<PAGE>
As filed with the Securities and Exchange Commission on June 10, 1994
Registration No. 33-
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-------------------
FORM S-8
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
-------------------
BAXTER INTERNATIONAL INC.
-------------------------
(Exact name of Registrant as specified in its charter)
Delaware 36-0781620
------------------------------- -----------------
(State or other jurisdiction of (I.R.S. Employer
incorporation) Identification No.)
ONE BAXTER PARKWAY
DEERFIELD, ILLINOIS 60015
(708) 948-2000
------------------------------------------------------------------------
(Address, including zip code, and telephone number, including area code,
of Registrant's principal executive offices)
BAXTER INTERNATIONAL INC.
1994 INCENTIVE COMPENSATION PROGRAM
-----------------------------------
(Full title of the plan)
J. PATRICK FITZSIMMONS
BAXTER INTERNATIONAL INC.
ONE BAXTER PARKWAY
DEERFIELD, ILLINOIS 60015
(708) 948-3781
------------------------------
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
-------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Title of Securities to be Amount to be Proposed Maximum Offering Price Proposed Maximum Aggregate Amount of
Registered Registered(1) per Share(2) Offering Price Registration Fee(1)
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, $1.00 par 8,000,000 $25.50 $204,000,000 $70,344.83
value per share
("Common Stock")
- -------------------------------------------------------------------------------------------------------------------------------
<FN>
(1) This Registration Statement also covers Common Stock of the Registrant to
be issued pursuant to the anti-dilution provisions of the Program.
(2) Estimated solely for the purposes of calculating the registration fee as
contemplated by rule 457(c) and (h)(1) and based on the average of the high
and low prices of the Registrant's Common Stock as reported by the New York
Stock Exchange on June 7, 1994, the latest practicable date prior to the
filing of this Registration Statement
-------------------
</TABLE>
<PAGE>
REOFFER PROSPECTUS
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
708.948.2000
COMMON STOCK (PAR VALUE $1.00 PER SHARE)
8,000,000 SHARES OF COMMON STOCK UNDER THE
1994 STOCK INCENTIVE COMPENSATION PROGRAM
This Prospectus is being used in connection with the
offering from time to time by officers and other key executive
employees (the "Registered Shareholders") of Baxter International
Inc., a Delaware corporation ("Baxter") and/or its subsidiaries (the
"Company"), who may be deemed "affiliates" of the Company as
defined in Section 495 of the General Rules and Regulations under
the Securities Act of 1933, as amended (the "Securities Act"), of
shares of common stock, par value $1.00 per share, of the Company
(the "Common Stock"), which may be acquired by them pursuant to
the Company's 1994 Incentive Compensation Program (the "Plan").
It is anticipated that the Registered Shareholders will
offer shares of Common Stock for sale at prevailing prices in the
over-the-counter market on the date of sale, and the commissions
payable will be the regular commissions of brokers for affecting
such sales. However, any securities covered by this Prospectus
which qualify for sale pursuant to Rule 144 under the Securities
Act may be sold under Rule 144 rather than pursuant to this
Prospectus. All expenses of registration incurred in connection
with this offering are being borne by the Company, but all
brokerage commissions and other expenses incurred by individual
Registered Shareholders will be borne by each such Registered
Shareholder. The Company will not receive any of the proceeds
from such sales.
The Registered Shareholders and any broker executing
selling orders on behalf of the Registered Shareholders may be
deemed to be "underwriters" within the meaning of the Securities
Act, in which event commissions received by any such broker may be
deemed to be underwriting commissions under the Securities Act.
