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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No.           )

Filed by the Registrant ý

Filed by a Party other than the Registrant o

Check the appropriate box:

o


Preliminary Proxy Statement

o


Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

ý


Definitive Proxy Statement

o


Definitive Additional Materials

o


Soliciting Material under §240.14a-12

 

Edwards Lifesciences Corporation

(Name of Registrant as Specified In Its Charter)

 

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check the appropriate box):

ý


No fee required.

o


Fee computed on table below per Exchange Act Rules 14a-6(i)(1) and 0-11.
  (1) Title of each class of securities to which transaction applies:
        
  (2) Aggregate number of securities to which transaction applies:
        
  (3) Per unit price or other underlying value of transaction computed pursuant to Exchange Act Rule 0-11 (set forth the amount on which the filing fee is calculated and state how it was determined):
        
  (4) Proposed maximum aggregate value of transaction:
        
  (5) Total fee paid:
        

o


Fee paid previously with preliminary materials.

o


Check box if any part of the fee is offset as provided by Exchange Act Rule 0-11(a)(2) and identify the filing for which the offsetting fee was paid previously. Identify the previous filing by registration statement number, or the Form or Schedule and the date of its filing.

 


(1)


Amount Previously Paid:
        
  (2) Form, Schedule or Registration Statement No.:
        
  (3) Filing Party:
        
  (4) Date Filed:
        

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EDWARDS LIFESCIENCES LOGO

March 31, 2016

To our Stockholders:

The Board of Directors joins me in inviting you to attend our 2016 Annual Meeting of Stockholders. The meeting will be held at our corporate headquarters located at One Edwards Way, Irvine, California, on Thursday, May 12, 2016, at 10:00 a.m., Pacific Daylight Time. Registration will begin at 9:00 a.m.

Details of the business to be conducted at the Annual Meeting are included in the attached Notice of 2016 Annual Meeting of Stockholders and Proxy Statement. Stockholders also may access the Notice of 2016 Annual Meeting of Stockholders and the Proxy Statement via the Internet at www.edwards.com.

At the meeting, in addition to discussing matters described in the Proxy Statement, I will report on our 2015 achievements and discuss our plans for continued growth and success.

We look forward to seeing you at the Annual Meeting.

Sincerely,

GRAPHIC

Michael A. Mussallem
Chairman of the Board and
Chief Executive Officer

Edwards Lifesciences Corporation
One Edwards Way
Irvine, California USA 92614
Phone: 949.250.2500
www.edwards.com


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Edwards Lifesciences Corporation
One Edwards Way
Irvine, California USA 92614
949.250.2500

NOTICE OF 2016 ANNUAL MEETING OF STOCKHOLDERS
To be held on Thursday, May 12, 2016

To the Stockholders of


EDWARDS LIFESCIENCES CORPORATION

The 2016 Annual Meeting of Stockholders (the "Annual Meeting") of Edwards Lifesciences Corporation, a Delaware corporation (the "Company"), will be held at the corporate headquarters of the Company, located at One Edwards Way, Irvine, California 92614 on Thursday, May 12, 2016, at 10:00 a.m., Pacific Daylight Time, for the following purposes:

The Proxy Statement accompanying this Notice describes each of the items of business in more detail.

If you were a holder of record of the Company's common stock at the close of business on March 18, 2016, you are entitled to notice of and to vote at the Annual Meeting.

Whether or not you expect to attend the Annual Meeting, please submit your proxy or voting instructions as soon as possible to ensure that your shares will be represented at the Annual Meeting. You may vote in person or by proxy at the Annual Meeting, or you may submit your proxy or voting instructions via the Internet, by telephone, or by mail. Please follow the instructions in the Notice of Internet Availability of Proxy Materials or on the proxy card or voting instruction form you received to vote your shares. If you only received the Notice of Internet Availability of Proxy Materials, you may request a paper copy of the proxy materials and a proxy card by following the instructions in such Notice.

  By Order of the Board of Directors,

 



GRAPHIC

 


Denise E. Botticelli
Vice President, Associate General Counsel,
and Secretary

March 31, 2016


Table of Contents

TABLE OF CONTENTS

  

Page  

  

PROXY SUMMARY

i  

  

GENERAL MEETING AND VOTING INFORMATION

1  

  

BOARD OF DIRECTORS MATTERS

5  

 

PROPOSAL 1 - ELECTION OF DIRECTORS

5  

  

Corporate Governance Policies and Practices

10  

  

Active Stockholder Engagement

10  

  

2015-2016 Stockholder Outreach and Board Responsiveness to Action by Written Consent

10  

  

Proxy Access

11  

  

Corporate Governance Highlights

12  

  

Director Independence

13  

  

Corporate Governance Guidelines

13  

  

Board Leadership Structure

13  

  

Board Role In Risk Oversight

14  

  

Meetings of the Board

14  

  

Board Composition

14  

  

Committees of the Board

15  

  

Board Criteria and Diversity Policy

17  

  

Board Evaluations

17  

  

Board Retirement Policy

17  

  

Succession Planning

17  

  

Sustainability Report

17  

  

Communications with the Board

18  

  

Director Compensation

19  

  

Director Compensation Table – 2015

19  

  

Retainers and Fees

20  

  

Nonemployee Directors Stock Incentive Program

20  

  

Deferral Election Program

20  

  

Directors' Stock Ownership Guidelines and Holding Requirement

21  

  

Expense Reimbursement Policy

21  

  

Outstanding Nonemployee Director Equity Awards

22  

  

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

23  

  

EXECUTIVE COMPENSATION AND OTHER INFORMATION

25  

  

Executive Officers

25  

  

Compensation Discussion and Analysis

27  

  

Executive Summary

27  

  

Compensation Philosophy and Objectives for NEOs

30  

  

Compensation Process

30  

  

Independent Compensation Consultant

31  

  

Use of Competitive Data

31  

  

Elements of Compensation

32  

  

Stock Ownership Guidelines and Holding Requirement

40  

  

Prohibition on Pledging and Hedging

40  

  

Market Timing of Equity Awards

40  

  

Benefits and Perquisites

40  

  

Deferred Compensation

41  

  

Employment and Post-Termination Agreements

41  

  

Tax and Accounting Implications – Policy Regarding Section 162(m)

42  

  

2016 Compensation Decisions

42  

  

Page  

  

Compensation and Governance Committee Report

43  

  

Executive Compensation

43  

  

Summary Compensation Table

44  

  

Grants of Plan-Based Awards in Fiscal Year 2015

46  

  

Non-Equity Incentive Plan Awards

47  

  

Equity Incentive Plan Awards

47  

  

Outstanding Equity Awards at 2015 Fiscal Year-End

50  

  

Option Exercises and Stock Vested In Fiscal Year 2015

52  

  

Nonqualified Deferred Compensation Plans

52  

  

Potential Payments Upon Termination or Change In Control

53  

 

PROPOSAL 2 - ADVISORY VOTE TO APPROVE COMPENSATION OF NAMED EXECUTIVE OFFICERS

58  

  

EQUITY COMPENSATION PLAN INFORMATION

60  

 

PROPOSAL 3 - AMENDMENT AND RESTATEMENT OF THE LONG-TERM STOCK PROGRAM

61  

  

AUDIT MATTERS

71  

 

PROPOSAL 4 - RATIFICATION OF APPOINTMENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

71  

  

Fees Paid to Principal Accountants

71  

  

Pre-Approval of Services

71  

  

Audit Committee Report

72  

  

OTHER MATTERS AND BUSINESS

73  

  

Additional Information

73  

  

Section 16(a) Beneficial Ownership Reporting Compliance

73  

  

Related Party Transactions

73  

  

Indemnification of Directors and Officers

73  

  

Deadline for Receipt of Stockholder Proposals and Director Nominations for the 2017 Annual Meeting

73  

  

Annual Report on Form 10-K

74  

  

Delivery of Proxy Materials

74  

  

APPENDIX A: LONG-TERM STOCK INCENTIVE COMPENSATION PROGRAM

A-1  

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PROXY SUMMARY

This summary contains highlights about our Company and the upcoming Annual Meeting. This summary does not contain all of the information that you should consider. Please read the entire Proxy Statement prior to voting.

VOTING MATTERS (Page 1)

Proposal
Board Vote
Recommendation
1. Election of Directors FOR
2. Advisory Vote to Approve Compensation of Named Executive Officers FOR
3. Amendment and Restatement of the Long-Term Stock Incentive Compensation Program FOR
4. Ratification of Appointment of Independent Registered Public Accounting Firm FOR

BOARD OF DIRECTORS (Page 5)

This year, eight of our current directors are standing for annual election at the Annual Meeting. The following chart provides key information on each of our current directors:

Name


Age
Director
Since


Primary Occupation
Board
Roles(1)


Other
Public
Company
Boards

Director Nominees (Annual Election)

John T. Cardis*

74 2004 Retired National Managing Partner
Deloitte & Touche

AC (Chair) 0

Kieran T. Gallahue*

52 2015 Former Chairman and CEO
CareFusion Corporation
AC 1

William J. Link, Ph.D.*

69 2009 Managing Director and Co-Founder
Versant Ventures

CGC (Chair) 2

Steven R. Loranger*

64 2016 Former Chairman, President and CEO
ITT Corporation
1

Martha H. Marsh*

67 2015 Retired President and CEO
Stanford Hospital & Clinics

2

Michael A. Mussallem

63 2000 Chief Executive Officer and Chairman
Edwards Lifesciences Corporation
Chairman 0

Wesley W. von Schack*

71 2010 Former Chairman, President, and CEO
Energy East Corporation

Presiding Director AC 2

Nicholas J. Valeriani*

59 2014 Former CEO West Health Institute
Former EVP, Johnson & Johnson
CGC 1

Average


65 5.4 years

Retiring Director (Not Standing for Re-Election Under Edwards' Director Retirement Policy)

Barbara J. McNeil, M.D., Ph.D.*

75 2006 Professor of Health Care Policy
Chair of Healthcare Policy Committee
Harvard Medical School


CGC 0
(1)
CGC=Compensation and Governance Committee; AC=Audit Committee, each member is an audit committee financial expert

*
Independent Director
Edwards Lifesciences Corporation  |    PROXY STATEMENT    i

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PROXY SUMMARY

ACTIVE STOCKHOLDER ENGAGEMENT AND 2015-2016 STOCKHOLDER OUTREACH (Page 10)

The Board and management are committed to engaging with Edwards' stockholders and incorporating feedback into their decision-making processes. Throughout the year our CEO, CFO and Vice President of Investor Relations meet, by phone and face-to-face, with current and prospective stockholders to discuss Edwards' strategy, business and financial results. Additionally, in the summer and fall of 2015, our Corporate Secretary and Investor Relations teams contacted stockholders representing approximately 53% of our outstanding shares, and conducted conversations with stockholders representing approximately 41% of outstanding shares. In this engagement, we received feedback from stockholders on a range of issues including governance, compensation and other related matters. We also heard feedback on the advisory stockholder proposal seeking the right to act by written consent that was supported by the majority of the votes cast at our 2015 annual meeting.

In early 2016, we again contacted stockholders to obtain more direct feedback specifically on the Board's proposed response to the majority-approved written consent proposal. We contacted stockholders representing approximately 49% of our outstanding shares, and spoke with stockholders representing approximately 47% of our outstanding shares. The Board's Presiding Director, Wes von Schack, led many of these conversations. Details of the feedback we heard from stockholders and the Board's process in responding to this proposal are discussed on page 10.

CORPORATE GOVERNANCE HIGHLIGHTS (Page 12)

Our commitment to good governance practices and accountability to stockholders is described in the following chart:

   WHAT WE DO
   ü Annual election of directors  
   ü Majority vote standard in uncontested elections, with director resignation policy
   ü Special stockholder meetings can be called by stockholders owning at least 15% of our outstanding shares  
   ü Proxy access right to permit a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for at least 3 years to nominate up to the greater of two directors or 20% of our Board for inclusion in our proxy statement
   ü Independent Board, excluding our Chief Executive Officer  
   ü Executive session of independent directors held at each Board and committee meeting
   ü Independent Presiding Director provides strong independent leadership of our Board  
   ü Retirement policy for directors
   ü Annual Board and committee self-evaluations, and peer reviews  
   ü Nonemployee directors expected to hold net shares upon vesting or exercise of equity awarded after 2011 until cease to serve on the Board
   ü Senior management succession planning considered at each regularly scheduled Board meeting  
   ü Active stockholder engagement
   ü Robust code of ethics in our Global Business Practice Standards  
   ü Corporate sustainability report
   ü "Clawback" policy for performance-based compensation  
   WHAT WE DON'T DO
 

No pledging or hedging of Edwards' securities by directors, executives, employees with a title of "vice president" or above and "insiders" under our insider trading policy

  

No stockholder rights plan ("poison pill")

 
  

No supermajority voting provisions in the Company's organizational documents

ii    Edwards Lifesciences Corporation  |    PROXY STATEMENT

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PROXY SUMMARY

EXECUTIVE COMPENSATION (Page 27)

Executive Summary.    Edwards is the global medical technology leader in patient-focused innovations for structural heart disease and critical illness. We embrace a corporate strategy that puts patients first and creates value with therapies that transform care. We execute our strategy by doing the right thing for patients, identifying unmet clinical needs and developing breakthrough therapies, doing so in a way that establishes trusted relationships with our stakeholders and results in clear industry leadership.

As a direct result of our strategy, we have introduced new therapies such as transcatheter aortic valve replacement, rapid-deployment surgical heart valves and noninvasive advanced hemodynamic monitoring, all while achieving our stated financial and operating objectives. Managing our business well in a challenging, highly regulated, dynamic environment requires talented and energetic leaders who champion our strategy and deliver on our commitments.

Pay-for-Performance Philosophy.    The Compensation Committee strives to create a pay-for-performance culture and strongly believes that executive compensation should be tied not only to performance, but also directly to the successful implementation of our corporate strategy. Management translates our strategy into a set of Strategic Imperatives and establishes Key Operating Drivers ("KODs") that measure our execution of these Strategic Imperatives, all of which are approved by the Board each year.

2015 Financial and Operating Performance and Incentive Plan Outcomes.    In 2015, our financial and operating performances were strong. We achieved significant growth and exceeded our financial goals. Notable in 2015 were:

Total sales increased 16.8% on a non-GAAP basis
A strong 75.2% gross margin
Diluted earnings per share growth of 30.9% on a non-GAAP basis
Launch of Edwards' SAPIEN 3 transcatheter heart valve in the United States, which drove 37.7% global THV sales growth on a non-GAAP basis
Investment of 15% of our sales in research and development
Edwards' stock price increased 24% over the year
Repurchase of 3.9 million split-adjusted shares for $280.1 million
For each quarter in 2015, results exceeded performance expectations, and each region demonstrated growth
Two-for-one stock split paid on December 11, 2015 to stockholders of record on November 30, 2015

A reconciliation of non-GAAP financial measures to the most comparable GAAP measure can be found in Edwards' fourth quarter 2015 earnings release on our investor website at http://ir.edwards.com/results.cfm.

