EMPLOYMENT AGREEMENT FOR
MICHAEL A. MUSSALLEM
Edwards Lifesciences Corporation
December 2000
CONTENTS
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Article 1. Definitions 1
Article 2. Term of Employment Agreement 2
Article 3. Employment Duties and Compensation 3
Article 4. Employment Termination 6
Article 5. Restrictive Covenants 9
Article 6. Indemnification 10
Article 7. Assignment 10
Article 8. Dispute Resolution and Notice 11
Article 9. Miscellaneous 11
EMPLOYMENT AGREEMENT FOR MICHAEL A. MUSSALLEM
EDWARDS LIFESCIENCES CORPORATION
This EMPLOYMENT AGREEMENT (the "Agreement") is made, entered into, and is
effective as of the day of 2000 (the "Effective Date"), by and
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between Edwards Lifesciences Corporation, a Delaware corporation (the
"Company"), and Michael A. Mussallem (the "Executive").
WHEREAS, the Executive possesses considerable experience and knowledge of
the business and affairs of the Company concerning its policies, methods,
personnel, and operations; and
WHEREAS, the Executive has demonstrated unique qualifications to act in an
executive capacity for the Company; and
WHEREAS, the Company is desirous of assuring the employment of the
Executive as Chief Executive Officer ("CEO") after the company spins off from
Baxter International Inc. and becomes an independent publicly traded entity, and
the Executive is desirous of having such assurances.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
ARTICLE 1. DEFINITIONS
As used in this Agreement, unless the context expressly indicates
otherwise, the following terms have the following meanings:
1.1 "BASE SALARY" means, at any time, the then-regular annual rate of pay
which the Executive is receiving as annual salary, excluding amounts: (i)
designated by the Company as payment toward reimbursement of expenses or (ii)
received under short-term or long-term incentive or other bonus plans,
regardless of whether or not the amounts are deferred.
1.2 "BOARD" means the Board of Directors of the Company.
1.3 "CAUSE" shall be determined solely by the Board in the exercise of
good faith and reasonable judgment, and shall mean the occurrence of either of
the following:
(i) The Executive's willfully engaging in conduct that is
demonstrably and materially injurious to the Company,
monetarily or otherwise; or
(ii) The Executive's conviction of a felony.
However, no act or failure to act on the Executive's part shall be deemed
"willful" unless done, or omitted to be done, by the Executive not in good faith
and without reasonable belief that the action or omission was in the best
interest of the Company.
1.4 "CHANGE IN CONTROL" has the same meaning as in the Severance
Agreement.
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1.5 "DISABILITY" shall have the meaning ascribed to such term in the
Executive's governing long-term disability plan, or if no such plan exists, it
shall have the meaning ascribed to such term in the Executive's governing
long-term disability plan in effect as of the Effective Date.
1.6 "EMPLOYMENT TERM" means the original or extended term of employment of
this Agreement as provided in Article 2 herein.
1.7 "RETIREMENT" means any voluntary termination of the Executive's
employment after age fifty-five (55), provided that the Executive has at least a
combined ten (10) years of service with the Company and Baxter International,
Inc. The Executive'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 Executive's original date of
hire with Baxter International, Inc. to the Executive's date of voluntary
employment termination.
1.8 "SEVERANCE AGREEMENT" means the Chief Executive Officer Change in
Control Severance Agreement dated between the Company and
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the Executive, as amended, or any successor agreement thereto.
1.9 "SEVERANCE PAYMENTS" means the payments designated as such in Section
4.3 herein and that may be provided to the Executive pursuant to such section.
1.10 "SUBSIDIARY" means a corporation, company, or other entity: (i) more
than fifty percent (50%) of whose outstanding shares or securities (representing
the right to vote for the election of directors or other managing authority)
are; or (ii) which does not have outstanding shares or securities (as may be the
case in a partnership, joint venture, or unincorporated association), but more
than fifty percent (50%) of whose ownership interest representing the right
generally to make decisions for such other entity is, now or hereafter, owned or
controlled, directly or indirectly, by the Company.
