Document:

EXHIBIT 10.1
                                                                    ------------

THIRD EXTENSION OF STOCKHOLDERS' AGREEMENT DATED AS OF DECEMBER 30, 2004 BETWEEN
LIFEWAY FOODS, INC. AND DANONE FOODS, INC.

                                 THIRD EXTENSION
                                       TO
                             STOCKHOLDERS' AGREEMENT

            This THIRD EXTENSION TO STOCKHOLDERS' AGREEMENT (the "Third
Extension") is hereby entered into as of the 30th day of December, 2004 by and
among Lifeway Foods, Inc., an Illinois corporation (the "Company") and Danone
Foods, Inc., a Delaware corporation (the "Stockholder"), who are parties to that
certain Stockholders' Agreement (as amended and extended, the "Stockholders'
Agreement") by and among the Company, the Stockholder, and certain other parties
(the "Holders") dated as of October 1, 1999, as amended on December 24, 1999 and
as extended by that certain Extension to Stockholders' Agreement dated as of
September 28, 2004 (the "First Extension") and by that certain Second Extension
to Stockholders' Agreement dated as of October 29, 2004 (the "Second
Extension"). Unless otherwise defined herein, all capitalized terms used herein
shall have the same meaning ascribed to those terms in the Stockholders'
Agreement.

            WHEREAS, under the Second Extension, the Standstill Period and the
operative period of Section 6.02 of the Stockholders' Agreement shall expire on
December 31, 2004;

            WHEREAS, each of the Company and the Stockholder desires to further
amend the Stockholders' Agreement to extend the Standstill Period and the
operative period of Section 6.02 of the Stockholders' Agreement as more fully
provided in this Third Extension; and

            WHEREAS, pursuant to Section 7.01 of the Stockholders' Agreement,
the time for the performance of any obligations under the Agreement may be
extended by an instrument in writing signed by the parties to be bound thereby.

            NOW, THEREFORE, in consideration of the entry of the parties into
this Third Extension and for other good and valuable consideration, the receipt
of which is acknowledged herein, the parties hereto agree as follows:

            1. Extension of Standstill Period. The Standstill Period shall be
extended to include any time during the period beginning on October 1, 1999 and
ending at the close of business on December 30, 2005 and during which the
Stockholder Beneficially Owns 10% or more of the outstanding shares of Common
Stock on a Fully Diluted Basis.

            2. Extension of Non-competition Period. The period referenced in
Section 6.02(a) of the Stockholders' Agreement shall be extended to include the
period beginning on October 1, 1999 and ending at the close of business on
December 30, 2005.

            3. Governing Law. This Third Extension shall be governed by and
construed in accordance with the laws of the State of Illinois.

            4. No Waiver of Other Rights. The execution, delivery and
effectiveness of this Third Extension shall not, except as expressly provided
herein, operate as a waiver of any right, power or remedy of any of the parties
to the Stockholders' Agreement.

            5. Counterparts. This Third Extension may be executed in any number
of counterparts, each of which shall be deemed to be an original and all of
which counterparts together shall constitute one and the same instrument.

                            [Signature Page Follows]
<PAGE>

     IN WITNESS WHEREOF, this Waiver is hereby executed as of the date first
above written.

LIFEWAY FOODS, INC.,                        DANONE FOODS, INC.,
an Illinois corporation                     a Delaware corporation

By: /s/ Julie Smolyansky                    By: /s/ Donna R. Besteiro
Name: Julie Smolyansky                      Name: Donna R. Besteiro
Its: President                              Its: Assistant Secretary and General
                                                 CounselExhibit 10.1

 

EDWARDS LIFESCIENCES CORPORATION

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

(Effective January 1, 2005)

 

 

TABLE OF CONTENTS

 

	
  ARTICLE I PURPOSE

  	
   

  
	
   

  	
   

  
	
  ARTICLE II DEFINITIONS

  	
   

  
	
   

  	
  2.1

  	
  Account

  	
   

  
	
   

  	
  2.2

  	
  Administrative Committee

  	
   

  
	
   

  	
  2.3

  	
  Base
  Pay

  	
   

  
	
   

  	
  2.4

  	
  Beneficiary

  	
   

  
	
   

  	
  2.5

  	
  Bonus

  	
   

  
	
   

  	
  2.6

  	
  Bonus Deferral

  	
   

