Dr. Mario served as Co-Chairman and Chief Executive
Officer of ALZA Corporation, a research-based pharmaceutical company with
leading drug-delivery technologies, and Chairman and Chief Executive Officer
from 1997 to 2001. Dr. Mario presently serves on the Boards of Directors of
Catalytica Energy Systems, Inc., Maxygen, Inc., Millenium Pharmaceuticals,
Inc., Orchid Biosciences, Inc., Pharmaceutical Product Development, Inc. and
SonoSite, Inc. He is also a Trustee of Duke University and Chairman of the
Board of the Duke University Health System. He is the Chairman of the
American Foundation for Pharmaceutical Education and serves as an advisor to
the colleges of pharmacy at the University of Maryland, the University of
Rhode Island and Rutgers University. Dr. Mario holds a B.S. in Pharmacy from
Rutgers, and an M.S. and a Ph.D. in Physical Sciences from the University of
Rhode Island.

Stephen F. Moreci was appointed to the Executive Committee of the Company as
Senior Vice President and Group President, Endosurgery in December 2000. Mr.
Moreci joined the Company in 1989 and most recently served as the Company's
President of its Medi-tech division since 1999. From 1989 until 1999, Mr. Moreci
held a variety of management positions within the Company, including Vice
President and General Manager of Cardiac Assist from 1989 to 1991, Vice
President and General Manager of Microvasive Endoscopy from 1991 until 1995,
Group Vice President of Nonvascular from 1995 until 1996 and President of
Microvasive Endoscopy from 1996 until 1999. Mr. Moreci received a B.S. degree
from Pennsylvania State University.

31

N.J. Nicholas, Jr. joined the Company as a Director in October 1994. Mr.
Nicholas served as President of Time, Inc. from September 1986 to May 1990 and
Co-Chief Executive Officer of Time Warner, Inc. from May 1990 until February
1992. N.J. Nicholas, Jr. is a director of Xerox Corporation and Priceline.com.
Mr. Nicholas received an A.B. degree from Princeton University and an M.B.A.
degree from Harvard Business School. He is also the brother of Pete Nicholas,
Chairman of the Board of the Company.

Peter M. Nicholas, a co-founder of the Company, has been the Chairman of the
Board of the Company since 1995. He has been a Director since 1979 and served
as the Chief Executive Officer from 1979 to March 1999 and Co-Chairman of the
Board from 1979 to 1995. Prior to joining the Company, he was corporate
director of marketing and general manager of the Medical Products Division at
Millipore Corporation, a medical device company, and served in various sales,
marketing and general management positions at Eli Lilly and Company. He is
currently Vice Chairman of the Board of Trustees of Duke University and a
member of the Board's Executive Committee. Mr. Nicholas is also a member of
the American Academy of Achievement and has recently received the Phoenix
Lifetime Achievement Award. He is also a recent recipient of the Ellis Island
Medal of Honor, and is a Fellow of the American Academy of Arts and Sciences.
He is a member of the Massachusetts Business Roundtable and currently serves
on the boards of the Boys & Girls Club of Boston, Massachusetts High
Technology Council, and CEO's for Charter Schools. Mr. Nicholas also serves
on several for profit and not-for-profit boards. After college, Mr. Nicholas
served as an officer in the U.S. Navy, resigning his commission as lieutenant
in 1968. Mr. Nicholas received a B.A. degree from Duke University, and an
M.B.A. degree from The Wharton School of the University of Pennsylvania. He
is also the brother of N.J. Nicholas, Jr., a Director of the Company.

Dr. Arthur L. Rosenthal joined the Company in January 1994 as Senior Vice
President and Chief Development Officer and became Chief Scientific Officer in
February 2000. Prior to joining the Company, he was Vice President--Research &
Development at Johnson & Johnson Medical, Inc., from April 1990 to January 1994.
Between 1973 and 1990, Dr. Rosenthal held several executive technical management
positions at Pfizer Inc., 3M and C.R. Bard, Inc., primarily in the fields of
device clinical research and biomedical engineering. Dr. Rosenthal received his
B.A. in bacteriology from the University of Connecticut, and his Ph.D. in
biochemistry from the University of Massachusetts.

