<PAGE>
As filed with the Securities and Exchange Commission on March 21, 2000
Registration No. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form S-8
Registration Statement
Under The
Securities Act of 1933
Edwards Lifesciences Corporation
(Exact name of Registrant as Specified in Its Charter)
<TABLE>
<S> <C>
Delaware 36-4316614
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
17221 Red Hill Avenue 92614
Irvine, California (Zip Code)
(Address of Principal Executive Offices)
</TABLE>
Edwards Lifesciences Corporation Long-Term Stock Incentive Compensation Program
Edwards Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees
Edwards Lifesciences Corporation Employee Stock Purchase Plan for International
Employees
Edwards Lifesciences Corporation Non-Employee Directors and Consultants Stock
Incentive Program
(Full Title of the Plans)
Michael A. Mussallem
Chairman of the Board and Chief Executive Officer
Edwards Lifesciences Corporation
17221 Red Hill Avenue
Irvine, California
(949) 250-2500
(Name, Address and Telephone Number, Including Area Code, of Agent for Service)
<PAGE>
Calculation of Registration Fee
<TABLE>
<CAPTION>
Title of Each Class Amount to be Proposed Maximum Proposed Maximum Amount of
of Securities to be Registered Offering Price Per Aggregate Offering Registration Fee
Registered Unit Price
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1 par 12,643,374 shares(1) $11.14(2) $140,847,186.36(2) $39,155.52
value
- -----------------------------------------------------------------------------------------------------------------------------------
Preferred Stock 12,643,374 rights (3) (3) (3)
Purchase Rights
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Consists of 12,138,893 shares of Common Stock issuable pursuant to the
Edwards Lifesciences Corporation Long-Term Stock Incentive Compensation Program,
325,000 shares of Common Stock issuable pursuant to the Edwards Lifesciences
Corporation Employee Stock Purchase Plan for United States Employees, 50,000
shares of Common Stock issuable pursuant to the Edwards Lifesciences Corporation
Employee Stock Purchase Plan for International Employees, and 129,481 shares of
Common Stock issuable pursuant to the Edwards Lifesciences Corporation Non-
Employee Directors and Consultants Stock Incentive Program. This registration
statement also covers an additional and indeterminate number of shares of Common
Stock that may be issued pursuant to the anti-dilution provisions of the Plans
described herein.
(2) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rules 457(c) and 457(h) under the Securities Act of 1933, as
amended, based upon the pro forma book value per share of the Common Stock
calculated from the most recent financial statements contained in the Company's
Registration Statement on Form 10 filed under the Securities Exchange Act of
1934, as amended.
(3) The Preferred Stock Purchase Rights initially are attached to and trade
with the shares of Common Stock being registered hereby. Value attributable to
such Rights, if any, is reflected in the market price of the Common Stock.
<PAGE>
Part II
Information Required in the Registration Statement
Item 3. Incorporation of Certain Documents by Reference
-----------------------------------------------
The following documents heretofore filed with the Securities and Exchange
Commission (the "Commission") by Edwards Lifesciences Corporation (the
"Company") are incorporated herein by reference:
(a) The Company's effective Registration Statement on Form 10, as amended
(Commission File No. 1-15525); and
(b) The descriptions of the Company's Common Stock, $1 par value per share
(the "Common Stock"), and the related Preferred Stock Purchase Rights (the
"Rights") associated with the Common Stock, which are contained in the Section
entitled "Description of Edwards Lifesciences Capital Stock" in the Company's
Registration Statement on Form 10/A No. 3, including any amendments or reports
filed for the purpose of updating such descriptions.
All documents filed by the Company with the Commission pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), after the date of this Registration Statement and prior to
the filing of a post-effective amendment which indicates that all securities
offered hereby have been sold or which deregisters all securities then remaining
unsold, shall be deemed to be incorporated by reference into this Registration
Statement and to be a part hereof from the respective dates of filing of such
documents (such documents, and the documents enumerated above, being hereinafter
referred to as "Incorporated Documents").
Any statement contained in an Incorporated Document shall be deemed to be
modified or superseded for purposes of this Registration Statement to the extent
that a statement contained herein or in any other subsequently filed
Incorporated Document modifies or supersedes such statement. Any such statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Registration Statement.
Item 4. Description of Securities
-------------------------
Not applicable.
Item 5. Interests of Named Experts and Counsel
--------------------------------------
Not applicable.
Item 6. Indemnification of Directors and Officers
-----------------------------------------
In accordance with Section 102(b)(7) of the Delaware General Corporation
Law (the "DGCL"), the Company's Amended and Restated Certificate of
Incorporation provides that directors will not be personally liable to the
Company or its stockholders for monetary damages for breaches of their fiduciary
duty as directors except for (i) breaches of their duty of loyalty to
-3-
<PAGE>
the Company or its stockholders, (ii) acts of omissions not in good faith or
which involve intentional misconduct or a knowing violation of law, (iii)
certain transactions under Section 174 of the DGCL (which concerns unlawful
payments of dividends, stock purchases or redemptions) or (iv) transactions from
which a director derives an improper personal benefit.
While the Company's Amended and Restated Certificate of Incorporation
provides directors with protection from awards for monetary damages for breaches
of their duty of care, it does not eliminate their duty of care. Accordingly,
the Amended and Restated Certificate of Incorporation will have no effect on the
availability of equitable remedies such as an injunction or rescission based on
a director's breach of his or her duty of care. The provisions of the Amended
and Restated Certificate of Incorporation described above apply to an officer of
the Company only if he or she is a director of the Company and is acting in his
or her capacity as director, and do not apply to the Company's officers who are
not directors.
The Company's Amended and Restated Certificate of Incorporation provides
that each person who is, or was, or has agreed to become a director or officer
of the Company, and each person who serves, or may have served, at the Company's
request as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise, will be indemnified by
the Company to the fullest extent permitted by the DGCL, as amended from time to
time. Directors and officers will not be indemnified with respect to an action
commenced by such directors or officers against the Company or by such directors
or officers as a derivative action.
The Company's Amended and Restated Certificate of Incorporation provides
that the right to indemnification and payment of expenses conferred therein will
not be exclusive of any other right that any person may have or may in the
future acquire under any agreement, vote of stockholders, vote of disinterested
directors or otherwise. The Amended and Restated Certificate of Incorporation
permits the Company to maintain insurance on behalf of any person who is or was
a director, officer, employee or agent of the Company, or is serving at the
request of the Company as a director, officer, employee or agent of another
corporation, partnership, joint venture, trust or other enterprise against any
expense, liability or loss, whether or not the Company would have the power to
indemnify such person against such liability under the Amended and Restated
Certificate of Incorporation or the DGCL.
The Company intends to obtain directors and officers liability insurance
providing coverage to its directors and officers.
Item 7. Exemption from Registration Claimed
-----------------------------------
Not applicable.
Item 8. Exhibits
--------
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.1 Amended and Restated Certificate of Incorporation of the Company, as
amended, filed as Exhibit 3.1 to the Company's Registration Statement
on Form 10, as
-4-
<PAGE>
amended (Commission File No. 1-15525) (the "Form 10"), is incorporated
herein by reference.
4.2 Amended and Restated Bylaws of the Company, filed as Exhibit 3.2 to
the Form 10, are incorporated herein by reference.
*4.3 Edwards Lifesciences Corporation Long-Term Stock Incentive
Compensation Program.
*4.4 Edwards Lifesciences Corporation Employee Stock Purchase Plan for
United States Employees.
*4.5 Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees.
*4.6 Edwards Lifesciences Corporation Non-Employee Directors and
Consultants Stock Incentive Program.
4.7 Form of Rights Agreement between the Company and First Chicago Trust
Company of New York, a division of EquiServe, as Rights Agent, filed
as Exhibit 10.9 to the Form 10, is incorporated herein by reference.
*5 Opinion of Sidley & Austin.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Sidley & Austin (included in its opinion filed as Exhibit
5).
*24.1 Power of Attorney from Michael R. Bowlin, Director.
*24.2 Power of Attorney from Victoria R. Fash, Director.
*24.3 Power of Attorney from Vernon R. Loucks Jr., Director.
*24.4 Power of Attorney from Philip M. Neal, Director.
*24.5 Power of Attorney from David E.I. Pyott, Director.
_____________________
* Filed herewith.
Item 9. Undertakings
------------
(a) The undersigned registrant hereby undertakes:
-5-
<PAGE>
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, as amended (the "Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the registration statement (or the most recent post-
effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
registration statement; and notwithstanding the foregoing, any increase or
decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering range
may be reflected in the form of prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in volume and
price represent no more than a 20 percent change in the maximum aggregate
offering price set forth in the "Calculation of Registration Fee" table in
the effective registration statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if the
- -------- -------
registration statement is on Form S-3, Form S-8 or Form F-3, and the information
required to be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed with or furnished to the Commission by the
registrant pursuant to Section 13 or 15(d) of the Exchange Act that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
----
fide offering thereof.
- ----
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act (and, where applicable, each filing of an employee benefit plan's
annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
----
fide offering thereof.
- ----
(c) Insofar as indemnification for liabilities arising under the
Securities Act may be permitted to directors, officers and controlling persons
of the registrant pursuant to the foregoing provisions, or otherwise, the
registrant has been advised that in the opinion of the Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore,
-6-
<PAGE>
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
-7-
<PAGE>
Signatures
The Registrant. Pursuant to the requirements of the Securities Act of
--------------
1933, as amended, the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form S-8 and has
duly caused this registration statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Irvine, State of
California, on this 10th day of March, 2000.
EDWARDS LIFESCIENCES CORPORATION
By: Michael A. Mussallem
----------------------------------
Michael A. Mussallem
Chairman of the Board and Chief Executive
Officer
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed by the following persons in the
capacities indicated on this 10th day of March, 2000.
Name Capacity
- ---- --------
Michael A. Mussallem Director, Chairman of the Board and Chief
- --------------------------
Michael A. Mussallem Executive Officer
(principal executive officer)
Bruce J. Bentcover Corporate Vice President and Chief
- --------------------------
Bruce J. Bentcover Financial Officer
(principal financial officer and
principal accounting officer)
Michael R. Bowlin Director
- --------------------------
Michael R. Bowlin
Victoria R. Fash Director
- --------------------------
Victoria R. Fash
-8-
<PAGE>
Vernon R. Loucks Jr. Director
- --------------------------
Vernon R. Loucks Jr.
Philip M. Neal Director
- --------------------------
Philip M. Neal
David E.I. Pyott Director
- --------------------------
David E.I. Pyott
-9-
<PAGE>
Index to Exhibits to Registration Statement on Form S-8
Exhibit
Number Description of Exhibit
- ------- ----------------------
4.1 Amended and Restated Certificate of Incorporation of the Company, as
amended, filed as Exhibit 3.1 to the Company's Registration
Statement on Form 10, as amended (Commission File No. 1-15525) (the
"Form 10"), is incorporated herein by reference.
4.2 Amended and Restated Bylaws of the Company, filed as Exhibit 3.2 to
the Form 10, are incorporated herein by reference.
*4.3 Edwards Lifesciences Corporation Long-Term Stock Incentive
Compensation Program.
*4.4 Edwards Lifesciences Corporation Employee Stock Purchase Plan for
United States Employees.
*4.5 Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees.
*4.6 Edwards Lifesciences Corporation Non-Employee Directors and
Consultants Stock Incentive Program.
4.7 Form of Rights Agreement between the Company and First Chicago Trust
Company of New York, a division of EquiServe, as Rights Agent, filed
as Exhibit 10.9 to the Form 10, is incorporated herein by reference.
*5 Opinion of Sidley & Austin.
*23.1 Consent of PricewaterhouseCoopers LLP.
*23.2 Consent of Sidley & Austin (included in its opinion filed as Exhibit
5).
*24.1 Power of Attorney from Michael R. Bowlin, Director.
*24.2 Power of Attorney from Victoria R. Fash, Director.
*24.3 Power of Attorney from Vernon R. Loucks Jr., Director.
*24.4 Power of Attorney from Philip M. Neal, Director.
*24.5 Power of Attorney from David E.I. Pyott, Director.
_____________________
* Filed herewith.
<PAGE>
EXHIBIT 4.3
Long-Term Stock Incentive
Compensation Program
Edwards Lifesciences Corporation
March 2000
<PAGE>
<TABLE>
<CAPTION>
Contents
<S> <C>
=================================================================
Article 1. Establishment, Objectives, and Duration 1
Article 2. Definitions 1
Article 3. Administration 4
Article 4. Eligibility and Participation 5
Article 5. Shares Subject to the Program and Maximum Awards 5
Article 6. Stock Options 7
Article 7. Restricted Stock 9
Article 8. Performance Units and Performance Shares 10
Article 9. Performance Measures 12
Article 10. Beneficiary Designation 13
Article 11. Deferrals 13
Article 12. Rights of Employees and Contractors 13
Article 13. Change in Control 13
Article 14. Amendment, Modification, and Termination 14
Article 15. Compliance with Applicable Law and Withholding 15
Article 16. Indemnification 17
Article 17. Successors 17
Article 18. Legal Construction 17
</TABLE>
<PAGE>
Edwards Lifesciences Corporation
Long-Term Stock Incentive Compensation Program
Article 1. Establishment, Objectives, and Duration
1.1 Establishment of the Program. Edwards Lifesciences Corporation, a
Delaware corporation (hereinafter referred to as the "Company"), hereby
establishes an incentive compensation plan to be known as the "Edwards
Lifesciences Corporation Long-Term Stock Incentive Compensation Program"
(hereinafter referred to as the "Program"), as set forth in this document. The
Program permits the grant of Nonqualified Stock Options, Incentive Stock
Options, Restricted Stock, Performance Shares, and Performance Units.
The Program shall become effective as of April 1, 2000 (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.
1.2 Objectives of the Program. The objectives of the Program are to optimize
the profitability and growth of the Company through long-term incentives which
are consistent with the Company's goals and which link the personal interests of
Participants to those of the Company's stockholders; to provide Participants
with an incentive for excellence in individual performance; and to promote
teamwork among Participants. Awards generally are made in conjunction with
services performed by the Participant within the previous twelve (12) months.
The Program is further intended to provide flexibility to the Company in its
ability to motivate, attract, and retain the services of Participants who make
significant contributions to the Company's success and to allow Participants to
share in the success of the Company.
1.3 Duration of the Program. The Program shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board to amend or terminate the Program at any time pursuant to
Article 14 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Program's provisions. However, in no event may an
Award be granted under the Program on or after April 1, 2010.
Article 2. Definitions
Whenever used in the Program, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1 "Award" means, individually or collectively, a grant under this Program
of Nonqualified Stock Options, Incentive Stock Options, Restricted Stock,
Performance Shares, or Performance Units.
2.2 "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Program.
2.3 "Board" or "Board of Directors" means the Board of Directors of the
Company.