ARTICLE 2. TERM OF EMPLOYMENT AGREEMENT
This Agreement will commence on the Effective Date first written above,
and shall continue in effect for three (3) full calendar years, that is, until
December 31, 2003. However, at the end of the second year of such three-year
period, this Agreement shall be extended automatically for one (1) additional
year, unless the Company notifies the Executive in writing within 180 days prior
to the occurrence of the automatic extension, that the term of this Agreement
will not be extended. Moreover, upon the end of each subsequent year, this
Agreement shall also be extended automatically for one (1) additional year,
unless the Company otherwise notifies the Executive in writing 180 days prior to
the occurrence of such automatic extension. In the case where the Company
properly notifies the Executive that the Agreement will no longer be extended,
the Agreement will terminate at the end of the term, or extended term, then in
progress.
However, in the event a Change in Control occurs during the original or
any extended term, this Agreement will remain in effect for twenty-four (24)
months beyond the month in which such Change in Control occurred.
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ARTICLE 3. EMPLOYMENT DUTIES AND COMPENSATION
3.1 EMPLOYMENT DUTIES. During the Employment Term, the Executive shall
serve as CEO of the Company. In his capacity as CEO of the
Company, the Executive shall report directly to the Board and
shall maintain the level of duties and responsibilities as in
effect on the Effective Date, or such higher level of duties and
responsibilities as he may be assigned during the Employment Term.
In his capacity as CEO, the Executive shall have the same status,
privileges, and responsibilities normally inherent in such
capacity in corporations of similar size and character to the
Company.
In addition, during the Employment Term, the Executive shall be entitled
to the benefits listed in Sections 3.2 through 3.8 herein and be subject to the
covenants contained in Section 3.9.
3.2 BASE SALARY. The Company shall pay the Executive an annual Base
Salary of at least five hundred and twenty-five thousand dollars
($525,000) during the Employment Term. The Executive's Base Salary
shall be paid in substantially equal installments throughout the
year, consistent with the normal payroll practices of the Company.
Further, the Base Salary shall be reviewed at least annually
following the Effective Date of this Agreement to ascertain
whether, in the sole judgment of the Board or the Board's
designee, such Base Salary should be changed. If so changed, the
Base Salary as stated above shall, likewise, be increased for all
purposes of this Agreement.
3.3 ANNUAL BONUS. Subject to Section 3.10, the Company shall provide the
Executive with the opportunity to earn an annual cash bonus at a level which is
in line with the Company's then current compensation philosophies and the then
current opportunities provided to other top executives at the Company, and
commensurate with the business opportunities and direction of the Company at the
time, as determined by the Board or the Board's designee.
3.4 LONG-TERM INCENTIVES INCLUDING STOCK OPTIONS. Subject to section 3.10,
the Company shall provide the Executive the opportunity to earn a long-term
performance incentive award and/or stock options pursuant to the Company's
Long-Term Stock Incentive Compensation Program (as amended, or any successor
plans thereto) at a level which is in line with the Company's current
compensation philosophies and the opportunities provided to other top executives
at the Company, and commensurate with the business opportunities and direction
of the Company at the time, as determined by the Board or the Board's designee.
3.5 RETIREMENT BENEFITS. Subject to Section 3.10, the Company shall
provide the Executive with participation in all tax qualified retirement plans
in effect from time to time, including, but not limited to, the Company's 401(k)
Savings and Investment Plan (as amended, or any successor plans thereto),
subject to the eligibility and participation requirements of each plan.
In addition, also subject to Section 3.10, the Company shall provide the
Executive with participation in all existing nonqualified retirement plans, in
effect from time to time including, but not limited to, the Edwards Lifesciences
Nonqualified Deferred Compensation Plan (as amended, or any successor plans
thereto).
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3.6 EMPLOYEE BENEFITS. Subject to Section 3.10 and as otherwise provided
within the provisions of each of the respective plans, the Company shall provide
to the Executive all benefits other employees of the Company are entitled to
receive, in accordance with the terms and conditions of any policies or plans
applicable to such benefits. Such benefits shall include, but not be limited to,
group term life insurance, health insurance, short- and long-term disability
insurance and vacation.
The Executive shall be entitled to the number of weeks of paid vacation
per year provided to other top Company executives and in line with competitive
market practices for comparably situated executives, but in no event less than
five (5) weeks per year.