The Common Stock is traded in the over-the-counter
market. On June 7, 1994, the closing price of the Common Stock
as reported by the New York Stock Exchange was $25.75 per
share.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY
THE SECURITIES AND EXCHANGE COMMISSION, NOR HAS THE
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is June 10, 1994
No person has been authorized to give any information or to
make any representations not contained in this Prospectus in
connection with the offering described herein and, if given or
made, such information or representations must not be relied upon
as having been authorized by the Company. This Prospectus does
not constitute an offer to sell or a solicitation of an offer to
buy, nor shall there be any offer to sell, solicitation of an
offer to buy or sale of these securities by any person in any
jurisdiction in which it is unlawful for such person to make such
offer, solicitation or sale. Neither the delivery of this
Prospectus not any sale made hereunder shall under any
circumstances create any implication that there has been no change
in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
AVAILABLE INFORMATION
INCORPORATION OF CERTAIN DOCUMENTS
BY REFERENCE
DESCRIPTION OF
BAXTER CAPITAL STOCK
STATEMENT OF INDEMNIFICATION
AVAILABLE INFORMATION
Baxter is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith file reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information filed by Baxter and the Registration Statement
and exhibits and schedules thereto can be inspected and copied at the Public
Reference section of the Commission at Room 1024, Judiciary Plaza, 450 Fifth
Street, N.W., Washington, D.C. 20549, and at the Commission's regional offices
located at 7 World Trade Center, 13th Floor, New York, New York 10048, and 500
West Madison Street, Suite 1400, Chicago, Illinois 60661-2511. Copies of such
material can also be obtained from the Public Reference section of the
Commission at Room 1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington,
D.C. 20549 at prescribed rates. Such reports, proxy statements and other
information concerning Baxter can also be inspected at the offices of New York
Stock Exchange at 20 Broad Street, New York, New York 10005.
Baxter has filed with the Commission a Registration Statement on Form S-8
(together with any amendments or supplements thereto, the "Registration
Statement") under the Securities Act of 1933, as amended (the "Act") with
respect to the Shares (as defined herein) offered hereby. This Prospectus omits
certain information contained in the Registration Statement and reference is
made to the Registration Statement and the exhibits and schedules thereto for
further information. Statements contained herein concerning the provisions of
any documents are not necessarily complete, and in each instance reference is
made to the copy of such document filed as an exhibit to the Registration
Statement or incorporated herein by reference. Each such statement is qualified
in its entirety by such reference.
2
<PAGE>
In the event that an appendix or other supplement
is used by the Company to update information in this
Prospectus, the Company will provide persons who have
already received copies of this Prospectus with a copy of
any such current appendix or supplement. Upon request, the
Company will also furnish an additional Prospectus, as
currently supplemented, to anyone who has misplaced or
discarded his copy.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents heretofore filed by the
Company with the commission pursuant to the Exchange Act
(File No. 8-7961) are incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for
the year ended December 31, 1993;
2. The Company's Quarterly Report on Form 10-Q
for the quarter ended March 31, 1994; and
3. All reports and other documents filed by the
Company pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act after the date hereof and prior to the filing
of a post-effective amendment indicating that all securities
offered hereby have been sold or deregistering all
securities then remaining unsold as of the date of filing of
such documents.
DESCRIPTION OF BAXTER CAPITAL STOCK
Baxter is authorized to issue up to 350,000,000 shares of Baxter Common
Stock, par value $1.00 per share, 277,148,631 shares of which were issued and
outstanding or held in treasury at April 30, 1994 and, at April 30, 1994
beneficially owned by approximately 81,000 stockholders. In addition, Baxter is
authorized to issue up to 100,000,000 shares, no par value, preferred stock
("Baxter Preferred Stock"). As of April 30, 1994 there were no shares of Baxter
Preferred Stock outstanding.
BAXTER COMMON STOCK
The holders of Baxter Common Stock are entitled to one vote per share on
all matters to be voted upon by the stockholders. Subject to the rights of
holders of Baxter Preferred Stock, the holders of Baxter Common Stock are
entitled to receive such dividends as may be declared from time to time by the
Board of Directors out of funds legally available therefor and in the event of
liquidation, dissolution or winding-up of Baxter, to share ratably in all assets
remaining after payment of all liabilities. The holders of Baxter Common Stock
received a dividend of one preferred stock purchase right for each share of
Baxter Common Stock held of record, which is described in more detail under
"Description of Baxter Capital Stock--Preferred Stock Purchase Rights." The
holders of Baxter Common Stock have no preemptive or conversion rights and are
not subject to further calls or assessments by Baxter. There are no redemption
or sinking fund provisions applicable to the Baxter Common Stock.