  
	
   

  	
  2.7

  	
  Code

  	
   

  
	
   

  	
  2.8

  	
  Company

  	
   

  
	
   

  	
  2.9

  	
  Compensation

  	
   

  
	
   

  	
  2.10

  	
  Compensation Committee

  	
   

  
	
   

  	
  2.11

  	
  Eligible Employee

  	
   

  
	
   

  	
  2.12

  	
  Excess Matching
  Contribution

  	
   

  
	
   

  	
  2.13

  	
  401(k)
  Plan

  	
   

  
	
   

  	
  2.14

  	
  Matching Contribution

  	
   

  
	
   

  	
  2.15

  	
  Participant

  	
   

  
	
   

  	
  2.16

  	
  Pay Deferral Contribution

  	
   

  
	
   

  	
  2.17

  	
  Plan
  Year

  	
   

  
	
   

  	
  2.18

  	
  Plan Year Account

  	
   

  
	
   

  	
  2.19

  	
  Separation from Service

  	
   

  
	
   

  	
  2.20

  	
  Vesting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE III PAY DEFERRALS, BONUS DEFERRALS
  AND MATCHING CONTRIBUTIONS

  	
   

  
	
   

  	
  3.1

  	
  Supplementary Pay
  Deferrals.

  	
   

  
	
   

  	
  3.2

  	
  Amounts

  	
   

  
	
   

  	
  3.3

  	
  Supplemental
  Matching Contribution

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE IV CREDITING OF ACCOUNTS AND
  EARNINGS

  	
   

  
	
   

  	
  4.1

  	
  Crediting of Accounts.

  	
   

  
	
   

  	
  4.2

  	
  Earnings

  	
   

  
	
   

  	
  4.3

  	
  Account Statements

  	
   

  
	
   

  	
  4.4

  	
  Vesting

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE V DISTRIBUTIONS

  	
   

  
	
   

  	
  5.1

  	
  Distribution of Benefits.

  	
   

  
	
   

  	
  5.2

  	
  Effect of Payment

  	
   

  
	
   

  	
  5.3

  	
  Taxation of Plan Benefits

  	
   

  
	
   

  	
  5.4

  	
  Withholding and Payroll
  Taxes

  	
   

  
	
   

  	
  5.5

  	
  Distribution
  Due to Unforeseeable Emergency

  	
   

  

 

i

 

	
  ARTICLE VI BENEFICIARY DESIGNATION

  	
   

  
	
   

  	
  6.1

  	
  Beneficiary Designation

  	
   

  
	
   

  	
  6.2

  	
  Amendments to
  Beneficiary Designation

  	
   

  
	
   

  	
  6.3

  	
  No Beneficiary Designation

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VII AMENDMENT AND TERMINATION OF
  PLAN

  	
   

  
	
   

  	
  7.1

  	
  Amendment

  	
   

  
	
   

  	
  7.2

  	
  Right to Terminate

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ARTICLE VIII MISCELLANEOUS

  	
   

  
	
   

  	
  8.1

  	
  Unfunded Plan

  	
   

  
	
   

  	
  8.2

  	
  Nonassignability

  	
   

  
	
   

  	
  8.3

  	
  Claims Procedure

  	
   

  
	
   

  	
  8.4

  	
  Indemnification.

  	
   

  
	
   

  	
  8.5

  	
  Not a Contract of
  Employment

  	
   

  
	
   

  	
  8.6

  	
  Protective Provisions

  	
   

  
	
   

  	
  8.7

  	
  Governing Law

  	
   

  
	
   

  	
  8.8

  	
  Severability

  	
   

  
	
   

  	
  8.9

  	
  Successors

  	
   

  
	
   

  	
  8.10

  	
  Effect on Benefit Plans

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTACHMENT A

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  ATTACHMENT B

  	
   

  

 

ii

 

EDWARDS LIFESCIENCES CORPORATION

 

EXECUTIVE DEFERRED COMPENSATION PLAN

 

(Effective January 1, 2005)

 

ARTICLE I 

PURPOSE

 

This Edwards Lifesciences Corporation Deferred
Compensation Plan (the “Plan”) is designed to (1) offer selected employees of
Edwards Lifesciences Corporation and its affiliates certain benefits that
cannot be provided under the Edwards Lifesciences Corporation tax-qualified
plans and (2) provide additional opportunities for selected employees to defer
compensation.  This Plan shall be
effective for (i) Compensation earned after December 31, 2004 and deferred
pursuant to the provisions of this Plan and (ii) any Compensation deferred
prior to January 1, 2005 under the Edwards Lifesciences Corporation Executive
Option Plan but not vested on or before such date.