Senator Warren B. Rudman joined the Company as a Director in October 1999.
Senator Rudman became a partner in the international law firm Paul, Weiss,
Rifkind, Wharton, and Garrison in 1992 after serving two terms as a U.S. Senator
from New Hampshire from 1980 to 1992. Senator Rudman serves on the Boards of
Trustees of Valley Forge Military Academy, the Brookings Institution, and the
Council on Foreign Relations. He also serves on the boards of Allied Waste
Industries, Inc., The Chubb Corporation, Collins & Aikman Corporation, Raytheon
Corporation and several funds managed by the Dreyfus Corporation. He is also the

32

founding co-chairman of the Concord Coalition. Senator Rudman received a B.S.
from Syracuse University and a LL.B. from Boston College Law School and served
in the U.S. Army during the Korean War.

Paul W. Sandman joined the Company as Senior Vice President, Secretary and
General Counsel in May 1993. From March 1992 through April 1993, he was Senior
Vice President, General Counsel and Secretary of Wang Laboratories, Inc., where
he was responsible for legal affairs. From 1984 to 1992, Mr. Sandman was Vice
President and Corporate Counsel of Wang Laboratories, Inc., where he was
responsible for corporate and international legal affairs. Mr. Sandman received
his A.B. from Boston College, and his J.D. from Harvard Law School.

James H. Taylor, Jr. joined the Company as Senior Vice President of Corporate
Operations in August 1999. Mr. Taylor most recently served as Vice President of
Global Technology at Nestle Clinical Nutrition from 1995 to 1997. Prior to
joining Nestle, he completed a thirty-year career at Baxter International, where
he held a broad range of positions in operations management, including from 1992
to 1995, the position of Corporate Vice President of Manufacturing Operations
and Strategy. Mr. Taylor received his B.A. degree from the University of North
Carolina.

James R. Tobin joined the Company as Director, President and Chief Executive
Officer in March 1999. Prior to joining the Company, Mr. Tobin served as
President and Chief Executive Officer of Biogen, Inc. from 1997 to 1998 and
Chief Operating Officer of Biogen from 1994 to 1997. From 1972 to 1994, Mr.
Tobin served in a variety of executive positions with Baxter International,
including President and Chief Operating Officer from 1992 to 1994. Previously,
he served at Baxter as Managing Director in Japan, Managing Director in Spain,
President of Baxter's I.V. Systems Group and Executive Vice President. Mr. Tobin
currently serves on the Boards of Directors of Beth Israel Deaconess Medical
Center, the Carl J. Shapiro Institute for Education and Research, Curis, Inc.
and Applera Corporation (formerly PE Corporation). Mr. Tobin holds an A.B. from
Harvard College and an M.B.A. from Harvard Business School. Mr. Tobin also
served as a lieutenant in the U.S. Navy from 1968 to 1972.

33

PART II

- ------------------------------------------------------------------------------

ITEM 5. MARKET FOR THE COMPANY'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The Company's common stock is traded on the New York Stock Exchange under the
symbol "BSX".

The information set forth under the caption "Market for the Company's Common
Stock and Related Matters" included in the Company's 2001 Consolidated Financial
Statements (Exhibit 13.1 filed herewith) is incorporated herein by reference.

On December 11, 2001, the Company issued an aggregate of 925,862 shares of its
common stock pursuant to the acquisition by the Company of RadioTherapeutics
Corporation. All of the Company's common shares issued in this transaction were
issued in a non-public offering pursuant to an exemption from the registration
requirements of the Securities Act of 1933, as amended (the "Act"), under
Section 4(2) of the Act. This sale was made without general solicitation or
advertising. The Company has a currently effective Registration Statement on
Form S-3 (Reg. No. 333-76346) covering the resale of these securities. All net
proceeds from the sale of the securities will go to the selling stockholders who
offer and sell these shares. The Company has not received and will not receive
any proceeds from the sale of these shares.