PREFERRED STOCK AND SHAREHOLDER RIGHTS PLAN
PREFERRED STOCK. Baxter's Restated Certificate of Incorporation provides
that the Board of Directors may issue an aggregate of 100,000,000 shares of
Baxter Preferred Stock from time to time in one or more series.
The Baxter Board of Directors is authorized to determine, among other
things, with respect to each additional series which may be issued: (i) the
dividend rate, conditions and preferences, if any; (ii) whether dividends will
be cumulative and, if so, the date from which dividends will accumulate;
(iii) whether, and to what extent, the holders of a series will enjoy voting
rights, if any, in addition to those prescribed by law; (iv) whether and upon
what terms, a series will be convertible into or exchangeable for shares of any
other class of capital stock or other series of Baxter Preferred Stock;
(v) whether, and upon what terms, a series would be redeemable; (vi) whether a
sinking fund will be provided for the redemption of a series and, if so, the
terms and conditions of the sinking fund, and (vii) the preference if any, to
which a series will be entitled on voluntary or involuntary liquidation,
dissolution or winding up of Baxter. With regard to dividends, redemption and
liquidation preference, any particular series of Baxter Preferred Stock may rank
junior to, on a parity with, or senior to any other series of Baxter Preferred
Stock and Baxter Common Stock. The Board of Directors, without shareholder
approval, can issue Baxter Preferred Stock with voting and conversion rights
which could adversely affect the voting power of the holders of Baxter Common
Stock. The issuance of Baxter Preferred Stock under certain circumstances could
have the effect of delaying or preventing a change of control of Baxter or other
corporate action.
3
<PAGE>
SERIES A JUNIOR PARTICIPATING PREFERRED STOCK. Baxter's Restated
Certificate of Incorporation provides that the Baxter Board of Directors shall
issue an aggregate of 3,500,000 shares of Baxter Preferred Stock, no par value,
to be designated Series A Junior Participating Preferred Stock (the "Series A
Preferred Stock").
PREFERRED STOCK PURCHASE RIGHTS. During 1989, holders of Baxter Common
Stock received a dividend of one preferred stock purchase right (collectively,
the "Rights") for each share of Baxter Common Stock held of record. Each Right
entitles the registered holder to purchase from Baxter one one-hundredth of a
share of Series A Preferred Stock for $70.00. The Rights will become
exercisable (and transferable apart from the Baxter Common Stock) on the earlier
of (i) 10 days following a public announcement that a person or group has
acquired 20% or more of the Baxter Common Stock, or (ii) 10 business days
following the commencement of an offer to acquire 20% or more of the Common
Stock.
If, after the Rights become exercisable, any person or group (the
"Acquirer") acquires 20% or more of the Baxter Common Stock (except pursuant to
an offer for all outstanding shares of Baxter Common Stock which the independent
directors determine to be fair to and otherwise in the best interests of Baxter
and its stockholders), each Right may be exercised for Baxter Common Stock (or,
in certain circumstances, cash, other property or securities) having a value of
$140.00. In specified circumstances, each Right may be exercised for common
stock of an acquiring entity having a value of $140.00. All Rights held by the
Acquirer will be null and void. Baxter may generally redeem the Rights at a
price of $.01 per Right at anytime until 10 days following a public announcement
that a person or group has acquired 20% or more of the Baxter Common Stock. The
Rights will expire on March 20, 1999, unless earlier redeemed.
4
<PAGE>
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
ITEM 3. INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents or portions thereof, filed by Baxter with the
Commission under the Exchange Act and the Act, are incorporated herein by
reference:
(a) Baxter's Annual Report on Form 10-K (File No. 1-4448) for the year
ended December 31, 1993;
(b) Baxter's Proxy Statement for the Annual Meeting of Stockholders held
on April 29, 1994; and
(c) Baxter's Quarterly Report on Form 10-Q for the quarter ended March 31,
1994, filed with the Commission on May 13, 1994.
All documents subsequently filed by Baxter pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this Prospectus shall
be deemed to be incorporated by reference in this Prospectus and to be a part of
this Prospectus from the date of filing thereof. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein or in any other subsequently filed document which also is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statements so modified or superseded shall not be deemed,
except as so modified or superseded, to constitute a part of this Prospectus.