 

This Plan is intended to comply with the provisions of
the American Jobs Creation Act of 2004 applicable to deferred compensation and
shall be administered and operated in conformity with those provisions and
applicable Treasury Regulations.

 

This Plan is intended to be a plan that is unfunded
and maintained by Edwards Lifesciences Corporation primarily for the purpose of
providing deferred compensation for a select group of management or highly
compensated employees within the meaning of the Employee Retirement Income
Security Act of 1974, as amended (“ERISA”).

 

ARTICLE II

DEFINITIONS

 

2.1           Account means the account maintained under the Plan for
each Participant which is credited with amounts under Article III of the Plan
and adjusted periodically for investment performance under Article IV of the
Plan and distributions or withdrawals in accordance with Article V. To the
extent it considers necessary or appropriate, the Compensation Committee or its
delegate may further divide each such Account into a series of separate
subaccounts so that each category of deferred Compensation or other
contribution may be credited to its own separate subcategories within that particular
Account.

 

2.2           Administrative Committee means the
Administrative Committee as defined in the 401(k) Plan.

 

2.3           Base Pay means the Participant’s Base Pay as defined in
the 401(k) Plan.

 

2.4           Beneficiary means the Participant’s Beneficiary (as
defined in Article VI) designated to receive the Participant’s Accounts, if
any, from the Plan, upon the death of the Participant.

 

 

 

2.5           Bonus means any bonus which is approved by the
Compensation Committee and listed on Attachment A to this Plan. Attachment A may
be updated from time to time to accurately reflect the approved bonuses for
purpose of this definition.

 

2.6           Bonus Deferral means the amount of the
Participant’s Bonus which the Participant elected to defer and contribute to
the Plan which, but for such election, would have otherwise been paid to
him/her.

 

2.7           Code means the Internal Revenue Code of 1986, as amended.

 

2.8           Company means Edwards Lifesciences Corporation.

 

2.9           Compensation means Compensation as defined in the
401(k) Plan without regard to Section 401(a)(17) of the Code, except that the
Bonuses deferred under the Plan are included in Compensation in the Plan Year
in which such amounts would be paid if they were not deferred and not in the
Plan Year in which such amounts are actually paid.

 

2.10         Compensation Committee means the
Compensation and Governance Committee of the Board of Directors of the Company.
The Compensation Committee shall have full discretionary authority to
administer and interpret the Plan, to determine eligibility for Plan benefits,
to select employees for Plan participation, to determine the benefit
entitlement of each Participant and Beneficiary hereunder and to correct
errors.  The Compensation Committee may
delegate one or more of its duties and responsibilities hereunder to the
Administrative Committee, and unless the Compensation Committee expressly
provides to the contrary, any such delegation will carry with it the
Compensation Committee’s full discretionary authority with respect to the
delegated duties and responsibilities. 
In no event, however, shall the Compensation Committee delegate its
authority to select the Eligible Employees who are to participate in the Plan
or its authority to amend or terminate the Plan pursuant to the provisions of
Article VII.  Decisions of the
Compensation Committee or the Administrative Committee will be final and
binding on all persons.

 

2.11         Eligible Employee means any individual who is
employed as a corporate officer of the Company and who is a U.S. employee or a
U.S. expatriate.  In addition, “Eligible
Employee” means any other key employee of the Company or an affiliate who is
designated as an Eligible Employee by the Chief Executive Officer of the
Company.

 

2.12         Excess Matching Contribution means
the difference between the Matching Contributions allocated to a Participant’s
401(k) Plan Account during the Plan Year and the amount that would have been
allocated if the limitations of Sections 415, 401(k), 402(g) and 401(m) of the
Code, as well as the limitations of Section 401(a)(17) of the Code, were
disregarded.

 

2.13         401(k)
Plan means the
Edwards Lifesciences Corporation 401(k) Savings and Investment Plan.