The closing price of the Company's Common Stock on March 15, 2002 was $24.06.

ITEM 6. SELECTED FINANCIAL DATA

The information set forth under the caption "Five-Year Selected Financial Data"
included in the Company's 2001 Consolidated Financial Statements (Exhibit 13.1
filed herewith) is incorporated herein by reference.

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The statements and information set forth under the caption "Management's
Discussion and Analysis of Financial Condition and Results of Operations"
included in the Company's 2001 Consolidated Financial Statements (Exhibit 13.1
filed herewith) are incorporated herein by reference.

34

ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

The information set forth under the subcaption "Market Risk Disclosures"
contained under the caption "Management's Discussion and Analysis of Financial
Condition and Results of Operations" included on page 10 of the Company's 2001
Consolidated Financial Statements (Exhibit 13.1 filed herewith) is incorporated
herein by reference.

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The consolidated financial statements of the Company and its subsidiaries
included in the Company's 2001 Consolidated Financial Statements (Exhibit 13.1
filed herewith) are incorporated herein by reference.

The statements and information set forth under the caption "Quarterly Results of
Operations" included in the Company's 2001 Consolidated Financial Statements
(Exhibit 13.1 filed herewith) are incorporated herein by reference.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
ACCOUNTING AND FINANCIAL DISCLOSURE

None.

35

PART III

- ------------------------------------------------------------------------------

ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE COMPANY

The required information concerning directors and executive officers set forth
in the Company's definitive Proxy Statement to be filed with the Commission on
or about April 5, 2002 is incorporated herein by reference. See also "Directors
and Executive Officers of the Company" following Item 4 herein.

ITEM 11. EXECUTIVE COMPENSATION

The required information concerning executive compensation set forth in the
Company's definitive Proxy Statement to be filed with the Commission on or about
April 5, 2002 is incorporated herein by reference.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
MANAGEMENT

The required statements concerning security ownership of certain beneficial
owners and management set forth in the Company's definitive Proxy Statement to
be filed with the Commission on or about April 5, 2002 are incorporated herein
by reference.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The required statements concerning certain relationships and related
transactions set forth in the Company's definitive Proxy Statement to be filed
with the Commission on or about April 5, 2002 are incorporated herein by
reference.

36

PART IV

- ------------------------------------------------------------------------------

ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K

(a)(1) Financial Statements.

The response to this portion of Item 14 is set forth under
Item 8.

(a)(2) Financial Schedules.

The response to this portion of Item 14 is filed herewith as a
separate attachment to this report.

(a)(3) Exhibits (* documents filed herewith).

EXHIBIT NO. TITLE

3.1 Second Restated Certificate of Incorporation of the Company
(Exhibit 3.1, Annual Report on Form 10-K for the year ended
December 31, 1993, File No. 1-11083).

3.2 Certificate of Amendment of the Second Restated Certificate of
Incorporation of the Registrant (Exhibit 3.2, Annual Report on
Form 10-K for the year ended December 31, 1994, File No.
1-11083).

3.3 Certificate of Second Amendment of the Second Restated
Certificate of Incorporation of the Registrant (Exhibit 3.3,
Annual Report on Form 10-K for the year ended December 31,
1998, File No. 1-11083).

3.4 Restated By-laws of the Company (Exhibit 3.2, Registration No.
33-46980).

4.1 Specimen Certificate for shares of the Company's Common Stock
(Exhibit 4.1, Registration No. 33-46980).

4.2 Description of Capital Stock contained in Exhibits 3.1, 3.2,
3.3 and 3.4.

37

4.3 Form of Debt Securities Indenture (Exhibit 4.4, Registration
Statement on Form S-3 of the Company, BSC Capital Trust, BSC
Capital Trust II and BSC Capital Trust III, File No.
333-64887).