Our actual results in 2015 surpassed the maximum percentage of achievement for non-GAAP revenue, net income, and free cash flow, the three financial measures under our annual cash incentive plan. In addition, overall achievement of our Key Operating Drivers, or KODs, for 2015 was 104%. Accordingly, our annual incentive plan funded at 175% of target, the maximum funding possible, before taking into account individual performance.

Stock Performance.    Over the past five years, an average of 88% of the CEO's total direct compensation (base salary, annual cash incentive, and long-term incentive award value) has been performance based, and 73% has been tied to our stock performance. Edwards' stock price has increased 95% over the past five years, 75% over the past three years, and 24% over the past year.

The charts below depict Edwards' stock performance and cumulative total stockholder return as it compares to the S&P 500 and our 12-company medical products peer group, the S&P 500 Health Care Equipment Index (the "SPHEI"), for periods specified below, as of December 31, 2015.


GRAPHIC

GRAPHIC
*Does not reflect reinvestment of dividends. +Reflects reinvestment of dividends
Edwards Lifesciences Corporation  |    PROXY STATEMENT    iii

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PROXY SUMMARY

COMPENSATION PROGRAM HIGHLIGHTS (Page 29)

The Compensation Committee reviews our executive compensation and benefits programs and makes changes as appropriate to reflect our compensation philosophy and objectives, and align executives with stockholder interests.

   WHAT WE DO
  

ü

Pay for Performance. In 2015, approximately 88% of the total direct compensation of our CEO, and an average of 77% of the total direct compensation of our other NEOs, was performance-based.

 
We align executive compensation with the interests of our stockholders

Executive compensation programs are designed to avoid excessive risk and foster sustainable growth

We adhere to strong executive compensation and governance practices
 
  

ü

Minimum Three-Year Vesting. Equity compensation is structured to vest over a minimum period of three years, subject to limited exceptions.

   
  

ü

Performance-Based Equity. Our performance-based restricted stock units ("PBRSUs") vest based on our relative total stockholder return ("TSR") over a three-year period.

     
  

ü

"Double Trigger" in the Event of a Change in Control. Severance benefits are paid, and equity compensation awarded since May 2015 vests, only upon a "double trigger" in connection with a change in control (meaning a termination of the executive's employment is required in addition to the occurrence of a change in control in order for the benefits to be triggered).

   
  

ü

Linkage Between Performance Measures and Strategic Imperatives. Performance measures for incentive compensation are linked to our Strategic Imperatives through achievement of Key Operating Drivers (KODs), and are designed to create long-term stockholder value and hold executives accountable for individual and Edwards' performance.

     
  

ü

Annual Stockholder Approval of Long-Term Stock Program Shares. We provide stockholders an annual opportunity to vote on proposed increases to the number of shares available for grant under the Long-Term Stock Program.

   
  

ü

Use Tally Sheets. The Compensation Committee annually reviews "tally sheets" reflecting all compensation elements for our NEOs.

     
  

ü

Robust Executive Stock Ownership Guidelines. Executives are required to hold Edwards stock with a value not less than six times salary for our CEO and three times salary for each other NEO. Fifty percent of net shares received as equity compensation must be retained if the guideline has not been met.

   
  

ü

CEO Stock Ownership. Our CEO far exceeds his six-times salary stock ownership guideline and continues to increase his ownership of Edwards stock.

     
  

ü

Modest Perquisites. We provide modest perquisites, and have a business rationale for the perquisites that we do provide.

   
  

ü

"Clawback" Policy. We maintain a recoupment policy for performance-based compensation.

     
  

ü

Independent Compensation Consultant. The Compensation Committee engages an independent compensation consulting firm.

   
          
   WHAT WE DON'T DO
     
  

No excise tax gross-ups for executive officers.

     
  

No repricing or buyout of underwater stock options.

   
  

No pledging of Edwards' securities by directors, executives, employees with a title of "vice president" or above and "insiders" under our insider trading policy.

     
  

No hedging of Edwards' securities by directors, executives, employees with a title of "vice president" or above and "insiders" under our insider trading policy.

   
iv    Edwards Lifesciences Corporation  |    PROXY STATEMENT

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EDWARDS LIFESCIENCES CORPORATION



PROXY STATEMENT FOR THE
2016 ANNUAL MEETING OF STOCKHOLDERS

GENERAL MEETING AND VOTING INFORMATION

Our Board of Directors (the "Board") is soliciting your proxy for use at the 2016 Annual Meeting of Stockholders (the "Annual Meeting") of Edwards Lifesciences Corporation ("Edwards," the "Company," "we," or "us") to be held at 10:00 a.m., Pacific Daylight Time, on Thursday, May 12, 2016, at our corporate headquarters, located at One Edwards Way, Irvine, California 92614.

IMPORTANT NOTICE REGARDING THE AVAILABILITY OF PROXY MATERIALS FOR THE
STOCKHOLDER MEETING TO BE HELD ON MAY 12, 2016

We are pleased to take advantage of Securities and Exchange Commission (the "SEC") rules that allow companies to furnish their proxy materials over the Internet. As a result, we are mailing to most of our stockholders a Notice of Internet Availability of Proxy Materials (the "Notice") instead of a paper copy of our proxy materials (i.e., the Notice of Annual Meeting, this Proxy Statement, our Annual Report on Form 10-K for the fiscal year ended 2015 ("2015 Annual Report"), and a form proxy card or voting instruction form). The Notice contains instructions on how to access those documents over the Internet and how to submit your proxy via the Internet. The Notice also contains instructions on how to request a paper copy of our

proxy materials. All stockholders who do not receive a Notice will receive a paper copy of the proxy materials by mail. This process allows us to provide our stockholders with the information they need in a more timely manner, while reducing the environmental impact and lowering the costs of printing and distributing our proxy materials. This Proxy Statement and our 2015 Annual Report are available at our website at http://ir.edwards.com/annuals-proxies.cfm, which does not have "cookies" that identify visitors to the site.

The Notice or these proxy materials are first being sent to stockholders on or about March 31, 2016.

VOTING MATTERS AND THE RECOMMENDATIONS OF THE BOARD

The items of business scheduled to be voted on at the Annual Meeting and our Board's recommendation on each item are as follows:

Proposal
Board Vote
Recommendation
1. Election of Directors FOR
2. Advisory Vote to Approve Compensation of Named Executive Officers FOR
3. Amendment and Restatement of the Long-Term Stock Program FOR
4. Ratification of Appointment of Independent Registered Public Accounting Firm FOR

 

Stockholders will also be asked to consider and transact such other business as may properly come before the Annual Meeting or any postponement or adjournment thereof. Pursuant to our Bylaws, the chairman of the Annual Meeting will determine whether any business proposed to be brought before the

Annual Meeting has been properly presented. If the chairman determines that the business was not properly brought before the Annual Meeting, the chairman will declare to the meeting that such business was not properly brought and such business will not be transacted.

Edwards Lifesciences Corporation  |    PROXY STATEMENT    1

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GENERAL MEETING AND VOTING INFORMATION

RECORD DATE AND STOCKHOLDER LIST

Our Board has fixed the close of business on Friday, March 18, 2016 as the record date for the determination of stockholders entitled to notice of, and to vote at, the Annual Meeting. A list of stockholders of record entitled to vote at the Annual Meeting will be available for inspection by any stockholder, for any

purpose germane to the meeting, during normal business hours, for a period of ten days prior to and including the date of the meeting, at our corporate headquarters located at One Edwards Way, Irvine, California 92614.

WHO CAN VOTE

You are entitled to vote your shares at the Annual Meeting if our records show that you held your shares as of the record date, March 18, 2016. At the close of business on that date, 211,734,901 shares of our common stock were outstanding and entitled to vote at

the Annual Meeting. We have no other class of voting securities outstanding. Each stockholder is entitled to one vote per share on each proposal to be voted upon at the meeting.

HOW TO VOTE

You may hold Edwards' shares in multiple accounts and therefore receive more than one proxy card or voting instruction form and related materials. Please vote EACH proxy card and voting instruction form that you receive.

Shares Held of Record.    If you hold your shares in your own name as a holder of record with our transfer agent, Computershare, you may authorize that your shares be voted at the Annual Meeting in one of the following ways:

By Internet or
By Telephone

If you received a Notice or a printed copy of the proxy materials, follow the instructions in the Notice or on the proxy card

By Mail

If you received printed copies of the proxy materials, complete, sign, date, and mail your proxy card in the enclosed, postage-prepaid envelope

In Person

You may also vote in person if you attend the Annual Meeting

Shares Held in Street Name.    If you hold your shares through a broker, bank or other nominee (that is, in street name), you will receive instructions from your broker, bank or nominee that you must follow in order to have your shares voted at the Annual Meeting. If you want to vote in person at the Annual Meeting, you must obtain a legal proxy from your broker, bank or other nominee and bring it to the meeting.

Shares Held in Our 401(k) Plan.    If you participate in the Edwards Lifesciences Corporation 401(k) Savings and Investment Plan or the Edwards Lifesciences Corporation of Puerto Rico Savings and Investment Plan, you will receive a request for voting instructions with respect to the shares allocated to your plan account. You are entitled to direct the plan trustee how to vote your plan shares. If the plan trustee does not receive voting instructions for shares in your plan account, the shares attributable to your account will be voted in the same proportion as the allocated shares for which voting instructions have been received.

Even if you plan to attend the Annual Meeting, we recommend that you submit your proxy or voting instructions in advance of the meeting as described above so that your vote will be counted if you later decide not to attend or are unable to attend the Annual Meeting.

2    Edwards Lifesciences Corporation  |    PROXY STATEMENT

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GENERAL MEETING AND VOTING INFORMATION

DEADLINE TO VOTE

If you are a stockholder of record, your proxy must be received by telephone or the Internet by 11:59 p.m. Eastern Time on May 11, 2016 in order for your shares to be voted at the Annual Meeting. If you are a stockholder of record and you received a printed copy of the proxy materials, you may instead mark, sign, date and return the enclosed proxy card, which must be received before the polls close at the Annual Meeting.

If you hold your shares in street name through a broker, bank or other nominee, please follow the instructions provided by the broker, bank or other nominee who holds your shares. If you hold shares in one of our 401(k) plans, to allow sufficient time for voting by the plan trustees, your voting instructions must be received by telephone or the Internet by 11:59 p.m. Eastern Time on May 9, 2016.

APPOINTMENT OF PROXIES

Our Board has appointed William J. Link, Michael A. Mussallem, and Wesley W. von Schack to serve as proxy holders to vote your shares according to the instructions you submit. If you properly submit a proxy but do not indicate how you want your shares to be voted on one or more items, your shares will be voted in accordance with the recommendations of our Board as

set forth above under "Voting Matters and the Recommendations of the Board." With respect to any other matter properly presented at the Annual Meeting, your proxy, if properly submitted, gives authority to the proxy holders to vote your shares on such matter in accordance with their best judgment.

REVOCATION OF YOUR PROXY

If you are a holder of record, you may revoke your proxy at any time before it is voted at the Annual Meeting by delivering written notice of revocation to the Secretary of the Company by submitting a subsequently dated proxy by mail, telephone or the Internet in the manner described above under "How to Vote," or by attending the Annual Meeting and voting in person. Attendance at the Annual Meeting will not itself revoke an earlier submitted proxy. If you hold your shares in street name, you must follow the instructions provided by your broker, bank or nominee to revoke your voting

instructions, or, if you have obtained a legal proxy from your broker, bank or other nominee giving you the right to vote your shares at the Annual Meeting, by attending the Annual Meeting and voting in person.

Any change to your proxy or voting instructions that is provided by telephone or the Internet must be submitted by 11:59 p.m. Eastern Time on May 11, 2016, except that if you are voting shares held in one of our 401(k) plans, the deadline is 11:59 p.m. Eastern Time on May 9, 2016.

BROKER VOTING

Brokers holding shares of record for their customers are entitled to vote on certain routine matters, such as the ratification of the appointment of PricewaterhouseCoopers LLP ("PwC"), our independent registered public accounting firm (Proposal 4), without instructions from their customers. However, these brokers are generally not entitled to vote on certain non-routine matters, including the election of directors, matters relating to equity compensation plans or executive compensation, and certain corporate governance proposals, unless their

customers submit voting instructions. If you hold your shares in street name through a broker and the broker does not receive your voting instructions, the broker will not be permitted to vote your shares in its discretion on any of the proposals at the Annual Meeting other than the proposal to ratify the appointment of PwC. If you do not submit voting instructions and your broker votes your shares on Proposal 4 in its discretion, your shares will constitute "broker non-votes" on each of the other proposals.

Edwards Lifesciences Corporation  |    PROXY STATEMENT    3

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GENERAL MEETING AND VOTING INFORMATION

QUORUM

The presence at the Annual Meeting, in person or by proxy, of holders of at least a majority of the outstanding shares of common stock entitled to vote is necessary to constitute a quorum to transact business at the Annual Meeting. Shares represented at the

Annual Meeting are counted toward a quorum even if the holder of such shares abstains from voting. Shares held through brokers are not counted toward a quorum unless the broker has authority to vote upon at least one matter at the Annual Meeting.

VOTE REQUIRED ON PROPOSALS

The following summary describes the vote required to approve each of the proposals at the Annual Meeting:

Voting Item Vote Standard Treatment of Abstentions and
Broker Non-Votes
Proposal 1 – Election of Directors

Majority of votes cast

Abstentions and broker non-votes not counted as votes cast

Proposal 2 – Say on Pay (Advisory)

Proposal 3 – Long-Term Stock Program

Proposal 4 – Ratification of PwC (Advisory)

Majority of shares represented at the Annual Meeting and entitled to vote on the proposal

Abstentions will have the effect of votes "against"

Broker non-votes will not be counted as shares represented

PROXY SOLICITATION COSTS

Your proxy for the Annual Meeting is being solicited on behalf of our Board and we will pay the cost of solicitation. At our expense, we will also request brokers and other custodians, nominees and fiduciaries to forward proxy soliciting materials to the beneficial owners of shares held of record by such persons. In addition, we have retained Georgeson Inc. ("Georgeson") to assist with the distribution and solicitation of proxies for a fee of $20,000, plus

expenses for these services. We also agreed to indemnify Georgeson against liabilities and expenses arising in connection with the proxy solicitation unless caused by Georgeson's gross negligence or intentional misconduct. Georgeson and our officers, directors and regular employees may also solicit proxies by telephone, facsimile, e-mail and personal solicitation. We will not pay additional compensation to our officers, directors and regular employees for these activities.

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PROPOSAL 1 – ELECTION OF DIRECTORS

THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF THE NOMINEES FOR DIRECTOR

General.     Our Board currently consists of nine directors forming one single class of directors Following stockholder approval of a proposal seeking declassification of the Board at our 2012 annual meeting, the Board recommended, and stockholders approved at the 2013 annual meeting, amendments to our Certificate of Incorporation to declassify the Board and to phase in the annual election of directors as terms expire. Accordingly, declassification of the Board has been fully phased in and all of our nominated directors will be standing for election for a one-year term. Dr. Barbara J. McNeil has not been nominated for re-election and will retire from the Board on the date of the Annual Meeting, according to the Edwards' director retirement policy. At that time, we expect the size of the Board will be reduced to eight directors.