 

2.14         Matching Contribution means the Matching
Contribution pursuant to the 401(k) Plan.

 

2

 

2.15         Participant means any Eligible Employee who has an
Account balance in the Plan.

 

2.16         Pay Deferral Contribution means the
amount of the Participant’s Compensation which the Participant elected to defer
into the Plan which, but for such election, would have otherwise been paid to
him/her.

 

2.17         Plan Year means the calendar year.

 

2.18         Plan Year Account means for each Plan Year, that portion of an Eligible Employee’s Account that
is attributable to (i) Compensation that would have been paid in such Plan Year
had payment not been deferred under this Plan and (ii) earnings credited
thereto pursuant to Article IV.

 

2.19         Separation from Service means separation
from service with the Company and all affiliates within the meaning of Code
Section 409A and the regulations thereunder.

 

2.20         Vesting has the same meaning as Vesting in the 401(k)
Plan.

 

ARTICLE III

PAY DEFERRALS, BONUS DEFERRALS AND MATCHING CONTRIBUTIONS

 

3.1           Supplementary Pay Deferrals.

 

(a)           Elections.  In order to be eligible to make supplementary
Pay Deferral Contributions for a Plan Year, an Eligible Employee must file an
appropriate deferral election for that Plan Year.  Such election must be made before the start
of the Plan Year in which the Compensation subject to that election is to be
earned in accordance with the rules and procedures established by the
Compensation Committee.  However, if an
individual first becomes an Eligible Employee during a Plan Year, that
individual may elect, within thirty (30) days after he or she is first notified
that he or she is eligible to participate in the Plan, to make supplemental Pay
Deferral Contributions with respect to Compensation earned for services
performed after the election is made. 
The election will remain in effect for the Plan Year for which it is
made or, if the Compensation Committee so permits, all subsequent Plan Years
during which the individual remains an Eligible Employee.

 

(b)           No
Changes.  A Participant’s Pay
Deferral election, once filed, may not be revoked, modified or changed, except
to the extent permitted under Code Section 409A and the regulations thereunder.

 

(c)           Late
Election.  If an Eligible Employee
does not make a timely election for a Plan Year, no Pay Deferrals will be made
under the Plan on behalf of that Eligible Employee with regard to that election
for that Plan Year.

 

3.2           Amounts.  A
Participant may make a separate election to defer under the Plan each of the
following amounts of Compensation:

 

3

 

(a)           A portion
of his or her Compensation in excess of the annual contribution limit under
Sections 401(k) and 402(g) of the Code (as contributed to the 401(k) Plan).

 

(b)           Any whole
percentage of his or her Base Pay (with a minimum of five percent (5%)) in
addition to the Base Pay being deferred pursuant to the Participant’s Pay
Deferral election.

 

(c)           Any whole
percentage of his or her Bonus.  However,
in no event may the Bonus deferred under the Plan, when added to any Bonus
contributed to the 401(k) Plan as Pay Deferral, exceed one hundred percent
(100%) of such Bonus.

 

3.3           Supplemental Matching Contribution.  An Eligible Employee will be eligible to
receive a supplemental matching contribution for a Plan Year equal to the
Eligible Employee’s Excess Matching Contribution for that Plan Year.

 

ARTICLE IV

CREDITING OF ACCOUNTS AND EARNINGS

 

4.1           Crediting of Accounts.

 

(a)           Pay
Deferral Contributions.  A
Participant’s Pay Deferral Contributions, if any, will be credited to his or
her Account as of the date that the salary deferrals to which those deferral
contributions relate would otherwise have been credited to the 401(k) Plan.

 

(b)           Base
Pay and Bonus Deferral.  A
Participant’s Base Pay and Bonus Deferrals, if any, will be credited to his or
her Account as of the date that the Base Pay and Bonus Deferrals would
otherwise have been paid.

 

(c)           Excess
Matching Contributions.  A
Participant’s Excess Matching Contributions, if any, will be credited to his or
her Account as of the date that the Matching Contribution to which the Excess
Matching Contribution relate would otherwise have been credited to the 401(k)
Plan.