Baxter hereby undertakes to provide without charge to each person to whom a
copy of this Prospectus has been delivered, upon the written or oral request of
any such person, a copy of any or all of the documents referred to above which
have been or may be incorporated in this Proxy Statement/Prospectus by reference
(other than exhibits). Requests for such copies should be directed to: Baxter
International Inc., One Baxter Parkway, Deerfield, Illinois, 60016, telephone:
(708) 948-3781, Attention: General Counsel.
No person has been authorized to give any information or to make any
representation other than as contained herein and, if given or made, such
information or representation must not be relied upon as having been authorized
by Baxter. Neither the delivery hereof nor any distribution of securities made
hereunder shall, under any circumstances, create an implication that there has
been no change in the facts herein set forth since the date hereof. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy the shares of Baxter Common Stock offered by this Prospectus or a
solicitation of a proxy in any jurisdiction where, or to any person to whom, it
is unlawful to make such an offer or solicitation.
ITEM 6. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law (the "DGCL") provides
for the indemnification of officers, directors, employees and other corporate
agents in terms sufficiently broad to indemnify such persons under certain
circumstances for liabilities (including reimbursement for expenses incurred)
arising under the Securities Act of 1933, as amended (the "Act"). The
Registrant's Restated Certificate of Incorporation (Exhibit 3.1 hereto) provides
for indemnification of the Registrant's directors, officers, employees and other
agents to the extent and under the circumstances permitted by the DGCL. The
Registrant has also entered into agreements with its directors and officers that
will require the Registrant, among other things, to indemnify them against
certain liabilities that may arise by reason of their status or service as
directors or officers to the fullest extent permitted by law.
ITEM 8. EXHIBITS
4.1 Baxter International Inc. 1994 Incentive Compensation Program.
8 Awareness Letter of Price Waterhouse
24 Consent of Price Waterhouse
24 Power of Attorney
II-1
<PAGE>
ITEM 9. UNDERTAKINGS.
(a) Insofar as indemnification for liabilities arising under the
Securities act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or otherwise,
the Registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Act and is, therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
(b) The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities act of 1933, each filing of the
Registrant's annual report pursuant to Section 13(a) of 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) The undersigned Registrant hereby undertakes as follows: that prior to
any public reoffering of the securities registered hereunder through use of a
prospectus which is a part of this Registration Statement, by any person or
party who is deemed to be an underwriter within the meaning of Rule 145(c), the
issuer undertakes that such reoffering prospectus will contain the information
called for by the applicable registration form with respect to reofferings by
persons who may be deemed underwriters, in addition to the information called
for by the other items of the applicable form.
(d) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (c) immediately preceding, or (ii) that purports to meet
the requirements of Section 109(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the Registration Statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(e) The undersigned registrant hereby undertakes to respond to requests
for information that is incorporated by reference into the prospectus pursuant
to Item 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This means information contained in documents filed
subsequent to the effective date of the Registration Statement through the date
of responding to the request.
(f) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not the subject of and
included in the registration statement when it became effective.
II-2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the Township of West Deerfield, State
of Illinois on June 10, 1994.
BAXTER INTERNATIONAL INC.
By/s/ VERNON R. LOUCKS JR.
-----------------------------------------------------
Name: Vernon R. Loucks Jr.
Title: Chairman and Chief Executive Officer
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints Vernon R. Loucks Jr., his attorney-in-fact,
with power of substitution, for him or her in any and all capacities, to sign
this Registration Statement and any amendments hereto, and to file the same,
with exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact, or his substitute or substitutes, may do or
cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/S/ VERNON R. LOUCKS JR. Chief Executive Officer June 10, 1994
- ------------------------------------ and Chairman of the Board
Vernon R. Loucks Jr. (Principal Executive
Officer)
/S/ HARRY M. JANSEN KRAEMER, JR. Senior Vice President and June 10, 1994
- ------------------------------------ Chief Financial Officer
Harry M. Jansen Kraemer, Jr. (Principal Financial
Officer)
/S/ BRIAN P. ANDERSON Controller (Principal June 10, 1994
- ------------------------------------ Accounting Officer)
Brian P. Anderson
/S/ VERNON R. LOUCKS JR.