Since our 2015 annual meeting, Robert A. Ingram retired from the Board in July 2015, and the Board appointed two new directors: Martha H. Marsh in October 2015, with extensive healthcare industry experience, and Steven R. Loranger in March 2016, with global operational and manufacturing experience, as described further in their biographies below. The Compensation and Governance Committee (the "Compensation Committee") authorized the retention of Spencer Stuart, an executive search consulting firm, to identify and assess appropriate candidates for director and facilitated background checks on both Ms. Marsh and Mr. Loranger as part of the director search process. The Compensation Committee and full Board then reviewed the results of Spencer Stuart's evaluations and screenings, discussed each potential nominee, and appointed Ms. Marsh and Mr. Loranger

to the Board. Ms. Marsh and Mr. Loranger were initially identified to the Board by Spencer Stuart.

The Board has nominated the eight individuals identified below, including the two new directors, for election to the Board, to serve until the next annual meeting of stockholders and until their successors are elected and qualified, or until their earlier resignation or removal.

Each of the nominees standing for election has consented to serve as a director if elected. However, if any nominee becomes unable or unwilling for good cause to serve before the election, the shares represented by proxy may be voted for a substitute nominee designated by the Board. No arrangement or understanding exists between any nominee and any other person or persons pursuant to which any nominee was or is to be selected as a director or nominee, and none of our directors has any family relationship with any other director or with any of our executive officers. More information regarding the Board, the committees of the Board, director independence, and related matters, follows this Proposal 1.


Director Nominees.     The following biographical information for each of the Board's director nominees includes information about the director's age, background, and business experience and the specific experience, qualifications, attributes or skills that led the Board to conclude that the individual should serve as a director.

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GRAPHIC

Michael A. Mussallem
Age:    63
Director Since:    2000

Edwards Board Roles:

Chairman of the Board



Select Business Experience:

Edwards Lifesciences Corporation

Chairman and CEO, since 2000

Baxter International Inc.

Group Vice President, Cardiovascular business from 1994 to 2000

Group Vice President, Biopharmaceutical business from 1998 to 2000

Held a variety of positions with increasing responsibility in engineering and product development

Member of the board and executive committee of the Advanced Medical Technology Association (AdvaMed), former chairman of the boards of directors of both AdvaMed and California Healthcare Institute (CHI)

Advisory board member for the Leonard D. Schaeffer Center for Health Policy and Economics at the University of Southern California

Trustee of the University of California, Irvine Foundation

Received his Bachelor of Science in Chemical Engineering and an honorary doctoral degree from the Rose-Hulman Institute of Technology

Select Skills and Qualifications:

Mr. Mussallem has an extensive knowledge of the medical technology industry in general, and of the people, operations, processes and products of the Company, in particular, built over a 35-year career with the Company and its predecessor. In addition, in his roles with AdvaMed and other healthcare organizations, he has played a leadership role in the medical technology industry and has made important contributions to healthcare policy discussions in California, the United States and the key global markets that the Company serves. These experiences have established relationships which are helpful in developing the Board's strategic perspective and enhanced his leadership of the Company.



GRAPHIC

John T. Cardis
Age:    74
Director Since:    2004

Edwards Board Roles:

Chair of the Audit Committee



Other Public Company Directorships in Past Five Years:

Avery Dennison Corporation, until May 2014

Select Business Experience:

Deloitte & Touche

Senior Partner from 1974 until his retirement in 2004

Served for 41 years in positions of increasing responsibility, including as National Managing Partner, Global Strategic Clients, as a member of its executive committee for 18 years, and as a member of its board of directors

Remains actively involved as a private investor and has served on the Boards of a number of non-profit and community organizations

Received a bachelor's degree in accounting and an honorary doctoral degree in public service from Marian College, and completed the Harvard School of Business Advance Management Program

Select Skills and Qualifications:

Mr. Cardis possesses in-depth, practical knowledge of financial and accounting principles as well as more than 40 years' enterprise risk and risk management expertise. Throughout his career, he has worked with numerous boards and audit committees on technical and governance matters. This background, and his management and operations experience as a senior partner at Deloitte & Touche, provide a valuable perspective to the Board as a whole, and are important to his role as Chair of the Audit Committee.


   
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GRAPHIC

Kieran T. Gallahue
Age:    52
Director Since:    2015

Edwards Board Roles:

Audit Committee Member



Other Current Public Company Directorships:

intersect ENT, Inc., since 2015

Lead Independent Director

Other Public Company Directorships in Past Five Years:

CareFusion Corporation, until 2015

Volcano Corporation, until 2015

ResMed, Inc., until 2011

Select Business Experience:

CareFusion Corporation, a global medical technology company (acquired by Becton, Dickinson and Company in March 2015)

Chairman and Chief Executive Officer from 2011 to 2015

ResMed, Inc.

Chief Executive Officer from 2008 to 2011

President from 2004 to 2011

President and COO, Americas from 2003 to 2004

Nanogen, Inc.

Various positions, including President and Chief Financial Officer, from 1998 to 2002

Prior to 1998, various marketing, sales and financial positions within Instrumentation Laboratory, the Procter & Gamble Company, and the General Electric Company

Served on the Board of Directors and Executive Committee of AdvaMed

Holds a bachelor's degree in economics from Rutgers University and an MBA from Harvard Business School

Select Skills and Qualifications:

Mr. Gallahue provides valuable insights and direction to the Board gained through extensive executive management experience at medical technology companies, and leadership roles on other public company boards and committees. His prior experience as a public company chief financial officer also permits him to contribute valuable financial and accounting perspectives to our Board and Audit Committee.



William J. Link, Ph.D.
Age:    69
Director since:    2009

Edwards Board Roles:

Chair of the Compensation and Governance Committee



Other Current Public Company Directorships:

Second Sight Medical Products, Inc., since 2003

Member of the Audit, Compensation, and Nominating and Corporate Governance Committees

Glaukos Corporation, since 2001 (became a public company in July 2015)

Chairman, and Member of the Compensation, Nominating and Governance Committee

Select Business Experience:

Versant Ventures, a venture capital firm investing in early stage healthcare companies

Managing Director and Co-Founder, since 1999

Brentwood Venture Capital, since 1998

General Partner

Chiron Vision (acquired by Bausch & Lomb, Inc.), from 1986 to 1997

Founder, Chairman, and Chief Executive Officer

American Medical Optics, Inc. (acquired by Allergan, Inc.), from 1978 to 1986

Founder and President

Before entering the healthcare industry, was an assistant professor in the Department of Surgery at the Indiana University School of Medicine

Earned his bachelor's, master's and doctoral degrees in mechanical engineering from Purdue University

Select Skills and Qualifications:

Dr. Link's corporate leadership and long history successfully commercializing products in the medical technology industry provide the Board with a valuable perspective in evaluating the prospects of, and risks associated with, existing business operations. In addition, his extensive experience in identifying new business opportunities and his strong technical and engineering background have proven beneficial in assessing the potential for future innovations.


   
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GRAPHIC

Steven R. Loranger
Age:    64
Director Since:    2016

Edwards Board Roles:

Member



Other Current Public Company Directorships:

Xylem Inc., since 2011

Member of Audit and Nominating and Governance Committees

Other Public Company Directorships in Past Five Years:

Exelis Inc., until May 2013

FedEx Corporation, until 2014

Select Business Experience:

Xylem Inc., a global water technology provider

Interim CEO and President from September 2013 until March 2014

ITT Corporation

Chairman, President, and CEO from 2004 until October 2011

Textron, Inc.

Executive Vice President and Chief Operating Officer from 2002 to 2004

From 1981 to 2002, held executive positions at Honeywell International Inc. and its predecessor company, AlliedSignal, Inc., including serving as President and Chief Executive Officer of its Engines, Systems and Services Businesses

Senior Advisor to the CEO of FlightSafety International and serves on the Boards of the National Air and Space Museum and the Congressional Medal of Honor Foundation

Holds a bachelor's and master's degree in science from the University of Colorado

Select Skills and Qualifications:

Mr. Loranger is a seasoned executive with global experience in highly regulated, high-tech industries. His decades of experience leading large, innovation-focused corporations will be particularly valuable to the Board.



Martha H. Marsh
Age:    67
Director Since:    2015

Edwards Board Roles:

Member



Other Current Public Company Directorships:

AMN Healthcare Services, Inc., since 2010

Chair, Compensation Committee and member of Corporate Governance Committee

Owens & Minor Inc., since 2012

Chair, Governance and Nominating Committee, member of Compensation Committee and Executive Committee

Other Public Company Directorships in Past Five Years:

Thoratec Corporation, until 2015

Select Business Experience:

Stanford Hospital & Clinics

President and Chief Executive Officer from 2002 until her retirement in 2010

University of California Davis Medical Center

Chief Executive Officer from 1999 until 2002

Received her Bachelor of Arts in History from the University of Rochester, and an MBA in accounting and health administration and a master's degree in public health from Columbia University

Select Skills and Qualifications:

Ms. Marsh's experience of more than 30 years in an increasingly complex and evolving healthcare system as both a president and chief executive officer, combined with years of Board experience that includes corporate governance chairmanships, provide a valuable perspective as our board considers the execution of our patient-focused innovation strategy.


   
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Wesley W. von Schack
Age:    71
Director Since:    2010

Edwards Board Roles:

Presiding Director

Audit Committee Member



Other Current Public Company Directorships:

Bank of New York Mellon Corporation, since 2007

Lead Director and Chair of Executive Committee

Teledyne Technologies, since 2006

Select Business Experience:

Energy East Corporation, an energy services company (acquired by Iberdrola S.A. in 2008)

Chairman, President, and Chief Executive Officer from 1996 until his retirement in 2009

AEGIS Insurance Services, Inc.

Director since 1997, Chairman since 2006 and Chair of Risk Managers Advisory Committee

AEGIS Managing Agency Limited, which manages Syndicate 1225 at Lloyd's of London

Non-executive Director and member of the Audit Committee since 2006

Received his Bachelor of Economics from Fordham University, an MBA from St. John's University, and a Ph.D. from Pace University

Select Skills and Qualifications:

Mr. von Schack's experience of more than 30 years' managing operations in the highly regulated energy industry as both a chief executive officer and a chief financial officer, combined with many years of Board experience and audit and compensation committee chairmanships, enable him to contribute his significant insights in assessing and managing the risks and opportunities inherent in complex organizations.



Nicholas J. Valeriani
Age:    59
Director Since:    2014

Edwards Board Roles:

Compensation and Governance Committee Member



Other Current Public Company Directorships:

Roka Bioscience, Inc., since 2015

Select Business Experience:

Gary and Mary West Health Institute, an independent, nonprofit medical research organization that works to create new, more effective ways of delivering care at lower costs

Chief Executive Officer from 2012 to 2014

Johnson & Johnson

Company Group Chairman, Ortho-Clinical Diagnostics from 2009 to 2012

Member of the Executive Committee

Vice President, Office of Strategy and Growth from 2007 to 2009

Served for 34 years in key positions, including Worldwide Chairman, Medical Devices and Diagnostics, and Corporate Vice President, Human Resources

Member of the board of directors of Gary and Mary West Health Institute, Robert Wood Johnson University Hospital, and the Center for Medical Interoperability.

Received a bachelor's degree in industrial engineering and an MBA from Rutgers University.

Select Skills and Qualifications:

Mr. Valeriani's 38 years of medical technology industry experience in a large and complex global company will benefit Edwards as we prepare to meet the challenges of continued growth. His experience directing strategy informs his assessment of future business opportunities. In addition, his background in human resources enables him to contribute valuable insights to the Compensation and Governance Committee.

THE BOARD RECOMMENDS A VOTE "FOR" THE ELECTION OF EACH OF
THE NOMINEES FOR DIRECTOR

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CORPORATE GOVERNANCE POLICIES AND PRACTICES

Active Stockholder Engagement.     The Board and management are committed to engaging with Edwards' stockholders. Throughout the year our CEO, CFO and Vice President of Investor Relations meet, by phone and face-to-face, with current and prospective stockholders to discuss Edwards' strategy, business and financial results. Our Corporate Secretary and Investor Relations teams, together with other members of management and, from time to time, our Presiding Director, have engaged stockholders to solicit their views and feedback on governance, compensation and other related matters and to discuss the issues that matter most to our stockholders. Stockholder feedback is shared with the Board and its committees, which enhances our governance practices, facilitates future dialogue between stockholders and the Board and provides additional transparency to our stockholders.

2015-2016 Stockholder Outreach and Board Responsiveness to Action by Written Consent

      2015 Outreach.     During late summer and early fall 2015, our management contacted 26 of our largest stockholders representing approximately 54% of our outstanding shares to understand their governance-related views. Additionally, we sought their feedback on the advisory stockholder proposal seeking the right to act by written consent that was approved by 50.8% of the votes cast (39% of the shares outstanding) at our 2015 annual meeting (the "Written Consent Proposal"). Of those we contacted, we conducted conversations with 13 stockholders representing approximately 43% of outstanding shares. Overall, stockholders were pleased to be consulted and, among other things, expressed their appreciation of our

current corporate governance profile,

long record of responsiveness to stockholders,

commitment to transparency,

process of Board refreshment, including adoption of a director retirement policy,

pay for performance philosophy, and

differentiated innovation strategy.

Specifically on the Written Consent Proposal, we heard two consistent themes:

Our stockholders strongly favor the right to call a special meeting over the right to act by written consent.

85% of those with whom we spoke (11 stockholders), volunteered that they had voted against the Written Consent Proposal specifically because they already had the right to call a special meeting.

Many of these stockholders said they preferred the right to call a special meeting over the right to act by written consent because while both provide stockholders an avenue to be heard outside the annual meeting cycle, special meetings provide additional protections for all stockholders.

Regardless of their views on the right to act by written consent, stockholders believed it was important that the Board be responsive to the majority-supported Written Consent Proposal.


      Committee and Board Deliberation and Responsiveness.     At their meetings in November 2015, the Compensation and Governance Committee, comprising independent directors, and the Board discussed the stockholders' clear preference for a strong special meeting right over the right to act by written consent and considered the possibility of amending our Bylaws to enhance the special meeting right by lowering the threshold percentage of stockholders required to call a special meeting from 25% to 15% in lieu of adopting Written Consent. In addition to stockholder feedback, the Board considered the following:

The Written Consent Proposal passed by a slim margin at our 2015 annual meeting (50.8% of the votes cast, representing 39% of the outstanding shares);

A nearly identical written consent stockholder proposal failed at our 2014 annual meeting with support of only 35% of votes cast (29% of the outstanding shares);
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The largest stockholder that supported the proposal in 2015 has since substantially sold down its position;

Our special meeting threshold of 25% was appropriate at the time we adopted the right because our two largest stockholders then held close to 25% of our shares; as opposed to 4% now; and

A 15% threshold was considered most appropriate given our current stockholder base and the relatively constant presence of at least one or more 10% holders over the past few years.