 

4.2           Earnings. 
Amounts credited to a Participant’s Accounts under the Plan shall be
credited with earnings and losses, at periodic intervals determined by the
Compensation Committee, at a rate equal to the actual rate of return for such
period of the investment fund or funds or index or indices or vehicle or
vehicles selected by that Participant from a range of investment vehicles
authorized by the Compensation Committee. 
The rate of return on investment vehicles shall be tracked solely for
the purpose of computing the amount of benefits payable from the Participant’s
Accounts under the Plan.  The Company
shall not be obligated to make any actual investment.  The available investment funds, subject to
change periodically by the Compensation Committee or delegate thereof, shall be
identified in Attachment B hereto.

 

4.3           Account Statements.  Account Statements will be generated
effective as of the last day of each calendar quarter and mailed to each
Participant as soon as administratively feasible. Account Statements will
reflect all Account activity during the reporting quarter, including Account
contributions, distributions and earnings credits.

 

4

 

4.4           Vesting. 
Subject to Section 8.1, a Participant shall be 100% Vested in his or her
Account in the Plan at all times.

 

ARTICLE V

DISTRIBUTIONS

 

5.1           Distribution of Benefits.

 

(a)           Annual
Election.  Each Participant must
elect, with respect to each Plan Year, the manner in which his or her Plan Year
Account will be distributed.  Such
election must be made at the same time the Participant files his or her
deferral election for one or more items of Compensation to be earned in the
Plan Year.

 

(b)           Timing.  A Participant may elect to have the vested
portion of his or her Plan Year Accounts distributed as soon as
administratively practicable following one of the following distribution
events: (i) the date of the Participant’s Separation from Service, (ii) the
date of the Participant’s death, (iii) the date specified by the Participant in
his or her election or (iv) the earliest of any (i), (ii) or (iii) above
elected by the Participant.  Under option
(iii), above, the date specified must be at least 12 months from the date the
initial deferral election for that Account is filed.

 

(c)           Form.  The vested portion of the Plan Year Accounts
will be distributed, based on the Participant’s election under (a) above, in
one of the following forms: (i) a lump sum or (ii) a series of annual
installments, not in excess of fifteen (15). 
The amount of each installment will be the remaining balance of the
Participant’s vested Accounts divided by the number of installments remaining
(including the installment to be made).

 

(d)           Subsequent
Election.  A Participant may change
the distribution election in effect for a Plan Year Account by submitting that
change to the Compensation Committee or its delegate in writing.  However, the subsequent election shall have
no force or effect and shall not become effective until the expiration of the
12-month period measured from the filing date of such election.  In addition, such election shall be valid
only if (A) such election defers any distribution for at least 5 years after
the date that distribution would have otherwise been made or commenced in the
absence of such subsequent election and, in the case of a scheduled
distribution to be made pursuant to option (iii) of Section 5.1(b), (B) such
election is made at least twelve (12) months before the date of the first of
the scheduled payments.  In no event may
any change to the distribution election in effect for the Plan Year Account
result in any acceleration of the distribution of that Account.

 

(e)           Default.  If, upon a Participant’s Separation from
Service, the Compensation Committee does not have a proper distribution
election on file for that Participant, the vested portion of each of his or her
Plan Year Account will be distributed to the Participant in one lump sum as
soon as administratively practicable following the Participant’s Separation
from Service.

 

(f)            Deferred
Commencement of Distribution. 
Notwithstanding any provision to the contrary in this Article V or any
other article of this Plan, no distribution in connection with the Separation
from Service by a Participant who is at the time a “key employee” within the
meaning of that term under Code Section 416(i) shall be made or

 

5

 

otherwise commence
prior to the earlier of (i) the expiration of the six (6)-month period measured
from the date of such Separation from Service or (ii) the date of the
Participant’s death.

 

(g)           Small
Benefit Cashout.  Notwithstanding
Section 5.1(f) above, a Participant whose Accounts under the Plan total less
than $50,000 as of the last day of the Plan Year in which he or she incurs a
Separation from Service will receive lump sum payment of his or her Accounts as
soon as administratively practicable following the Participant’s Separation
from Service.

 

5.2           Effect of Payment.  Payment to the person or trust reasonably and
in good faith determined by the Compensation Committee to be the Participant’s
Beneficiary will completely discharge any obligations the Company may have
under the Plan.  If a Plan benefit is
payable to a minor or a person declared to be incompetent or to a person the
Compensation Committee in good faith believes to be incompetent or incapable of
handling the disposition of property, the Compensation Committee may direct
payment of such Plan benefit to the guardian, legal representative or person
having the care and custody of such minor and such decision by the Compensation
Committee is binding on all parties.  The
Compensation Committee may initiate reasonable action to ensure that benefits
are properly paid to an appropriate guardian.