1
<PAGE>
2.4 "Change in Control" of the Company shall mean the occurrence of any one
of the following events:
(a) Any "Person", as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, and any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or such
proportionately owned corporation), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing thirty
percent (30%) or more of the combined voting power of the Company's
then outstanding securities; or
(b) During any period of not more than twenty-four (24) months,
individuals who at the beginning of such period constitute the Board
of Directors of the Company, and any new director (other than a
director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in Sections
2.4(a), 2.4(c), or 2.4(d) of this Section 2.4) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least
a majority thereof; or
(c) The consummation of a merger or consolidation of the Company with
any other entity, other than: (i) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than sixty percent (60%) of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no Person acquires more than thirty percent (30%) of the
combined voting power of the Company's then outstanding securities;
or
(d) The Company's stockholders approve a plan of complete liquidation or
dissolution of the Company, or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect).
2.5 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.6 "Committee" means the Compensation Committee or any other committee
appointed by the Board to administer Awards to Participants, as specified in
Article 3 herein.
2
<PAGE>
2.7 "Company" means Edwards Lifesciences Corporation, a Delaware
corporation, and any successor thereto as provided in Article 17 herein.
2.8 "Contractor" means an individual providing services to the Company who
is not an Employee or member of the Board, and who does not participate in the
Edwards Lifesciences Corporation Nonemployee Directors and Consultants Stock
Incentive Program.
2.9 "Covered Employee" means a Participant who, as of the date of vesting
and/or payout of an Award, as applicable, is one of the group of "covered
employees," as defined in the regulations promulgated under Code Section 162(m),
or any successor statute.
2.10 "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.
2.11 "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.12 "Employee" means any employee of the Company or of a Subsidiary of the
Company. Directors who are employed by the Company shall be considered Employees
under this Program. For the purposes of this definition, "Subsidiary" means any
business, whether or not incorporated, in which the Company has a direct or
indirect ownership interest.
2.13 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.14 "Fair Market Value" means, at any date, the closing sale price on the
principal securities exchange on which the Shares are traded on the last
previous day on which a sale was reported.
2.15 "Incentive Stock Option" or "ISO" means an option to purchase Shares
granted under Article 6 herein and which is designated as an Incentive Stock
Option and which is intended to meet the requirements of Code Section 422.
2.16 "Insider" shall mean an individual who is, on the relevant date, an
officer, director, or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.17 "Nonqualified Stock Option" or "NQSO" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.18 "Option" means an Incentive Stock Option or a Nonqualified Stock
Option, as described in Article 6 herein.
2.19 "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
3
<PAGE>
2.20 "Participant" means an Employee or Contractor who has been selected to
receive an Award or who has outstanding an Award granted under the Program.
2.21 "Performance-Based Exception" means the performance-based exception
from the tax deductibility limitations of Code Section 162(m).
2.22 "Performance Share" means an Award granted to a Participant, as
described in Article 8 herein.
2.23 "Performance Unit" means an Award granted to a Participant, as
described in Article 8 herein.
2.24 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, in its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 7 herein.
2.25 "Restricted Stock" means an Award granted to a Participant pursuant to
Article 7 herein.
2.26 "Retirement" means, unless otherwise defined in the applicable Award
Agreement, any termination of an Employee's employment or a Contractor's service
after age fifty-five (55) other than due to death or Disability, provided that
such Employee or Contractor has at least a combined ten (10) years of service
with the Company and Baxter International Inc. A Participant's number of years
of service with the Company and Baxter International, Inc. shall be determined
by calculating the number of complete twelve-month (12) periods of employment
from the Participant's original date of hire as an Employee or Contractor with
the Company or Baxter International, Inc. to the Participant's date of
employment or service termination.
2.27 "Shares" means the shares of common stock of the Company.
Article 3. Administration
3.1 General. The Program shall be administered by the Compensation Committee
of the Board, or by any other Committee appointed by the Board, which shall
consist of two (2) or more nonemployee directors within the meaning of the rules
promulgated by the Securities and Exchange Commission under Section 16 of the
Exchange Act who also qualify as outside directors within the meaning of Code
Section 162(m) and the related regulations under the Code, except as otherwise
determined by the Board. Any Committee administering the Program shall be
comprised entirely of directors. The members of the Committee shall be appointed
from time to time by, and shall serve at the sole discretion of, the Board. The
Committee shall have the authority to delegate administrative duties to
officers, Employees, or directors of the Company; provided, however, that the
Committee shall not be able to delegate its authority with respect to: (i)
granting Awards to Insiders; (ii) granting Awards to Covered Employees that are
intended to qualify for the Performance-Based Exception; and (iii) certifying
that any performance goals and other material terms attributable to
4
<PAGE>
Awards to Covered Employees that are intended to qualify for the Performance-
Based Exception have been satisfied.
3.2 Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions of the Program, the Committee shall have the authority to: (a)
interpret the provisions of the Program, and prescribe, amend, and rescind rules
and procedures relating to the Program; (b) grant Awards under the Program, in
such forms and amounts and subject to such terms and conditions as it deems
appropriate, including, without limitation, Awards which are made in combination
with or in tandem with other Awards (whether or not contemporaneously granted)
or compensation or in lieu of current or deferred compensation; (c) subject to
Article 14, modify the terms of, cancel and reissue, or repurchase outstanding
Awards; (d) prescribe the form of agreement, certificate, or other instrument
evidencing any Award under the Program; (e) correct any defect or omission and
reconcile any inconsistency in the Program or in any Award hereunder; (f) to
design Awards to satisfy requirements to make such Awards tax-advantaged to
Participants in any jurisdiction or for any other reason that the Company
desires; and (g) make all other determinations and take all other actions as it
deems necessary or desirable for the administration of the Program; provided,
however, that it is the Company's intent that no outstanding Option will be
canceled for the purpose of reissuing such Option to a Participant at a lower
exercise price. The determination of the Committee on matters within its
authority shall be conclusive and binding on the Company and all other persons.
The Committee shall comply with all applicable law in administering the Plan. As
permitted by law (and subject to Section 3.1 herein), the Committee may delegate
its authority as identified herein.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Program and all related orders and
resolutions of the Board shall be final, conclusive, and binding on all persons,
including the Company, its stockholders, directors, Employees, Contractors,
Participants, and their estates and beneficiaries.
Article 4. Eligibility and Participation
4.1 Eligibility. Persons eligible to participate in this Program shall
include all Employees and Contractors. Directors who are not Employees of the
Company shall not be eligible to participate in the Program.
4.2 Actual Participation. Subject to the provisions of the Program, the
Committee may, from time to time, select from all eligible Employees and
Contractors those to whom Awards shall be granted and shall determine the nature
and amount of each Award.
Article 5. Shares Subject to the Program and Maximum Awards
5.1 Number of Shares Available for Grants. Subject to adjustment as provided
in Section 5.4 herein, the number of Shares hereby reserved for delivery to
Participants under the Program shall be twelve million five hundred thousand
(12,500,000) Shares. No more than five hundred thousand (500,000) Shares
reserved for issuance under the Program may be granted in the form of Shares of
Restricted Stock. The Committee shall determine the appropriate methodology for
calculating the number of Shares issued pursuant to the Program. Unless and
until the Committee determines that an Award to a Covered Employee shall not be
designed to comply with the
5
<PAGE>
Performance-Based Exception, the following rules shall apply to grants of such
Awards under the Program:
(a) Options: The maximum aggregate number of Shares that may be granted
in the form of Options in any one (1) fiscal year to any one (1)
Participant shall be one million (1,000,000).
(b) Restricted Stock: The maximum aggregate number of Shares that may be
granted in the form of Restricted Stock in any one (1) fiscal year
to any one (1) Participant shall be fifty thousand (50,000).
(c) Performance Shares: The maximum aggregate payout (determined as of
the end of the applicable performance period) with respect to Awards
of Performance Shares granted in any one (1) fiscal year to any one
(1) Participant shall be equal to the value of one hundred thousand
(100,000) Shares.
(d) Performance Units: The maximum aggregate payout (determined as of
the end of the applicable performance period) with respect to Awards
of Performance Units granted in any one (1) fiscal year to any one
(1) Participant shall be equal to two million dollars ($2,000,000).
5.2 Type of Shares. Shares issued under the Program in connection with Stock
Options and Performance Shares may be authorized and unissued Shares or issued
Shares held as treasury Shares. Shares issued under the Program in connection
with Restricted Stock shall be issued Shares held as treasury Shares; provided,
however, that authorized and unissued Shares may be issued in connection with
Restricted Stock to the extent that the Committee determines that past services
of the Participant constitute adequate consideration for at least the par value
thereof.
5.3 Reusage of Shares.
(a) General. In the event of the exercise or termination (by reason of
forfeiture, expiration, cancellation, surrender, or otherwise) of
any Award under the Program, that number of Shares that was subject
to the Award but not delivered shall again be available as Awards
under the Program.
(b) Restricted Stock. In the event that Shares are delivered under the
Program as Restricted Stock and are thereafter forfeited or
reacquired by the Company pursuant to rights reserved upon the grant
thereof, such forfeited or reacquired Shares shall again be
available as Awards under the Program.
(c) Limitation. Notwithstanding the provisions of Sections 5.3(a) or
5.3(b) above, the following Shares shall not be available for
reissuance under the Program: (i) Shares which are withheld from any
Award or payment under the Program to satisfy tax withholding
obligations (as described in Section 15.3; (ii) Shares which are
surrendered to fulfill tax obligations (as described in Section
15.4; and
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(iii) Shares which are surrendered in payment of the Option Price
upon the exercise of an Option.
5.4 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 5.1, in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Program, and in the Award limits set forth
in Section 5.1, as may be determined to be appropriate and equitable by the
Committee, in its sole discretion, to prevent dilution or enlargement of rights;
provided, however, that the number of Shares subject to any Award shall always
be a whole number. In a stock-for-stock acquisition of the Company, the
Committee may, in its sole discretion, substitute securities of another issuer
for any Shares subject to outstanding Awards.
Article 6. Stock Options
6.1 Grant of Options. Subject to the terms and provisions of the Program,
Options may be granted to Participants in such number, and upon such terms, and
at any time and from time to time as shall be determined by the Committee. If
all or any portion of the exercise price or taxes incurred in connection with
the exercise are paid by delivery (or, in the case of payment of taxes, by
withholding of Shares) of other Shares of the Company, the Options may provide
for the grant of replacement Options.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine. The Award Agreement also shall specify whether the
Option is intended to be an ISO or an NQSO.
6.3 Option Price. The Option Price for each grant of an Option under this
Program shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted. The only exception to the
foregoing shall be for Options issued to Participants upon the conversion of
their Baxter International, Inc. stock options at the time of the Company's
spin-off from Baxter International, Inc.
6.4 Duration of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
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6.6 Payment. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
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The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent; or (b) by tendering previously
acquired Shares (by either actual delivery or attestation) having an aggregate
Fair Market Value at the time of exercise equal to the total Option Price
(provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price); or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Board determines to be consistent with the
Program's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name (or, at the
direction of the Participant, jointly in the names of the Participant and the
Participant's spouse), Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares.
6.8 Termination of Employment or Service. Each Participant's Option Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's
employment with the Company or service to the Company as a Contractor. Such
provisions shall be determined in the sole discretion of the Committee, shall be
included in the Award Agreement entered into with each Participant, need not be
uniform among all Options issued pursuant to this Article 6, and may reflect
distinctions based on the reasons for termination.
6.9 Nontransferability of Options.
(a) Incentive Stock Options. No ISO granted under the Program may be
sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated, other than by will or by the laws of descent and
distribution. Further, all ISOs granted to a Participant under the
Program shall be exercisable during his or her lifetime only by such
Participant.
(b) Nonqualified Stock Options. Except as otherwise provided in a
Participant's Award Agreement, no NQSO granted under this Article 6
may be sold, transferred, pledged, assigned, or otherwise alienated
or hypothecated, other than by will or by the laws of descent and
distribution. Further, except as otherwise provided in a
Participant's Award Agreement, all NQSOs granted to a Participant
under this Article 6 shall be exercisable during his or her lifetime
only by such Participant.
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6.10 Substitution of Cash. Unless otherwise provided in a Participant's
Award Agreement, and notwithstanding any provision in the Program to the
contrary (including but not limited to Section 14.3), in the event of a Change
in Control in which the Company's stockholders holding Shares receive
consideration other than shares of common stock that are registered under
Section 12 of the Exchange Act, the Committee shall have the authority to
require that any outstanding Option be surrendered to the Company by a
Participant for cancellation by the Company, with the Participant receiving in
exchange a cash payment from the Company within ten (10) days of the Change in
Control. Such cash payment shall be equal to the number of Shares under Option,
multiplied by the excess, if any, of the greater of (i) the highest per Share
price offered to stockholders in any transaction whereby the Change in Control
takes place, or (ii) the Fair Market Value of a Share on the date the Change in
Control occurs, over the Option Price.
Article 7. Restricted Stock
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Program, the Committee, at any time and from time to time, may grant Shares of
Restricted Stock to Participants in such amounts as the Committee shall
determine.
7.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
7.3 Restriction on Transferability. Except as provided in this Article 7,
the Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and specified in
the Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Program shall be available
during his or her lifetime only to such Participant.
7.4 Other Restrictions. Subject to Article 9 herein, the Committee shall
impose such other conditions and/or restrictions on any Shares of Restricted
Stock granted pursuant to the Program as it may deem advisable including,
without limitation, any or all of the following:
(a) A required period of employment or service as a Contractor with the
Company, as determined by the Committee, prior to the vesting of
Shares of Restricted Stock.
(b) A requirement that Participants forfeit (or in the case of Shares
sold to a Participant, resell to the Company at his or her cost) all
or a part of Shares of Restricted Stock in the event of termination
of his or her employment or service as a Contractor during the
Period of Restriction.
(c) A prohibition against employment of Participants holding Shares of
Restricted Stock by any competitor of the Company, against such
Participants' dissemination of any secret or confidential
information belonging to the Company, or the solicitation by
Participants of the Company's employees for employment by another
entity.
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Shares of Restricted Stock awarded pursuant to the Program shall be
registered in the name of the Participant and, if such Shares are certificated,
in the sole discretion of the Committee, may be deposited in a bank designated
by the Committee or with the Company. The Committee may require a stock power
endorsed in blank with respect to Shares of Restricted Stock whether or not
certificated.
Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Program shall become
freely transferable (subject to any restrictions under any applicable securities
law) by the Participant after the last day of the applicable Period of
Restriction.
7.5 Voting Rights. At the Committee's sole discretion, Participants holding
Shares of Restricted Stock granted hereunder may be granted the right to
exercise full voting rights with respect to those Shares during the Period of
Restriction.