Before taking action, however, the Board wanted to understand how our stockholders would view the Board amending our Bylaws to lower the special meeting threshold in lieu of adopting Written Consent, and whether they would consider this approach responsive to the majority-supported Written Consent Proposal.


      2016 Outreach.     To obtain feedback specifically on the Board's questions, in January and February 2016, we contacted 20 stockholders representing approximately 51% of our outstanding shares, and spoke with 18 stockholders representing just over 50% of our shares, including many stockholders who had provided their views during our initial outreach. Wes von Schack, the Board's Presiding Director, led conversations with five of our top six stockholders. The remaining calls were conducted by the management team that participated on the calls with Mr. von Schack, which included the CFO, the Corporate Secretary and the Vice President of Investor Relations.

The results of these conversations were as follows:

All of these stockholders approved of the Board's process and proposed approach, and

All but one (or 99%) of these stockholders said they considered the Board lowering the special meeting threshold in lieu of adopting a written consent right to be responsive to the vote on the Written Consent Proposal.

During our 2016 outreach, the one stockholder who said that it had voted for the Written Consent Proposal and would still prefer to have both special meeting and written consent rights, felt the Board had engaged in a thoughtful process designed to address the feedback received during the 2015 outreach conversations. This stockholder was supportive of the Board's approach and believed it was responsive to the Written Consent Proposal.


      Committee and Board Action.     The Compensation and Governance Committee considered this feedback, including Mr. von Schack's conversations with our largest stockholders, and input from the management team and advisors in making their decision. Upon the recommendation of the Compensation and Governance Committee, the Board determined that it would be consistent with the wishes of the broadest group of our stockholders and responsive to the vote on the Written Consent Proposal to amend the existing stockholder right to call special meetings in our Bylaws to lower the threshold requirement to call a special meeting from 25% to 15% of our outstanding shares in lieu of adopting the right to act by written consent. This action was taken by the Board at its meeting in February 2016.

    


Proxy Access.     As further demonstration of the Board's responsiveness and thoughtful approach to sound corporate governance, at its February 2016 meeting, the Board also amended our Bylaws to provide stockholders the right to nominate candidates for board membership and have those nominees included in our proxy statement, commonly referred to as "proxy access." This action was recommended to the Board by the Compensation and Governance Committee, which determined that the adoption of a proxy access right was an appropriate enhancement to our governance profile, given the current governance environment, emerging governance trends and stockholder feedback.

Specifically, the proxy access bylaw adopted by the Board permits a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for a period of at least 3 years, to nominate up to the greater of two director candidates or 20% of our Board, for inclusion in our proxy statement. The bylaw contains other eligibility and procedural requirements that are typically included in connection with providing proxy access, which can be found in Section 10 of Article I of our Bylaws posted on our website at www.edwards.com under "Investors—Corporate Governance."

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Corporate Governance Highlights.     The Company and the Board take seriously our commitment to good corporate governance. We believe the regular review of our governance practices with current issues and trends in mind, the discussions we hold with our stockholders and advisers, and the practice enhancements we consider as a result, help us to compete more effectively, sustain our successes, and build long-term value for our stockholders. Our commitment to good governance practices and accountability to stockholders is described in the following chart:

   WHAT WE DO
   ü Annual election of directors  
   ü Majority vote standard in uncontested elections, with director resignation policy
   ü Special stockholder meetings can be called by stockholders owning at least 15% of our outstanding shares  
   ü Proxy access right to permit a stockholder, or a group of up to 30 stockholders, owning at least 3% of our outstanding shares continuously for at least 3 years to nominate up to the greater of two directors or 20% of our Board for inclusion in our proxy statement
   ü Independent Board, excluding our Chief Executive Officer  
   ü Executive session of independent directors held at each Board and committee meeting
   ü Independent Presiding Director provides strong independent leadership of our Board  
   ü Retirement policy for directors
   ü Annual Board and committee self-evaluations, and peer reviews  
   ü Nonemployee directors expected to hold net shares upon vesting or exercise of equity awarded after 2011 until cease to serve on the Board
   ü Senior management succession planning considered at each regularly scheduled Board meeting  
   ü Active stockholder engagement
   ü Robust code of ethics in our Global Business Practice Standards  
   ü Corporate sustainability report
   ü "Clawback" policy for performance-based compensation  
   WHAT WE DON'T DO
 

No pledging or hedging of Edwards' securities by directors, executives, employees with a title of "vice president" or above and "insiders" under our insider trading policy

  

No stockholder rights plan ("poison pill")

 
  

No supermajority voting provisions in the Company's organizational documents

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Director Independence.     Under the corporate governance rules of the New York Stock Exchange ("NYSE"), a majority of the members of the Board must satisfy the NYSE criteria for "independence." No director qualifies as independent unless the Board affirmatively determines that the director has no material relationship with the Company (either directly or as a partner, stockholder, or officer of an organization that has a relationship with the Company). The Board has determined that each of Mr. Cardis, Mr. Gallahue, Dr. Link, Mr. Loranger, Ms. Marsh, Dr. McNeil, Mr. Valeriani and Mr. von Schack is independent under the NYSE rules. Mr. Mussallem is not independent as a result of his position as our Chief Executive Officer. The Board also previously determined that Mr. Ingram, who resigned from the Board in 2015, was independent during his Board service.


Corporate Governance Guidelines.     Our Board has adopted a set of Corporate Governance Guidelines (the "Governance Guidelines") to assist the Board and its committees in performing their duties and serving the best interests of the Company and its stockholders. The Governance Guidelines cover topics including, but not limited to, director selection and qualification, director responsibilities and operation of the Board, director access to management and independent advisors, director compensation, director orientation and continuing education, succession planning, recoupment of performance-based compensation, and the annual evaluations of the Board. The Governance Guidelines are available on our website at www.edwards.com under "Investors—Corporate Governance."


Board Leadership Structure.     Our Chief Executive Officer also serves as the Chairman of the Board. This leadership structure has been in place since we first became a public company in 2000. This approach is commonly used by other public companies in the United States, and our Board believes it has been effective for our Company as well. Under this model, the Company has experienced strong financial and operational growth over its 16 years as a public company, more recently providing a cumulative total return of 95% to stockholders from 2010 to 2015. We have a single leader, and our Chairman and Chief Executive Officer is seen by customers, business partners, investors, and others as providing strong leadership for the Company in the communities we serve and in our industry. Our Board believes that

combining the roles of Chairman and Chief Executive Officer has fostered a more constructive and cooperative relationship between the Board and management, and that their communications are more open and effective than they would be under a different structure. Our Board also believes that, given its size and constructive working relationships, changing the existing structure would not improve the Board's performance. The directors bring a broad range of leadership experience to the boardroom and regularly contribute to the thoughtful discussion involved in overseeing the affairs of the Company. All directors are well-engaged in their responsibilities, express their views, and are open to the opinions expressed by other directors.

Our Board believes that it is important to have an active, engaged and independent Board. Our Governance Guidelines provide that a substantial majority of our Board and all of the members of our Audit Committee and Compensation Committee will be independent under the applicable rules of the NYSE. All members of our Board, other than the Chairman, are independent. In order to assure that the independent directors are not inappropriately influenced by management, the non-management members of the Board meet in executive session, without management, in conjunction with each regularly scheduled meeting of the Board and each committee, and otherwise as deemed necessary. These executive sessions allow directors to speak candidly on any matter of interest, without the CEO or other members of management present. Our Governance Guidelines provide that if our Chairman is also our Chief Executive Officer, or if our Chairman is otherwise not independent, our independent directors shall annually select an independent director to serve as Presiding Director. Mr. von Schack is currently designated as the Presiding Director and, as such, he presides at the executive sessions of the Board. In addition, among other things, the Presiding Director serves as a liaison between the independent members of the Board and the Chairman and other members of management, providing feedback to management from the Board's executive sessions, coordinating the activities of the independent directors, including calling meetings of the independent directors as necessary and appropriate to address their responsibilities, provides advice and counsel to the Chairman, and consults and directly communicates with major stockholders, as appropriate.

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Board Role in Risk Oversight.     Effective risk oversight is an important priority of the Board. Its role includes understanding the critical risks in the business, allocating the responsibilities for risk oversight among the full Board and its committees, evaluating the Company's risk management processes, and facilitating open communication between management and the directors.

While the Board oversees risk management, the Company's management is charged with managing risk and bringing to the Board's attention the most material risks. We have robust internal processes that facilitate the identification and management of risks and regular communication with the Board and the Audit Committee.

The Board implements its risk oversight function both as a whole and through delegation to its committees. Both committees play significant roles in carrying out the risk oversight function.

The Audit Committee oversees risks related to the financial statements, the financial reporting process and accounting matters. It also regularly reviews Edwards' risk management processes and enterprise-wide risk management, focusing primarily on manufacturing processes and supplier quality, product development processes and systems, and regulatory compliance issues. The Audit Committee also regularly reviews treasury risks (insurance, credit, debt, currency risk and hedging programs), legal and compliance risks, information technology infrastructure and cyber-security risks, and other risk management functions. In addition, the Audit Committee considers risks to the Company's reputation and reviews risks related to the sustainability of our operations. The Audit Committee periodically receives reports on and discusses the risk management process and reviews significant risks and exposures identified by management, the internal auditors or the independent public accountants.

The Compensation Committee considers risks related to succession planning, the attraction and retention of talent, and risks relating to the design of compensation programs and arrangements. As part of its normal review of these risks, the Compensation Committee considers the Company's compensation policies and practices to determine if their structure or implementation provides incentives to employees to take unnecessary or inappropriate risks that could have

a material adverse effect on the Company. The Compensation Committee also reviews compensation and benefits plans affecting employees in addition to those applicable to executive officers. The Compensation Committee has determined that the implementation and structure of the compensation policies and practices do not encourage unnecessary and inappropriate risks that could have a material adverse effect on the Company. The Compensation Committee further determined that the Company's compensation programs and practices appropriately encourage employees to maintain a strong balance sheet, improve operating performance, and create value for stockholders, without encouraging unreasonable or unrestricted risks. In making these determinations, the Compensation Committee considered the views of the Company's compensation staff and legal counsel, as well as its Compensation Consultant (as defined below).

The full Board considers strategic risks and opportunities and regularly receives reports from the committees regarding risk oversight in their areas of responsibility. Our Board believes that the processes it has established for overseeing risk would be effective under a variety of leadership frameworks and therefore do not materially affect its choice of leadership structure as described under "Board Leadership Structure" above.


Meetings of the Board.     During the year ended December 31, 2015, the Board held eight meetings. Each director attended at least 75% of the total of all meetings of the Board and any applicable committee held during the period of his or her tenure in 2015.

The Company encourages, but does not require, its directors to attend annual meetings of stockholders. All of our then-current directors attended our 2015 annual meeting.


Board Composition.     Our Board currently has fixed the number of directors at nine, one of whom (Dr. McNeil) is scheduled to retire on the date of the Annual Meeting.

Excluding Dr. McNeil, the ages of our directors range from 52 to 74, with an average age of 65. Their lengths of service on our Board range from two weeks to 16 years, with an average tenure of approximately 5.4 years. None of our directors serves on the board of directors of more than three other public companies.

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Committees of the Board.     To facilitate independent director review, and to make the most effective use of the directors' time and capabilities, we have established the Audit Committee and the Compensation and Governance Committee. The Board is permitted to establish other committees from time to time as it deems appropriate.

   Audit Committee Membership
  John T. Cardis, Chair  
  Kieran T. Gallahue  
  Wesley W. von Schack  
Each member is "independent," "financially literate," and an "audit committee financial expert" under applicable rules of the NYSE and the SEC.

Mr. Gallahue was appointed to the Audit Committee in May 2015, replacing Dr. Link, who was an Audit Committee member until he was appointed Chair of the Compensation and Governance Committee in May 2015.

The Audit Committee held ten meetings in 2015.

The responsibilities of the Audit Committee are included in its written charter, which is posted on our website at www.edwards.com under "Investors—Corporate Governance."

As described more fully in the Audit Committee charter, the primary purpose of the Audit Committee is to assist the Board in fulfilling its oversight responsibilities relating to the integrity of the Company's financial statements; compliance with legal and regulatory requirements; adherence to policies regarding ethics and business practices; and monitoring the independent registered public accounting firm's qualifications, performance, and independence, the performance of the Company's internal audit function, the Company's investment and hedging activities and enterprise-wide risk management practices. Management is responsible for the preparation, presentation, and integrity of the Company's financial statements, as well as adoption of accounting and financial reporting principles and internal controls, and procedures designed to reasonably assure compliance with accounting standards, applicable laws, and regulations. The Company has a full-time internal audit

function that reports to the Audit Committee and to the CFO and is responsible for, among other things, objectively reviewing and evaluating the adequacy, effectiveness, and quality of the Company's system of internal controls. The Company also has a Chief Responsibility Officer who manages the Company's ethics and compliance programs and oversees our sustainability programs, reporting to the Audit Committee and the CEO.

The Audit Committee appoints, retains, terminates, determines compensation for, and oversees the independent registered public accounting firm, reviews the scope of the audit by the independent registered public accounting firm and inquires into the effectiveness of the Company's accounting and internal control functions. The Audit Committee also assists the Board in establishing and monitoring ethics and compliance with the Global Business Practice Standards of the Company. The Company's Global Business Practice Standards are posted on our website at www.edwards.com under "Investors—Corporate Governance." The Audit Committee also reviews, with the Company's management and the independent registered public accounting firm, the Company's policies and procedures with respect to risk assessment and risk management and reviews and approves any related party transactions, as described under "Other Matters and Business—Related Party Transactions" below.

The Audit Committee organizes its activities at each meeting through the use of a periodic agenda, incorporating additional agenda items as suggested by Audit Committee members or to address current Company events. At each regularly scheduled meeting, the Audit Committee receives reports from the senior members of the Company's financial management team and the Chief Responsibility Officer. Additionally, the Audit Committee meets in executive session at each of its regularly scheduled meetings with the Company's independent registered public accounting firm, and, periodically, with the Vice President of Internal Audit, the Company's Chief Financial Officer, the Company's Chief Responsibility Officer, and the Company's General Counsel, in addition to executive sessions without any others present.

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   Compensation and Governance
Committee Membership


  William J. Link, Ph.D.  
  Barbara J. McNeil, M.D., Ph.D.  
  Nicholas J. Valeriani  
Each member is "independent" under the rules of the NYSE, a "nonemployee director" under Rule 16b-3 of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and an "outside director" as defined in Treasury Regulation § 1.162- 27(3).

Dr. Link was appointed to the Compensation Committee in May 2015, replacing Mr. Ingram as Chair at that time. Mr. Ingram was a member of the Compensation Committee until he retired from the Board in July 2015.

The Compensation Committee held six meetings in 2015.

The responsibilities of the Compensation Committee are included in its written charter, which is posted on our website at www.edwards.com under "Investors—Corporate Governance."