 

The Compensation Committee may require proof of
incompetence, minority, incapacity or guardianship as it may deem appropriate
prior to distribution of the Plan benefit. 
Such distribution will completely discharge the Compensation Committee
from all liability with respect to such benefit.

 

5.3           Taxation of Plan Benefits.  It is intended that each Participant will be
taxed on amounts credited to him or her under the Plan at the time such amounts
are received, and the provisions of the Plan will be interpreted consistent
with that intention.

 

5.4           Withholding and Payroll Taxes.  Edwards will withhold from payments made
hereunder any taxes required to be withheld for the payment of taxes to the
Federal, or any state or local government.

 

5.5           Distribution Due to Unforeseeable
Emergency. If a Participant (a) incurs a severe financial hardship as a
result of (i) a sudden and unexpected illness or accident involving the
Participant or his or her spouse or any dependent (as determined pursuant to
Section 152(a) of the Code), (ii) a casualty loss involving the Participant’s
property or (iii) other similar extraordinary and unforeseeable event beyond
the Participant’s control and (b) does not have any other resources available,
whether through reimbursement or compensation (by insurance or otherwise) or
liquidation of existing assets (to the extent such liquidation would not itself
result in financial hardship), to satisfy such financial emergency, then the
Participant may apply to the Compensation Committee for an immediate
distribution from the vested portion of his or her Account in an amount
necessary to satisfy such financial hardship and the tax liability attributable
to such distribution.  The Compensation
Committee shall have complete discretion to accept or reject the request and
shall in no event authorize a distribution in an amount in excess of that
reasonably required to meet such financial hardship and the tax liability
attributable to that distribution.  In
addition, such Participant shall be precluded from enrolling in the Plan for
the entire Plan Year beginning January 1 after the request is approved.

 

6

 

ARTICLE VI

BENEFICIARY DESIGNATION

 

6.1           Beneficiary Designation.  Each Participant has the right to designate
one or more persons or trusts as the Participant’s Beneficiary, primary as well
as secondary, to whom benefits under this Plan will be paid in the event of the
Participant’s death prior to complete distribution to the Participant of the
benefits due under the Plan. Each Beneficiary designation will be in a written
form prescribed by the Compensation Committee and will be effective only when
filed with the Compensation Committee during the Participant’s lifetime.

 

6.2           Amendments to Beneficiary
Designation.  Any Beneficiary
designation may be changed by a Participant without the consent of any
Beneficiary by the filing of a new Beneficiary designation with the
Compensation Committee. Filing a Beneficiary designation as to any benefits
available under the Plan revokes all prior Beneficiary designations effective
as of the date such Beneficiary designation is received by the Compensation
Committee. If a Participant’s Accounts are community property, any Beneficiary
designation will be valid or effective only as permitted under applicable law.

 

6.3           No Beneficiary Designation.  In the absence of an effective Beneficiary
designation, or if all Beneficiaries predecease the Participant, the Participant’s
estate will be the Beneficiary. If a Beneficiary dies after the Participant and
before payment of benefits under this Plan has been completed, and no secondary
Beneficiary has been designated to receive such Beneficiary’s share, the
remaining benefits will be payable to the Beneficiary’s estate.

 

ARTICLE VII

AMENDMENT AND TERMINATION OF PLAN

 

7.1           Amendment.  The
Compensation Committee may amend the Plan at any time, except that no amendment
will decrease or restrict the Accounts of Participants and Beneficiaries at the
time of the amendment. Notwithstanding the foregoing, if the Compensation
Committee determines that additional restrictions or limitations must be placed
on the investment vehicles utilized for measuring the return on the amounts credited
to Participant Accounts, the right of Participants to make investment elections
with respect to their Accounts, their ability to make or change distribution
elections, their ability to defer distributions, the commencement date for the
distribution of their benefits and the method of such distribution or their
rights or status as creditors under the Plan in order to avoid current income
taxation of amounts deferred under the Plan, the Compensation Committee may, in
its sole discretion, amend the Plan to impose such restrictions or limitations,
cease deferrals under the Plan and/or defer distribution dates under the Plan.

