Edwards’ established its Stock Ownership Guidelines for Executive Officers to create additional owner commitment and to emphasize stockholder value creation. Under these Guidelines, the Chief Executive Officer is expected to own shares of Edwards’ stock equal to six times his base salary. All other executive officers are expected to own three times their base salary. Expected ownership levels are adjusted as annual base salaries change.
Shares that count toward meeting these Guidelines include shares held outright, shares held in 401(k) savings and stock purchase plans, restricted stock, and restricted stock units.
Executive officers who have not achieved these Guidelines must hold 50% of the net shares of Edwards’ stock acquired in connection with the exercise of stock options, the lapse of restrictions from restricted stock and restricted stock units, and the vesting of performance-based restricted stock units (after satisfaction of applicable taxes and, in the case of stock options, payment of the exercise price) until these Guidelines are met.
Executive officers who have achieved these Guidelines are expected, absent unusual circumstances, to maintain or exceed their target ownership levels. In the event an executive officer achieved these Guidelines but was unable to maintain their ownership level due to a decline in the price of Edwards’ stock, the 50% holding requirement is reinstated.