The Executive shall likewise participate in any additional benefits as may
be established during the Employment Term, by standard written policy of the
Company
3.7 PERQUISITES. Subject to Section 3.10, the Company shall provide to the
Executive all perquisites that other executives of the Company generally are
entitled to receive, and such other perquisites, which are available generally
to top executives with the Company and that are suitable to the character of the
Executive's position with the Company and adequate for the performance of his
duties hereunder. In addition, the Company shall provide the Executive with a
monthly car allowance of one thousand one hundred dollars ($1,100), a home
security system, and annual membership at two (2) country clubs of the
Executive's choice.
3.8 EXPENSES. The Company shall pay, or reimburse the Executive, for all
ordinary and necessary expenses in a reasonable amount which the Executive
incurs in performing his duties under this Agreement including, but not limited
to, travel (including, but not limited to, the cost of chartering a private
aircraft when reasonably necessary for Company business), entertainment,
professional dues and subscriptions, and all dues, fees, and expenses associated
with membership in various professional, business, and civic associations and
societies of which the Executive's participation is in the best interests of the
Company as determined in good faith by the Executive. The expenses will be
accounted for and reimbursed through the Company's normal expense reporting and
approval process.
3.9 STANDARD OF CARE. During the Employment Term, the Executive agrees to
devote substantially all of his time, attention, and energies to the Company's
business and shall not be engaged in any other business activity, whether or not
such business activity is pursued for gain, profit, or other pecuniary
advantage. However, subject to Article 5 herein, and subject to prior approval
by the Board (except where the Executive was serving as a director of another
company as of the Effective Date), the Executive may serve as a director of
other companies and participate in civic, religious, and charitable
organizations, so long as such service is not injurious to the Company. The
Executive covenants, warrants, and represents that, during the Employment Term,
he shall:
(a) Devote his full time and best efforts to the fulfillment of
his employment obligations;
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(b) Exercise the highest degree of loyalty and the highest
standards of conduct in the performance of his duties; and
(c) Do nothing that harms, in any way, the business or reputation
of the Company.
This Section 3.9 shall not be construed as preventing the Executive from
investing assets in such form or manner as will not require his services in the
daily operations of the affairs of the companies in which such investments are
made.
3.10 RIGHT TO CHANGE PLANS. The Company shall not be obligated by reason
of any of the provisions of this Article 3, to institute, maintain, or refrain
from changing, amending, or discontinuing any compensation or benefit plan,
program, or perquisite (including but not limited to, changes in the amount of
target annual bonus or target long-term performance incentives), provided that
if any changes are made they will apply to the Executive on a basis that is no
less favorable to the Executive than when applied to other top executives of the
Company.
3.11 STATE TAX EQUALIZATION PAYMENT. For the year 2000 only, the Company
intends that the Executive will pay the same amount of state income tax
attributable to the Base Salary paid to him by the Company in the year 2000 for
services rendered to the Company in the year 2000 as if the Executive had
remained employed for all of the year 2000 in Illinois and not been subject to
California income tax. To achieve this, an accounting firm agreeable to both the
Company and the Executive will determine the difference between (i) the sum of
the Illinois and California income tax actually owed by the Executive for the
year 2000 that is attributable to his Base Salary from the Company in 2000 and
(ii) the amount of Illinois income tax that the Executive would have paid for
the year 2000 on such Base Salary had he been taxed as an Illinois resident only
for the entire year. The Company will then pay the Executive an amount equal to
the difference so calculated (the "Tax Equalization Payment") plus an amount
sufficient to cover all of the Executive's additional state and federal income,
employment and other taxes (the "Additional Tax") that arise on the Tax
Equalization Payment such that the Executive is in the same after-tax position
as if he had not been subject to the Additional Tax. For this purpose, the
Executive shall be deemed to pay the highest marginal rate of federal and state
income taxes. The sum of the Tax Equalization Payment and the payment
attributable to the Additional Tax shall be made no later than the earlier of
(i) April 1, 2001 or (ii) fifteen (15) calendar days after the date that the
accounting firm determines the amount of the Tax Equalization Payment and the
Additional Tax.
In the event that the accounting firm cannot precisely determine the sum
of the Tax Equalization Payment and the payment attributable to the Additional
Tax by April 1, 2001, an estimated amount of such sum shall be made to the
Executive before April 15, 2001 with any subsequent adjustments (including, if
necessary, repayment by the Executive) made once the final determination of the
sum is made (with such final determination occurring no later than October 15,
2001).