*4.4 Form of First Supplemental Indenture dated as of December 6,
2001

10.1 Boston Scientific Corporation 1992 Long-Term Incentive Plan, as
amended (Exhibit 10.1, Annual Report on Form 10-K for the year
ended December 31, 1996, File No. 1-11083).

*10.2 Form of Amendment to the Boston Scientific Corporation 1992
Long-Term Incentive Plan

10.3 Boston Scientific Corporation 1992 Non-Employee Directors'
Stock Option Plan, as amended (Exhibit 10.2, Annual Report on
Form 10-K for the year ended December 31, 1996, Exhibit 10.3,
Annual Report on Form 10-K for the year ended December 31,
2000, File No. 1-11083).

10.4 Boston Scientific Corporation 1995 Long-Term Incentive Plan, as
amended (Exhibit 10.1, Annual Report on Form 10-K for the year
ended December 31, 1996, File No. 1-11083).

*10.5 Form of Amendment to the Boston Scientific Corporation 1995
Long-Term Incentive Plan

10.6 SCIMED Life Systems, Inc. 1987 Non-Qualified Stock Option Plan,
amended and restated (Exhibit 4.3, Registration No. 33-89772
which was incorporated by reference to Exhibit A to SCIMED's
Proxy Statement dated May 23, 1991 for its 1991 Annual Meeting
of Shareholders, Commission File No. 0-9301).

10.7 SCIMED Life Systems, Inc. 1991 Directors Stock Option Plan, as
amended (Exhibit 4.2, Registration No. 33-89772 which was
incorporated by reference to Exhibit A to SCIMED's Proxy
Statement dated June 8, 1994 for its 1994 Annual Meeting of
Shareholders, Commission File No. 0-9301).

10.8 SCIMED Life Systems, Inc. 1992 Stock Option Plan (Exhibit 4.1,
Registration No. 33-89772 which was incorporated by reference
to Exhibit A to SCIMED's Proxy Statement dated May 26, 1992 for
its 1992 Annual Meeting of Shareholders, Commission File No.
0-9301).

10.9 Heart Technology, Inc. Restated 1989 Stock Option Plan (Exhibit
4.5, Registration No. 33-99766 which was incorporated by
reference to Exhibit 10.4 to the Registration Statement on Form
S-1 of Heart Technology, Registration No. 33-45203).

10.10 EP Technologies, Inc. 1991 Stock Option/Stock Issuance Plan
(Exhibit 4.6, Registration No. 33-80265 which was incorporated
by reference to EPT's Registration Statement on Form S-8, File
No. 33-82140).

38

10.11 EP Technologies, Inc. 1993 Stock Option/Stock Issuance Plan,
(Exhibit 4.5, Registration No. 33-80265 which was incorporated
by reference to EPT's Registration Statement on Form S-8, File
No. 33-93196).

10.12 Target Therapeutics, Inc. 1988 Stock Option Plan (Exhibit 10.2,
Quarterly Report of Target Therapeutics, Inc. on Form 10-Q for
the quarter ended September 30, 1996, File No. 0-19801).

10.13 Target Therapeutics, Inc. 1988 Stock Option Plan, (Exhibit 10.3
Quarterly Report of Target Therapeutics, Inc. on Form 10-Q for
the quarter ended September 30, 1996, File No. 0-19801).

10.14 Boston Scientific Corporation 401(k) Retirement Savings Plan,
as Amended and Restated, Effective January 1, 1997 (Exhibit
10.17, Annual Report on Form 10-K for the year ended December
31, 1997, Exhibit 10.1, Quarterly Report on Form 10-Q for the
quarter ended March 31, 1999, Exhibit 10.1, Quarterly Report on
Form 10-Q for the quarter ended September 30, 1999, Exhibit
10.19, Annual Report on Form 10-K for the year ended December
31, 2000, and Exhibit 10.1, Quarterly Report on Form 10-Q for
the quarter ended June 30, 2001, File No. 1-11083).