- ------------------------------------
Vernon R. Loucks Jr.
Director and Attorney-in Fact
II-3
<PAGE>
A Majority of the Board of Directors: June 8, 1994
William B. Graham
John W. Colloton
Susan Crown
Georges C. St. Laurent, Jr.
Silas S. Cathcart
David C. K. Chin, M.D.
James D. Ebert
Mary Johnston Evans
Frank R. Frame
David N. Grainger
Martha R. Ingram
Fred L. Turner
II-4
<PAGE>
EXHIBIT 4.1
EXHIBIT A
BAXTER INTERNATIONAL INC.
1994 INCENTIVE COMPENSATION PROGRAM
1. PURPOSE. The purpose of the Baxter International Inc. 1994 Incentive
Compensation Program ("Program") is to increase stockholder value and to advance
the interests of Baxter International Inc. ("Baxter") and its subsidiaries
(collectively, the "Company") by providing a variety of economic incentives
designed to attract, retain and motivate employees. As used in this Program, the
term "subsidiary" means any business, whether or not incorporated, in which
Baxter has a direct or indirect ownership interest.
2. ADMINISTRATION.
2.1 ADMINISTRATION BY COMMITTEE. The Program shall be administered by
the Compensation Committee of the Baxter Board of Directors ("Committee"),
which shall consist of two or more disinterested persons within the meaning
of Rule 16b-3 of the Securities Exchange Act of 1934, as amended ("Exchange
Act") who also qualify as outside directors within the meaning of Section
162(m) and the related regulations under the Internal Revenue Code of 1986,
as amended. The Board of Directors may exercise any or all authority
otherwise delegated to the Committee under the terms of the Program with
respect to the grant or administration of incentives made to or held by
persons who, at the time of the exercise of such authority, are not subject
to section 16(a) of the Exchange Act.
2.2 AUTHORITY. Subject to the provisions of the Program, the Committee
shall have the authority to (a) manage the operation of the Program, (b)
interpret the provisions of the Program, and prescribe, amend and rescind
rules and procedures relating to the Program, (c) grant incentives under the
Program, in such forms and amounts and subject to such restrictions,
limitations and conditions as it deems appropriate, including, without
limitation, incentives which are made in combination with or in tandem with
other incentives (whether or not contempo-raneously granted) or compensation
or in lieu of current or deferred compensation, (d) modify the terms of,
cancel and reissue, or repurchase outstanding incentives, subject to
subsection 11.9(b), (e) prescribe the form of agreement, certificate or
other instrument evidencing any incentive under the Program, (f) correct any
defect or omission and reconcile any inconsistency in the Program or in any
incentive hereunder, and (g) make all other determinations and take all
other actions as it deems necessary or desirable for the implementation and
administration of the Program; provided, however, that in no event shall the
Committee cancel any outstanding stock option for the purpose of reissuing
an additional option to the option holder at a lower exercise price. The
determination of the Committee on matters within its authority shall be
conclusive and binding on the Company and all other persons.
3. PARTICIPATION. Subject to the terms and conditions of the Program, the
Committee shall determine and designate from time to time the employees of the
Company (including employees who are directors of Baxter) who shall receive
incentives under the Program ("Participants"). All officers of the Company are
eligible to receive incentives under the Program. All other full-time employees
of the Company are eligible to receive incentives under the Program.
Participation, the grant of incentives and any related performance goals for
persons subject to section 16(a) of the Exchange Act must be approved by the
Committee. The Committee's authority with respect to participation, the grant of
incentives and related performance objectives for others (persons not subject to
section 16(a)) may be delegated.
A-1
<PAGE>
- --------------------------------------------------------------------------------
4. SHARES SUBJECT TO THE PROGRAM.
4.1 NUMBER OF SHARES RESERVED. Shares of common stock, $1.00 par
value, of Baxter ("Common Stock") shall be available for incentives under
the Program. To the extent provided by resolution of the Baxter Board of
Directors, such shares may be uncertificated. Subject to adjustment in
accordance with subsections 4.3 and 4.4, the aggregate number of shares of
Common Stock available for incentives under the Program shall be 15,000,000
shares.