7.6 Dividends and Other Distributions. At the Committee's sole discretion,
during the Period of Restriction, Participants holding Shares of Restricted
Stock granted hereunder may be credited with regular cash dividends paid with
respect to the underlying Shares while they are so held. The Committee may apply
any restrictions to the dividends that the Committee deems appropriate. Without
limiting the generality of the preceding sentence, if the grant or vesting of
Shares of Restricted Stock granted to a Covered Employee is designed to comply
with the requirements of the Performance-Based Exception, the Committee may
apply any restrictions it deems appropriate to the payment of dividends declared
with respect to such Shares of Restricted Stock, such that the dividends and/or
the Shares of Restricted Stock maintain eligibility for the Performance-Based
Exception.
7.7 Termination of Employment or Service. Each Restricted Stock Award
Agreement shall set forth the extent to which the Participant shall have the
right to receive unvested Shares of Restricted Stock following termination of
the Participant's employment with the Company or service to the Company as a
Contractor. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock issued
pursuant to the Program, and may reflect distinctions based on the reasons for
termination; provided, however that, except in the cases of terminations
connected with a Change in Control and terminations by reason of death or
Disability, the vesting of Shares of Restricted Stock which qualify for the
Performance-Based Exception and which are held by Covered Employees shall occur
at the time they otherwise would have, but for the termination.
Article 8. Performance Units and Performance Shares
8.1 Grant of Performance Units/Shares. Subject to the terms of the Program,
Performance Units and/or Performance Shares may be granted to Participants in
such amounts and upon such terms, and at any time and from time to time, as
shall be determined by the Committee.
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8.2 Value of Performance Units/Shares. Each Performance Unit shall have an
initial value that is established by the Committee at the time of grant. Each
Performance Share shall have an initial value equal to the Fair Market Value of
a Share on the date of grant. The Committee shall set performance goals in its
sole discretion which, depending on the extent to which they are met, will
determine the number and/or value of Performance Units/Shares that will be paid
out to the Participant. For purposes of this Article 8, the time period during
which the performance goals must be met shall be called a "Performance Period."
8.3 Earning of Performance Units/Shares. Subject to the terms of this
Program, after the applicable Performance Period has ended, the holder of
Performance Units/Shares shall be entitled to receive payout on the number and
value of Performance Units/Shares earned by the Participant over the Performance
Period, to be determined as a function of the extent to which the corresponding
performance goals have been achieved.
8.4 Form and Timing of Payment of Performance Units/Shares. Payment of
earned Performance Units/Shares shall be made in a single lump sum following the
close of the applicable Performance Period. Subject to the terms of this
Program, the Committee, in its sole discretion, may pay earned Performance
Units/Shares in the form of cash or in Shares (or in a combination thereof)
which have an aggregate Fair Market Value equal to the value of the earned
Performance Units/Shares at the close of the applicable Performance Period. Such
Shares may be granted subject to any restrictions deemed appropriate by the
Committee. The determination of the Committee with respect to the form of payout
of such Awards shall be set forth in the Award Agreement pertaining to the grant
of the Award.
At the discretion of the Committee, Participants may be entitled to receive
any dividends declared with respect to Shares which have been earned in
connection with grants of Performance Units and/or Performance Shares which have
been earned, but not yet distributed to Participants (such dividends shall be
subject to the same accrual, forfeiture, and payout restrictions as apply to
dividends earned with respect to Shares of Restricted Stock, as set forth in
Section 7.6 herein). In addition, Participants may, at the discretion of the
Committee, be entitled to exercise their voting rights with respect to such
Shares.
8.5 Termination of Employment or Service Due to Death, Disability, or
Retirement. Unless determined otherwise by the Committee and set forth in the
Participant's Award Agreement, following termination of the Participant's
employment with the Company or service to the Company as a Contractor, by reason
of death, Disability, or Retirement during a Performance Period, the Participant
or his legal representative shall receive a payout of the Performance
Units/Shares which is prorated, as specified by the Committee in its discretion.
Payment of earned Performance Units/Shares shall be made at a time specified
by the Committee in its sole discretion and set forth in the Participant's Award
Agreement. Notwithstanding the foregoing, with respect to Covered Employees who
retire during a Performance Period, payments shall be made at the same time as
payments are made to Participants who did not terminate employment during the
applicable Performance Period.
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8.6 Termination of Employment or Service for Other Reasons. In the event
that a Participant's employment or service to the Company as a Contractor
terminates for any reason other than those reasons set forth in Section 8.5
herein, all Performance Units/Shares shall be forfeited by the Participant to
the Company unless determined otherwise by the Committee, as set forth in the
Participant's Award Agreement.
8.7 Nontransferability. Except as otherwise provided in a Participant's
Award Agreement, Performance Units/Shares may not be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, a Participant's rights under the Program shall be
exercisable during the Participant's lifetime only by the Participant or the
Participant's legal representative.
Article 9. Performance Measures
Unless and until the Board proposes for stockholder vote and stockholders
approve a change in the general performance measures set forth in this Article
9, the attainment of which may determine the degree of payout and/or vesting
with respect to Awards to Covered Employees which are designed to qualify for
the Performance-Based Exception, the performance measure(s) to be used for
purposes of such grants shall be chosen from among:
(a) Earnings per share;
(b) Net income (before or after taxes);
(c) Return measures (including, but not limited to, return on assets,
capital, equity, or sales);
(d) Cash flow return on investments which equals net cash flows divided by
owners' equity;
(e) Gross revenues;
(f) Market-to-book value ratio;
(g) Share price (including, but not limited to, growth measures and total
shareholder return);
(h) Working capital measures;
(i) Economic value added; and
(j) The percentage of sales generated by new products.
Subject to the terms of the Program, each of these measures shall be defined
by the Committee on a corporation or subsidiary basis or in comparison with peer
group performance, and may include or exclude specified extraordinary items, as
determined by the corporation's auditors.
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The Committee shall have the discretion to adjust the determinations of the
degree of attainment of the preestablished performance goals or the size of
Awards; provided, however, that Awards which are designed to qualify for the
Performance-Based Exception, and which are held by Covered Employee, may not be
adjusted upward in terms of either the degree of goal attainment or size (the
Committee shall retain the discretion to adjust the degree of goal attainment or
the size of the Awards downward).
In the event that applicable tax and/or securities laws change to permit
Committee discretion to alter the governing performance measures without
obtaining stockholder approval of such changes, the Committee shall have sole
discretion to make such changes without obtaining stockholder approval. In
addition, in the event that the Committee determines that it is advisable to
grant Awards that shall not qualify for the Performance-Based Exception, the
Committee may make such grants without satisfying the requirements of Code
Section 162(m).
Article 10. Beneficiary Designation
Each Participant under the Program may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Program is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
Article 11. Deferrals
The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option, lapse or waiver
of restrictions with respect to Restricted Stock, or the satisfaction of any
performance goals with respect to Performance Units/Shares. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
Article 12. Rights of Employees and Contractors
12.1 Employment. Nothing in the Program or any Award Agreement shall
interfere with or limit in any way the right of the Company to terminate at any
time any Participant's employment or service to the Company as a Contractor, nor
confer upon any Participant any right to continue in the employ of the Company
or to provide services to the Company as a Contractor.
12.2 Participation. No Employee or Contractor shall have the right to be
selected to receive an Award under this Program, or, having been so selected, to
be selected to receive a future Award.
Article 13. Change in Control
13.1 Treatment of Outstanding Awards. Except as may otherwise be provided in
a Participant's Award Agreement, and subject to Section 13.3, upon the
occurrence of a Change in Control, unless otherwise specifically prohibited
under applicable laws, or by the rules and regulations of any governing
governmental agencies or national securities exchanges:
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(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire
term;
(b) Any restriction periods and restrictions imposed on Share of
Restricted Stock that are not performance-based shall lapse;
(c) The vesting of all performance-based Awards denominated in Shares
such as performance-based Restricted Stock and Performance Shares
shall be accelerated as of the effective date of the Change in
Control, and there shall be paid out to Participants within thirty
(30) days following the effective date of the Change in Control a
pro rata number of Shares based upon an assumed achievement of all
relevant targeted performance goals and upon the length of time
within the Performance Period(s) which has elapsed prior to the
Change in Control. The vesting of Awards denominated in cash, such
as Performance Units, shall also be accelerated as of effective date
of the Change in Control and there shall be paid out to Participants
within thirty (30) days following the effective date of the Change
in Control a pro rata cash payment with the proration determined as
a function of the length of time within the Performance Period(s)
which has elapsed prior to the Change in Control, and based on an
assumed achievement of all relevant targeted performance goals.
13.2 Termination, Amendment, and Modifications of Change-in-Control
Provisions. Notwithstanding any other provision of this Program (but subject to
the limitations of Section 13.3 hereof) or any Award Agreement provision, the
provisions of this Article 13 may not be terminated, amended, or modified on or
after the date of a Change in Control to affect adversely any Award theretofore
granted under the Program without the prior written consent of the Participant
with respect to said Participant's outstanding Awards; provided, however, the
Board may terminate, amend, or modify this Article 13 at any time and from time
to time prior to the date of a Change in Control.
13.3 Pooling of Interests Accounting. Notwithstanding any provision of the
Program or of any Award Agreement to the contrary, in the event that the
consummation of a Change in Control is contingent on using pooling of interests
accounting methodology, the Board may, in its sole discretion, take any action
necessary to preserve the use of pooling of interests accounting.
Article 14. Amendment, Modification, and Termination
14.1 Amendment, Modification, and Termination. Subject to the terms of the
Program, the Board may at any time and from time to time, alter, amend, suspend
or terminate the Program in whole or in part.
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14.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 5.4 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Program; provided that, unless the
Committee determines otherwise at the time such adjustment is considered, no
such adjustment shall be authorized to the extent that such authority would be
inconsistent with the Program's meeting the requirements of Section 162(m) of
the Code, as from time to time amended.
14.3 Awards Previously Granted. Notwithstanding any provision of the Program
or of any Award Agreement to the contrary (but subject to Sections 6.10 and 13.3
hereof), no termination, amendment, or modification of the Program shall
adversely affect in any material way any Award previously granted under the
Program, without the written consent of the Participant holding such Award.
14.4 Compliance with Code Section 162(m). At all times when Code Section
162(m) is applicable, all Awards granted under this Program to a Covered
Employee shall comply with the requirements of Code Section 162(m); provided,
however, that in the event the Committee determines that such compliance is not
desired with respect to any Award or Awards available for grant under the
Program, then compliance with Code Section 162(m) will not be required. In
addition, in the event that changes are made to Code Section 162(m) to permit
greater flexibility with respect to any Award or Awards available under the
Program, the Committee may, subject to this Article 14, make any adjustments it
deems appropriate.
Article 15. Compliance with Applicable Law and Withholding
15.1 General. The granting of Awards and the issuance of Shares under the
Program shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required. Notwithstanding anything to the contrary in the Program or any
Award Agreement, the following shall apply:
(a) The Company shall have no obligation to issue any Shares under the
Program if such issuance would violate any applicable law or any
applicable regulation or requirement of any securities exchange or
similar entity.
(b) Prior to the issuance of any Shares under the Program, the Company
may require a written statement that the recipient is acquiring the
Shares for investment and not for the purpose or with the intention
of distributing the Shares and that the recipient will not dispose
of them in violation of the registration requirements of the
Securities Act of 1933.
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(c) With respect to any person who is subject to Section 16(a) of the
Exchange Act, the Committee may, at any time, add such conditions
and limitations to any incentive or payment under the Program or
implement procedures for the administration of the Program which it
deems necessary or desirable to comply with the requirements of Rule
16b-3 of the Exchange Act.
(d) If, at any time, the Company, determines that the listing,
registration, or qualification (or any updating of any such
document) of any Award, or the Shares issuable pursuant thereto, is
necessary on any securities exchange or under any federal or state
securities or blue sky law, or that the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, any Award, the issuance of
Shares pursuant to any Award, or the removal of any restrictions
imposed on Shares subject to an Award, such Award shall not be
granted and the Shares shall not be issued or such restrictions
shall not be removed, as the case may be, in whole or in part,
unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions
not acceptable to the Company.
15.2 Securities Law Compliance. With respect to Insiders, transactions under
this Program are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of the Program
or action by the Committee or the Board fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the Board.
15.3 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Program.
15.4 Share Withholding. With respect to withholding required upon any
taxable event arising as a result of Awards payable in Shares granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares to satisfy their tax obligations. With respect to withholding required
upon the exercise of Options, or upon the lapse of restrictions on Shares of
Restricted Stock, Participants may only elect to have Shares withheld having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory withholding tax which could be imposed on the transaction. All
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
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Article 16. Indemnification
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Program
and against and from any and all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in satisfaction of
any judgement in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
Article 17. Successors
All obligations of the Company under the Program with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
Article 18. Legal Construction
18.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
18.2 Severability. In the event any provision of the Program shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Program, and the Program shall be construed and
enforced as if the illegal or invalid provision had not been included.
18.3 Governing Law. To the extent not preempted by federal law, the Program,
and all Award or other agreements hereunder, shall be construed in accordance
with and governed by the laws of the state of Delaware without giving effect to
principles of conflicts of laws.
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EXHIBIT 4.4
Edwards Lifesciences Corporation
Employee Stock Purchase Plan
For United States Employees
(Effective April 1, 2000)
<PAGE>
Edwards Lifesciences Corporation
Employee Stock Purchase Plan
For United States Employees
(Effective April 1, 2000)
ARTICLE I-PURPOSE
1.01. Purpose
The Edwards Lifesciences Corporation Employee Stock Purchase Plan for United
States Employees is intended to provide a method whereby employees of Edwards
Lifesciences Corporation and its participating subsidiary corporations
(hereinafter referred to, unless the context otherwise requires, as the
"Company") will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Common Stock of the Company
("Stock"). It is the intention of the Company to have the Plan qualify as an
"employee stock purchase plan" under Section 423 of the Internal Revenue Code of
1986, as amended (the "Code"). The provisions of the Plan shall be construed so
as to extend and limit participation in a manner consistent with the
requirements of Code Section 423.
ARTICLE II-DEFINITIONS
2.01. Base Pay
"Base Pay" shall mean regular straight-time earnings plus commissions and
payments in lieu of regular earnings (such as vacation, sick pay and holiday
pay). In the case of a part-time hourly employee, such employee's base pay
during an Offering shall be determined by multiplying such employee's hourly
rate of pay by the number of regularly scheduled hours of work for such employee
during such Offering.
2.02. Committee
"Committee" shall mean the individuals appointed by the Company to administer
the Plan as described in Article IX.
2.03. Eligible Employee
"Eligible Employee" means any regular employee of the Company who is paid from
the United States payroll and is scheduled to work 20 or more hours per week.
<PAGE>
2.04. Enrollment Period
"Enrollment Period" shall mean with respect to any Offering, the period
designated by the Committee prior to such Offering during which Eligible
Employees may authorize payroll deductions through a Subscription. Unless the
Committee determines otherwise, the Enrollment Period with respect to any
Offering shall end on the twenty-fifth day of the month immediately preceding
the Offering Commencement Date or, if such day is not a business day, the
immediately preceding business day, and any Subscription received after such
date shall be deemed to be an enrollment in the next following Offering.
