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Exhibit 10.3  

 
 

Long-Term Stock Incentive
  Compensation Program
  (as amended and restated February 20, 2003)    
    

Edwards
Lifesciences Corporation 

February 2003

 
 

Contents    
    

	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	
 	

6
	

Article 7. Restricted Stock	
 	

8
	

Article 8. Performance Units and Performance Shares	
 	

9
	

Article 9. Performance Measures	
 	

10
	

Article 10. Beneficiary Designation	
 	

11
	

Article 11. Deferrals	
 	

11
	

Article 12. Rights of Employees and Contractors	
 	

11
	

Article 13. Change in Control	
 	

12
	

Article 14. Amendment, Modification, and Termination	
 	

12
	

Article 15. Compliance with Applicable Law and Withholding	
 	

12
	

Article 16. Indemnification	
 	

13
	

Article 17. Successors	
 	

14
	

Article 18. Legal Construction	
 	

14

  

 
 

Edwards Lifesciences Corporation
  Long-Term Stock Incentive Compensation Program
  (as amended and restated February 20, 2003)    
    

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 amends and restates the incentive compensation plan established April 1, 2000 and known as the "Edwards Lifesciences Corporation Long-Term Stock
Incentive Compensation Program" (hereinafter, as amended and restated, 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 became effective as of April 1, 2000 (the "Effective Date") and shall remain in effect as provided in Section 1.3 hereof. 

        The
Program was amended and restated effective as of July 12, 2000 to clarify the definition of "Subsidiary" and was subsequently further amended and restated as of May 8,
2002 and, subject to stockholder approval, February 20, 2003. 

        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. 

        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, 

1

 

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. 

        2.7   "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 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. 

        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

 

        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 beneficial owner of more than
ten percent (10%) 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. 

        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) applicable to compensation payable to Covered Employees. 

        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, Disability or, with respect to Awards made on or after May 8, 2002, Cause, 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. Employment or service with Baxter International Inc.
shall be included for purposes of determining qualification for Retirement only to the extent that such employment or service immediately, and without any break, precedes employment or service with
the Company. For purposes of this definition, unless defined otherwise in the applicable Award Agreement, "Cause" means: (a) a Participant's willful and continued failure to substantially
perform his duties with the Company or a Subsidiary (other than any such failure resulting from Disability); (b) a Participant's willfully engaging in conduct that is demonstrably and
materially injurious to the Company or a Subsidiary, monetarily or otherwise; or (c) a Participant's having been convicted of a felony. For the purpose of determining "Cause," no act, or
failure to act, on a Participant's part shall be deemed "willful" unless done, or omitted to be done, 

3

 

by
the Participant not in good faith and without reasonable belief that the action or omission was in the best interests of the Company or a Subsidiary. 

        2.27 "Shares" means the shares of common stock of the Company. 

        2.28 "Subsidiary" means any business, whether or not incorporated, in which the Company beneficially owns, directly or
indirectly through another entity or entities, securities or interests representing more than fifty percent (50%) of the combined voting power of the voting securities or voting interests of such
business. 

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 that are intended to qualify for the Performance-Based Exception; and
(iii) certifying that any performance goals and other material terms attributable to Awards 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 except for adjustments made pursuant to Section 5.4, no outstanding Option
will be amended to lower the exercise price or will be canceled for the purpose of reissuing such Option to a Participant at a lower exercise price without the approval of the Company's stockholders.
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 laws 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. 

4

 

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 fifteen million five hundred thousand (15,500,000) 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. 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    Reuse 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. 

5

 

	(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; (ii) Shares which are surrendered to
fulfill tax obligations incurred under the Program; 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 Award
limits set forth in Section 5.1, as shall 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, not later than the
tenth (10th) anniversary date of its grant, as the Committee shall determine; provided, however, that an Option may have such shorter or longer term as the Committee shall deem necessary
to comply with applicable federal, state, local or, if applicable, foreign law, or, if the Committee so determines, to qualify for favorable tax treatment. Unless the Committee determines otherwise,
the term of each Option granted to a Participant after February 20, 2003 shall expire on the seventh (7th) anniversary date of its grant, subject to such provisions for earlier
expiration as the Committee may specify in accordance with Section 6.8 (relating to termination of employment or service) or otherwise. 

        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

 

        6.6    Payment.    Options granted under this Article 6 shall be exercised by the delivery of a written notice
(or such other form of notice as the Company may specify) 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 (or a satisfactory "cashless exercise" notice). 

        The
Option Price upon exercise of any Option shall be payable to the Company in full either: (a) in cash or its equivalent; (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, or such shorter or longer period, if any, as is necessary to avoid variable accounting treatment); (c) by a cashless exercise, as permitted
under Federal Reserve Board's Regulation T, subject to applicable securities law restrictions and such procedures and limitations as the Company may specify from time to time, (d) by any
other means which the Committee determines to be consistent with the Program's purpose and applicable law, or (e) by a combination of two or more of (a) through (d). 