4.2 TYPE OF COMMON STOCK. Common Stock issued under the Program in
connection with Stock Options and Performance Shares may be authorized and
unissued shares or issued shares held as treasury shares. Common Stock
issued under the Program in connection with Restricted Stock or Stock Awards
shall be issued shares held as treasury shares; provided, however, that
authorized and unissued shares may be issued in connection with Restricted
Stock or Stock Awards to the extent that the Committee determines that past
services of the Participant constitute adequate consideration for at least
the par value thereof.
4.3 REUSAGE OF SHARES.
(a) In the event of the exercise or termination (by reason of
forfeiture, expiration, cancellation, surrender or otherwise) of any
incentive under the Program, that number of shares of Common Stock that
was subject to the incentive but not delivered shall again be available
for incentives under the Program.
(b) In the event that shares of Common Stock are delivered under the
Program as Restricted Stock or pursuant to a Stock Award and are
thereafter forfeited or reacquired by the Company pursuant to rights
reserved upon the award thereof, such forfeited or reacquired shares
shall again be available for incentives under the Program.
(c) Notwithstanding the provisions of paragraphs (a) or (b), the
following shares of Common Stock shall not be available for reissuance
under the Program: (1) shares with respect to which the Participant has
received the benefits of ownership (other than voting rights), either in
the form of dividends or otherwise, except to the extent that such
reissuance is permitted by Rule 16b-3 of the Exchange Act; (2) shares
which are withheld from any award or payment under the Program to satisfy
tax withholding obligations (as described in subsection 11.5(e)); (3)
shares which are surrendered to fulfill tax obligations (as described in
subsection 11.5(e)); and (4) shares which are surrendered in payment of
the Option Price (as defined in subsection 5.1) upon the exercise of a
Stock Option.
4.4 ADJUSTMENTS TO SHARES RESERVED. In the event of any merger,
consolidation, reorganization, recapitalization, spinoff, stock dividend,
stock split, reverse stock split, exchange, or other distribution with
respect to shares of Common Stock or other change in the corporate structure
or capitalization affecting the Common Stock, the type and number of shares
of stock which are or may be subject to incentives under the Program and the
terms of any outstanding incentives (including the price at which shares of
stock may be issued pursuant to an outstanding incentive) shall be equitably
adjusted by the Committee, in its sole discretion, to preserve the value of
incentives awarded or to be awarded to Participants under the Program.
5. STOCK OPTIONS.
5.1 AWARDS. Subject to the terms and conditions of the Program, the
Committee shall designate the employees to whom options to purchase shares
of Common Stock ("Stock Options") are to be awarded under the Program and
shall determine the number, type and terms of the Stock Options to be
awarded to each of them. Stock Option awards are subject to the following
specific limitations. Each Stock Option shall expire on the earlier of the
date provided by the option terms or the date which is 10 years and one day
after the date of grant. The option price
A-2
<PAGE>
- --------------------------------------------------------------------------------
per share ("Option Price") for any Stock Option awarded shall not be less
than the greater of par value or the Fair Market Value of a share of Common
Stock on the date the Stock Option is awarded. Each Stock Option awarded
under the Program shall be a "nonqualified stock option" for tax purposes
unless the Stock Option satisfies all of the requirements of section 422 of
the Internal Revenue Code of 1986, as amended, and the Committee designates
such Stock Option as an "Incentive Stock Option". No person shall receive,
in any calendar year, Stock Options which, in the aggregate, represent more
than 500,000 shares of Common Stock.
5.2 MANNER OF EXERCISE. A Stock Option may be exercised, in whole or
in part, by giving written notice to Baxter prior to the date on which the
Stock Option expires; provided, however, that a Stock Option may only be
exercised with respect to whole shares of Common Stock. Such notice shall
specify the number of shares of Common Stock to be purchased and shall be
accompanied by payment of the Option Price for such shares in such form and
manner as the Committee may from time to time approve.