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3.12 HOME RELOCATION LOAN. The Company will provide the Executive with a
mortgage loan in an amount of up to three million dollars ($3,000,000) (the
"Home Relocation Loan") to purchase a primary residence in California (the
"Residence") provided that the amount of the Home Relocation Loan, when combined
with any other mortgage loans on the Residence, shall not exceed eighty percent
(80%) of the purchase price of the Residence. The Home Relocation Loan will be
secured by a mortgage on the Residence and is intended to qualify as an
employee-relocation loan pursuant to Treasury Regulation Sections
1.7872-5T(b)(6) and (c)(1) and be exempt from the provisions of Code Section
7872. The term of the Home Relocation Loan will be five (5) years with repayment
in full due upon the earlier of (i) the fifth (5th) anniversary of the date on
which the Home Relocation Loan was made, (ii) forty-five (45) days after the
date of the Executive's termination of employment for any reason other than
following a Change in Control, or (iii) the sale of the Residence. Without the
written consent of the Executive, and notwithstanding anything to the contrary
in this Agreement or the documents evidencing the Home Relocation Loan, the
terms of the Home Relocation Loan may not be changed following a Change in
Control nor will the Company or any successor to the Company have the ability to
accelerate the repayment of the Home Relocation Loan following a Change in
Control even in the event of the subsequent termination of the Executive's
employment. The other specific provisions of the Home Relocation Loan will be
outlined in documents executed between the Company and the Executive including a
certificate of borrower and a promissory note that comply with the requirements
of Treasury Regulation Sections 1.7872-5T(b)(6) and (c)(1) and any other
applicable laws or regulations.
ARTICLE 4. EMPLOYMENT TERMINATION
4.1 TERMINATION DUE TO RETIREMENT, DISABILITY, OR DEATH. In the event the
Executive's employment during the Employment Term is terminated by reason of
Retirement, Disability, or death, the Executive's benefits shall be determined
in accordance with the Company's retirement, survivor's benefits, annual bonus
and long-term incentive plans, insurance, and other applicable programs then in
effect.
In addition, upon the effective date of such termination, the Company
shall pay to the Executive or his beneficiary or estate, as the case may be, his
base salary as earned but unpaid through the effective date of termination.
Further, the Executive shall receive all other benefits to which the Executive
has a vested right at that time.
The Company shall also pay to the Executive (or the Executive's estate or
beneficiaries as the reason may be), within thirty (30) calendar days of the
Executive's termination, a lump-sum cash amount equal to the Executive's target
annual bonus under the Company's annual bonus plan in effect for the bonus plan
year in which the Executive's date of termination occurs, multiplied by a
fraction, the numerator of which is the number of full completed months in the
bonus plan year through the effective date of termination, and the denominator
of which is twelve (12). This payment will be in lieu of any other payment to be
made to the Executive under such annual bonus plan for such plan year.
The Company's obligation to pay and provide to the Executive base salary,
annual bonus, and long-term incentives (as provided in Sections 3.2, 3.3, and
3.4 herein, respectively) shall immediately thereafter expire and, with the
exception of the covenants contained in Article 5 herein (which shall survive
such termination), the Company and the Executive thereafter shall have no
further obligations under this Agreement.
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The provisions of Section 4.3 shall supersede this Section 4.1 in the
event that the Company involuntarily terminates the Executive's employment
without Cause.
4.2 VOLUNTARY TERMINATION BY THE EXECUTIVE OTHER THAN RETIREMENT OR
INVOLUNTARY TERMINATION FOR CAUSE. The Executive may terminate this Agreement at
any time by giving the Board written notice of intent to terminate, delivered at
least ninety (90) calendar days prior to the effective date of such termination.
The termination automatically shall become effective upon the expiration of the
ninety (90) day notice period.
Nothing in this Agreement shall be construed to prevent the Board from
terminating the Executive's employment under this Agreement for "Cause" at any
time.
In the event that the Executive voluntarily terminates employment (other
than by Retirement) or if he is involuntarily terminated by the Company for
Cause, upon the effective date of such a termination, the Company shall pay to
the Executive or his beneficiary or estate, as the case may be, his base salary
as earned but unpaid and any accrued vacation time through the effective date of
termination. The Executive also shall receive all other benefits to which he has
a vested right at that time.