 

7.2           Right to Terminate.  The Compensation Committee may at any time
terminate the Plan.

 

7

 

ARTICLE VIII

MISCELLANEOUS

 

8.1           Unfunded Plan. 
This Plan is intended to be an unfunded retirement plan maintained
primarily to provide retirement benefits for a select group of management or
highly compensated employees. All credited amounts are unfunded, general
obligations of the Company. The Plan constitutes a mere promise by the Company
to make payments in the future in accordance with the terms of the Plan.  Participants and Beneficiaries have the
status of general unsecured creditors of the Company.  Plan benefits will be paid from the general
assets of the Company and nothing in the Plan will be construed to give any
Participant or any other person rights to any specific assets of the Company.

 

8.2           Nonassignability.  Neither a Participant nor any other person
will have any right to commute, sell, assign, transfer, pledge, anticipate,
mortgage or otherwise encumber, transfer, hypothecate or convey in advance of
actual receipt the amounts, if any, payable hereunder, or any part thereof,
which are, and all rights to which are, expressly declared to be nonassignable
and nontransferable.  No part of the
amounts payable will, prior to actual payment, be subject to seizure or
sequestration for the payment of any debts, judgments, alimony or separate maintenance
owed by a Participant or any other person, nor be transferable by operation of
law in the event of a Participant’s or any other person’s bankruptcy or
insolvency.  Nothing contained herein
will preclude the Company from offsetting any amount owed to it by a
Participant against payments to such Participant or his or her Beneficiary.

 

8.3           Claims Procedure.  If a claim for benefits by a Participant or
his or her beneficiary or beneficiaries (the “applicant”) is denied, the
Compensation Committee will furnish the applicant within 90 days after receipt
of such claim (or within 180 days after receipt if the Compensation Committee
notifies the applicant prior to the end of the 90 day period that special
circumstances require an extension of time), a written notice which specifies
the reason for the denial, refers to the pertinent provisions of the Plan on
which the denial is based, describes any additional material or information
necessary for properly completing the claim and explains why such material or
information is necessary, and explains the claim review procedures of this
Section 8.3. If, within 60 days after receipt of such notice, the applicant so
requests in writing, the Compensation Committee will review its earlier
decision. The Compensation Committee’s decision on review will be in writing,
and will include specific reasons for the decision, written in a manner
calculated to be understood by the claimant, and will include specific
references to the pertinent provisions of the Plan on which the decision is
based. It will be delivered to the claimant within 60 days after the request
for review is received, unless extraordinary circumstances require a longer
period, but in no event more than 120 days after the request for review is
received.

 

8.4           Indemnification.  The Company and its Affiliates will indemnify
and hold harmless the Board of Directors, the members of the Compensation
Committee and the Administrative Committee, and employees of the Company and
the affiliates who may be deemed fiduciaries of the Plan, from and against any
and all liabilities, claims, costs and expenses, including attorneys’ fees,
arising out of an alleged breach in the performance of their fiduciary duties
under the Plan, other than such liabilities, claims, costs and expenses as may
result from the gross negligence or willful misconduct of such persons.  The Company and its

 

8

 

affiliates shall have the right, but not the obligation, to conduct the
defense of such persons in any proceeding to which this Section 8.4 applies

 

8.5           Not a Contract of Employment.  The terms and conditions of this Plan will
not be deemed to constitute a contract of employment between a Participant and
the Company or any affiliates, and neither the Participant nor the Participant’s
Beneficiary will have any rights against the Company or any affiliate except as
may otherwise be specifically provided herein. Moreover, nothing in this Plan
is deemed to give a Participant the right to be retained in the service of his
or her employer or to interfere with the right of such employer to discipline
or discharge him or her at any time.

 

8.6           Protective Provisions.  A Participant will cooperate with the Company
by furnishing any and all information requested by the Company, in order to
facilitate the payment of benefits hereunder.

 

8.7           Governing Law. 
The provisions of this Plan will be construed and interpreted according
to the laws of the State of California, to the extent not preempted by ERISA.

 

8.8           Severability. 
In the event any provision of the Plan is held invalid or illegal for
any reason, any illegality or invalidity will not affect the remaining parts of
the Plan, but the Plan will be construed and enforced as if the illegal or
invalid provision had never been inserted, and Edwards will have the privilege
and opportunity to correct and remedy such questions of illegality or
invalidity by amendment as provided in the Plan, including, but not by way of
limitation, the opportunity to construe and enforce the Plan as if such illegal
and invalid provision had never been inserted herein.