The Compensation Committee determines the compensation of executive officers and recommends to the Board the compensation of outside directors, exercises the authority of the Board concerning employee benefit plans, advises the Board on other compensation and employee benefit matters and approves the compensation clawback policy applicable to our executive officers. The Compensation Committee may, and has, delegated authority to the CEO to grant rights in, or options to purchase, shares of the Company's common stock to eligible employees who are not executive officers, and oversees the evaluation of the Board and executive officers.

In 2015, the Compensation Committee retained the services of Semler Brossy Consulting Group as its independent compensation Consultant ("Compensation Consultant"). See "Compensation Discussion and Analysis—Independent Compensation Consultant" for additional information regarding the Compensation Committee's engagement of its Compensation Consultant.

The Compensation Committee also advises the Board on board committee structure and membership and corporate governance matters. It evaluates the

governance environment, receives feedback from management interactions with stockholders, and reviews and recommends to the full Board governance enhancements that are in the best interest of the Company and its stockholders.

In addition, the Compensation Committee makes recommendations to the Board regarding candidates for election as directors of the Company and is otherwise responsible for matters relating to the nomination of directors. The Compensation Committee maintains formal criteria for selecting director nominees who will best serve the interests of the Company and its stockholders. These criteria are described in more detail below under "Board Criteria and Diversity Policy." In addition to these requirements, the Compensation Committee also evaluates whether the candidate's skills and experience are complementary to the existing Board members' skills and experience, as well as the need of the Board for operational, management, financial, international, technological, or other expertise. Some or all of the members of the Compensation Committee interview candidates that meet the criteria and the Compensation Committee selects nominees that it believes best suit the needs of the Board.

Since 2014, the Board has embarked upon a thoughtful and deliberate process of Board refreshment that has involved participation of all directors to take advantage of their broad range of expertise and experience as part of the decision-making process. Accordingly, since then, the Compensation Committee has exercised its responsibilities of selecting nominees at meetings of the full Board.

From time to time, the Compensation Committee may engage the services of an executive search firm to assist the Compensation Committee in identifying and evaluating candidates for the Board. The Compensation Committee will consider qualified candidates for director nominees suggested by the Company's stockholders. Stockholders can suggest qualified candidates for director nominees by writing to the Secretary of the Company at One Edwards Way, Irvine, California 92614. Submissions received that meet the criteria described above are forwarded to the Compensation Committee for further review and consideration. The Compensation Committee does not intend to evaluate candidates proposed by stockholders any differently than other candidates.

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The Compensation Committee also oversees Edwards' political activities, including the periodic review of its policy on political expenditures and its payments that may be used for political purposes, and confirms that political expenditures from corporate funds are consistent with the policy.


Board Criteria and Diversity Policy.     The Compensation Committee is responsible for identifying, evaluating, and recommending to the Board, individuals qualified to be directors of the Company. The Compensation Committee's charter sets forth the membership criteria against which potential director candidates are evaluated. These written membership criteria state that the Company "seeks a board with diversity of background among its members, including diversity of experience, gender, race, ethnic or national origin, and age." In performing this responsibility, the Compensation Committee considers women and minority candidates consistent with the membership criteria and the Company's non-discrimination policies. The Compensation Committee also considers fundamental qualities of intelligence, honesty, perceptiveness, good judgment, maturity, high ethics and standards, integrity, fairness and responsibility; a background that demonstrates an understanding of business and financial affairs and the complexities of a large, multifaceted, global business, governmental or educational organization; and the ability to hold independent opinions and express them in a constructive manner. Of equal importance, the Compensation Committee and the Board seek individuals who are compatible and able to work well with other directors and executives. The satisfaction of these criteria is implemented and assessed through ongoing consideration of directors and potential nominees by the Compensation Committee and the Board, with a discussion of Board succession planning held at every regularly scheduled meeting of the Board and certain specially called meetings. These discussions have included reviews of current director skills against an established skills matrix and consideration of each director's retirement horizon, as well as the Board's self-evaluation and peer evaluation processes, as described below under "Board Evaluations." Based upon these activities and its review of the current composition of the Board, the Compensation Committee and the Board believe that the nominating criteria have been satisfied. As a result, the members of the Board represent diverse

backgrounds and experience in many areas, including financial, industrial, entrepreneurial, international, and educational.


Board Evaluations.     The Board conducts an annual self-evaluation every July or August, soliciting each director's views on, among other things, Board and committee performance and effectiveness, size, composition, agenda, processes and schedule. In addition, the directors conduct annual peer evaluations specifically to seek feedback on directors' personal interactions and skills. Our Board views the self- and peer-evaluation processes as an integral part of its commitment to cultivating excellence and best practices in its performance.


Board Retirement Policy.     As set forth in the Governance Guidelines, the Board has adopted a retirement policy that no director shall stand for election to the Board after reaching the age of 75.


Succession Planning.     Our Board is actively engaged and involved in talent management to identify and cultivate our future leaders. At every Board meeting, directors discuss the Company's leadership and talent development. Our directors also have an opportunity to meet with leaders of our Company, including executive officers, business group leaders and functional leaders through regular reports to the Board from senior management, technology showcases and meals with management. In addition, Board members have freedom of access to all employees, and have made site visits to meet local management.

We maintain a robust mid-year and annual performance review process for our employees, as well as a leadership development program that cultivates leadership principles in our future leaders. Management develops leadership at lower levels of our organization by identifying key talent and exposing them to the skills and capabilities that will allow these individuals to become future leaders.


Sustainability Report.     Edwards' Sustainability Report discusses programs and practices we have in place to promote ethical business practices, good governance, and the well-being and health of our environment, employees and the communities in which we live and work. Recently, we completed and published a summary of Edwards' sustainability metrics that we sent to interested parties and

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BOARD OF DIRECTORS MATTERS


stakeholders. We are currently conducting a materiality assessment with our key internal and external stakeholders to better understand their priorities on the topics of environment, social responsibility and governance. We plan to use this information to further refine our approach to sustainability, identifying additional opportunities to enhance our practices, and continuing to report our progress. Our Sustainability Report is posted on our website at www.edwards.com under "About Us—Corporate Responsibility."


Communications with the Board.     Any interested party who desires to contact any member of the Board,

including the Presiding Director or the non-management members of the Board as a group, may write to any member or members of the Board at: Board of Directors, c/o Secretary, Edwards Lifesciences Corporation, One Edwards Way, Irvine, California 92614. Communications will be received by the Secretary of the Company and, after initial review and determination of the nature and appropriateness of such communications, will be distributed to the appropriate members of the Board depending on the facts and circumstances described in the communication.

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DIRECTOR COMPENSATION

Director Compensation Table – 2015

The following table presents the 2015 compensation paid or awarded to each individual who served as a nonemployee director at any time during 2015. The compensation paid to Mr. Mussallem is presented in the "Executive Compensation" disclosures beginning on page 43. Mr. Mussallem does not receive additional compensation for his service as a director.

Name


Fees Earned or
Paid in Cash
($)(1)



Stock
Awards
($)(2)



Option
Awards
($)(2)



Total
($)

Mr. Bowlin(3)

$ 6,000 $ 6,000

Mr. Cardis

71,000 $ 199,875   270,875

Mr. Gallahue(4)

50,000 199,875 $ 200,021 449,896

Dr. Link

26,000 239,955   265,955

Mr. Ingram(5)

6,000 239,955 245,955

Ms. Marsh(6)

20,000   200,018 220,018

Dr. McNeil

6,000 239,955 245,955

Mr. von Schack

36,000 239,955   275,955

Mr. Valeriani

43,000 199,875 242,875
(1)
Consists of annual retainer fees and meeting fees for service as a director and a member of Board committees. Please see the "Retainers and Fees" section below. Excludes retainer fees deferred into stock-based awards, as described in footnote 2 below.

(2)
Includes annual retainer fee converted into a stock award or option award, as the case may be, under the Nonemployee Directors Program (as defined below).

Amounts disclosed in these columns reflect the aggregate grant date fair value of the stock award or option award, as applicable, granted to our nonemployee directors during 2015 as determined under the principles used to calculate the grant date fair value of equity awards for purposes of our financial statements in accordance with Financial Accounting Standards Board Accounting Standards Codification Topic 718. For a discussion of the assumptions and methodologies used to value the awards reported in these columns, please see the discussion of stock awards and option awards contained in Note 13 of the "Notes to Consolidated Financial Statements" in our 2015 Annual Report.

Please see the information under "Nonemployee Directors Stock Incentive Program" and "Outstanding Nonemployee Director Equity Awards" below for the grant date fair value of each stock and option award granted to our nonemployee directors in 2015 as well as the stock and option awards held by each nonemployee director at the end of 2015.

(3)
Mr. Bowlin retired from the Board on May 14, 2015.

(4)
Mr. Gallahue joined the Board on February 10, 2015.

(5)
Mr. Ingram retired from the Board on July 24, 2015 and the equity awarded to him in 2015 terminated on that date.

(6)
Ms. Marsh joined the Board on October 22, 2015.
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Retainers and Fees.     Nonemployee directors received the following retainers and fees in 2015:

  

Nonemployee Director Retainers and Fees

  

Annual Retainer

   

  

Nonemployee Director

$40,000  

  

Presiding Director

$25,000  

  

Compensation Committee Chair

$18,000  

  

Audit Committee Chair

$20,000  

  

Fees per Committee Meeting Attended

$1,000  

A director may elect to receive stock options or restricted shares in lieu of the annual cash retainers as described in "Deferral Election Program" below. Retainers are paid in advance, and fees are paid in arrears. Directors beginning service during the year receive a prorated amount of the retainer.


Nonemployee Directors Stock Incentive Program.     In order to align the nonemployee directors' interests more closely with the interests of our stockholders, we have implemented our Nonemployee Directors Stock Incentive Program (the "Nonemployee Directors Program"), pursuant to which each nonemployee director receives an annual grant of options for up to 40,000 shares of our common stock, or a restricted stock unit ("RSU") award for up to 16,000 units with respect to shares of our common stock, or a combination of options and RSUs with a maximum grant date value of approximately $200,000. The Compensation Committee recommends to the Board for its approval the actual amount and type of award for each year.

The annual equity award is granted on the day after our annual meeting. The option exercise price is the closing price of our common stock on the grant date. Options are valued as of the grant date using the Black-Scholes valuation model, and the RSUs are valued at the fair market value of the common stock on the grant date.

On May 15, 2015, each nonemployee director who was serving on that date received 3,042 RSUs as an annual grant (the grant date fair value of such award was $199,875, determined as noted in footnote (2) to the table above).

These RSU awards vest 100% upon completion of one year of service on the Board measured from the grant date, subject to earlier vesting in the event of the nonemployee director's death or disability. Once the RSUs vest, the shares must be held until the nonemployee director no longer serves on the Board.

In addition to the equity awards described above, upon a nonemployee director's initial election to the Board, the director receives a grant of a number of stock options determined by dividing $200,000 by the fair value of an option on the grant date, estimated using the Black-Scholes valuation model and rounding up to the nearest whole share. These initial equity awards vest one-third each year over three years from the grant date, subject to the nonemployee director's continued service on the Board, and subject to earlier vesting in the event of the nonemployee director's death or disability. The exercise price of an option is the closing price of our common stock on the date of the award. With respect to initial stock option awards granted after May 14, 2013, the shares of our common stock issued upon exercise of the options must be held until the nonemployee director no longer serves on the Board. On February 19, 2015, Mr. Gallahue received an initial equity award of 10,752 stock options and on November 19, 2015, Ms. Marsh received an initial equity award of 9,574 stock options (the grant date fair values of such awards were $200,021 and $200,018, respectively, determined as noted in footnote (2) to the table above).


Deferral Election Program.     In lieu of all or part of a nonemployee director's annual cash retainer, the director may elect to receive either a stock option or a grant of restricted shares under the Nonemployee Directors Program. If a director makes a timely election to receive stock options, such options are granted on the date the cash retainer would otherwise have been paid, and the number of shares subject to the option is equal to four times the number of shares that could have been purchased on the grant date with the amount of the director's cash retainer that was foregone to receive the award. The options are exercisable and vested in full on the grant date, and the exercise price per share is the fair market value of the common stock on the grant date. If a director makes a timely election to receive a restricted share award, the shares are granted on the date the cash retainer would otherwise have been paid, and the number of shares granted is equal to the portion of the cash retainer to be paid in the form of restricted shares divided by the fair market value per share of the common stock on the grant date. The restrictions on the restricted shares lapse upon the completion of one year of board service from the date of grant.

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On May 15, 2015, Messrs. Ingram and von Schack, and Drs. Link and McNeil each received a grant of 610 restricted shares in lieu of his or her annual cash retainer (the grant date fair value of each such award was $40,080, determined as noted in footnote (2) to the table above).


Directors' Stock Ownership Guidelines and Holding Requirement.     Under the stock ownership guidelines, each nonemployee director is expected to own shares of our common stock equal to eight (8) times the amount of the annual cash retainer paid to the nonemployee directors. Stock that is counted toward meeting the guideline includes any common shares owned outright, restricted stock, RSUs, and 25% of the value of vested, in-the-money stock options. Upon vesting or exercise of equity awarded after 2011, each director is required to hold the underlying common stock (net of any shares sold to cover the

exercise price and applicable taxes) until the director ceases to serve on the Board. The holding requirement does not apply to equity awards directors elect to receive in lieu of their cash retainers.


Expense Reimbursement Policy.     Directors are reimbursed for travel expenses related to their attendance at Board and committee meetings as well as for the costs of attending director continuing education programs.

All equity award amounts and related share price information discussed in this Director Compensation section have been adjusted to reflect the two-for-one stock split of the outstanding shares of our common stock paid on December 11, 2015 to stockholders of record on November 30, 2015.

The Board may change compensation arrangements for our nonemployee directors from time to time.

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Outstanding Nonemployee Director Equity Awards

The following table sets forth, as of December 31, 2015, the options and unvested stock awards (RSUs and restricted shares) held by each nonemployee director who served on the Board in 2015.

  Option Awards
Stock Awards

Name


Grant Date
Exercise
Price
($)



Unvested
Option
Awards
(#)




Option Awards
Vested and
Outstanding
(#)(2)




Stock Awards Not Vested (#)

Mr. Bowlin

Mr. Cardis

05/15/2015   3,042

Total

      3,042

Mr. Gallahue

02/19/2015 $66.860 10,752 (1)

05/15/2015 3,042

Total

3,042

Mr. Ingram

Dr. Link

05/15/2015 3,042

05/15/2015 610 (2)

Total

3,652

Ms. Marsh

11/19/2015 $77.965 9,574 (1)  

Total

       

Dr. McNeil

05/13/2011 $44.125 3,628

05/15/2015 3,042

05/15/2015 610 (2)

Total

3,628 3,652

Mr. von Schack

05/15/2015   3,042

05/15/2015   610 (2)

Total

      3,652

Mr. Valeriani

11/13/2014 $62.275 7,692 (1) 3,844

05/15/2015 3,042

Total

3,844 3,042

(1)
Initial stock option award vests one-third annually on the anniversary of the grant date, subject to the nonemployee director's continued service on the Board.