The Company's obligation to pay and provide the Executive base salary,
annual bonus, and long-term incentives (as provided in Sections 3.2, 3.3, and
3.4 herein, respectively) shall immediately expire. With the exception of the
covenants contained in Article 5 herein (which shall survive such termination),
the Company and the Executive thereafter shall have no further obligations under
this Agreement.
4.3 INVOLUNTARY TERMINATION BY THE COMPANY WITHOUT CAUSE. The Company may
terminate the Executive's employment, as provided under this Agreement, at any
time, for any reason other than death, Disability, or for Cause, by notifying
the Executive in writing of the Company's intent to terminate, at least thirty
(30) calendar days prior to the effective date of such termination. Subject to
the payment of the Severance Payments provided below, the termination
automatically shall become effective upon the expiration of the thirty (30)
calendar day notice period. Thereafter, this Agreement, along with all
corresponding rights, duties, and covenants, shall automatically expire. A
nonrenewal or nonextension of this Agreement or any term of this Agreement, as
described in Article 2 herein, shall not be deemed an involuntary termination
under this Section 4.3 and, thereby, shall not trigger the payment of the
Severance Payments described below.
Subject to Section 4.4, upon the effective date of an involuntary
termination without Cause under this Section 4.3, the Company shall pay to the
Executive and provide the Executive with the following "Severance Payments":
(a) A lump-sum cash amount equal to the Executive's unpaid Base
Salary, accrued vacation pay, unreimbursed business expenses, and
all other items earned by and owed to the Executive through and
including the effective date of the termination (including, but
not limited to, annual bonus or performance-based long-term
incentives that have been earned, but not paid). Such payment
shall constitute full satisfaction for these amounts owed to the
Executive.
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(b) A lump-sum cash amount equal to the Executive's target annual
bonus under the Company's annual bonus plan in effect for the
bonus plan year in which the Executive's date of termination
occurs, multiplied by a fraction, the numerator of which is the
number of full completed months in the bonus plan year through the
effective date of termination, and the denominator of which is
twelve (12). This payment will be in lieu of any other payment to
be made to the Executive under such annual bonus plan for such
plan year.
(c) A cash amount equal to two (2) times the sum of the Executive's
Base Salary and the greater of: (i) the Executive's target annual
bonus under the Company's annual bonus plan in effect for the
bonus plan year in which his employment with the Company
terminates; or (ii) the actual annual bonus earned by the
Executive in the bonus plan year prior to the year of employment
termination under the annual bonus plan in effect for such prior
plan year. For the purposes of this calculation, the Executive's
highest Base Salary during the twelve (12) months prior to his
termination of employment shall be used.
(d) All long-term incentive awards shall be subject to the treatment
provided under the Company's Long-Term Stock Incentive
Compensation Program (as amended, or any successor plans thereto)
and/or the applicable award agreements thereunder.
(e) A continuation for a twenty-four (24) month period of the
Executive's medical insurance and dental insurance coverage. These
benefits shall be provided by the Company to the Executive
beginning immediately upon the date of the Executive's
termination. Such benefits shall be provided to the Executive at
the same coverage level (with all premium costs borne by the
Company) as in effect as of the date of the Executive's
termination for a period of twenty-four (24) months following the
Executive's date of termination.
Notwithstanding the above, these medical and dental insurance
benefits shall be discontinued prior to the end of the stated
continuation period in the event the Executive receives
substantially similar benefits from a subsequent employer, as
determined solely by the Board in good faith. However, if the
benefits received from the subsequent employer do not cover the
preexisting medical conditions of the Executive or a covered
member of the Executive's family, the continuation period shall
continue, but not beyond the twenty-fourth (24th) month following
the Executive's date of termination. For purposes of enforcing
this offset provision, the Executive shall be deemed to have a
duty to keep the Company informed as to the terms and conditions
of any subsequent employment and the corresponding benefits earned
from such employment and shall provide, or cause to provide, to
the Company in writing correct, complete, and timely information
concerning the same.
If triggered, the Severance Payments provided under this Section 4.3 and
any State Tax Equalization Payment under Section 3.11 shall be in lieu of all
other benefits provided to the Executive under the provisions of this Agreement.