6. STOCK AWARDS. Subject to the terms and conditions of the Program, the
Committee shall designate the employees who shall be awarded shares of Common
Stock without restrictions ("Stock Awards"), under the Program and shall
determine the number and terms of the Stock Awards to be awarded to each of
them. Stock Awards are subject to the following specific limitations. No person
subject to section 16(a) of the Exchange Act may receive a Stock Award, and no
person eligible to receive a Stock Award may receive a Stock Award representing
more than 2,500 shares of Common Stock in any calendar year.
7. RESTRICTED STOCK.
7.1 AWARDS. Subject to the terms and conditions of the Program, the
Committee shall designate the employees to whom shares of Common Stock,
subject to restrictions ("Restricted Stock"), shall be awarded under the
Program and determine the number of shares and the terms and conditions of
each such award. Each Restricted Stock award shall entitle the Participant
to receive shares of Common Stock upon the terms and conditions specified by
the Committee and subject to the following provisions of this Section 7 and
the provisions of Section 10.
7.2 RESTRICTIONS. All shares of Restricted Stock transferred or sold
hereunder shall be subject to such restrictions as the Committee may
determine, including, without limitation, any or all of the following:
(a) a required period of employment with the Company, as determined
by the Committee, prior to the vesting of the shares of Restricted Stock;
(b) a prohibition against the sale, assignment, transfer, pledge,
hypothecation or other encumbrance of the shares of Restricted Stock for
a specified period as determined by the Committee;
(c) a requirement that the holder of shares of Restricted Stock
forfeit (or in the case of shares sold to a Participant, resell to the
Company at his or her cost) all or a part of such shares in the event of
termination of his or her employment during any period in which such
shares are subject to restrictions; or
(d) a prohibition against employment of the holder of such Restricted
Stock by any competitor of the Company or against such holder's
dissemination of any secret or confidential information belonging to the
Company.
All restrictions on shares of Restricted Stock awarded pursuant to the
Program shall expire at such time or times as the Committee shall
specify.
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7. 3 REGISTRATION OF SHARES. Shares of Restricted Stock awarded
pursuant to the Program shall be registered in the name of the Participant
and, if such shares are certificated, in the discretion of the Committee,
may be deposited in a bank designated by the Committee or with Baxter. The
Committee may require a stock power endorsed in blank with respect to shares
of Restricted Stock whether or not certificated.
7.4 STOCKHOLDER RIGHTS. Subject to the terms and conditions of the
Program, during any period in which shares of Restricted Stock are subject
to forfeiture or restrictions on transfer, each Participant who has been
awarded shares of Restricted Stock shall have such rights of a stockholder
with respect to such shares as the Committee may designate at the time of
the award, including the right to vote such shares and the right to receive
all dividends paid on such shares. Unless otherwise provided by the
Committee, stock dividends or non-cash dividends and, except as otherwise
provided by subsection 11.10, any other securities distributed with respect
to Restricted Stock shall be restricted to the same extent and subject to
the same terms and conditions as the Restricted Stock to which they are
attributable.
7.5 LAPSE OF RESTRICTIONS. Subject to the terms and conditions of the
Program, at the end of any time period during which the shares of Restricted
Stock are subject to forfeiture or restrictions on transfer, such shares
will be delivered free of all restrictions to the Participant (or to the
Participant's legal representative, beneficiary or heir).
7.6 SUBSTITUTION OF CASH. The Committee may, in its sole discretion,
substitute cash equal to the Fair Market Value (determined as of the date of
the distribution) of shares of Common Stock otherwise required to be
distributed to a Participant in accordance with this Section 7.
8. PERFORMANCE SHARES.
8.1 AWARDS. A performance share is an award which shall be paid in
shares of Common Stock, as described below. Subject to the terms and
conditions of the Program, the Committee shall designate the employees to
whom Performance Shares are to be awarded in accordance with this Section 8
and the number of shares subject to the award and the terms and conditions
of such awards. Each Performance Share awarded pursuant to this Section 8
shall entitle the Participant to a payment in the form of one share of
Common Stock upon the attainment of such performance goals and other terms
and conditions as may be specified by the Committee.