(2)
Annual retainer fees deferred into restricted shares under the deferral election program vest on the first anniversary of the grant date.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of the Company's common stock as of February 29, 2016 by each stockholder known by the Company to own beneficially more than 5% of the common stock.

Principal Stockholder
Name and Address



Total Shares
Beneficially
Owned



Percentage
of Class

The Vanguard Group(1)

18,316,097 8.49%

100 Vanguard Blvd.

   

Malvern, PA 19355

   

BlackRock, Inc.(2)


14,046,404

6.5%

55 East 52nd Street

   

New York, NY 10055

   

Sands Capital Management, LLC(3)



10,924,382




5.1%

1101 Wilson Blvd, Suite 2300

   

Arlington, VA 22209

   
(1)
Based solely on information contained in the Schedule 13G/A filed with the SEC by The Vanguard Group, on its own behalf, on February 11, 2016. The Schedule 13G/A indicates The Vanguard Group has sole voting power for 403,846 shares, shared voting power for 21,800 shares, sole dispositive power for 17,895,143 shares, and shared dispositive power for 420,954 shares.

(2)
Based solely on information contained in the Schedule 13G/A filed with the SEC by BlackRock, Inc. on its own behalf, on February 10, 2016. The Schedule 13G/A indicates BlackRock, Inc. has sole voting power for 12,257,276 shares and sole dispositive power for 14,046,404 shares.

(3)
Based solely on information contained in the Schedule 13G filed with the SEC by Sands Capital Management, LLC, on its own behalf, on February 11, 2016. The Schedule 13G/A indicates Sands Capital Management, LLC has sole voting power for 8,088,600 shares and sole dispositive power for 10,924,382 shares.
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SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding beneficial ownership of the Company's common stock as of February 29, 2016 by (i) each of the NEOs (as defined below); (ii) each of our directors; and (iii) all of our directors and executive officers as a group.

The number of shares subject to options that each beneficial owner has the right to acquire on or before April 29, 2016, and RSUs with restrictions that will lapse prior to that date, are listed separately under the column "RSUs and Shares Underlying Options." These shares are not deemed exercisable for purposes of computing the beneficial ownership of any other person. Percent of beneficial ownership is based upon 211,653,483 shares of the Company's common stock outstanding as of February 29, 2016. Unless otherwise indicated, we believe that the stockholders listed have sole voting and investment power with respect to all shares, subject to applicable community property laws.

Named Executive Officers,
Executive Officers, and Directors:



Outstanding
Shares
Beneficially
Owned




RSUs and
Shares
Underlying
Options




Total
Shares
Beneficially
Owned




Percentage
of Class

Mr. Mussallem

802,629 2,377,208 3,179,837 1.50%

Mr. Ullem

28,429 107,668 136,097 *

Mr. Bobo

50,899 371,450 422,349 *

Ms. Szyman

4,716 8,764 13,480 *

Mr. Wood

81,272 219,550 300,822 *

Mr. Cardis

93,416 93,416 *

Mr. Gallahue

3,584 3,584 *

Dr. Link

55,208 55,208 *

Mr. Loranger

*

Ms. Marsh

*

Dr. McNeil

71,716 3,628 75,344 *

Mr. von Schack

40,740 40,740 *

Mr. Valeriani

3,844 3,844 *

All directors and executive officers as a group (16 persons)

1,398,627 3,625,554 5,024,181 2.37%

*
Less than 1%
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EXECUTIVE COMPENSATION AND OTHER INFORMATION

EXECUTIVE OFFICERS

Set forth below is the biographical information regarding our current executive officers, other than Mr. Mussallem, whose biographical information is set forth under "Proposal 1 – Election of Directors—Director Nominees" above. None of the executive officers has any family relationship with any other executive officer or any of our directors.


GRAPHIC

Donald E. Bobo, Jr., age 54. Mr. Bobo has been Corporate Vice President since 2007 and is currently responsible for Edwards' corporate strategy and corporate development functions. In addition, Mr. Bobo has executive responsibility for the transcatheter mitral valve replacement and heart failure initiatives, as well as the healthcare solutions and commercial services team. Mr. Bobo has more than 30 years of experience in the medical products and healthcare industry including various operating roles at Edwards such as vice president and general manager of the global heart valve therapy business and global valve manufacturing operations. Prior to joining Edwards in 1995, Mr. Bobo held a variety of roles with increasing levels of responsibility with American Hospital Supply and Baxter Healthcare Corporation, including research and development, business development, operations and general management. Currently, Mr. Bobo serves on the board of Innerspace Neuro Solutions Inc., on the board and executive committee of the California Healthcare Institute (CHI), and as Vice Chair of the board of the California Life Sciences Association. He received a bachelor's degree in mathematics from Bob Jones University, and a master's degree in engineering from the University of Southern California.


GRAPHIC

Catherine M. Szyman, age 49. Ms. Szyman has been Corporate Vice President, Critical Care since January 2015. Prior to 2015, she was employed for more than 20 years at Medtronic, Inc., where she served as its Senior Vice President of Channel Management from June 2014. Previously, she served as Senior Vice President and President of Medtronic's global diabetes business from August 2009 to June 2014, overseeing research, development, operations, sales and marketing for Medtronic's insulin infusion pumps and continuous glucose monitoring systems. Prior to that, she held a variety of leadership roles at Medtronic, including Senior Vice President of Corporate Strategy and Innovation, Vice President and General Manager of Endovascular Innovations and Vice President of Finance for the Vascular Business. Ms. Szyman previously served on the boards of Tornier, Inspire Medical Systems, and the California Healthcare Institute. She graduated from the University of St. Thomas, and earned her MBA from Harvard Business School.


GRAPHIC

Scott B. Ullem, age 49. Mr. Ullem became Corporate Vice President, Chief Financial Officer in January 2014. Prior to joining Edwards, he served from May 2010 to December 2013 as Chief Financial Officer of Bemis Company Inc., a publicly traded global supplier of packaging and pressure sensitive materials used in leading food, consumer and healthcare products. Mr. Ullem served from 2008 to May 2010 as the Vice President, Finance of Bemis. Before joining Bemis, Mr. Ullem spent 17 years in investment banking, serving as Managing Director at Goldman Sachs and later for Bank of America. Mr. Ullem earned a bachelor's degree in political science from DePauw University and an MBA from Harvard Business School.

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EXECUTIVE OFFICERS

GRAPHIC

Patrick B. Verguet, age 58. Mr. Verguet has been Corporate Vice President, Europe, Middle East and Africa since 2004, with responsibility for operations in Canada and Latin America since 2010 and 2012, respectively. Since 1984, he served Edwards (or Baxter Healthcare Corporation) in various positions including Vice President of Sales, Europe; Global Business Director for hemofiltration; Business Unit/Country Manager for Edwards' operations in Western Europe; General Manager of Edwards' research medical operations in Utah; and Vice President and General Manager of the Cardiac Surgery Systems business. Mr. Verguet holds a doctorate in Pharmacy from the University of Besançon.


GRAPHIC

Huimin Wang, M.D., age 59. Dr. Wang has been Corporate Vice President, Japan, Asia and Pacific since 2010. From 2004 to 2010, he served as Corporate Vice President, Japan and Intercontinental and was Corporate Vice President, Japan from 2000 to 2004. Previously, he served in a number of roles with Baxter Healthcare Corporation, including Senior Manager of Strategy Development, Director of Product/Therapy for the Renal Division in Japan, President of Medical Systems and Devices in Japan, and was a representative director of Baxter Limited, a Japan corporation, through September 2002. Dr. Wang earned his Doctor of Medicine degree from Kagoshima University in Japan and was a Resident and Staff Physician in anesthesiology at Keio University Hospital in Tokyo. He earned his MBA from the University of Chicago. Dr. Wang is a Visiting Associate Professor at Keio University.


GRAPHIC

Larry L. Wood, age 50. Mr. Wood has been Corporate Vice President, Transcatheter Heart Valves since 2007, and is responsible for all Edwards' key initiatives in transcatheter heart valve replacement around the globe, including research and development, operations, marketing, commercial clinical and regulatory initiatives. Most recently, from March 2004 to February 2007, he served as Vice President and General Manager, Percutaneous Valve Interventions. Mr. Wood has more than 30 years of experience in the medical technology industry at both Edwards and Baxter Healthcare Corporation in positions including manufacturing management, regulatory affairs and strategic and clinical marketing, primarily for the surgical heart valve therapy business. Mr. Wood holds an MBA from Pepperdine University.


GRAPHIC

Bernard J. Zovighian, age 48. Mr. Zovighian has been Corporate Vice President, Surgical Heart Valve Therapy since January 2016. He joined Edwards in January 2015 as Vice President and General Manager for the surgical heart valve business. Prior to joining Edwards, Mr. Zovighian held a variety of roles with increasing levels of responsibility at Johnson & Johnson for nearly 20 years, including Worldwide President of Advanced Sterilization Products from 2011 to 2014, and President of JJMP, Johnson & Johnson's medical technology business in Canada, from 2006 to 2011. Mr. Zovighian holds a master's degree in biomedical engineering from University of Marseille and an executive MBA from Euromed Management.

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COMPENSATION DISCUSSION AND ANALYSIS

This Compensation Discussion and Analysis describes and provides disclosure about the objectives and policies underlying our compensation programs for our 2015 named executive officers, or NEOs, who are:

Michael A. Mussallem, CEO;

Scott B. Ullem, CFO;

Donald E. Bobo, Jr., Corporate Vice President, Strategy and Corporate Development;

Catherine M. Szyman, Corporate Vice President, Critical Care; and

Larry L. Wood, Corporate Vice President, Transcatheter Heart Valves.


Executive Summary.     Edwards is the global medical technology leader in patient-focused innovations for structural heart disease and critical illness. Driven by a passion for patients, we collaborate with the world's leading clinicians and researchers to address unmet needs in heart valves and critical care, helping to improve patient outcomes and save and enhance lives. We embrace a corporate strategy that puts patients first and creates value with therapies that transform care. We execute our strategy by doing the right thing for patients, identifying unmet clinical needs and developing breakthrough therapies, doing so in a way that establishes trusted relationships with our stakeholders and results in clear industry leadership.

As a direct result of our strategy, we have introduced new therapies such as transcatheter aortic valve replacement, rapid-deployment surgical heart valves and noninvasive advanced hemodynamic monitoring, all while achieving our stated financial and operating objectives. Managing our business well in a challenging, highly regulated, dynamic environment

requires talented and energetic leaders who champion our strategy and deliver on our commitments.


      Pay for Performance Philosophy.     The Compensation Committee strives to create a pay-for-performance culture and strongly believes that executive compensation should be tied not only to performance, but also directly to the successful implementation of our corporate strategy. Management translates our strategy into a set of Strategic Imperatives and establishes Key Operating Drivers ("KODs") that measure our execution of these Strategic Imperatives, all of which are approved by the Board each year. Our executive compensation programs are designed to emphasize performance-based compensation, reward achievement of our KODs, and align the financial interests of our executives with those of our stockholders.

In 2015, annual cash incentive compensation was determined by evaluating performance in three areas: achievement of company-wide financial measures, achievement of company-wide KODs, and individual performance, as described in more detail below under "Elements of Compensation."

Long-term incentive awards were designed to align the financial interests of our executives with those of stockholders. Awards granted to our NEOs in 2015 included stock options, PBRSUs, the payout of which is based on relative total stockholder return over a three-year period (TSR), and time-based RSUs. We believe stock options are performance-based because their value is dependent upon stock price appreciation after the date of grant of the award. Since RSUs are paid out in shares of Edwards' stock, their value is also directly linked to stock price.



Edwards'
Strategy

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      2015 Financial and Operating Performance and Incentive Plan Outcomes.     In 2015, our financial and operating performances were strong. We achieved significant growth and exceeded our financial goals. Through the introduction of innovative new products, we extended our leadership in all of our business areas. At the same time, we made encouraging progress on our long-term growth initiatives that we expect will create future value. We are particularly gratified to see the meaningful impact that our dedicated employees are having in helping so many patients around the world.

Notable in 2015 were:

Total sales increased 16.8% on a non-GAAP basis

A strong 75.2% gross margin

Diluted earnings per share growth of 30.9% on a non-GAAP basis

Launch of Edwards' SAPIEN 3 transcatheter heart valve in the United States, which drove 37.7% global THV sales growth on a non-GAAP basis

Investment of 15% of our sales in research and development

Edwards' stock price increased 24% over the year

Repurchase of 3.9 million split-adjusted shares for $280.1 million

For each quarter in 2015, results exceeded performance expectations, and each region demonstrated growth

Two-for-one stock split paid on December 11, 2015 to stockholders of record on November 30, 2015

These and other achievements produced strong year-over-year growth in non-GAAP revenue, net income and free cash flow, the three measures used to indicate financial achievement under our annual cash incentive plan. Our actual results in 2015 surpassed the maximum percentage of achievement for all three of these financial measures by significant margins. In addition, our overall achievement of KODs for 2015 was 104%. Accordingly, our annual incentive plan for

corporate employees funded at 175% of target, the maximum funding for the plan, before taking into account individual performance. Final incentive amounts for the NEOs for 2015 also took into account each employee's individual performance, as more fully described below under "Elements of Compensation—Annual Cash Incentive Payment."


      Stock Performance.     One indicator of our pay-for-performance culture is the relationship of our CEO's total direct compensation to total stockholder return. Over the past five years, an average of 88% of the CEO's total direct compensation has been performance-based, and 73% has been tied to our stock performance. Edwards' stock price has increased 95% over the past five years, 75% over the past three years, and 24% over the past year.

In looking at stock price, the Compensation Committee considers Edwards' stock performance overall, as well as how our stock price compares to both the S&P 500 and our 12-company medical products peer group, the S&P 500 Health Care Equipment Index (the "SPHEI"). These values, as of December 31, 2015 over five-year, three-year and one-year periods are set forth below:

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     *Does not reflect reinvestment of dividends.

Although Edwards does not pay dividends on its common stock, some companies in our comparison indexes do. Therefore, the Compensation Committee also considers our relative cumulative total return over the same periods, including the reinvestment of dividends.

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      Compensation Program Highlights.     The Compensation Committee reviews our executive compensation and benefits programs and makes changes as appropriate to reflect our compensation philosophy and objectives, and align executives with stockholder interests.

   WHAT WE DO
  

ü

Pay for Performance. Approximately 88% of the total direct compensation of our CEO, and an average of 77% of the total direct compensation of our other NEOs is performance-based.

 
We align executive compensation with the interests of our stockholders

Executive compensation programs are designed to avoid excessive risk and foster sustainable growth

We adhere to strong executive compensation and governance practices
 
  

ü

Minimum Three-Year Vesting. Equity compensation is structured to vest over a minimum period of three years, subject to limited exceptions.

   
  

ü

Performance-Based Equity. Our PBRSUs vest based on our relative TSR over a three-year period.

     
  

ü

"Double Trigger" in the Event of a Change in Control. Severance benefits are paid, and equity compensation awarded since May 2015 vests, only upon a "double trigger" in connection with a change in control (meaning a termination of the executive's employment is also required, in addition to the occurrence of a change in control, in order for the benefits to be triggered).