10.15 Boston Scientific Corporation Global Employee Stock Ownership
Plan, as Amended and Restated (Exhibit 10.18, Annual Report on
Form 10-K for the year ended December 31, 1997, Exhibit 10.21,
Annual Report on Form 10-K for the year ended December 31,
2000, Exhibit 10.22, Annual Report on Form 10-K for the year
ended December 31, 2000, File No. 1-11083).

10.16 Boston Scientific Corporation Deferred Compensation Plan,
Effective January 1, 1996 (Exhibit 10.17, Annual Report on Form
10-K for the year ended December 31, 1996, File No. 11083).

10.17 Boston Scientific Corporation 2000 Long Term Incentive Plan
(Exhibit 10.20, Annual Report on Form 10-K for the year ended
December 31, 1999, File No. 1-11083).

*10.18 Form of Amendment to the Boston Scientific Corporation 2000
Long-Term Incentive Plan

10.19 Embolic Protection Incorporated 1999 Stock Plan (Exhibit 10.1,
Registration Statement on Form S-8 of the Company, File No.
333-61060).

10.20 Quanam Medical Corporation 1996 Equity Incentive Plan (Exhibit
10.2, Registration Statement on Form S-8 of the Company, File
No. 333-61060).

10.21 Quanam Medical Corporation 1996 Stock Plan (Exhibit 10.3,
Registration Statement on Form S-8 of the Company, File No.
333-61060).

39

10.22 RadioTherapeutics Corporation 1994 Stock Incentive Plan
(Exhibit 10.1, Registration Statement on Form S-8 of the
Company, File No. 333-76380).

10.23 Form of Second Amended and Restated Credit Agreement, dated
September 4, 1998 among the Company, The Several Lenders and
certain other parties (Exhibit 10.1, Current Report on Form 8-K
dated September 25, 1998, File No. 1-11083).

10.24 Form of Second Amendment to the Second Amended and Restated
Credit Agreement among Boston Scientific Corporation, The
Several Lenders and The Chase Manhattan Bank dated as of June
20, 2001. (Exhibit 10.1, Quarterly Report on Form 10-Q for the
quarter ended June 30, 2000, File No. 1-11083).

10.25 Form of Amendment to the Second Amended and Restated Credit
Agreement among Boston Scientific Corporation, The Several
Lenders and The Chase Manhattan Bank dated as of August 21,
2001 (Exhibit 10.1, Quarterly Report on Form 10-Q for the
quarter ended September 30, 2001, File No. 1-11083).

10.26 Form of Credit Agreement among the Company, The Several Lenders
and Banc of America Securities LLC dated as of August 15, 2001
(Exhibit 10.2, Quarterly Report on Form 10-Q for the quarter
ended September 30, 2001, File No. 1-11083).

10.27 Form of Indemnification Agreement between the Company and
certain Directors and Officers (Exhibit 10.16, Registration No.
33-46980).

10.28 Letter Agreement, dated June 22, 1992, between the Company and
Lawrence C. Best (Exhibit 10.11, Annual Report on Form 10-K for
the year ended December 31, 1993, File No. 1-11083).

10.29 Form of Retention Agreement between the Company and certain
Executive Officers (Exhibit 10.23, Annual Report on Form 10-K
for the year ended December 31, 1996, File No. 1-11083).

10.30 Letter Agreement dated March 17, 1999, between the Company and
James R. Tobin (Exhibit 10.34, Annual Report on Form 10-K for
the year ended December 31, 1998, File No. 1-11083).

10.31 Agreement Containing Consent Decree, dated as of February 23,
1995, between the Company and the Federal Trade Commission
(Exhibit 10.16, Annual Report on Form 10-K for the year ended
December 31, 1994, File No. 1-11083).

