8-KOther Events

Edwards Lifesciences Corp 8-K Report, Corporate Update (Apr 26, 2011)

Filed April 26, 2011For Securities:EW

Summary

This 8-K filing from Edwards Lifesciences Corporation provides supplementary information regarding a proposal to amend and restate its Long-Term Stock Incentive Compensation Program, which is to be voted on at the company's 2011 Annual Meeting of Stockholders. The filing details a significant number of stock options that were approaching or had already exceeded their six-year lifespan as of February 28, 2011. The company is informing shareholders about the details of these expiring options, including grant dates, exercise prices, and expiration dates, as well as providing historical stock prices to illustrate the potential intrinsic value these options may have represented over time. Additionally, the report highlights Edwards Lifesciences' strong historical total shareholder return (TSR) compared to the medical device industry, underscoring the company's long-term value creation for its investors.

Key Highlights

  • 1Edwards Lifesciences is providing additional details on its Long-Term Stock Incentive Compensation Program ahead of its Annual Meeting of Stockholders.
  • 2A significant number of stock options (1,759,588) were outstanding in excess of six years as of February 28, 2011, with a weighted average exercise price of $13.43.
  • 3The filing lists specific grants of these older options, including their grant dates, vesting schedules, expiration dates, and exercise prices.
  • 4Several of these options were set to expire on or around March 30, 2011, or April 3, 2011, indicating a short window for exercise.
  • 5The company included a table of historical NYSE closing prices (adjusted for stock splits) from 2000 to 2010 to demonstrate the potential value of these options.
  • 6Edwards Lifesciences showcased a strong cumulative total shareholder return (TSR) across one, three, five, and ten-year periods, significantly outperforming the medical device industry average.

Frequently Asked Questions

The main purpose of this 8-K filing is to provide additional, specific information to shareholders regarding stock options that are nearing or have surpassed their expiration dates. This is in preparation for a vote on the amendment and restatement of the company's Long-Term Stock Incentive Compensation Program at the upcoming Annual Meeting of Stockholders.

The company is highlighting these older stock options to inform shareholders about their details and potential value. Some of these options were granted over six years prior and were approaching their expiration dates, meaning they might have been exercised or forfeited. Providing this data helps shareholders understand the context of the compensation program being proposed for amendment.

Edwards Lifesciences has demonstrated exceptionally strong performance compared to the medical device industry. The company's total shareholder return (TSR) significantly outperformed industry averages across multiple long-term periods, including one, three, five, and ten years, as of December 31, 2010. For example, its 10-year TSR was 810.9% compared to a negative 12.6% for the industry.

The filing details numerous options. For example, options granted on 3/30/2001 with an exercise price of $9.80 were set to expire on 3/30/2011. Options granted on 4/3/2001 with an exercise price of $9.20 were set to expire on 4/3/2011. Another significant block granted on 4/3/2004 with an exercise price of $16.08 were set to expire on 4/2/2011. The table in the filing provides a comprehensive list of these details.