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4.4 COORDINATION WITH SEVERANCE AGREEMENT. In the event that the Executive
receives any severance benefits pursuant to the Severance Agreement, he shall
not be entitled to receive the Severance Payments provided for in Section 4.3
herein.
ARTICLE 5. RESTRICTIVE COVENANTS
5.1 DISCLOSURE OF INFORMATION. Without the prior written consent of the
Company, or except to the extent required in the good faith execution of his
duties with the Company, the Executive shall not, at any time, directly or
indirectly, use, attempt to use, disclose, or otherwise make known to any person
or entity (other than the Board):
(a) Any confidential or proprietary knowledge or information,
including without limitation, lists of customers or suppliers,
trade secrets, know-how, inventions, discoveries, processes, and
systems, as well as any data and records pertaining thereto, which
the Executive may acquire in the course of his employment.
(b) Any confidential or proprietary knowledge or information of a
confidential nature (including, but not limited to, all
unpublished matters) relating to, without limitation, the
business, properties, accounting, books and records, computer
systems and programs, trade secrets, or memoranda of the Company
or a Subsidiary.
5.2 EMPLOYMENT. Without the prior written consent of the Company, during
the Employment Term, and for a period of twenty-four (24) calendar months
following the Executive's employment termination for any reason, the Executive
shall not, directly or indirectly employ or retain or solicit for employment or
arrange to have any other person, firm, or other entity employ or retain or
solicit for employment or otherwise participate in the employment or retention
of any person who is an employee or consultant of the Company or any Subsidiary.
5.3 NONDISPARAGEMENT. Without the prior written consent of the Company, or
except to the extent required in the good faith execution of his duties with the
Company, the Executive shall not, at any time, directly or indirectly, make
statements or representations, or otherwise communicate, in writing, orally, or
otherwise, or take any action that may disparage or be damaging to the Company
or any Subsidiary or their respective officers, directors, employees, advisors,
businesses or reputations. Notwithstanding the foregoing, nothing in this
Agreement shall preclude Executive from making truthful statements or
disclosures that are required by applicable law, regulation or legal process.
5.4 ACKNOWLEDGEMENT OF COVENANTS. The Company and the Executive
acknowledge that the Executive's services are of a special, extraordinary, and
intellectual character which gives him unique value, and that the business of
the Company and its Subsidiaries is highly competitive, and that violation of
any of the covenants provided in this Article 5 would cause immediate,
immeasurable, and irreparable harm, loss, and damage to the Company and/or a
Subsidiary not adequately compensable by a monetary award. The Executive
acknowledges that the time and scope of activity restrained by the provisions of
this Article 5 are reasonable and do not impose a greater restraint than is
necessary to protect the goodwill of the Company's business and/or that of any
Subsidiary. The Executive further acknowledges that he and the Company have
negotiated and bargained for the terms of this Agreement, and that the Executive
has received adequate consideration for entering into this Agreement. In the
event of any such breach or threatened breach
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by the Executive of any one or more of such covenants, the Company shall be
entitled to such equitable and injunctive relief as may be available to restrain
the Executive from violating the provisions hereof. Nothing herein shall be
construed as prohibiting the Company from pursuing any other remedies available
at law or in equity for such breach or threatened breach, including the recovery
of damages and the immediate termination of the employment of the Executive
hereunder.
5.5 ENFORCEABILITY. If any court determines that the foregoing covenant,
or any part thereof, is unenforceable because of the duration or scope of such
provision, or for any other reason, the duration or scope of such provision, as
the case may be, shall be reduced so that such provision becomes enforceable
and, in its reduced form, such provision shall then be enforceable and shall be
enforced.
ARTICLE 6. INDEMNIFICATION
The Company hereby covenants and agrees to indemnify and hold harmless the
Executive fully, completely, and absolutely against and in respect to any and
all actions, suits, proceedings, claims, demands, judgments, costs, expenses
(including attorneys' fees), losses, and damages resulting from the Executive's
good faith performance of his duties and obligations under the terms of this
Agreement, to the maximum extent permitted under applicable law.