However, the initial Enrollment Period shall end on the twenty-seventh day of
the month immediately preceding the initial Offering Commencement Date, and any
Subscription received after such date shall be deemed to be an enrollment in the
next following Offering.
2.05. Offering Commencement Date
"Offering Commencement Date" shall mean April 3, 2000, and unless determined
otherwise by the Committee, the first day of each calendar quarter thereafter.
2.06. Offering
"Offering" shall mean the quarterly offering of the Company's Stock.
2.07. Offering End Date
"Offering End Date" shall mean, with respect to each Offering, the day preceding
the second annual anniversary of the Offering Commencement Date for such
Offering.
2.08. Participant
"Participant" shall mean an Eligible Employee who has elected to participate in
an Offering by entering a Subscription during the Enrollment Period for such
Offering.
2.09. Plan
"Plan" shall mean the Edwards Lifesciences Corporation Employee Stock Purchase
Plan for United States Employees, as amended from time to time.
2.10. Purchase Date
"Purchase Date" shall mean with respect to any Offering, the last day of each
calendar quarter during the period beginning with the Offering Commencement Date
for such Offering and ending with the Offering End Date; provided, however, if
any such day is not a business day, the Purchase Date shall be the next
preceding business date on which shares of Stock are traded.
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2.11. Subscription
"Subscription" shall mean an Eligible Employee's authorization for payroll
deductions made in the form and manner specified by the Committee (which may
include enrollment by submitting forms, by voice response, internet access or
other electronic means). Unless withdrawn earlier in accordance with Section
6.02, each Subscription shall be in effect for 24 months. No more than one
Subscription may be in effect for an Eligible Employee during any calendar
quarter.
2.12. Subsidiary Corporation
"Subsidiary Corporation" shall mean any present or future corporation which
would be a "subsidiary corporation" of the Company as that term is defined in
Section 424 of the Code.
ARTICLE III-ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility
Any individual who is an Eligible Employee on an Offering Commencement Date
shall be eligible to participate in the Offering commencing on such date,
subject to the terms and conditions of the Plan.
3.02. Leave of Absence
For purposes of participation in the Plan, a Participant on a leave of absence
shall be deemed to be an employee for a period of up to 90 days or, if longer,
during the period the Participant's right to reemployment is guaranteed by
statute or contract. If the leave of absence is paid, deductions authorized
under any Subscription in effect at the time the leave began will continue. If
the leave of absence is unpaid, no deductions or contributions will be permitted
during the leave. If such a Participant returns to active status within 90 days
or the guaranteed reemployment period, as applicable, payroll deductions under
the Subscription in effect at the time the leave began will automatically begin
again upon the Participant's return to active status, unless the Subscription
Period has expired. If the Participant does not return to active status within
90 days or the guaranteed reemployment period, as applicable, the Participant
shall be treated as having terminated employment for all purposes of the Plan.
If such individual later returns to active employment as an Eligible Employee,
such individual will be treated as a new employee and will be eligible to
participate in Offerings commencing after his or her reemployment date by filing
a Subscription during the applicable Enrollment Period for such Offering.
3
<PAGE>
3.03. Restrictions on Participation
Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee
shall be granted an option to participate in the Plan:
(a) if, immediately after the grant, such employee would own stock, and/or
hold outstanding options to purchase stock, possessing 5% or more of
the total combined voting power or value of all classes of stock of
the Company (for purposes of this paragraph, the rules of Section
424(d) of the Code shall apply in determining stock ownership of any
employee); or
(b) which permits the employee's rights to purchase stock under all
employee stock purchase plans of the Company to accrue at a rate which
exceeds $25,000 in fair market value of the stock (determined at the
time such option is granted) for each calendar year in which such
option is outstanding.
Further, with respect to any Offering, in no event shall an employee be granted
an option to purchase in excess of 10,000 shares of stock.
3.04. Commencement of Participation
An Eligible Employee may become a Participant in any Offering by entering a
Subscription during the Enrollment Period for such Offering. Payroll deductions
for such Offering shall commence on the applicable Offering Commencement Date
and shall end on the applicable Offering End Date unless withdrawn by the
Participant or sooner terminated in accordance with Article VII. Only one
Subscription may be in effect with respect to any Participant at any one time.
3.05. Participation After Rehire
An Eligible Employee's Subscription will automatically terminate on his or her
termination of employment with the Company. If the Eligible Employee terminates
employment with a Subscription in effect with respect to an Offering and is
rehired prior to the Offering End Date for that Offering, the Subscription will
not be reinstated and the Eligible Employee will not be allowed to again make
payroll deductions under such Offering. The Eligible Employee may elect to
participate in Offerings commencing after his or her reemployment date by
entering a Subscription during the applicable Enrollment Period for such
Offering.
3.06. International Employees/International Transfers
Eligible Employees who transfer to the United States and are placed on a U. S.
payroll may not participate in Offerings which had an Offering Commencement Date
prior to such transfer, regardless of whether such Eligible Employee was
participating in an offering under a stock purchase plan for international
employees prior to the transfer. Such Eligible Employee may
4
<PAGE>
participate in Offerings commencing after such transfer, by entering a
Subscription during the applicable Enrollment Period for such Offering.
A Participant who transfers outside of the United States and is no longer paid
on a U.S. payroll will be treated as a terminated Participant under this Plan.
For purposes of the Plan, Puerto Rico is not considered U.S. payroll.
ARTICLE IV-OFFERINGS
4.01. Quarterly Offerings
The Plan will be implemented by Offerings beginning on April 3, 2000 and, unless
determined otherwise by the Committee, on the first day of each calendar quarter
thereafter. Eligible Employees may not have in effect more than one Subscription
at a time.
Participants may subscribe to any Offering by entering a Subscription during the
Enrollment Period for such Offering in such manner as the Committee may
prescribe (which may include enrollment by submitting forms, by voice response,
internet access or other electronic means).
A Subscription that is in effect on an Offering End Date will automatically be
deemed to be a Subscription for the Offering that commences immediately
following such Offering End Date, provided that the Participant is still an
Eligible Employee and has not withdrawn the Subscription. Under the foregoing
automatic enrollment provisions, payroll deductions will continue at the level
in effect immediately prior to the new Offering Commencement Date, unless
changed in advance by the Participant in accordance with Section 5.03.
4.02. Purchase Price
The purchase price per share of Stock under each Offering shall be the lower of:
(a) 85% of the closing price of the Stock on the Offering Commencement
Date or the nearest preceding business day on which trading occurred
on the New York Stock Exchange; or
(b) 85% of the closing price of the Stock on the Purchase Date or the
nearest prior business day on which trading occurred on the New York
Stock Exchange. If the Common Stock of the Company is not admitted to
trading on any of the aforesaid dates for which closing prices of the
stock are to be determined, then reference shall be made to the next
preceding date on which Common Stock was so admitted.
5
<PAGE>
Such purchase price may only be paid with accumulated payroll deductions in
accordance with Article V. For purposes of the initial Offering, "the closing
price" shall be replaced by "the average of the opening price and closing price"
in 4.02(a), above.
ARTICLE V-PAYROLL DEDUCTIONS
5.01. Amount of Deduction
An Eligible Employee's Subscription shall authorize payroll deductions at a
rate, in whole percentages, of no less than 1% and no more than 12% of Base Pay
on each payday that the Subscription is in effect.
5.02. Participant's Account
All payroll deductions made with respect to a Participant shall be credited to
his or her recordkeeping account under the Plan. A Participant may not make any
separate cash payment into such account. No interest will accrue or be paid on
any amount withheld from a Participant's pay under the Plan or credited to the
Participant's account. Except as otherwise provided in this Section 5.02, all
amounts in a Participant's account will be used to purchase Stock and no cash
refunds shall be made from such account. Any amounts remaining in a
Participant's account pursuant to the Participant's Subscription election or
because of the limitations of Section 3.03 shall be returned to the Participant
without interest and will not be used to purchase shares with respect to any
other Offering under the Plan.
5.03. Changes in Payroll Deductions
During an Offering period, a Participant may change his or her level of payroll
deduction with respect to such Offering within the limits described in Section
5.01 in accordance with procedures established by the Committee (including,
without limitation, rules relating to the frequency of such changes); provided,
however, if the Participant reduces his or her payroll deductions to zero, it
shall be deemed to be a withdrawal of the Subscription and the Participant may
not thereafter participate in such Offering but must wait until the next
quarterly Offering to resubscribe to the Plan. Any such discontinuance or
change in level shall be effective as soon as administratively practicable.
ARTICLE VI-EXERCISE OF OPTION
6.01. Automatic Exercise
6
<PAGE>
A Participant's option for the purchase of Stock with respect to any Offering
will be automatically exercised on each Purchase Date for the Offering. The
option will be exercised by using the accumulated payroll deductions in the
Participant's account as of each such Purchase Date to purchase the number of
full and fractional shares of Stock that may be purchased at the purchase price
on such date, determined in accordance with Section 4.02.
6.02. Withdrawal From Offering
A Participant may not withdraw the accumulated payroll deductions in his or her
account during an Offering period. If the Participant withdraws his or her
Subscription with respect to any Offering, the accumulated payroll deductions in
the Participant's account at the time the Subscription is withdrawn will be used
to purchase shares of Stock at the next Purchase Date for the Offering to which
the Subscription related, in accordance with Section 6.01.
6.03 Delivery of Stock
Stock purchases under the Plan will be held in an account in the Participant's
name in uncertificated form unless certification is requested by the
Participant.
ARTICLE VII-WITHDRAWAL
7.01. Effect on Subsequent Participation
A Participant's election to withdraw from any Offering will not have any effect
upon the Participant's eligibility to participate in any succeeding Offering or
in any similar plan which may hereafter be adopted by the Company.
7.02. Termination of Employment
Subject to the following provisions of this Section 7.02, upon termination of
the Participant's employment for any reason, any Subscription then in effect
will be deemed to have been withdrawn and any payroll deductions credited to the
Participant's account will be used to purchase Stock on the next Purchase Date
for the Offering with respect to which such deductions relate. Notwithstanding
the foregoing, if the Participant has a Subscription in effect on the
Participant's termination of employment, payroll deductions (at the rate in
effect on the termination date) shall continue to be made from Base Pay earned
prior to termination of employment, if any, that is paid to the Participant
after such termination of employment and before the earlier of (i) the three-
month anniversary of such termination of employment, or (ii) the Offering End
Date of such Offering. Any such payroll deduction shall be used to purchase
Stock on the next Purchase Date for the Offering after the deduction is made.
7
<PAGE>
ARTICLE VIII-STOCK
8.01. Maximum Shares
The maximum number of shares which may be issued under the Plan, subject to
adjustment upon changes in capitalization of the Company as provided in Section
10.04, shall be 325,000 shares. If the total number of shares for which options
are exercised on any Purchase Date in accordance with Article IV exceeds the
maximum number of shares for the applicable Offering, the Company shall make a
pro rata allocation of the shares available for delivery and distribution in as
nearly a uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the account of each
Participant under the Plan shall be returned to him as promptly as possible.
8.02. Participant's Interest in Option Stock
The Participant will have no interest in Stock covered by an option under the
Plan until such option has been exercised.
8.03. Registration of Stock
Stock to be delivered to a Participant under the Plan will be registered in the
name of the Participant.
ARTICLE IX-ADMINISTRATION
9.01. Appointment of Committee
The Board of Directors shall appoint a Committee to administer the Plan. No
member of the Committee who is not an Eligible Employee shall be eligible to
purchase Stock under the Plan.
9.02. Authority of Committee
Subject to the express provisions of the Plan, the Committee shall have plenary
authority in its discretion to interpret and construe any and all provisions of
the Plan, to adopt rules and regulations for administering the Plan, and to make
all other determinations deemed necessary or advisable for administering the
Plan. The Committee's determination on the foregoing matters shall be
conclusive. The Committee shall also have the authority to determine whether the
employees of divisions or subsidiaries of the Company organized or acquired
after the Effective Date shall be eligible for participation in the Plan.
8
<PAGE>
9.03. Rules Governing the Administration of the Committee
The Board of Directors may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it shall deem advisable and may hold telephonic meetings. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable. Any decision or determination reduced to writing
and signed by a majority of the members of the Committee shall be as fully
effective as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a secretary and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
9.04. Statements
Each Participant shall receive a statement of his account showing the number of
shares of Stock held and the amount of cash credited to such account. Such
statements will be provided as soon as administratively feasible following the
end of each calendar quarter.
ARTICLE X-MISCELLANEOUS
10.01. Transferability
Neither payroll deductions credited to a Participant's account nor any rights
with regard to the exercise of an option or to receive Stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
Participant other than by will or the laws of descent and distribution. Any such
attempted assignment, transfer, pledge or other disposition shall be without
effect. During a Participant's lifetime, options held by such Participant shall
be exercisable only by that Participant.
10.02. Use of Funds
All payroll deductions received or held by the Company under this Plan may be
used by the Company for any corporate purpose and the Company shall not be
obligated to segregate such payroll deductions.
10.03. Adjustment Upon Changes in Capitalization
In the event of a stock split, stock dividend, recapitalization,
reclassification or combination of shares, merger, sale of assets or similar
event, the Committee shall adjust equitably (a) the number and class of shares
or other securities that are reserved for sale under the Plan, (b) the number
and class of shares or other securities that are subject to outstanding options,
and (c) the
9
<PAGE>
appropriate market value and other price determinations applicable to options.
The Committee shall make all determinations under this Section 10.03, and all
such determinations shall be conclusive and binding.
10.04. Amendment and Termination
The Board of Directors shall have complete power and authority to terminate or
amend the Plan; provided, however, that the Board of Directors shall not,
without the approval of the stockholders of the Company (i) increase the maximum
number of shares which may be issued under any Offering (except pursuant to
Section 10.03); (ii) amend the requirements as to the class of employees
eligible to purchase stock under the Plan; or (iii) permit the members of the
Committee to purchase stock under the Plan.
Upon termination, any cash remaining in Participant accounts will be applied to
the purchase of Stock. For purposes of valuing the Stock, the closing price of
the Stock on the New York Stock Exchange on the most recent preceding trading
day will determine the purchase price. Upon termination, the Board of Directors
shall have the authority to establish administrative procedures regarding the
exercise of unpurchased shares or to determine that such exercise shall not be
permitted under the Plan.
10.05. Effective Date
This Plan shall be effective as of April 1, 2000.
10.06. No Employment Rights
The Plan does not, directly or indirectly, create any right for the benefit of
any employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.
10.07. Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be binding upon,
and inure to the benefit of, all successors of each employee participating in
the Plan, including, without limitation, such employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such employee.
10
<PAGE>
10.08. Governing Law
The law of the State of California will govern all matters relating to this Plan
except to the extent it is superseded by the laws of the United States.