 

8.9           Successors. 
The provisions of this Plan will bind and inure to the benefit of the
Company, the Participants and Beneficiaries, and their respective successors,
heirs and assigns. The term successors as used herein will include any
corporate or other business entity which, whether by merger, consolidation,
purchase or otherwise acquires all or substantially all of the business and
assets of Edwards, and successors of any such corporation or other business
entity.

 

8.10         Effect on Benefit Plans.  Amounts paid under this Plan, will not by
operation of this Plan be considered to be compensation for the purposes of any
benefit plan maintained by the Company or any affiliate.  The treatment of such amounts under other
employee benefit plans will be determined pursuant to the provisions of such
plans.

 

9

 

The Company has caused this instrument to be executed
by its authorized officer, as of December             ,
2004.

 

	
   

  	
  EDWARDS LIFESCIENCES CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
   

  	
   

  

 

10

 

ATTACHMENT A

 

Bonuses included in the definition of Compensation

 

 

ATTACHMENT B

 

Available Investment Funds

January 1, 2005

 

	
  Large Cap
  Growth

  
	
  HACAX

  	
  Harbor
  Capital Appreciation

  
	
  WCATX

  	
  Credit
  Suisse Capital Appreciation Fund

  
	
  PRGFX

  	
  T
  Rowe Price Growth Stock

  
	
  SINGX

  	
  SSgA
  International Opportunities Fund

  
	
   

  	
   

  
	
  Large Cap
  Blend

  
	
  PAPIX

  	
  PIMCO
  Capital Appreciation Fund

  
	
  SLASX

  	
  Selected
  American Shares

  
	
  VFINX

  	
  Vanguard
  500 Index Fund

  
	
  SVSPX

  	
  SSgA
  S&P 500 Equity Index Fund

  
	
  SSGWX

  	
  SSgA
  Core Opportunities

  
	
   

  	
   

  
	
  Large Cap
  Value

  
	
  CFIMX

  	
  Clipper
  Fund

  
	
  VWNFX

  	
  Vanguard
  Windsor II

  
	
  FEQTX

  	
  Fidelity
  Equity Income II Fund

  
	
   

  	
   

  
	
  Mid Cap
  Growth

  
	
  TVFQX

  	
  Firsthand
  Technology Value Fund

  
	
  SSMGX

  	
  Sit
  Small Cap Growth Fund

  
	
  FMCSX

  	
  Fidelity
  Midcap Stock Fund

  
	
  BRAGX

  	
  Bridgeway
  Aggressive Growth Fund

  
	
   

  	
   

  
	
  Mid Cap
  Blend

  
	
  LLPFX

  	
  Longleaf
  Partners

  
	
   

  	
   

  
	
  Mid Cap
  Value

  
	
  DMCVX

  	
  Dreyfus
  Midcap Value Fund

  
	
  TAVFX

  	
  Third
  Avenue Value Fund

  
	
  TBGVX

  	
  Tweedy,
  Browne Global Value Fund

  
	
  WVALX

  	
  Weitz
  Value Fund

  
	
   

  	
   

  
	
  Small Cap
  Growth

  
	
  FUSMX

  	
  Freemont
  US Micro Cap Fund

  
	
   

  	
   

  
	
  Small Cap
  Blend

  
	
  RYPRX

  	
  Royce
  Premier Fund

  
	
   

  	
   

  
	
  Small Cap
  Value

  
	
  TASCX

  	
  Third
  Avenue Small Cap

  
	
  TSCVX

  	
  Tocqueville
  Small Cap Value Fund

  
	
   

  	
   

  
	
  High
  Quality Intermediate-Term Bond

  
	
  PNBIX

  	
  BlackRock
  Intermediate Bond Fund

  
	
   

  	
   

  
	
  Medium
  Quality Short-Term Bond

  
	
  FSGVX

  	
  Federated
  US Gov’t: 1-3 Years Inst’l.

  
	
  VFISX

  	
  Vanguard
  Short-Term Treasury

  

 

*  Please note that the funds listed above are
subject to availability from the fund sponsors. 
Fund availability is subject to change without advance notice.

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