   
  

ü

Linkage Between Performance Measures and Strategic Imperatives. Performance measures for incentive compensation are linked to our Strategic Imperatives through achievement of Key Operating Drivers (KODs), and are designed to create long-term stockholder value and hold executives accountable for individual and Edwards' performance.

     
  

ü

Annual Stockholder Approval of Long-Term Stock Program Shares. We provide stockholders an annual opportunity to vote on proposed increases to the number of shares available for grant under the Long-Term Stock Program.

   
  

ü

Use Tally Sheets. The Compensation Committee annually reviews "tally sheets" reflecting all compensation elements for our NEOs.

     
  

ü

Robust Executive Stock Ownership Guidelines. Executives are required to hold Edwards' stock with a value not less than six times salary for our CEO and three times salary for each other NEO. Fifty percent of net shares received as equity compensation must be retained if the guideline has not been met.

   
  

ü

CEO Stock Ownership. Our CEO far exceeds his six-times salary ownership guideline and continues to increase his ownership of Edwards' stock each year.

     
  

ü

Modest Perquisites. We provide modest perquisites, and have a business rationale for the perquisites that we do provide.

   
  

ü

"Clawback" Policy. We maintain a recoupment policy for performance-based compensation.

     
  

ü

Independent Compensation Consultant. The Compensation Committee engages an independent compensation consulting firm that provides us with no other services.

   
          
   WHAT WE DON'T DO
     
  

No excise tax gross-ups for executive officers.

     
  

No repricing or buyout of underwater stock options.

   
  

No pledging of Edwards' securities by directors, executives, employees with a title of "vice president" or above, and "insiders" under our insider trading policy.

     
  

No hedging of Edwards' securities by directors, executives, employees with a title of "vice president" or above, and "insiders" under our insider trading policy.

   

 

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      Consideration of Say-on-Pay Vote Results.     At our 2015 annual meeting, our stockholders cast an annual advisory vote on the compensation of our NEOs (a "say-on-pay" vote). Approximately 95% of the votes cast on this proposal voted in favor of our NEO compensation. We believe this vote reflects stockholders' continued strong support of compensation programs for our NEOs. The Compensation Committee will continue to consider the results of say-on-pay votes when making future compensation decisions for the NEOs.


Compensation Philosophy and Objectives for NEOs.     Our compensation programs are designed to attract, retain, motivate and engage executives with superior leadership and management capabilities to enhance stockholder value. Within this overall philosophy, our objectives are to:

offer programs that place a higher emphasis on performance-based compensation than fixed compensation;

align the financial interests of executives with those of our stockholders; and

provide compensation that is competitive.

We strongly believe that a significant amount of compensation for the NEOs should be composed of short- and long-term incentives, or at-risk pay, to focus the executives on near-term goals and strategic initiatives. The amount of such short- and long-term incentive compensation is dependent on achievement of our annual goals, individual performance, and long-term increases in the value of our stock. The target total direct compensation for each NEO consists of (i) base salary, (ii) Incentive Pay Objective (as defined under "Elements of Compensation—Annual Cash Incentive Payment" below), and (iii) long-term incentive awards (presented using their grant date fair

values). The charts below illustrate the proportions of the 2015 target total direct compensation for the CEO and the average for the other NEOs.


Compensation Process.     The Compensation Committee is responsible for discussing, evaluating, and approving the compensation for the CEO and the other NEOs, including the specific objectives and target performance levels to be included in our executive compensation plans. The CEO and other members of our executive leadership team develop our Strategic Imperatives, as well as the KODs that measure our execution of these imperatives. The Board reviews and approves the Strategic Imperatives and KODs every year. The CEO then provides input to the Compensation Committee regarding achievement of our Strategic Imperatives and KODs and the way results were achieved. In addition, the CEO and the Corporate Vice President of Human Resources, provide recommendations to the Compensation Committee regarding compensation of the NEOs (other than the CEO). The Compensation Committee then determines the compensation of the CEO and reviews and approves the compensation of the other NEOs.

The CEO and the Corporate Vice President of Human Resources are invited to, and regularly attend, Compensation Committee meetings as non-voting guests. The Compensation Committee regularly meets in executive session without participation by the CEO or other management representatives. Meetings of the Compensation Committee may only be called by members of the Compensation Committee. In addition, our CEO and Corporate Vice President of Human Resources meet with the Compensation Consultant in preparation for Compensation Committee meetings, and the Compensation Consultant also regularly attends Compensation Committee meetings and executive sessions.

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Independent Compensation Consultant.     The Compensation Consultant has been retained by and reports to the Compensation Committee and provides executive and director compensation consulting services to the Compensation Committee.

The Compensation Consultant does not provide any other services to us. The Compensation Committee has assessed the independence of the Compensation Consultant pursuant to the NYSE rules and determined that the Compensation Consultant is independent, and free of conflicts of interest with us or any of our directors or executive officers.


Use of Competitive Data.     We generally position each NEO's total direct compensation to approximate the median for comparable positions at competitive peer companies. However, in determining the appropriate positioning level of each NEO's total direct compensation and each component of compensation for an NEO, the Compensation Committee also takes into account its assessment of the Company's or business unit's general performance, as applicable for each executive, and the executive's tenure, experience, level of individual performance, and potential to contribute to our future growth. Accordingly, an NEO's actual compensation may be higher or lower than the median for the position based on the Compensation Committee's assessment of these other factors. If the Compensation Committee determines that changes are appropriate, it has the flexibility to make adjustments for one or more executives.

Consistent with our philosophy of emphasizing pay for performance, annual cash incentive payments are designed to be above Incentive Pay Objectives when

we exceed our goals and below the Incentive Pay Objectives when we do not achieve our goals. In the event threshold levels of performance are not attained, no annual incentive payment is earned.

For purposes of establishing the value of equity awards, stock options are valued as of the grant date using the Black-Scholes valuation model. RSUs and, commencing in 2015, PBRSUs, are valued at the fair market value of the underlying shares on the grant date. Except as otherwise noted above or described below, the Compensation Committee's executive compensation determinations are subjective and the result of the Compensation Committee's business judgment, which is informed by the experiences of the members of the Compensation Committee as well as the input from the Compensation Consultant and peer group data provided by the Compensation Consultant. In order to establish competitive compensation market data for the NEOs, the Compensation Consultant uses public proxy information from companies primarily in the medical technology industry. These peer companies are chosen based on their market capitalization, revenue, complexity, geographic location, and the extent to which the Compensation Committee believes they compete with us for executive talent (the "Comparator Group"). The composition of the Comparator Group is reviewed periodically to monitor the appropriateness of the profiles of the companies included so that the group continues to reflect our competitive market and provides statistical reliability. The review of the Comparator Group for pay decisions in 2015 was conducted in July 2014. For 2015, the Comparator Group consisted of the following companies:

Edwards 2015 Comparator Group
Becton, Dickinson and Company Intuitive Surgical, Inc.

Boston Scientific Corporation


PerkinElmer, Inc.

C. R. Bard, Inc.


ResMed Inc.

CareFusion Corporation (acquired by Becton, Dickinson and Company in March 2015)


St. Jude Medical, Inc.

Hologic, Inc.


Stryker Corporation

Hospira, Inc. (acquired by Pfizer Inc. in Sept 2015)


Thoratec Corporation

Illumina, Inc.


Varian Medical Systems, Inc.

Integra Lifesciences Holdings Corporation


Zimmer Holdings, Inc.
      
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The Compensation Committee made changes to the comparator group used to make 2015 executive compensation decisions, including (1) removing Covidien Plc due to its acquisition by Medtronic, Inc., (2) removing Allergan, Inc. and Medtronic, Inc. because they have significantly higher revenue and market capitalization than we have, and Masimo Corporation because it has significantly lower revenue and market capitalization, and (3) replacing them with Illumina Inc. and Intuitive Surgical Inc., because they are closer to us in size, with reasonably similar business models.

As of December 31, 2015, Edwards ranked at the 56th percentile of this group in terms of market capitalization. Compensation data are generally regressed for market capitalization to ensure that the data are not distorted by larger companies. Regression analysis is a commonly used technique to size-adjust data, which allows for more statistically valid comparisons. The key measure used in our regression model is market capitalization. Based on this measure, the regression formula correlates and adjusts the raw data for base salary, total cash compensation and total direct compensation to predict those items based on the market capitalization for each of the Comparator Group companies.

Although data from the Comparator Group are the primary data input for compensation decisions for the NEOs, the Compensation Committee also considers compensation data for companies in the high technology, life sciences and medical technology industries reported in the following nationally recognized surveys: Hewitt Total Compensation Management Executive Compensation United States, Radford Global Lifesciences Survey, Radford U.S.

Executive Survey, Mercer Benchmark Database (Executive Positions), and SIRS Executive Compensation Survey. The Compensation Committee considers the survey data generally, without focusing on any one particular group or subset of companies included in the data (other than the Comparator Group identified above). The Compensation Committee believes it is appropriate to refer to these additional data because we compete with these types of companies for executive talent. If the results of the Comparator Group vary significantly from the data from the other surveys, the Compensation Committee will consider such information in its decision-making process. To date, reference to the data from the other surveys has not resulted in a change to the decisions made based on the Comparator Group.

When compared to similar positions at our 2015 Comparator Group companies, total direct compensation and the elements of compensation (base salary, annual cash incentive, and long-term incentive award value) approximated or were below the median for all of the NEOs.


Elements of Compensation.     The compensation package for each NEO consists primarily of (a) base salary; (b) an annual cash incentive payment based on attainment of pre-established financial measures, operating goals, and individual performance; and (c) long-term stock-based incentive awards. Each of these three components of compensation is intended to promote one or more of our objectives of designing executive compensation that is competitive, is performance-based, and aligns the interests of the executives with our stockholders.

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Elements of Compensation Summary

Element of Compensation
Why We Pay this Element
Compensation Committee's Evaluation Criteria
Base Salary Provides fixed compensation component payable in cash

Provides a certain level of security and continuity from year to year

Helps attract and retain qualified executives

In addition to competitive data, the executive's responsibilities, tenure, prior experience and expertise; individual performance, future potential; and internal equity are considered
Annual Cash Incentive Payment (see "Annual Cash Incentive Payment" section below) Provides variable compensation component payable in cash to motivate and reward executives for performance against annually established corporate financial measures, operating and strategic goals, and individual objectives

Incentive plan funding is determined by multiplying:

Financial Measurement Achievement
(based on revenue growth, net income and free cash flow targets set at the beginning of the year)


 


Recognizes individuals based on their contributions


X

 


Is performance-based and not guaranteed


KOD Achievement (as defined below)
(based on strategic, corporate and business unit objectives determined at the beginning of the year)

 


 


The incentive payment is further modified by achievement of individual performance objectives determined at the beginning of the year (up to a maximum of 200% of pre-established Incentive Pay Objective)
Long-Term Incentive Awards

55% stock options

20% RSUs

25% PBRSUs

Enhance our value (and ultimately create stockholder value) by aligning executives' interests directly with those of stockholders; provide participants with an incentive to manage the Company from the perspective of an owner

Stock options tie executive pay directly to stockholder value creation over the long term

RSUs promote stability and retention of our executives over the long term

PBRSUs are measured against relative TSR, which allows us to evaluate our performance over a three-year period against the performance of other companies

Since RSUs and PBRSUs are paid in shares of Edwards stock, these awards also further link executives' interests with those of our stockholders

Retain qualified employees

Is performance- or stock price-based and not guaranteed

The size and composition of long-term incentive awards are determined annually by the Compensation Committee taking into account competitive total direct compensation pay positioning guidelines using market reference data from the Comparator Group, along with the individual executive's level of responsibilities, ability to contribute to and influence our long-term results, and individual performance
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Element of Compensation Why We Pay this Element
Compensation Committee's Evaluation Criteria

Benefits


Provide a safety net to protect against financial catastrophes that can result from illness, disability or death


Executives are eligible to participate in benefit programs on terms as are generally offered to other Company employees
  A benefit program that is competitive with other companies with which we compete for executive talent supports recruitment and retention of executives  
Perquisites Assist in attracting and retaining executives by enhancing the competitiveness of the executive's compensation in a relatively inexpensive way Modest perquisites consistent with market practices
Enable executives to perform their responsibilities efficiently, maximize their working time and minimize distractions

      Base Salary.     Please see the "Elements of Compensation Summary" above for additional information regarding the base salary element. The Compensation Committee generally reviews each NEO's base salary in February and any approved changes are effective with the first pay period in April. The base salary for the CEO is established in a similar manner and is described more fully under "Employment and Post-Termination Agreements" below. Mr. Mussallem's base salary was increased by 5.5% in 2015 over the level in effect in 2014, to reward him for strong operational and stock price performance. Base salaries paid to the other NEOs increased between 3% and 8% in 2015 over the level in effect in 2014 to help maintain market competitiveness and based on the committee's assessment of internal roles and contribution (except Mr. Bobo, who received a 13% increase in 2015 to compensate him in part for his dual role managing both surgical heart valve therapy and strategy and corporate development, and for Ms. Szyman who did not receive an increase from the compensation determined when she joined Edwards in January 2015).


      Annual Cash Incentive Payment.     All of the NEOs and many other management and non-management level salaried employees (approximately 2,700 employees) participated in the 2015 Edwards Incentive Plan (the "Incentive Plan"). Please see the "Elements of Compensation Summary" chart above for additional information regarding the annual cash incentive payment.

The Incentive Plan for the NEOs is structured to preserve the tax deductibility of payments under Section 162(m) ("Section 162(m)") of the Internal Revenue Code (the "Code"). As such, cash incentive targets for all NEOs have been established at the maximum amounts payable under the Incentive Plan. The Compensation Committee may then use "negative discretion" to reduce the payment based on performance results. By setting a high amount that can then be reduced, we intend the Incentive Plan to meet the requirements of Section 162(m). See "Tax and Accounting Implications – Policy Regarding Section 162(m)" below. A reduction from the maximum amount is not necessarily a negative reflection on performance, as maximum amounts are generally set higher than intended bonus levels in order to preserve flexibility. Anticipating the application of negative discretion, the Compensation Committee also establishes for each NEO the amount of incentive payment that will be earned for expected performance, referred to as the "Incentive Pay Objective."

The Compensation Committee utilizes the Incentive Pay Objective so that the total cash compensation (base salary plus incentive payment for expected performance) for the NEOs will be at approximately the median of the Comparator Group. The accompanying "Grants of Plan-Based Awards in Fiscal Year 2015" table reports the maximum amounts payable and the Incentive Pay Objective (called the "Target" in the table) established for each NEO.

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The Incentive Plan for NEOs in 2015 provided that achievement at the threshold of any one of three Company financial measures (revenue growth, net income and free cash flow) would result in initial funding for the Incentive Plan being set at the maximum level. Then, the Compensation Committee proceeded to apply its negative discretion to determine annual cash incentive payments for the NEOs. In doing so, the Compensation Committee undertook a two-step process. It considered first the overall Incentive Plan funding level, discussed in more detail below, followed by an assessment of individual performance, as compared to pre-established objectives and overall. An individual's incentive payment may range from 0%–200% of his or her Incentive Pay Objective. Each of these two steps is discussed in more detail below:

(1)
Incentive Plan Funding

The Compensation Committee, after consultation with management, sets annual incentive performance goals each year for achievement of financial measures and KODs. Incentive Plan funding is determined after results of achievement of the predetermined financial measures and KODs are known.