IN WITNESS WHEREOF, the company has caused this instrument to be executed on the
___ day of _________________, 2000.
EDWARDS LIFESCIENCES CORPORATION
By:____________________________
Its:___________________________
11
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EXHIBIT 4.5
Edwards Lifesciences Corporation
Employee Stock Purchase Plan
For International Employees
(Effective April 1, 2000)
<PAGE>
Edwards Lifesciences Corpration
Employee Stock Purchase Plan
For International Employees
(Effective April 1, 2000)
ARTICLE I-PURPOSE
1.01. Purpose
The Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees is intended to provide a method whereby certain
employees of Edwards Lifesciences Corporation and its participating subsidiary
corporations (hereinafter referred to, unless the context otherwise requires, as
the "Company") will have an opportunity to acquire a proprietary interest in the
Company through the purchase of shares of the Common Stock of the Company
("Stock").
ARTICLE II-DEFINITIONS
2.01. Base Pay
"Base Pay" shall mean regular straight-time earnings plus commissions (where
legally permissible and administratively feasible) and payments in lieu of
regular earnings and any legally mandated bonus or other pay. In the case of a
part-time hourly employee, such employee's base pay during an Offering shall be
determined by multiplying such employee's hourly rate of pay by the number of
regularly scheduled hours of work for such employee during such Offering.
2.02. Committee
"Committee" shall mean the individuals appointed by the Company to administer
the Plan as described in Article IX.
2.03. Conversion Rate
"Conversion Rate" shall mean with respect to any non-U.S. currency, the rate
established by the Company's Corporate Treasury Department for purposes of
converting such currency to United States dollars.
2.04. Eligible Employee
"Eligible Employee" means any regular employee of the Company or a participating
subsidiary who is not paid from the United States payroll and is scheduled to
work 20 or more hours per
<PAGE>
week. Eligible Employee shall also mean any other employee of a participating
subsidiary to the extent that local law requires the plan to be extended to such
employee. The Committee shall designate the subsidiaries that shall be eligible
to participate in the Plan.
2.05. Enrollment Period
"Enrollment Period" shall mean with respect to any Offering, the period
designated by the Committee prior to such Offering during which Eligible
Employees may authorize payroll deductions through a Subscription. Unless the
Committee determines otherwise, the Enrollment Period with respect to any
Offering shall end on the fifteenth day of the month (or the twenty-fifth day of
the month for Puerto Rico) immediately preceding the Offering Commencement Date
or, if such day is not a business day, the immediately preceding business day,
and any Subscription received after such date shall be deemed to be an
enrollment in the next following Offering. However, the initial Enrollment
Period shall end on the twenty-seventh day of the month immediately preceding
the initial Offering Commencement Date, and any Subscription received after such
date shall be deemed to be an enrollment in the next following Offering.
2.06. Offering Commencement Date
"Offering Commencement Date" shall mean April 3, 2000 and, unless determined
otherwise by the Committee, the first day of each calendar quarter thereafter.
2.07. Offering
"Offering" shall mean the quarterly offering of the Company's Stock.
2.08. Offering End Date
"Offering End Date" shall mean, with respect to each Offering, the day preceding
the second annual anniversary of the Offering Commencement Date for such
Offering.
2.09. Participant
"Participant" shall mean an Eligible Employee who has elected to participate in
an Offering by entering a Subscription during the Enrollment Period for such
Offering.
2.10. Plan
"Plan" shall mean the Edwards Lifesciences Corporation Employee Stock Purchase
Plan for International Employees, as amended from time to time.
2.11. Purchase Date
"Purchase Date" shall mean with respect to any Offering, the last day of each
calendar quarter during the period beginning with the Offering Commencement Date
for such Offering and
2
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ending with the Offering End Date; provided, however, if any such day is not a
business day on which trading occurs, the Purchase Date shall be the next
preceding business date on which shares of Stock are traded.
2.12. Subscription
"Subscription" shall mean an Eligible Employee's authorization for payroll
deductions made in the form and manner specified by the Committee (which may
include enrollment by submitting forms, by voice response, internet access or
other electronic means). Unless withdrawn earlier in accordance with Section
6.02, each Subscription shall be in effect for 24 months. No more than one
Subscription may be in effect for an Eligible Employee during any calendar
quarter.
2.13. Subsidiary Corporation
"Subsidiary Corporation" shall mean any present or future corporation which
would be a "subsidiary corporation" of the Company as that term is defined in
Section 424 of the U.S. Internal Revenue Code.
ARTICLE III-ELIGIBILITY AND PARTICIPATION
3.01. Initial Eligibility
Any individual who is an Eligible Employee on an Offering Commencement Date
shall be eligible to participate in the Offering commencing on such date,
subject to the terms and conditions of the Plan.
3.02. Leave of Absence
For purposes of participation in the Plan, a Participant on a leave of absence
shall be deemed to be an employee for a period of up to 90 days or, if longer,
during the period the Participant's right to reemployment is guaranteed by
statute or contract. If the leave of absence is paid, deductions authorized
under any Subscription in effect at the time the leave began will continue. If
the leave of absence is unpaid, no deductions or contributions will be permitted
during the leave. If such a Participant returns to active status within 90 days
or the guaranteed reemployment period, as applicable, payroll deductions under
the Subscription in effect at the time the leave began will automatically begin
again upon the Participant's return to active status unless the Subscription
period has expired. If the Participant does not return to active status within
90 days or the guaranteed reemployment period, as applicable, the Participant
shall be treated as having terminated employment for all purposes of the Plan.
If such individual later returns to active employment as an Eligible Employee,
such individual will be treated as a new employee and will be eligible to
participate in Offerings commencing after his or her reemployment date by filing
a Subscription during the applicable Enrollment Period for such Offering.
3
<PAGE>
3.03. Restrictions on Participation
Notwithstanding any provisions of the Plan to the contrary, no Eligible Employee
shall be granted an option to participate in the Plan which permits the
employee's rights to purchase stock under all employee stock purchase plans of
the Company to accrue at a rate which exceeds $25,000 in fair market value of
the stock (determined at the time such option is granted) for each calendar year
in which such option is outstanding.
3.04. Commencement of Participation
An Eligible Employee may become a Participant in any Offering by entering a
Subscription during the Enrollment Period for such Offering. Payroll deductions
for such Offering shall commence on the applicable Offering Commencement Date
and shall end on the applicable Offering End Date unless withdrawn by the
Participant or sooner terminated in accordance with Article VII. Only one
Subscription may be in effect with respect to any Participant at any one time.
3.05. Participation After Rehire
An Eligible Employee's Subscription will automatically terminate on his or her
termination of employment with the Company. If the Eligible Employee terminates
employment with a Subscription in effect with respect to an Offering and is
rehired prior to the Offering End Date for that Offering, the Subscription will
not be reinstated and the Eligible Employee will not be allowed to again make
payroll deductions under such Offering. The Eligible Employee may elect to
participate in Offerings commencing after his or her reemployment date by
entering a Subscription during the applicable Enrollment Period for such
Offering.
3.06. United States Employees/United States Transfers
Eligible Employees who transfer outside of the United States and are placed on a
non-U.S. payroll may not participate in Offerings which had an Offering
Commencement Date prior to such transfer, regardless of whether such Eligible
Employee was participating in an offering under a stock purchase plan for United
States employees prior to the transfer. Such Eligible Employee may participate
in Offerings commencing after such transfer, by entering a Subscription during
the applicable Enrollment Period for such Offering.
A Participant who transfers to the United States and is placed on the U.S.
payroll will be treated as a terminated Participant under this Plan. Such
Participant shall have the right to elect, in such form as the Committee may
require, prior to the earlier of (i) the three month anniversary of such
transfer date, or (ii) the Offering End Date, to buy out the remaining shares in
his or her Subscription. For purposes of the Plan, Puerto Rico is not
considered U.S. payroll.
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<PAGE>
ARTICLE IV-OFFERINGS
4.01. Quarterly Offerings
The Plan will be implemented by Offerings beginning on April 3, 2000 and, unless
determined otherwise by the Committee, on the first day of each calendar quarter
thereafter. Eligible Employees may not have in effect more than one Subscription
at a time.
Participants may subscribe to any Offering by entering a Subscription during the
Enrollment Period for such Offering in such manner as the Committee may
prescribe (which may include enrollment by submitting forms, by voice response,
internet access or other electronic means).
A Subscription that is in effect on an Offering End Date will automatically be
deemed to be a Subscription for the Offering that commences immediately
following such Offering End Date, provided that the Participant is still an
Eligible Employee and has not withdrawn the Subscription. Under the foregoing
automatic enrollment provisions, payroll deductions will continue at the level
in effect immediately prior to the new Offering Commencement Date, unless
changed in advance by the Participant in accordance with Section 5.03.
4.02. Purchase Price
The purchase price per share of Stock under each Offering shall be the lower of:
(a) 85% of the closing price of the Stock on the Offering Commencement
Date or the nearest preceding business day on which trading occurred
on the New York Stock Exchange; or
(b) 85% of the closing price of the Stock on the Purchase Date or the
nearest prior business day on which trading occurred on the New York
Stock Exchange. If the Common Stock of the Company is not admitted to
trading on any of the aforesaid dates for which closing prices of the
stock are to be determined, then reference shall be made to the next
preceding date on which Common Stock was so admitted.
Such purchase price may only be paid with accumulated payroll deductions in
accordance with Article V. For purposes of the initial Offering, "the closing
price" shall be replaced by "the average of the opening price and closing price"
in 4.02(a), above.
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ARTICLE V-PAYROLL DEDUCTIONS
5.01. Amount of Deduction
An Eligible Employee's Subscription shall authorize payroll deductions at a
rate, in whole percentages, of no less than 1% and no more than 12% of Base Pay
on each payday that the Subscription is in effect.
5.02. Participant's Account
All payroll deductions made with respect to a Participant shall be credited to
his or her recordkeeping account under the Plan. A Participant may not make any
separate cash payment into such account. No interest will accrue or be paid on
any amount withheld from a Participant's pay under the Plan or credited to the
Participant's account. Except as otherwise provided in this Section 5.02, all
amounts in a Participant's account will be used to purchase Stock and no cash
refunds shall be made from such account. Any amounts remaining in a
Participant's account pursuant to the Participant's Subscription election or
because of the limitations of Section 3.03 shall be returned to the Participant
without interest and will not be used to purchase shares with respect to any
other Offering under the Plan.
5.03. Changes in Payroll Deductions
During an Offering period, a Participant may change his or her level of payroll
deduction with respect to such Offering within the limits described in Section
5.01 in accordance with procedures established by the Committee (including,
without limitation, rules relating to the frequency of such changes); provided,
however, if the Participant reduces his or her payroll deductions to zero, it
shall be deemed to be a withdrawal of the Subscription and the Participant may
not thereafter participate in such Offering but must wait until the next
quarterly Offering to resubscribe to the Plan. Any such discontinuance or
change in level shall be effective as soon as administratively practicable.
ARTICLE VI-EXERCISE OF OPTION
6.01. Automatic Exercise
A Participant's option for the purchase of Stock with respect to any Offering
will be automatically exercised on each Purchase Date for the Offering. The
option will be exercised by using the accumulated payroll deductions in the
Participant's account as of each such Purchase Date to purchase the number of
full and fractional shares of Stock that may be purchased at the purchase price
on such date, determined in accordance with Section 4.02. If the Participant is
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paid in a non-U.S. currency, the Participant's accumulated payroll deductions
shall be converted into U.S. dollars using the Conversion Rate in effect on the
Purchase Date.
6.02. Withdrawal From Offering
A Participant may not withdraw the accumulated payroll deductions in his or her
account during an Offering period. If the Participant withdraws his or her
Subscription with respect to any Offering, the accumulated payroll deductions in
the Participant's account at the time the Subscription is withdrawn will be used
to purchase shares of Stock at the next Purchase Date for the Offering to which
the Subscription related, in accordance with Section 6.01.
6.03. Delivery of Stock
Stock purchases under the Plan will be held in an account in the Participant's
name in uncertificated form unless certification is requested by the
Participant.
ARTICLE VII-WITHDRAWAL
7.01. Effect on Subsequent Participation
A Participant's election to withdraw from any Offering will not have any effect
upon the Participant's eligibility to participate in any succeeding Offering or
in any similar plan which may hereafter be adopted by the Company.
7.02. Termination of Employment
Subject to the following provisions of this Section 7.02, upon termination of
the Participant's employment for any reason, any Subscription then in effect
will be deemed to have been withdrawn and any payroll deductions credited to the
Participant's account will be used to purchase Stock on the next Purchase Date
for the Offering with respect to which such deductions relate. Notwithstanding
the foregoing, if the Participant has a Subscription in effect on the
Participant's termination of employment, payroll deductions (at the rate in
effect on the termination date) shall continue to be made from Base Pay earned
prior to termination of employment, if any, that is paid to the Participant
after such termination of employment and before the earlier of (i) the three-
month anniversary of such termination of employment, or (ii) the Offering End
Date of such Offering. Any such payroll deduction shall be used to purchase
Stock on the next Purchase Date for the Offering after the deduction is made.
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ARTICLE VIII-STOCK
8.01. Maximum Shares
The maximum number of shares which may be issued under the Plan, subject to
adjustment upon changes in capitalization of the Company as provided in Section
10.04, shall be 50,000 shares. If the total number of shares for which options
are exercised on any Purchase Date in accordance with Article IV exceeds the
maximum number of shares for the applicable Offering, the Company shall make a
pro rata allocation of the shares available for delivery and distribution in as
nearly a uniform manner as shall be practicable and as it shall determine to be
equitable, and the balance of payroll deductions credited to the account of each
Participant under the Plan shall be returned to him as promptly as possible.
8.02. Participant's Interest in Option Stock
The Participant will have no interest in Stock covered by an option under the
Plan until such option has been exercised.
8.03. Registration of Stock
Stock to be delivered to a Participant under the Plan will be registered in the
name of the Participant.
ARTICLE IX-ADMINISTRATION
9.01. Appointment of Committee
The Board of Directors shall appoint a Committee to administer the Plan. No
member of the Committee who is not an Eligible Employee shall be eligible to
purchase Stock under the Plan.
9.02. Authority of Committee
Subject to the express provisions of the Plan, the Committee shall have plenary
authority in its discretion to interpret and construe any and all provisions of
the Plan, to adopt rules and regulations for administering the Plan, and to make
all other determinations deemed necessary or advisable for administering the
Plan. The Committee's determination on the foregoing matters shall be
conclusive. The Committee shall also have the authority to determine whether
the employees of divisions or subsidiaries of the Company organized or acquired
after the Effective Date shall be eligible for participation in the Plan.