40

10.32 6.625% Promissory Notes due March 15, 2005 issued by the
Company in the aggregate principal amount of $500 million, each
dated as of March 10, 1998 (Exhibit Nos. 4.1, 4.2 and 4.3 to
the Company's Current Report on Form 8-K dated March 30, 1998,
File No. 1-11083).

11 Statement regarding computation of per share earnings (included
in Note J to the Company's 2001 Consolidated Financial
Statements for the year ended December 31, 2001, filed as
Exhibit 13.1 hereto).

*12.1 Statement regarding computation of ratios of earnings to fixed
charges.

*13.1 The Company's 2001 Consolidated Financial Statements for the
year ended December 31, 2001.

13.2 Report of Independent Auditors, Ernst & Young LLP (included in
the Company's 2001 Consolidated Financial Statements for the
year ended December 31, 2001, filed as Exhibit 13.1 hereto).

*21. List of the Company's subsidiaries as of March 15, 2002. Each
subsidiary does business under the corporate name indicated.

*23.1 Consent of Independent Auditors, Ernst & Young LLP.

(b) Reports on Form 8-K.

None.

41

SIGNATURE

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange
Act of 1934, the Company has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.

Dated: March 27, 2002 BOSTON SCIENTIFIC CORPORATION

BY: /s/ LAWRENCE C. BEST
--------------------------------------------
Lawrence C. Best
Chief Financial Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following persons on behalf of the Company and in
the capacities and on the dates indicated.

Dated: March 27, 2002 /s/ JOHN E. ABELE
--------------------------------------------
John E. Abele
Director, Founder

Dated: March 27, 2002 /s/ LAWRENCE C. BEST
---------------------------------------------
Lawrence C. Best
Senior Vice President--Finance and
Administration and Chief Financial
Officer (Principal Financial and
Accounting Officer)

Dated: March 27, 2002 /s/ JOSEPH A. CIFFOLILLO
--------------------------------------------
Joseph A. Ciffolillo
Director

Dated: March 27, 2002 /s/ JOEL L. FLEISHMAN
---------------------------------------------
Joel L. Fleishman
Director

42

Dated: March 27, 2002 /s/ RAY J. GROVES
--------------------------------------------
Ray J. Groves
Director

Dated: March 27, 2002 /s/ LAWRENCE L. HORSCH
--------------------------------------------
Lawrence L. Horsch
Director

Dated: March 27, 2002 /s/ ERNEST MARIO
--------------------------------------------
Ernest Mario
Director

Dated: March 27, 2002 /s/ N.J. NICHOLAS, JR.
---------------------------------------------
N.J. Nicholas, Jr.
Director

Dated: March 27, 2002 /s/ PETER M. NICHOLAS
---------------------------------------------
Peter M. Nicholas
Director, Chairman of the Board

Dated: March 27, 2002 /s/ WARREN B. RUDMAN
--------------------------------------------
Warren B. Rudman
Director

Dated: March 27, 2002 /s/ JAMES R. TOBIN
---------------------------------------------
James R. Tobin
Director, President and
Chief Executive Officer
(Principal Executive Officer)

43

FINANCIAL STATEMENT SCHEDULE

The following additional consolidated financial statement schedule should be
considered in conjunction with the Company's 2001 Consolidated Financial
Statements (Exhibit 13.1 filed herewith):

Schedule II - Valuation and Qualifying Accounts

All other schedules have been omitted since the required information is not
present or not sufficiently material to require submission of the schedule, or
because the information required is included in the consolidated financial
statements or the notes thereto.

44

SCHEDULE II

VALUATION AND QUALIFYING ACCOUNTS

(a) Uncollectible accounts written off.

(b) Charges for sales returns and allowances, net of actual sales returns

Certain prior years' amounts have been reclassified to conform to the
current year's presentation.