The following illustration shows how the Incentive Plan is funded:

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First, the Board assesses the percentage of achievement of pre-established Company financial measures. No funding is earned if actual performance associated with at least one of the financial goals does not exceed the pre-established minimum threshold. All three thresholds were satisfied in 2015. Achievement of the maximum level specified for each financial goal results in funding for this measure at 175%.

For 2015, our financial goals, and the corresponding weightings, were as follows: revenue growth (50% weighting); net income (30% weighting); and free cash flow (20% weighting). The following table sets forth the target level for each goal as well as the level of achievement required to reach the various levels of financial measure achievement. Interpolation is applied for results between the levels shown in the chart.

Based on the performance levels in the chart below, our financial measures funded at the maximum, 175%.

2015 Company Financial Performance Measures*

Percentage of Financial Measure Achievement


Revenue Growth
50% Weight


Net Income ($M)
30% Weight


Free Cash Flow**
($M)
20% Weight

Min

  5.0 % $ 401.5 $ 350.0

100% (Target)

  9.0 %   439.0   400.0

Max

13.0 %   467.5   450.0

ACTUAL

16.8 % $ 504.9 $ 480.0

*
Performance measures used in setting and determining incentive compensation are not calculated in accordance with GAAP and reflect adjustments for items such as transcatheter heart valve sales returns reserve and related expenses, intellectual property litigation expenses, foreign exchange and the tax impact on other special items. A reconciliation of non-GAAP financial measures to the most comparable GAAP measure can be found in Edwards' Q4 2015 earnings release on our investor website at http://ir.edwards.com/results.cfm.
**
Defined as cash flow from operations less capital expenditures, on a non-GAAP basis, excluding the impact of a $33 million tax payment related to a litigation settlement.
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Second, the financial measure achievement is multiplied by the level of achievement of pre-established KODs. We establish KODs each year to address specific business initiatives derived from our Strategic Imperatives and operating plans. The KODs address specific tangible and measurable progress toward our Strategic Imperatives, and focus the executive team on the areas and strategic initiatives most important to our future success. We have established a range of performance for each KOD with the expectation that the target range should be achievable with the expected level of performance. Performance within the expected range results in a multiplier of 100%. Performance below the range is considered sub-optimal and will result in a discount to the financial measure. Performance above the range is considered extraordinary and results in a multiplier above 100%. The aggregate KOD multiplier may not exceed 150%.

In 2015, there were five KODs:

Lead the global transformation of aortic valve disease treatment;

Lead in next generation structural heart therapies;

Drive acute care monitoring to standard-of-care in appropriate patients;

Foster a culture of trust, innovation, and compliance; and

Business excellence.

After evaluating over 50 different metrics and milestones underlying these KODs, the Board determined in its judgment that overall KOD performance for 2015 was 104%.

Based on the formula above, combining financial performance of 175% with KOD performance of 104%, the Compensation Committee arrived at an actual calculated Incentive Plan funding of 182%. However, because the maximum is 175%, the 2015 Incentive Plan funding for corporate level employees was capped at 175%.

(2)
Individual Performance

Individual performance objectives for the CEO are established by the Compensation Committee, and the individual performance objectives for the other NEOs are established collaboratively by the CEO and each such executive. The Compensation Committee believes each executive has an appropriate number of meaningful individual performance objectives. The goal in choosing the individual performance objectives is to create objectives, the attainment of which is designed to implement our strategic and operating plans, with a focus on the achievement of the financial measures and operational goals within each executive's individual area of responsibility.

These objectives are considered in the aggregate to determine an overall performance assessment for each NEO for the purposes of determining compensation. Although some of the individual performance objectives are expressed in qualitative terms that require subjective evaluation, objectives also include several quantitative measures. However, the assessment of the overall performance for each NEO involves a subjective process. The CEO reviews the performance of each NEO (other than the CEO) with the Compensation Committee and recommends a performance assessment for each executive. The Compensation Committee assesses the CEO's performance. The Compensation Committee then exercises subjective judgment, reviewing the individual performance objectives, the overall performance of the individual executive against all of his or her individual objectives, taken together, and the executive's performance relative to the environment and to other executives. There is no formal weighting of the individual performance objectives. Individual performance may impact an executive's cash incentive payment, subject to an overall cap on incentive payments of 200% of the Incentive Pay Objective.

The individual performance objectives for the CEO and the other NEOs and the factors considered by the Compensation Committee for 2015 are described below.

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NEO 2015 Performance Objectives and Factors Considered by the Compensation Committee
Mr. Mussallem

Develop and execute corporate strategy; achieve Company financial goals and KODs; increase stockholder value; drive innovation and product leadership; attract and retain talented employees; promote a culture of ethical business practices and social responsibility; and provide leadership as Board Chairman.

The Compensation Committee found that Mr. Mussallem broadly achieved all of his objectives, noting that Edwards' financial results demonstrated impressive growth, and that he had overseen important product-specific and infrastructure-related strategic initiatives. Mr. Mussallem led the delivery of above-expectation financial results while making significant investments in future initiatives to drive our longer-term success and growth.

Mr. Ullem

Ensure the Company's financial reporting maintains the highest integrity; drive to achieve 2015 KODs and financial goals; maintain a high standard of investor relations; optimize the Company's capital structure; enhance stockholder returns; execute company-wide Information Technology initiatives; and attract, develop and retain talented employees.

 

The Compensation Committee noted that Mr. Ullem demonstrated strong overall performance in the role of Chief Financial Officer. Specifically, he led the development of solid financial planning and issuance of timely and accurate financial reports, continued to build investor confidence, and focused on global talent development.

Mr. Bobo

Develop and evolve Edwards' corporate strategy, establish and execute business development goals as well as provide leadership to the Surgical Heart Valve business to consistently deliver sales growth and achieve the financial goals for the Surgical Heart Valve business; meet 2015 product development KODs; attract, develop and retain talented employees; and promote a culture of patient focus, innovation, operational excellence and quality compliance.

The Compensation Committee noted Mr. Bobo's leadership in the evolution of our innovation-driven strategy, the successful execution of several business development initiatives, particularly the acquisition of CardiAQ, a potentially transformative new therapy for mitral heart valve patients, and achievement of financial results in the Surgical Heart Valve business while maintaining focus to ensure continued investment for future new innovative heart valve products.

Ms. Szyman

Execute her onboarding plan; develop, evolve and execute the strategy for the Critical Care and Vascular businesses to strengthen the core capability; consistently deliver sales growth and achieve the financial goals for the Critical Care and Vascular businesses; drive innovation and 2015 product development KODs; attract, develop and retain talented employees; and promote a culture of patient focus, innovation, operational excellence and quality compliance.

 

The Compensation Committee noted that while Ms. Szyman focused on and succeeded in delivering near-term results, she also developed a longer term strategy to improve the performance of the Critical Care business in future years by strengthening the core, driving enhanced surgical recovery and exploring new complementary technologies.

Mr. Wood

Develop, evolve and execute the strategy for the Transcatheter Heart Valve business to strengthen our leadership position; consistently deliver sales growth and achieve the financial goals for the Transcatheter Heart Valve business; drive innovation and 2015 product development KODs; attract, develop and retain talented employees; and promote a culture of patient focus, innovation, operational excellence and quality compliance.

The Compensation Committee noted that under Mr. Wood's leadership, impressive Transcatheter Heart Valve financial results were delivered, the SAPIEN 3 product was successfully introduced in the U.S., and a strategy was developed to expand patient access to transcatheter technology through clinical studies designed to enable indication expansion.

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EXECUTIVE COMPENSATION AND OTHER INFORMATION

      Committee Review Process.     The Compensation Committee generally meets each February to review and approve annual incentive payments for the prior year and to set incentive performance targets for the current year. The Compensation Committee may adjust the incentive payment levels based on financial measure achievement, KOD achievement, individual performance, and TSR. In February 2016, after reviewing the Company's 2015 performance versus financial and operational goals, TSR performance, and business unit performance, the Compensation Committee awarded incentive payments to the NEOs that ranged from 172% to 200% of the Incentive Pay Objectives for the NEOs. The amount awarded to each NEO for 2015 is reported in the accompanying "Summary Compensation" table. The incentive payments were paid in March 2016.


      Long-Term Incentive Awards.     In 2014, our long-term incentive awards for our NEOs consisted of stock options and PBRSUs. The mix of long-term incentive awards granted to our NEOs in 2015 included stock options, PBRSUs and RSUs. We use stock options to tie our executives' pay directly to stockholder value creation over the long term because the value of our common stock must increase after the date of grant of the options in order for the options to have any value. We use PBRSUs to measure relative TSR, which the Compensation Committee believes is a straightforward and objective metric for our stockholders to evaluate our performance against the performance of other companies and to align with stockholder interests. In 2015, the Compensation Committee added time-based vesting RSUs as a component of our long-term incentive awards for our NEOs. As the RSU awards have value regardless of stock price performance, they help promote the stability and retention of a strong executive team over the longer term (as vesting schedules generally require continuous service over multiple years, as described below). The Compensation Committee also believes that RSUs may result in lower dilution for stockholders because, as RSUs have greater value than options on a per-share basis, it requires fewer shares to deliver an RSU award with the same grant date fair value as a stock option. As PBRSUs and RSUs are paid in shares of our common stock, their value is also linked to our stock price and the awards therefore help further align our NEOs' interests with those of our stockholders.

Of the total 2015 long-term incentive award granted to each of our NEOs, the values of stock options were weighted 55%, PBRSUs were weighted 25%, and time-based RSUs were weighted 20% (based on the grant date fair value of the awards). We believe measuring a combination of absolute TSR (through options), relative TSR (through PBRSUs), and providing stock-denominated time-based vesting RSUs, results in a balance between these incentives that appropriately aligns our executives' pay with stockholder value and promotes the stability and retention of the executive team.

Stock options granted to Mr. Bobo, Mr. Ullem, Ms. Szyman and Mr. Wood vest annually over four years and have a seven-year term. Stock options granted to Mr. Mussallem since 2015 vest monthly over 36 months, consistent with vesting standards established for all retirement-eligible executives, and have a seven-year term. Stock options granted during 2015 have an exercise price equal to the closing price on the day of the regular Board meeting held on the next day following Compensation Committee approval.

PBRSUs awarded in 2015 are based on relative TSR performance as measured for the performance period beginning April 30, 2015 and ending April 30, 2018. The percentage of the target PBRSU awards that will vest at the end of the three-year performance period depends on the percentage by which our TSR exceeds or falls short of the median TSR (calculated assuming dividend reinvestment) of the S&PHEI Companies (as defined below). The chart below illustrates the maximum, target and threshold performance levels and the PBRSU payout at each level.

2015 PBRSU
Performance
Levels



TSR vs Median of S&PHEI
Companies


Payout as a
Percentage of
Target Award
Maximum +7.5% points from median 175 %
Target Median 100 %
Threshold –7.5% points from median   25 %
  More than –7.5% from median     0 %

The maximum and threshold performance levels applicable to the awards were set at levels that the Compensation Committee believed were consistent with the historical 75th and 25th percentile levels, respectively, for the TSRs of the S&PHEI Companies. The "S&PHEI Companies" are a subset of 21 companies in the S&P Healthcare Equipment Index

38    Edwards Lifesciences Corporation  |    PROXY STATEMENT

Table of Contents

EXECUTIVE COMPENSATION AND OTHER INFORMATION

that are also on the S&P 500 and S&P 400 Midcap Index.

RSUs granted to the NEOs become vested as to 50% of the total number of units subject to the award on each of the third and fourth anniversaries of the award date, subject to continued employment of the award recipient through the applicable vesting date.

At the Compensation Committee meeting immediately preceding the stockholder meeting in May of each year, the Compensation Committee generally determines the size of the long-term incentive award for each NEO. In keeping with our commitment to provide a total compensation package that emphasizes at-risk components of pay, long-term incentives for 2015 comprised, on average, 67% of the value of the NEO's total direct compensation package.

For 2015, the CEO evaluated each NEO's performance (other than his own), as discussed previously (see "Compensation Process" above), and established specific recommendations for the Compensation Committee's consideration. Accordingly, the Compensation Committee established awards for the NEOs (other than the CEO) based on these recommendations and the Committee's assessment of the factors noted above for each executive. The Compensation Committee evaluated the CEO's performance using the same criteria as discussed above in "Compensation Process" to establish the appropriate award for the CEO. Awards are granted under the Long-Term Stock Program, which was last approved by the stockholders in May 2015. The awards made to the NEOs for 2015 are set forth in the accompanying "Grants of Plan Based Awards in Fiscal Year 2015" table below.


      Value of Equity Awarded in 2015.     Under applicable accounting rules, the grant date fair value of the PBRSUs awarded to our NEOs (at the "target" level of performance) is calculated using a Monte Carlo simulation pricing model. The PBRSUs are included as compensation for our NEOs in the "Summary Compensation Table" based on this valuation methodology. For information on the assumptions used in this fair value computation, refer to Note 13 of the "Notes to Consolidated Financial Statements" in our 2015 Annual Report.

The value of the PBRSUs awarded to our NEOs using this model in each of 2012, 2013 and 2014 differed

from the Company's stock price on the grant date, either positively or negatively, by approximately 30% as a result of applying the Monte Carlo simulation. As a result, the number of PBRSUs awarded to our executives has varied significantly year over year. In 2015, the Compensation Committee decided to calculate the number of PBRSUs to be awarded to executives using the stock price on the grant date, rather than by applying the Monte Carlo simulation model, in order to simplify the process and to provide more consistent award sizing (based on the number of shares subject to the awards) from year to year. The Monte Carlo simulation model will continue to be applied, as required under applicable accounting rules, for purposes of valuing these awards in our financial disclosures and in presenting the grant date fair value of these awards in the "Summary Compensation Table."

The following chart shows the values of the PBRSU awards approved by the Compensation Committee in 2015 that were used to determine the number of shares subject to the awards (based on the $65.28 closing price per share of our common stock on the grant date for PBRSUs, calculated at the "target" level of performance and without taking the Monte Carlo simulation model into account), as well as the accounting grant date fair value of the PBRSUs we are required to use under applicable SEC rules to report in the "Summary Compensation Table" (calculated as noted in the footnotes to the "Summary Compensation Table," and including the impact of the Monte Carlo simulation model).

2015 PBRSU Awards

Name


Value Based
on May 12,
2015 Stock
Price




Value Required
to Be Included
in Summary
Compensation
Table

Mr. Mussallem

$ 1,436,160 $ 1,525,260

Mr. Ullem

362,304 384,782

Ms. Szyman

349,248 370,916

Mr. Wood

349,248 370,916

Mr. Bobo

362,304 384,782