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9.03. Rules Governing the Administration of the Committee
The Board of Directors may from time to time appoint members of the Committee in
substitution for or in addition to members previously appointed and may fill
vacancies, however caused, in the Committee. The Committee may select one of its
members as its Chairman and shall hold its meetings at such times and places as
it shall deem advisable and may hold telephonic meetings. A majority of its
members shall constitute a quorum. All determinations of the Committee shall be
made by a majority of its members. The Committee may correct any defect or
omission or reconcile any inconsistency in the Plan, in the manner and to the
extent it shall deem desirable. Any decision or determination reduced to writing
and signed by a majority of the members of the Committee shall be as fully
effective as if it had been made by a majority vote at a meeting duly called and
held. The Committee may appoint a secretary and shall make such rules and
regulations for the conduct of its business as it shall deem advisable.
9.04. Statements
Each Participant shall receive a statement of his account showing the number of
shares of Stock held and the amount of cash credited to such account. Such
statements will be provided as soon as administratively feasible following the
end of each calendar quarter.
ARTICLE X-MISCELLANEOUS
10.01. Transferability
Neither payroll deductions credited to a Participant's account nor any rights
with regard to the exercise of an option or to receive Stock under the Plan may
be assigned, transferred, pledged, or otherwise disposed of in any way by the
Participant other than by will or the laws of descent and distribution. Any such
attempted assignment, transfer, pledge or other disposition shall be without
effect. During a Participant's lifetime, options held by such Participant shall
be exercisable only by that Participant.
10.02. Use of Funds
All payroll deductions received or held by the Company under this Plan may be
used by the Company for any corporate purpose and the Company shall not be
obligated to segregate such payroll deductions; provided, however, such amounts
shall be held in trust or otherwise segregated from the Company's general assets
to the extent required under local law.
10.03. Adjustment Upon Changes in Capitalization
In the event of a stock split, stock dividend, recapitalization,
reclassification or combination of shares, merger, sale of assets or similar
event, the Committee shall adjust equitably (a) the number and class of shares
or other securities that are reserved for sale under the Plan, (b) the
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number and class of shares or other securities that are subject to outstanding
options, and (c) the appropriate market value and other price determinations
applicable to options. The Committee shall make all determinations under this
Section 10.03, and all such determinations shall be conclusive and binding.
10.04. Amendment and Termination
The Board of Directors shall have complete power and authority to terminate or
amend the Plan; provided, however, that the Board of Directors shall not,
without the approval of the stockholders of the Company (i) increase the maximum
number of shares which may be issued under any Offering (except pursuant to
Section 10.03); (ii) amend the requirements as to the class of employees
eligible to purchase stock under the Plan; or (iii) permit the members of the
Committee to purchase stock under the Plan.
Upon termination, any cash remaining in Participant accounts will be applied to
the purchase of Stock. For purposes of valuing the Stock, the closing price of
the Stock on the New York Stock Exchange on the most recent preceding trading
day will determine the purchase price. At the discretion of the Board of
Directors, Participants will be permitted to exercise their options for any
unpurchased shares by either requiring direct payment from the Participants,
cashless exercise or any other arrangement deemed appropriate by the Board of
Directors.
10.05. Effective Date
This Plan shall be effective as of April 1, 2000.
10.06. No Employment Rights
The Plan does not, directly or indirectly, create any right for the benefit of
any employee or class of employees to purchase any shares under the Plan, or
create in any employee or class of employees any right with respect to
continuation of employment by the Company, and it shall not be deemed to
interfere in any way with the Company's right to terminate, or otherwise modify,
an employee's employment at any time.
10.07. Effect of Plan
The provisions of the Plan shall, in accordance with its terms, be binding upon,
and inure to the benefit of, all successors of each employee participating in
the Plan, including, without limitation, such employee's estate and the
executors, administrators or trustees thereof, heirs and legatees, and any
receiver, trustee in bankruptcy or representative of creditors of such employee.
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10.08. Governing Law
The law of the State of California will govern all matters relating to this Plan
except to the extent it is superseded by the laws of the United States.
IN WITNESS WHEREOF, the company has caused this instrument to be executed on the
___ day of _________________, 2000.
EDWARDS LIFESCIENCES CORPORATION
By:___________________________
Its:__________________________
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EXHIBIT 4.6
Nonemployee Directors and
Consultants Stock Incentive Program
Edwards Lifesciences Corporation
March 2000
<PAGE>
<TABLE>
<CAPTION>
Contents
<S> <C>
=================================================================
Article 1. Establishment, Objectives, and Duration 1
Article 2. Definitions 1
Article 3. Administration 4
Article 4. Eligibility and Participation 4
Article 5. Shares Subject to the Program 5
Article 6. Stock Options 6
Article 7. Restricted Stock 8
Article 8. Beneficiary Designation 10
Article 9. Deferrals 10
Article 10. Rights of Nonemployee Directors and Consultants 10
Article 11. Change in Control 10
Article 12. Amendment, Modification, and Termination 11
Article 13. Compliance with Applicable Law and Withholding 11
Article 14. Indemnification 13
Article 15. Successors 13
Article 16. Legal Construction 13
</TABLE>
<PAGE>
Edwards Lifesciences Corporation Nonemployee Directors
and Consultants Stock Incentive Program
Article 1. Establishment, Objectives, and Duration
1.1 Establishment of the Program. Edwards Lifesciences Corporation, a
Delaware corporation (hereinafter referred to as the "Company"), hereby
establishes an incentive compensation plan to be known as the "Edwards
Lifesciences Corporation Nonemployee Directors and Consultants Stock Incentive
Program" (hereinafter referred to as the "Program"), as set forth in this
document. The Program permits the grant of Nonqualified Stock Options and
Restricted Stock.
The Program shall become effective as of April 1, 2000 (the "Effective Date")
and shall remain in effect as provided in Section 1.3 hereof.
1.2 Objectives of the Program. The objectives of the Program are to optimize
the profitability and growth of the Company through long-term incentives which
are consistent with the Company's goals and which link the personal interests of
Participants to those of the Company's stockholders. The Program is further
intended to provide flexibility to the Company in its ability to motivate,
attract, and retain the services of Participants who make significant
contributions to the Company's success and to allow Participants to share in the
success of the Company.
1.3 Duration of the Program. The Program shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect, subject to
the right of the Board to amend or terminate the Program at any time pursuant to
Article 12 hereof, until all Shares subject to it shall have been purchased or
acquired according to the Program's provisions. However, in no event may an
Award be granted under the Program on or after April 1, 2010.
Article 2. Definitions
Whenever used in the Program, the following terms shall have the meanings set
forth below, and when the meaning is intended, the initial letter of the word
shall be capitalized:
2.1 "Annual Retainer" means the fixed annual fee of a Nonemployee Director
in effect on the first day of the year in which such Annual Retainer is payable
for services to be rendered as a Nonemployee Director of the Company. The Annual
Retainer does not include meeting or chairmanship fees.
2.2 "Award" means, individually or collectively, a grant under this Program
of Nonqualified Stock Options and Restricted Stock.
2.3 "Award Agreement" means an agreement entered into by the Company and
each Participant setting forth the terms and provisions applicable to Awards
granted under this Program.
2.4 "Board" or "Board of Directors" means the Board of Directors of the
Company.
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2.5 "Change in Control" of the Company shall mean the occurrence of any one
of the following events:
(a) Any "Person", as such term is used in Sections 13(d) and 14(d) of
the Exchange Act (other than the Company, any corporation owned,
directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of
the Company, and any trustee or other fiduciary holding securities
under an employee benefit plan of the Company or such
proportionately owned corporation), is or becomes the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing thirty
percent (30%) or more of the combined voting power of the Company's
then outstanding securities; or
(b) During any period of not more than twenty-four (24) months,
individuals who at the beginning of such period constitute the Board
of Directors of the Company, and any new director (other than a
director designated by a Person who has entered into an agreement
with the Company to effect a transaction described in Sections
2.5(a), 2.5(c), or 2.5(d) of this Section 2.5) whose election by the
Board or nomination for election by the Company's stockholders was
approved by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors at the beginning of
the period or whose election or nomination for election was
previously so approved, cease for any reason to constitute at least
a majority thereof; or
(c) The consummation of a merger or consolidation of the Company with
any other entity, other than: (i) a merger or consolidation which
would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities
of the surviving entity) more than sixty percent (60%) of the
combined voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such merger or
consolidation; or (ii) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction)
in which no Person acquires more than thirty percent (30%) of the
combined voting power of the Company's then outstanding securities;
or
(d) The Company's stockholders approve a plan of complete liquidation or
dissolution of the Company, or an agreement for the sale or
disposition by the Company of all or substantially all of the
Company's assets (or any transaction having a similar effect.
2.6 "Code" means the Internal Revenue Code of 1986, as amended from time to
time.
2.7 "Committee" means the Compensation Committee or any other committee
appointed by the Board to administer Awards to Participants, as specified in
Article 3 herein.
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2.8 "Company" means Edwards Lifesciences Corporation a Delaware corporation,
and any successor thereto as provided in Article 15 herein.
2.9 "Consultant" means an individual who is providing or has provided
services to the Company but who is not an Employee or a member of the Board, and
who does not participate in the Edwards Lifesciences Corporation Long-Term Stock
Incentive Compensation Program. For the purposes of this Program, "Employee"
means an employee of the Company or of a Subsidiary of the Company and
"Subsidiary" is defined as any business, whether or not incorporated, in which
the Company has a direct or indirect ownership interest.
2.10 "Disability" shall have the meaning ascribed to such term in the
Participant's governing long-term disability plan, or if no such plan exists, at
the discretion of the Board.
2.11 "Effective Date" shall have the meaning ascribed to such term in
Section 1.1 hereof.
2.12 "Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, or any successor act thereto.
2.13 "Fair Market Value" means, at any date, the closing sale price on the
principal securities exchange on which the Shares are traded on the last
previous day on which a sale was reported.
2.14 "Insider" shall mean an individual who is, on the relevant date, an
officer, director or ten percent (10%) beneficial owner of any class of the
Company's equity securities that is registered pursuant to Section 12 of the
Exchange Act, all as defined under Section 16 of the Exchange Act.
2.15 "Nonemployee Director" means a member of the Company's Board who is not
an Employee of the Company.
2.16 "Nonqualified Stock Option" or "Option" means an option to purchase
Shares granted under Article 6 herein and which is not intended to meet the
requirements of Code Section 422.
2.17 "Option Price" means the price at which a Share may be purchased by a
Participant pursuant to an Option.
2.18 "Participant" means a Nonemployee Director or Consultant who has been
selected to receive an Award or who has outstanding an Award granted under the
Program.
2.19 "Period of Restriction" means the period during which the transfer of
Shares of Restricted Stock is limited in some way (based on the passage of time,
the achievement of performance goals, or upon the occurrence of other events as
determined by the Committee, in its discretion), and the Shares are subject to a
substantial risk of forfeiture, as provided in Article 7 herein.
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2.20 "Restricted Stock" means an Award granted to a Participant pursuant to
Article 7 herein.
2.21 "Shares" means the shares of common stock of the Company.
Article 3. Administration
3.1 General. The Program shall be administered by the Compensation Committee
of the Board, or by any other Committee appointed by the Board. Any Committee
administering the Program shall be comprised entirely of directors. The members
of the Committee shall be appointed from time to time by and shall serve at the
sole discretion of the Board. Members of the Committee may participate in the
Program. The Committee shall have the authority to delegate administrative
duties to officers, Employees, or directors of the Company; provided that the
Committee shall not be able to delegate its authority with respect to granting
Awards to Insiders.
3.2 Authority of the Committee. Except as limited by law or by the
Certificate of Incorporation or Bylaws of the Company, and subject to the
provisions of the Program, the Committee shall have the authority to: (a)
interpret the provisions of the Program, and prescribe, amend, and rescind rules
and procedures relating to the Program; (b) grant Awards under the Program, in
such forms and amounts and subject to such terms and conditions as it deems
appropriate, including, without limitation, Awards which are made in combination
with or in tandem with other Awards (whether or not contemporaneously granted)
or compensation or in lieu of current or deferred compensation; (c) subject to
Article 12, modify the terms of, cancel and reissue, or repurchase outstanding
Awards; (d) prescribe the form of agreement, certificate or other instrument
evidencing any Award under the Program; (e) correct any defect or omission and
reconcile any inconsistency in the Program or in any Award hereunder; (f) to
design Awards to satisfy requirements to make such Awards tax-advantaged to
Participants in any jurisdiction or for any other reason that the Company
desires; and (g) make all other determinations and take all other actions as it
deems necessary or desirable for the administration of the Program; provided,
however, that it is the Company's intent that no outstanding Option will be
canceled for the purpose of reissuing such Option to a Participant at a lower
exercise price. The determination of the Committee on matters within its
authority shall be conclusive and binding on the Company and all other persons.
The Committee shall comply with all applicable law in administering the Plan. As
permitted by law (and subject to Section 3.1 herein), the Committee may delegate
its authority as identified herein.
3.3 Decisions Binding. All determinations and decisions made by the
Committee pursuant to the provisions of the Program and all related orders and
resolutions of the Board shall be final, conclusive and binding on all persons,
including the Company, its stockholders, directors, Employees, Consultants,
Participants, and their estates and beneficiaries.
Article 4. Eligibility and Participation
4.1 Eligibility. Persons eligible to participate in this Program shall
include all Nonemployee Directors and Consultants.
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4.2 Actual Participation. Subject to the provisions of the Program, the
Committee may, from time to time, select from all eligible Nonemployee Directors
and Consultants those to whom Awards shall be granted and shall determine the
nature and amount of each Award.
Article 5. Shares Subject to the Program
5.1 Number of Shares Available for Grants. Subject to adjustment as provided
in Section 5.4 herein, the number of Shares hereby reserved for delivery to
Participants under the Program shall be three hundred thousand (300,000) Shares.
Subject to the restrictions for Nonemployee Directors set forth in Articles 6
and 7, the Committee shall determine the appropriate methodology for calculating
the number of Shares issued pursuant to the Program.
5.2 Type of Shares. Shares issued under the Program in connection with
Options may be authorized and unissued Shares or issued Shares held as treasury
Shares. Shares issued under the Program in connection with Restricted Stock
shall be issued Shares held as treasury Shares; provided, however, that
authorized and unissued Shares may be issued in connection with Restricted Stock
to the extent that the Committee determines that past services of the
Participant constitute adequate consideration for at least the par value
thereof.
5.3 Reusage of Shares.
(a) General. In the event of the exercise or termination (by reason of
forfeiture, expiration, cancellation, surrender or otherwise) of any
Award under the Program, that number of Shares that was subject to
the Award but not delivered shall again be available as Awards under
the Program.
(b) Restricted Stock. In the event that Shares are delivered under the
Program as Restricted Stock and are thereafter forfeited or
reacquired by the Company pursuant to rights reserved upon the grant
thereof, such forfeited or reacquired Shares shall again be
available as Awards under the Program.
(c) Limitation. Notwithstanding the provisions of Sections 5.3(a) or
5.3(b) above, the following Shares shall not be available for
reissuance under the Program: (i) Shares which are withheld from any
Award or payment under the Program to satisfy tax withholding
obligations (as described in Section 13.3; (ii) Shares which are
surrendered to fulfill tax obligations (as described in Section
13.4; and (iii) Shares which are surrendered in payment of the
Option Price upon the exercise of an Option.