        Subject
to any governing rules or regulations, including cashless exercise procedures, as soon as practicable after receipt of a notification of exercise and full payment (or a
satisfactory "cashless exercise" notice), the Company shall cause to be issued and delivered to the Participant, in certificate form or otherwise, evidence of the 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. 

7

   
        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 14.2), 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. 

        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 

8

 

restrictions
under any applicable securities law) by the Participant after the last day of the applicable Period of Restriction. 

        7.5    Voting Rights.    Unless the Committee determines otherwise, Participants holding Shares of Restricted Stock
issued hereunder shall be entitled to exercise full voting rights with respect to those Shares during the Period of Restriction. 

        7.6    Dividends and Other Distributions.    Unless the Committee determines otherwise, during the Period of
Restriction, Participants holding Shares of Restricted Stock issued hereunder shall be entitled to regular cash dividends paid with respect to such Shares. 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 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 vest in previously 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. 

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. 

        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. 

9

 

        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. 

        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; 

10

 

	(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. 

        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. 

11

 

Article 13. Change in Control  

        Except as may otherwise be provided in a Participant's Award Agreement, 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: 

	(a)
	Any
and all Options granted hereunder shall become immediately exercisable, and, if granted before May 8, 2002, shall remain exercisable throughout their entire term;

	(b)
	Any
restriction periods and restrictions imposed on Shares 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; provided, however, that if an Option or Share of Restricted Stock granted on or after
May 8, 2002 becomes exercisable or vests only after either (i) a minimum fixed period of employment or service (the duration of which is determined by the Committee at the time of the
grant of the Award) or (ii) the earlier achievement of a performance-related goal, its exercisability or vesting shall not automatically accelerate in full in accordance with Article 13
(a) or (b) above, but may accelerate if and to the extent provided in the applicable Award Agreement. 

Article 14. Amendment, Modification, and Termination  

        14.1    Amendment, Modification, and Termination.    Subject to the terms of the Program, including
Section 14.2, the Board may at any time and from time to time, alter, amend, suspend or terminate the Program in whole or in part and the Committee may amend Awards previously granted under the
Program. 

        14.2    Awards Previously Granted.    Notwithstanding any provision of the Program or of any Award Agreement to the
contrary (but subject to Section 6.10 hereof), no termination, amendment, or modification of the Program or amendment of an Award previously granted under the Program shall adversely affect in
any material way any Award previously granted under the Program, without the express consent of the Participant holding such Award. 

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. 

12

 

	(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 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 all federal, state, local and foreign taxes 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.    Awards payable in Shares may provide that with respect to withholding required upon any
taxable event arising thereunder, Participants may elect to satisfy the withholding requirement, in whole or in part, by having the Company withhold Shares to satisfy their withholding tax
obligations; provided that Participants may only elect to have Shares withheld having a Fair Market Value on the date the tax is to be determined equal to or less than the minimum 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, including prior
Committee approval, that the Committee, in its sole discretion, deems appropriate. 

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 judgment 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 

13

 

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, to the extent legally permissible, 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. 

14

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Long-Term Stock Incentive Compensation Program (as amended and restated February 20, 2003)

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Exhibit 10.4  

 
 

EDWARDS LIFESCIENCES CORPORATION
  2001 EMPLOYEE STOCK PURCHASE PLAN
  FOR UNITED STATES EMPLOYEES    
    
    (As Amended and Restated on February 20,
2003)    

Edwards Lifesciences Corporation

2001 Employee Stock Purchase Plan

For United States Employees  

(As Amended and Restated on February 20, 2003)  

ARTICLE I—PURPOSE  

        1.01.    Purpose    

        The
Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for United States Employees is intended to provide a method whereby employees of Edwards Lifesciences Corporation
(the "Company") and its participating subsidiary companies authorized by the Committee (or an officer designated by the Committee pursuant to Section 9.02) to extend the benefits of the Plan to
their Eligible Employees will have an opportunity to acquire a proprietary interest in the Company through the purchase of shares of the Company's common 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 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. 

        The
Plan was initially adopted by the Board on February 8, 2001, and subsequently approved by the stockholders on May 10, 2001. The Plan was subsequently amended and
restated by the Board on February 20, 2003. 

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.    Change in Control    

        "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 2.02(a), 2.02(c), or 2.02(d) of this
Section 2.02) 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). 

        2.03.    Code    

        "Code"
shall mean the Internal Revenue Code of 1986, as amended. 

        2.04.    Committee    

        "Committee"
shall mean the individuals appointed by the Company to administer the Plan as described in Article IX. 