ARTICLE 7. ASSIGNMENT
7.1 ASSIGNMENT BY THE COMPANY. The Company shall require any successor
(whether direct or indirect, by purchase, merger, reorganization, consolidation,
acquisition of property or stock, liquidation, or otherwise) of all or a
significant portion of the assets of the Company by agreement, in form and
substance satisfactory to the Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
Regardless of whether such agreement is executed, this Agreement shall be
binding upon any successor in accordance with the operation of law and such
successor shall be deemed the "Company" for purposes of this Agreement.
Failure of the Company to obtain such agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and shall immediately
entitle the Executive to the Severance Payments as provided in Section 4.3.
Except as herein provided, this Agreement may not otherwise be assigned by
the Company.
7.2 ASSIGNMENT BY EXECUTIVE. This Agreement shall inure to the benefit of
and be enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
legatees. If the Executive should die while any amounts payable to the Executive
hereunder remain outstanding, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's beneficiary, devisee, legatee, or other designee or, in the absence
of such designee, to the Executive's estate.
The Executive shall not assign any obligations or responsibilities he has
under this Agreement.
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ARTICLE 8. DISPUTE RESOLUTION AND NOTICE
8.1 DISPUTE RESOLUTION. The Executive shall have the right and option to
elect (in lieu of litigation) to have any dispute or controversy arising under
or in connection with this Agreement settled by arbitration, conducted before a
panel of three (3) arbitrators sitting in a location selected by the Executive
within fifty (50) miles from the location of the Company's principal place of
business, in accordance with the rules of the American Arbitration Association
then in effect. The Executive's election to arbitrate, as herein provided, and
the decision of the arbitrators in that proceeding, shall be binding on the
Company and the Executive.
Judgment may be entered on the award of the arbitrator in any court having
jurisdiction. All expenses of such arbitration, including the fees and expenses
of the counsel for the Executive, shall be borne by the Company.
8.2 PAYMENT OF LEGAL FEES. Unless a court shall find the Executive's claim
to be arbitrary and capricious, the Company shall pay all legal fees, costs of
litigation, prejudgment interest, and other expenses which are incurred in good
faith by the Executive (or the Executive's estate or beneficiaries as the case
may be) as a result of the Company's refusal to provide the benefits to which
the Executive becomes entitled under this Agreement, or as a result of the
Company's (or any third party's) contesting the validity, enforceability, or
interpretation of the Agreement, or as a result of any conflict between the
parties pertaining to this Agreement.
8.3 NOTICE. Any notices, requests, demands, or other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Company or, in the case of the Company, at its principal
offices.
ARTICLE 9. MISCELLANEOUS
9.1 ENTIRE AGREEMENT. This Agreement supersedes any prior agreements or
understandings, oral or written, between the parties hereto and contains the
entire understanding of the Company and the Executive with respect to the
subject matter hereof.
9.2 MODIFICATION. This Agreement shall not be varied, altered, modified,
canceled, changed, or in any way amended except by mutual agreement of the
parties in a written instrument executed by the parties hereto or their legal
representatives.
9.3 SEVERABILITY. If any provision of this Agreement or the application
thereof is held invalid, such invalidity shall not affect other provisions or
applications of the Agreement that can be given effect without the invalid
provision or application and, to such end, the provisions of this Agreement are
declared to be severable.
9.4 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original, but all of which
together will constitute one and the same Agreement.
9.5 TAX WITHHOLDING. The Company may withhold from any benefits payable
under this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
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9.6 BENEFICIARIES. The Executive may designate one or more persons or
entities as the primary and/or contingent beneficiaries of any amounts to be
received under this Agreement. Such designation must be in the form of a signed
writing acceptable to the Board or the Board's designee. The Executive may make
or change such designation at any time.
9.7 WAIVER OF CLAUSES. At its discretion, the Company may require the
Executive to sign a waiver of all legal claims against the Company or any
Subsidiary upon the Executive's employment termination.
9.8 GOVERNING LAW. To the extent not preempted by federal law, the
provisions of this Agreement shall be construed and enforced in accordance with
the laws of the state of Delaware without giving effect to principles of
conflicts of laws.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement, as of
the Effective Date.
ATTEST Edwards Lifesciences Corporation
By:______________________________ By:___________________________________
Bruce P. Garren Robert C. Reindl
Corporate Secretary Vice President, Human Resources
Executive:
______________________________________
Michael A. Mussallem
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