5.4 Adjustments in Authorized Shares. In the event of any change in
corporate capitalization, such as a stock split, or a corporate transaction,
such as any merger, consolidation, separation, including a spin-off, or other
distribution of stock or property of the Company, any reorganization (whether or
not such reorganization comes within the definition of such term in Code Section
368) or any partial or complete liquidation of the Company, such adjustment
shall be made in the number and class of Shares which may be delivered under
Section 5.1, in the number and class of and/or price of Shares subject to
outstanding Awards granted under the Program, and in the
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Award limits set forth in Section 5.1, as may be determined to be appropriate
and equitable by the Board, in its sole discretion, to prevent dilution or
enlargement of rights; provided, however, that the number of Shares subject to
any Award shall always be a whole number. In a stock-for-stock acquisition of
the Company, the Committee may, in its sole discretion, substitute securities of
another issuer for any Shares subject to outstanding Awards.
Article 6. Stock Options
6.1 Grant of Options. Subject to the discretion of the Committee and the
terms and provisions of the Program, during the period beginning January 1, 2001
and ending April 1, 2010, each Nonemployee Director shall receive annually
Options to purchase seven thousand five hundred (7,500) Shares, effective as of
the day following each annual meeting of the Company's shareholders (but subject
to any vesting provisions or other restrictions determined by the Committee).
Aside from the foregoing annual grants, no additional Options shall be granted
to Nonemployee Directors under the Program.
Subject to the terms and provisions of the Program, Options may be granted to
Consultants in such number, and upon such terms, and at any time and from time
to time as shall be determined by the Committee.
If all or any portion of the exercise price or taxes incurred in connection
with the exercise are paid by delivery (or, in the case of payment of taxes, by
withholding of Shares) of other Shares of the Company, a Participant's Options
may provide for the grant of replacement Options. All Options under the Program
shall be granted in the form of nonqualified stock options as no Option under
the Program may be granted in the form of an incentive stock options as defined
under the provisions of Code Section 422.
6.2 Award Agreement. Each Option grant shall be evidenced by an Award
Agreement that shall specify the Option Price, the duration of the Option, the
number of Shares to which the Option pertains, and such other provisions as the
Committee shall determine.
6.3 Option Price. The Option Price for each grant of an Option under this
Program shall be at least equal to one hundred percent (100%) of the Fair Market
Value of a Share on the date the Option is granted.
6.4 Duration of Options. Each Option granted to a Participant shall expire
at such time as the Committee shall determine at the time of grant; provided,
however, that no Option shall be exercisable later than the tenth (10th)
anniversary date of its grant.
6.5 Exercise of Options. Options granted under this Article 6 shall be
exercisable at such times and be subject to such restrictions and conditions as
the Committee shall in each instance approve, which need not be the same for
each grant or for each Participant.
6.6 Payment. Options granted under this Article 6 shall be exercised by the
delivery of a written notice of exercise to the Company, setting forth the
number of Shares with respect to which the Option is to be exercised,
accompanied by full payment for the Shares.
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The Option Price upon exercise of any Option shall be payable to the Company
in full either: (a) in cash or its equivalent; or (b) by tendering previously
acquired Shares (by either actual delivery or attestation) having an aggregate
Fair Market Value at the time of exercise equal to the total Option Price
(provided that the Shares which are tendered must have been held by the
Participant for at least six (6) months prior to their tender to satisfy the
Option Price); or (c) by a combination of (a) and (b).
The Committee also may allow cashless exercise as permitted under Federal
Reserve Board's Regulation T, subject to applicable securities law restrictions,
or by any other means which the Board determines to be consistent with the
Program's purpose and applicable law.
Subject to any governing rules or regulations, as soon as practicable after
receipt of a written notification of exercise and full payment, the Company
shall deliver to the Participant, in the Participant's name (or, at the
discretion of the Participant, jointly in the names of the Participant and the
Participant's spouse), Share certificates in an appropriate amount based upon
the number of Shares purchased under the Option(s).
6.7 Restrictions on Share Transferability. The Committee may impose such
restrictions on any Shares acquired pursuant to the exercise of an Option
granted under this Article 6 as it may deem advisable, including, without
limitation, restrictions under applicable federal securities laws, under the
requirements of any stock exchange or market upon which such Shares are then
listed and/or traded, and under any blue sky or state securities laws applicable
to such Shares. Except as otherwise provided in a Participant's Award Agreement,
no Option granted under this Article 6 may be sold, transferred, pledged,
assigned, or otherwise alienated or hypothecated, other than by will or by the
laws of descent and distribution. Further, except as otherwise provided in a
Participant's Award Agreement, all Options granted to a Participant under this
Article 6 shall be exercisable during his or her lifetime only by such
Participant.
6.8 Termination of Directorship or Service. Each Participant's Option Award
Agreement shall set forth the extent to which the Participant shall have the
right to exercise the Option following termination of the Participant's service
to the Company as a Nonemployee Director or Consultant. Such provisions shall be
determined in the sole discretion of the Committee, shall be included in the
Award Agreement entered into with each Participant, need not be uniform among
all Options issued pursuant to this Article 6, and may reflect distinctions
based on the reasons for termination.
6.9 Nontransferability of Options. Except as otherwise provided in a
Participant's Award Agreement, no Option granted under this Article 6 may be
sold, transferred, pledged, assigned, or otherwise alienated or hypothecated,
other than by will or by the laws of descent and distribution. Further, except
as otherwise provided in a Participant's Award Agreement, all Options granted to
a Participant under this Article 6 shall be exercisable during his or her
lifetime only by such Participant.
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6.10 Substitution of Cash. Unless otherwise provided in a Participant's
Award Agreement, and notwithstanding any provision in the Program to the
contrary (including but not limited to Section 12.3), in the event of a Change
in Control in which the Company's stockholders holding Shares receive
consideration other than shares of common stock that are registered under
Section 12 of the Exchange Act, the Committee shall have the authority to
require that any outstanding Option be surrendered to the Company by a
Participant for cancellation by the Company, with the Participant receiving in
exchange a cash payment from the Company within ten (10) days of the Change in
Control. Such cash payment shall be equal to the number of Shares under Option,
multiplied by the excess, if any, of the greater of (i) the highest per Share
price offered to stockholders in any transaction whereby the Change in Control
takes place, or (ii) the Fair Market Value of a Share on the date the Change in
Control occurs, over the Option Price.
6.11 Elective Grants to Nonemployee Directors in Lieu of Annual Retainer.
Subject to the terms and provisions of the Program and any other restrictions
set out by the Committee in its sole discretion, the Committee may permit each
Nonemployee Director to elect to receive all or a portion of his Annual Retainer
in the form of Options to be issued as of the first day of the year for which
such Annual Retainer is payable (the "Conversion Date") and using the Fair
Market Value of a Share as of the Conversion Date as the Option Price of the
Options.
If deferral elections are permitted by the Committee, each irrevocable
election shall be made in accordance with such rules as the Committee may
determine in its sole discretion. Except as may otherwise be determined by the
Committee, in the event of such an election, the number of Options which an
electing Nonemployee Director shall receive shall be determined by dividing that
portion of the Annual Retainer as to which the election is being made by the
Fair Market Value of a Share on the Conversion Date and multiplying the quotient
by three (3).
Any portion of a Nonemployee Director's Annual Retainer for which an election
has not been made pursuant to this Section 6.11, shall be paid in cash to such
Nonemployee Director at such time or times as payments thereof are customarily
made by the Company.
Article 7. Restricted Stock
7.1 Grant of Restricted Stock. Subject to the terms and provisions of the
Program, during the year 2000 only, each Nonemployee Director shall be granted
five thousand (5,000) Shares of Restricted Stock effective as of the later of
(i) April 1, 2000, or (ii) the date of the Nonemployee Director's election to
the Board on or before December 31, 2000.
Subject to the terms and provisions of the Program, the Committee, at any
time and from time to time, may grant Shares of Restricted Stock to Consultants
in such amounts as the Committee shall determine.
7.2 Restricted Stock Agreement. Each Restricted Stock grant shall be
evidenced by a Restricted Stock Award Agreement that shall specify the Period(s)
of Restriction, the number of Shares of Restricted Stock granted, and such other
provisions as the Committee shall determine.
8
<PAGE>
7.3 Restriction on Transferability. Except as provided in this Article 7,
the Shares of Restricted Stock granted herein may not be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated until the end of the
applicable Period of Restriction established by the Committee and specified in
the Restricted Stock Award Agreement, or upon earlier satisfaction of any other
conditions, as specified by the Committee in its sole discretion and set forth
in the Restricted Stock Award Agreement. All rights with respect to the
Restricted Stock granted to a Participant under the Program shall be available
during his or her lifetime only to such Participant.
7.4 Other Restrictions. The Committee shall impose such other conditions
and/or restrictions on any Shares of Restricted Stock granted pursuant to the
Program as it may deem advisable including, without limitation, any or all of
the following:
(a) A required period of service with the Company, as determined by the
Committee, prior to the vesting of Shares of Restricted Stock.
(b) A requirement that Participants forfeit (or in the case of Shares
sold to a Participant, resell to the Company at his or her cost) all
or a part of Shares of Restricted Stock in the event of termination
of his or her service as a Nonemployee Director or Consultant during
the Period of Restriction.
(c) A prohibition against such Participants' dissemination of any secret
or confidential information belonging to the Company, or the
solicitation by Participants of the Company's Employees for
employment by another entity.
Shares of Restricted Stock awarded pursuant to the Program shall be
registered in the name of the Participant and, if such Shares are certificated,
in the sole discretion of the Committee, may be deposited in a bank designated
by the Committee or with the Company. The Committee may require a stock power
endorsed in blank with respect to Shares of Restricted Stock whether or not
certificated.
Except as otherwise provided in this Article 7, Shares of Restricted Stock
covered by each Restricted Stock grant made under the Program shall become
freely transferable (subject to any restrictions under applicable securities
law) by the Participant after the last day of the applicable Period of
Restriction.
7.5 Voting Rights. At the Committee's sole discretion, Participants holding
Shares of Restricted Stock granted hereunder may be granted the right to
exercise full voting rights with respect to those Shares during the Period of
Restriction.
7.6 Dividends and Other Distributions. At the Committee's sole discretion,
during the Period of Restriction, Participants holding Shares of Restricted
Stock granted hereunder may be credited with regular cash dividends paid with
respect to the underlying Shares while they are so held. The Committee may apply
any restrictions to the dividends that the Committee deems appropriate.
9
<PAGE>
7.7 Termination of Directorship or Service. Each Restricted Stock Award
Agreement shall set forth the extent to which the Participant shall have the
right to receive unvested Shares of Restricted Stock following termination of
the Participant's service to the Company as a Nonemployee Director or
Consultant. Such provisions shall be determined in the sole discretion of the
Committee, shall be included in the Award Agreement entered into with each
Participant, need not be uniform among all Shares of Restricted Stock issued
pursuant to the Program, and may reflect distinctions based on the reasons for
termination.
Article 8. Beneficiary Designation
Each Participant under the Program may, from time to time, name any
beneficiary or beneficiaries (who may be named contingently or successively) to
whom any benefit under the Program is to be paid in case of his or her death
before he or she receives any or all of such benefit. Each such designation
shall revoke all prior designations by the same Participant, shall be in a form
prescribed by the Company, and will be effective only when filed by the
Participant in writing with the Company during the Participant's lifetime. In
the absence of any such designation, benefits remaining unpaid at the
Participant's death shall be paid to the Participant's estate.
Article 9. Deferrals
The Committee may permit or require a Participant to defer such Participant's
receipt of the payment of cash or the delivery of Shares that would otherwise be
due to such Participant by virtue of the exercise of an Option, or the lapse or
waiver of restrictions with respect to Restricted Stock. If any such deferral
election is required or permitted, the Committee shall, in its sole discretion,
establish rules and procedures for such payment deferrals.
Article 10. Rights of Nonemployee Directors and Consultants
10.1 Directorship or Provision of Services. Nothing in the Program or any
Award Agreement shall interfere with or limit in any way the right of the
Company to terminate at any time any Participant's service to the Company as a
Nonemployee Director or as a Consultant, nor confer upon any Participant any
right to continue in the service of the Company.
10.2 Participation. No Nonemployee Director or Consultant shall have the
right to be selected to receive an Award under this Program, or, having been so
selected, to be selected to receive a future Award.
Article 11. Change in Control
11.1 Treatment of Outstanding Awards. Subject to Section 11.3, upon the
occurrence of a Change in Control and notwithstanding the terms of any Award
Agreement, unless otherwise specifically prohibited under applicable laws, or by
the rules and regulations of any governing governmental agencies or national
securities exchanges:
(a) Any and all Options granted hereunder shall become immediately
exercisable, and shall remain exercisable throughout their entire
term; and
(b) Any restriction periods and restrictions imposed on Shares of
Restricted Stock shall lapse.
10
<PAGE>
11.2 Termination, Amendment, and Modifications of Change-in-Control
Provisions. Notwithstanding any other provision of this Program (but subject to
the limitations of Section 11.3 hereof) or any Award Agreement provision, the
provisions of this Article 11 may not be terminated, amended, or modified on or
after the date of a Change in Control to affect adversely any Award theretofore
granted under the Program without the prior written consent of the Participant
with respect to said Participant's outstanding Awards; provided, however, the
Board may terminate, amend, or modify this Article 11 at any time and from time
to time prior to the date of a Change in Control.
11.3 Pooling of Interests Accounting. Notwithstanding any provision of the
Program or of any Award Agreement to the contrary, in the event that the
consummation of a Change in Control is contingent on using pooling of interests
accounting methodology, the Board may, in its sole discretion, take any action
necessary to preserve the use of pooling of interests accounting.
Article 12. Amendment, Modification, and Termination
12.1 Amendment, Modification, and Termination. Subject to the terms of the
Program, the Board may at any time and from time to time, alter, amend, suspend
or terminate the Program in whole or in part.
12.2 Adjustment of Awards Upon the Occurrence of Certain Unusual or
Nonrecurring Events. The Committee may make adjustments in the terms and
conditions of, and the criteria included in, Awards in recognition of unusual or
nonrecurring events (including, without limitation, the events described in
Section 5.4 hereof) affecting the Company or the financial statements of the
Company or of changes in applicable laws, regulations, or accounting principles,
whenever the Committee determines that such adjustments are appropriate in order
to prevent dilution or enlargement of the benefits or potential benefits
intended to be made available under the Program.
12.3 Awards Previously Granted. Notwithstanding any provision of the Program
or of any Award Agreement to the contrary (but subject to Sections 6.10 and 11.3
hereof), no termination, amendment, or modification of the Program shall
adversely affect in any material way any Award previously granted under the
Program, without the written consent of the Participant holding such Award.