        2.05.    Company    

        "Company"
shall mean Edwards Lifesciences Corporation. 

        2.06.    Corporate Affiliate    

        "Corporate
Affiliate" shall mean any parent or subsidiary corporation or limited liability company of the Company (as determined in accordance with Code section 424), whether now
existing or subsequently established. 

        2.07.    Eligible Employee    

        "Eligible
Employee" means, unless local laws prohibit such employee's participation in the Plan, any regular employee of a Participating Company who is scheduled to work 20 or more hours
per week. 

        2.08.    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 and any Subscription received after such date shall be deemed to be an enrollment in the next following Offering. 

        2.09.    Exchange Act    

        "Exchange
Act" shall mean the Securities Exchange Act of 1934, as amended from time to time, or any successor thereto. 

        2.10.    Fair Market Value    

        The
"Fair Market Value" of a share of Stock on a given day shall be determined as follows: (i) if the Stock is listed on any established stock exchange or a national market system
(a) for any date of determination except the Purchase Date, Fair Market Value shall be the closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such
exchange or system for the last market trading day prior to the time of determination, as reported in The Wall Street Journal or such other source as
the Committee deems reliable; (b) for the Purchase Date, Fair Market Value shall be 

2

 

the
closing sales price for such stock (or the closing bid, if no sale is reported) as quoted on such exchange or system on the Purchase Date, as reported in The Wall Street
Journal or such other source as the Committee deems reliable, or (ii) in the absence of an established market for the Stock, the Fair Market Value thereof shall be
determined in good faith by the Committee. 

        2.11.    Offering    

        "Offering"
shall mean the quarterly offering of the Company's Stock, the duration of which shall not exceed twenty seven (27) months. 

        2.12.    Offering Commencement Date    

        "Offering
Commencement Date" shall mean June 1, 2001 and, unless determined otherwise by the Committee, the first day of each calendar quarter thereafter. 

        2.13.    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, unless determined
otherwise by the Committee prior to the Offering Commencement Date or such date as determined pursuant to Section 6.04. 

        2.14.    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. 

        2.15.    Participating Company    

        "Participating
Company" shall mean the Company and each Corporate Affiliate as may be authorized from time to time by the Committee to extend the benefits of the Plan to their Eligible
Employees. 

        2.16.    Plan    

        "Plan"
shall mean the Edwards Lifesciences Corporation 2001 Employee Stock Purchase Plan for United States Employees, as amended from time to time. 

        2.17.    Purchase Date    

        "Purchase
Date" shall mean with respect to any Offering, the last day of each calendar quarter (or such other dates determined by the Committee prior to the Offering Commencement Date or
pursuant to Section 6.04) 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. 

        2.18.    Stock    

        "Stock"
shall mean the common stock, par value $1.00, of the Company. 

        2.19.    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 the duration of the
Offering to which it applies. No more than one Subscription may be in effect for an Eligible Employee during any calendar quarter. 

3

 

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 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 terminated Participant later returns to active employment as an Eligible Employee or if a Participant returns to active employment as
an Eligible Employee after the Subscription has expired, 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. 

        3.03.    Restrictions on Participation    

        Notwithstanding
any provisions of the Plan to the contrary, no Eligible Employee shall be granted a right to purchase Stock: 

	(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 the Company's stock (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 right to purchase Stock is granted) for each calendar year in which such right is outstanding. 

        Further,
with respect to any Offering, in no event shall an employee be granted a right to purchase in excess of 10,000 shares of Stock, subject to adjustment pursuant to
Section 10.03. 

        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 the date he or she is no longer an employee of any Participating 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 

4

 

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. Notwithstanding the foregoing, an Eligible
Employee's transfer from one Participating Company to another shall not terminate such Eligible Employee's Subscription. 

        3.06.    International Employees/International Transfers    

        Eligible
Employees who transfer to a Participating Company from a subsidiary of the Company participating in the Company's stock purchase plan for international employees may not
participate in Offerings which had an Offering Commencement Date prior to such 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 from a Participating Company to either a Corporate Affiliate that is not a Participating Company or a location that, by local law, prohibits participation in
any of the Company's stock purchase plans will be treated as a terminated Participant under this Plan. 

ARTICLE IV—OFFERINGS  

        4.01.    Quarterly Offerings    

        The
Plan commenced with an Offering beginning on June 1, 2001 and, unless determined otherwise by the Committee, will continue in operation with a new Offering commencing 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 Fair Market Value of the Stock on the Offering Commencement Date; or

	(b)
	85%
of the Fair Market Value of the Stock on the Purchase Date. 

        Such
purchase price may only be paid with accumulated payroll deductions in accordance with Article V. 

        4.03.    Automatic Transfer to New Offering    

        Should
the Fair Market Value per share of Stock on any Purchase Date within a particular Offering be less than the Fair Market Value per share of Stock on the Offering Commencement Date
of that Offering, then the individuals participating in such Offering shall, immediately after the purchase of shares of Stock on their behalf on such Purchase Date, be transferred from that Offering
and automatically enrolled in the next Offering commencing immediately after such Purchase Date, unless the Participant elects otherwise. Under the foregoing automatic enrollment provisions, payroll 

5

 

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. 

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 whole shares of Stock and no cash refunds shall be made from such account. Any amounts that are insufficient to
purchase whole shares shall be credited to the Participant's account, and added to any fractional amounts resulting on subsequent Purchase Dates. Upon liquidation or other closing of a Participant's
account, any fractional amounts shall be paid in cash to the Participant based on the then current Fair Market Value of the Stock. In addition, any amounts that are withheld but unable to be applied
to the purchase of Stock 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, 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 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 RIGHTS TO PURCHASE STOCK  

        6.01.    Automatic Exercise    

        A
Participant's right to purchase Stock with respect to any Offering will be automatically exercised on each Purchase Date for the Offering. The right to purchase Stock 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 whole 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. 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. 

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        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. Furthermore, Stock to be
delivered to a Participant under the Plan will be registered in the name of the Participant. 

        6.04.    Change in Control    

        If
pursuant to a Change in Control rights to purchase Stock are not assumed or otherwise continued in full force and effect, then each right to purchase Stock under each Offering in
effect at the time of the Change in Control shall automatically be exercised, immediately prior to the effective date of any Change in Control, by applying the payroll deductions of each Participant
for the Offering in which such Change in Control occurs to the purchase of whole shares of Stock at a purchase price per share equal to eighty-five percent (85%) of the lower of
(i) the Fair Market Value per share of Stock on the start date of the applicable Offering or (ii) the Fair Market Value per share of Stock immediately prior to the effective date of such
Change in Control. 

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 that results in the Participant not qualifying as an
Eligible Employee, 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. 

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 10.03, shall be
1,500,000 shares. If the total number of shares for which rights to purchase Stock are exercised on any Purchase Date exceeds the maximum number of shares available for issuance, 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 Rights to Purchase Stock    

        The
Participant will have no interest in Stock covered by a right to purchase Stock under the Plan until such right has been exercised. 

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ARTICLE IX—ADMINISTRATION  

        9.01.    Appointment of Committee    

        The
Company's 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 if and when the employees of Corporate Affiliates organized or acquired
after the Effective Date shall be eligible for participation in the Plan. The Committee may delegate to an officer its authority under this Section 9.02 to determine if and when the employees
of a Corporate Affiliate shall be eligible or ineligible for participation in the Plan. 

        9.03.    Rules Governing the Administration of the Committee    

        The
Company's 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 a right to purchase Stock 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, rights to purchase Stock that are held by such Participant
shall be exercisable only by that Participant. 

        10.02.    Use of Funds    

        All
payroll deductions received or held by the Participating Company under this Plan may be used by the Participating Company for any corporate purpose and the Participating Company
shall not be obligated to segregate such payroll deductions. 

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        10.03.    Adjustment Upon Changes in Capitalization    

        In
the event of a stock split, stock dividend, recapitalization, reclassification or combination of shares, merger, spin-off 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 rights to purchase Stock, (c) the maximum number of shares of Stock that can be purchased by a Participant with respect to any Offering and (d) the appropriate market value
and other price determinations applicable to rights to purchase Stock. 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
Company's Board of Directors shall have complete power and authority to terminate or amend the Plan at any time and for any reason; provided, however, that the Company's Board of
Directors shall not, without the approval of the stockholders of the Company in accordance with Section 423 of the Code, (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 members
of the Committee who are not Eligible Employees to purchase stock under the Plan. 

        Upon
termination of the Plan, the date of termination shall be considered a Purchase Date, and any cash remaining in Participant accounts will be applied to the purchase of Stock, unless
determined otherwise by the Company's Board of Directors. Upon termination of the Plan, the Company's Board
of Directors shall have authority to establish administrative procedures regarding the exercise of outstanding rights to purchase Stock or to determine that such rights shall not be exercised. 

        10.05.    Effective Date    

        This
Plan became effective as of June 1, 2001. 

        10.06.    No Employment Rights    

        The
Plan does not, directly or indirectly, create in any employee or class of employees any right with respect to continuation of employment with the Company or any Corporate Affiliate,
and it shall not be deemed to interfere in any way with the right of the Company or any Corporate Affiliate employing such person 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. 

        10.08.    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. 

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QuickLinks

EDWARDS LIFESCIENCES CORPORATION 2001 EMPLOYEE STOCK PURCHASE PLAN FOR UNITED STATES EMPLOYEES (As Amended and Restated on February 20, 2003)

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