Article 13. Compliance with Applicable Law and Withholding
13.1 General. The granting of Awards and the issuance of Shares under the
Program shall be subject to all applicable laws, rules, and regulations, and to
such approvals by any governmental agencies or national securities exchanges as
may be required. Notwithstanding anything to the contrary in the Program or any
Award Agreement, the following shall apply:
(a) The Company shall have no obligation to issue any Shares under the
Program if such issuance would violate any applicable law or any
applicable regulation or requirement of any securities exchange or
similar entity.
11
<PAGE>
(b) Prior to the issuance of any Shares under the Program, the Company
may require a written statement that the recipient is acquiring the
Shares for investment and not for the purpose or with the intention
of distributing the Shares and that the recipient will not dispose
of them in violation of the registration requirements of the
Securities Act of 1933.
(c) With respect to any Participant who is subject to Section 16(a) of
the Exchange Act, the Committee may, at any time, add such
conditions and limitations to Award or payment under the Program or
implement procedures for the administration of the Program which it
deems necessary or desirable to comply with the requirements of Rule
16b-3 of the Exchange Act.
(d) If, at any time, the Company, determines that the listing,
registration, or qualification (or any updating of any such
document) of any Award, or the Shares issuable pursuant thereto, is
necessary on any securities exchange or under any federal or state
securities or blue sky law, or that the consent or approval of any
governmental regulatory body is necessary or desirable as a
condition of, or in connection with, any Award, the issuance of
Shares pursuant to any Award, or the removal of any restrictions
imposed on Shares subject to an Award, such Award shall not be
granted and the Shares shall not be issued or such restrictions
shall not be removed, as the case may be, in whole or in part,
unless such listing, registration, qualification, consent, or
approval shall have been effected or obtained free of any conditions
not acceptable to the Company.
13.2 Securities Law Compliance. With respect to Insiders, transactions under
this Program are intended to comply with all applicable conditions of Rule 16b-3
or its successors under the 1934 Act. To the extent any provision of the Program
or action by the Committee or the Board fails to so comply, it shall be deemed
null and void, to the extent permitted by law and deemed advisable by the Board.
13.3 Tax Withholding. The Company shall have the power and the right to
deduct or withhold, or require a Participant to remit to the Company, an amount
sufficient to satisfy federal, state, and local taxes, domestic or foreign,
required by law or regulation to be withheld with respect to any taxable event
arising as a result of this Program.
13.4 Share Withholding. With respect to withholding required upon any
taxable event arising as a result of Awards payable in Shares granted hereunder,
Participants may elect, subject to the approval of the Committee, to satisfy the
withholding requirement, in whole or in part, by having the Company withhold
Shares to satisfy their tax obligations. With respect to withholding required
upon the exercise of Options, or upon the lapse of restrictions on Shares of
Restricted Stock, Participants may only elect to have Shares withheld having a
Fair Market Value on the date the tax is to be determined equal to the minimum
statutory withholding tax which could be imposed on the transaction. All
elections shall be irrevocable, made in writing, signed by the Participant, and
shall be subject to any restrictions or limitations that the Committee, in its
sole discretion, deems appropriate.
12
<PAGE>
Article 14. Indemnification
Each person who is or shall have been a member of the Committee, or of the
Board, shall be indemnified and held harmless by the Company against and from
any loss, cost, liability, or expense that may be imposed upon or reasonably
incurred by him or her in connection with or resulting from any claim, action,
suit, or proceeding to which he or she may be a party or in which he or she may
be involved by reason of any action taken or failure to act under the Program
and against and from any and all amounts paid by him or her in settlement
thereof, with the Company's approval, or paid by him or her in satisfaction of
any judgement in any such action, suit, or proceeding against him or her,
provided he or she shall give the Company an opportunity, at its own expense, to
handle and defend the same before he or she undertakes to handle and defend it
on his or her own behalf. The foregoing right of indemnification shall not be
exclusive of any other rights of indemnification to which such persons may be
entitled under the Company's Articles of Incorporation or Bylaws, as a matter of
law, or otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
Article 15. Successors
All obligations of the Company under the Program with respect to Awards
granted hereunder shall be binding on any successor to the Company, whether the
existence of such successor is the result of a direct or indirect purchase,
merger, consolidation, or otherwise, of all or substantially all of the business
and/or assets of the Company.
Article 16. Legal Construction
16.1 Gender and Number. Except where otherwise indicated by the context, any
masculine term used herein also shall include the feminine; the plural shall
include the singular and the singular shall include the plural.
16.2 Severability. In the event any provision of the Program shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Program, and the Program shall be construed and
enforced as if the illegal or invalid provision had not been included.
16.3 Governing Law. To the extent not preempted by federal law, the Program,
and all Award or other agreements hereunder, shall be construed in accordance
with and governed by the laws of the state of Delaware without giving effect to
principles of conflicts of laws.
13
<PAGE>
Exhibit 5
March 21, 2000
Edwards Lifesciences Corporation
17221 Red Hill Avenue
Irvine, California 92614
Re: 12,643,374 shares of Common Stock, $1 par value
12,643,374 Preferred Stock Purchase Rights
---------------------------------------------------
Ladies and Gentlemen:
We refer to the Registration Statement on Form S-8 (the "Registration
Statement") being filed by Edwards Lifesciences Corporation, a Delaware
corporation (the "Company"), with the Securities and Exchange Commission under
the Securities Act of 1933, as amended (the "Securities Act"), relating to the
registration of an aggregate of 12,643,374 shares of Common Stock, $1 par value,
of the Company (the "Registered Common Stock"), together with 12,643,374
Preferred Stock Purchase Rights of the Company (the "Registered Rights")
associated therewith, to be issued under the Edwards Lifesciences Corporation
Long-Term Stock Incentive Compensation Program, the Edwards Lifesciences
Corporation Employee Stock Purchase Plan for United States Employees, the
Edwards Lifesciences Corporation Employee Stock Purchase Plan for International
Employees and the Edwards Lifesciences Corporation Non-Employee Directors and
Consultants Stock Incentive Program (collectively, the "Plans"). The terms of
the Rights will be set forth in a Rights Agreement substantially in the form of
Exhibit 10.9 to the Company's Registration Statement on Form 10, as amended (the
"Rights Agreement") to be entered into between the Company and First Chicago
Trust Company of New York, a division of EquiServe, as Rights Agent.
We are familiar with the proceedings to date with respect to the proposed
issuance of the Registered Common Stock and the Registered Rights under the
Plans and have examined such records, documents and questions of law, and
satisfied ourselves as to such matters of fact, as we have considered relevant
and necessary as a basis for this opinion.
Based on the foregoing, we are of the opinion that:
1. The Company is duly incorporated and validly existing under the laws of
the State of Delaware.
2. Each share of the Registered Common Stock which is newly issued
pursuant to the Plans will constitute a share of Common Stock of the Company
which has been duly authorized, legally issued, fully paid and non-assessable
when (i) the Registration Statement shall have become effective under the
Securities Act; (ii) the Company's Board of Directors or a duly authorized
committee thereof shall have duly adopted final resolutions authorizing the
issuance
<PAGE>
Edwards Lifesciences Corporation
March 21, 2000
Page 2
and sale of the Registered Common Stock as contemplated by the Registration
Statement; (iii) such Registered Common Stock shall have been duly issued and
sold in the manner contemplated by the Plans; and (iv) a certificate
representing such Registered Common Stock shall have been duly executed,
countersigned and registered and duly delivered to the purchaser thereof upon
payment of the agreed consideration therefor (not less than the par value
thereof) determined in accordance with the terms of the Plans.
3. The Registered Right associated with each share of Registered Common
Stock referred to in paragraph 2 above will be validly issued when (i) the
Rights Agreement shall have been duly executed by the parties thereto; (ii) such
Registered Right shall have been duly issued in accordance with the terms of the
Rights Agreement; and (iii) such associated share shall have been duly issued
and paid for as set forth in paragraph 2 above.
This opinion letter is limited to the General Corporation Law of the State
of Delaware and the federal laws of the United States of America.
We hereby consent to the filing of this opinion letter as an exhibit to the
Registration Statement and to all references to our firm included in or made a
part of the Registration Statement.
Very truly yours,
Sidley & Austin
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
----------------------------------
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of our report dated February 16, 2000 relating to the
financial statements and financial statement schedule of Edwards Lifesciences
Corporation, which appears in the Edwards Lifesciences Corporation Form 10 dated
March 21, 2000.
Pricewaterhouse Coopers LLP
Chicago, Illinois
March 20, 2000
<PAGE>
Exhibit 24.1
Power of Attorney
The undersigned, a Director and/or Officer of Edwards Lifesciences
Corporation, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Michael A. Mussallem or Bruce J. Bentcover (each acting alone and
without the other) his or her true and lawful attorney-in-fact and agent, with
full power and authority to execute in the name and on behalf of the undersigned
as such Director and/or Officer, a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration under the Securities Act of the offer and sale of shares of the
Corporation's Common Stock, par value $1, and the associated Preferred Stock
Purchase Rights, issuable in accordance with the Edwards Lifesciences
Corporation Long-Term Stock Incentive Compensation Program, the Edwards
Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees, the Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees and the Edwards Lifesciences Corporation Non-Employee
Directors and Consultants Stock Incentive Program, and to execute any and all
amendments to such Registration Statement, whether filed prior or subsequent to
the time such Registration Statement becomes effective, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. The undersigned hereby grants unto each
such attorney-in-fact and agent, full power of substitution and revocation in
the premises and hereby ratifies and confirms all that each such attorney-in-
fact and agent, or his substitute or substitutes, may do or cause to be done by
virtue of these presents.
Dated this 10th day of March, 2000.
Michael R. Bowlin
-----------------
Michael R. Bowlin
<PAGE>
Exhibit 24.2
Power of Attorney
The undersigned, a Director and/or Officer of Edwards Lifesciences
Corporation, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Michael A. Mussallem or Bruce J. Bentcover (each acting alone and
without the other) his or her true and lawful attorney-in-fact and agent, with
full power and authority to execute in the name and on behalf of the undersigned
as such Director and/or Officer, a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration under the Securities Act of the offer and sale of shares of the
Corporation's Common Stock, par value $1, and the associated Preferred Stock
Purchase Rights, issuable in accordance with the Edwards Lifesciences
Corporation Long-Term Stock Incentive Compensation Program, the Edwards
Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees, the Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees and the Edwards Lifesciences Corporation Non-Employee
Directors and Consultants Stock Incentive Program, and to execute any and all
amendments to such Registration Statement, whether filed prior or subsequent to
the time such Registration Statement becomes effective, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. The undersigned hereby grants unto each
such attorney-in-fact and agent, full power of substitution and revocation in
the premises and hereby ratifies and confirms all that each such attorney-in-
fact and agent, or his substitute or substitutes, may do or cause to be done by
virtue of these presents.
Dated this 10th day of March, 2000.
Victoria R. Fash
------------------
Victoria R. Fash
<PAGE>
Exhibit 24.3
Power of Attorney
The undersigned, a Director and/or Officer of Edwards Lifesciences
Corporation, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Michael A. Mussallem or Bruce J. Bentcover (each acting alone and
without the other) his or her true and lawful attorney-in-fact and agent, with
full power and authority to execute in the name and on behalf of the undersigned
as such Director and/or Officer, a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration under the Securities Act of the offer and sale of shares of the
Corporation's Common Stock, par value $1, and the associated Preferred Stock
Purchase Rights, issuable in accordance with the Edwards Lifesciences
Corporation Long-Term Stock Incentive Compensation Program, the Edwards
Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees, the Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees and the Edwards Lifesciences Corporation Non-Employee
Directors and Consultants Stock Incentive Program, and to execute any and all
amendments to such Registration Statement, whether filed prior or subsequent to
the time such Registration Statement becomes effective, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. The undersigned hereby grants unto each
such attorney-in-fact and agent, full power of substitution and revocation in
the premises and hereby ratifies and confirms all that each such attorney-in-
fact and agent, or his substitute or substitutes, may do or cause to be done by
virtue of these presents.
Dated this 10th day of March, 2000.
Vernon R. Loucks Jr.
--------------------
Vernon R. Loucks Jr.
<PAGE>
Exhibit 24.4
Power of Attorney
The undersigned, a Director and/or Officer of Edwards Lifesciences
Corporation, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Michael A. Mussallem or Bruce J. Bentcover (each acting alone and
without the other) his or her true and lawful attorney-in-fact and agent, with
full power and authority to execute in the name and on behalf of the undersigned
as such Director and/or Officer, a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration under the Securities Act of the offer and sale of shares of the
Corporation's Common Stock, par value $1, and the associated Preferred Stock
Purchase Rights, issuable in accordance with the Edwards Lifesciences
Corporation Long-Term Stock Incentive Compensation Program, the Edwards
Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees, the Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees and the Edwards Lifesciences Corporation Non-Employee
Directors and Consultants Stock Incentive Program, and to execute any and all
amendments to such Registration Statement, whether filed prior or subsequent to
the time such Registration Statement becomes effective, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. The undersigned hereby grants unto each
such attorney-in-fact and agent, full power of substitution and revocation in
the premises and hereby ratifies and confirms all that each such attorney-in-
fact and agent, or his substitute or substitutes, may do or cause to be done by
virtue of these presents.
Dated this 10th day of March, 2000.
Philip M. Neal
------------------
Philip M. Neal
<PAGE>
Exhibit 24.5
Power of Attorney
The undersigned, a Director and/or Officer of Edwards Lifesciences
Corporation, a Delaware corporation (the "Corporation"), does hereby constitute
and appoint Michael A. Mussallem or Bruce J. Bentcover (each acting alone and
without the other) his or her true and lawful attorney-in-fact and agent, with
full power and authority to execute in the name and on behalf of the undersigned
as such Director and/or Officer, a Registration Statement on Form S-8 under the
Securities Act of 1933, as amended (the "Securities Act"), with respect to the
registration under the Securities Act of the offer and sale of shares of the
Corporation's Common Stock, par value $1, and the associated Preferred Stock
Purchase Rights, issuable in accordance with the Edwards Lifesciences
Corporation Long-Term Stock Incentive Compensation Program, the Edwards
Lifesciences Corporation Employee Stock Purchase Plan for United States
Employees, the Edwards Lifesciences Corporation Employee Stock Purchase Plan for
International Employees and the Edwards Lifesciences Corporation Non-Employee
Directors and Consultants Stock Incentive Program, and to execute any and all
amendments to such Registration Statement, whether filed prior or subsequent to
the time such Registration Statement becomes effective, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission. The undersigned hereby grants unto each
such attorney-in-fact and agent, full power of substitution and revocation in
the premises and hereby ratifies and confirms all that each such attorney-in-
fact and agent, or his substitute or substitutes, may do or cause to be done by
virtue of these presents.
Dated this 10th day of March, 2000.
David E.I. Pyott
----------------
David E.I. Pyott