8.2 NO ADJUSTMENTS. Except as otherwise provided by the Committee, no
adjustment shall be made in Performance Shares awarded on account of cash
dividends which may be paid or other rights which may be provided to the
holders of Common Stock prior to the end of any period for which performance
goals were established.
8.3 SUBSTITUTION OF CASH. The Committee may, in its sole discretion,
substitute cash equal to the Fair Market Value (determined as of the date of
the issuance) of shares of Common Stock otherwise required to be issued to a
Participant in accordance with this Section 8.
9. OTHER INCENTIVES. In addition to the incentives described in Sections 5
through 8 above and subject to the terms and conditions of the Program, the
Committee may grant other incentives ("Other Incentives"), payable in cash or in
kind, under the Program as it determines to be in the best interest of the
Company.
10. PERFORMANCE GOALS AND APPLICATION OF TAX DEDUCTION
LIMITATIONS. Compensation attributable to a Stock Option awarded to a
Participant is intended to satisfy the requirements of the exception for
qualified performance-based compensation within the meaning of section 162(m)
and the related regulations under the Internal Revenue Code of 1986, as amended.
All awards of Restricted Stock, Performance Shares and Other Incentives under
the Program shall be made subject to the attainment
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of performance goals relating to one or more of the business criteria within the
meaning of section 162(m) identified above, including but not limited to, stock
price, market share, sales, earnings per share, return on equity, costs and cash
flow, as determined by the Committee from time to time.
11. GENERAL
11.1 EFFECTIVE DATE. The Program will become effective upon its
approval by the affirmative vote of the holders of a majority of the voting
stock of Baxter at a meeting of its stockholders. Unless approved within one
year after the date of the Program's adoption by the Board of Directors, the
Program shall not be effective for any purpose. Prior to the approval of the
Program by Baxter's stockholders, the Committee may award incentives, but if
such approval is not received in the specified period, then such awards
shall be of no effect.
11.2 DURATION. The Program shall remain in effect until all incentives
granted under the Program have either been satisfied by the issuance of
shares of Common Stock or the payment of cash or been terminated in
accordance with the terms of the Program or the incentive and until all
restrictions imposed on shares of Common Stock issued under the Program have
lapsed. No incentive may be granted under the Program after the tenth
anniversary of the date the Program is approved by Baxter's stockholders.
11.3 NON-TRANSFERABILITY OF INCENTIVES. No Stock Option, share of
Restricted Stock, Performance Share or Other Incentive under the Program may
be transferred, pledged or assigned by the holder thereof (except, in the
event of the holder's death, by will or the laws of descent and distribution
to the limited extent provided in the Program or in the terms of the
incentive), and the Company shall not be required to recognize any attempted
assignment of such rights by any Participant. During a Participant's
lifetime, awards may be exercised only by the Participant or by the
Participant's guardian or legal representative.
11.4 EFFECT OF TERMINATION OF EMPLOYMENT OR DEATH. If a Participant
ceases to be an employee of the Company for any reason, including death, any
incentives then outstanding may be exercised or shall expire in accordance
with the terms of the incentive.
11.5 COMPLIANCE WITH APPLICABLE LAW AND WITHHOLDING.
(a) Notwithstanding any other provision of the Program, Baxter shall
have no obligation to issue any shares of Common Stock under the Program
if such issuance would violate any applicable law or any applicable
regulation or requirement of any securities exchange or similar entity.
(b) Prior to the issuance of any shares of Common Stock under the
Program, Baxter or the Company may require a written statement that the
recipient is acquiring the shares for investment and not for the purpose
or with the intention of distributing the shares and that the recipient
will not dispose of them in violation of the registration requirements of
the Securities Act of 1933.
(c) With respect to any person who is subject to section 16(a) of the
Exchange Act, the Committee may, at any time, add such conditions and
limitations to any incentive or payment under the Program or implement
procedures for the administration of the Program which it deems necessary
or desirable to comply with the requirements of Rule 16b-3 of the
Exchange Act.
(d) If, at any time, Baxter, in its sole discretion, determines that
the listing, registration or qualification (or any updating of any such
document) of any type of incentive, or the shares of Common Stock
issuable pursuant thereto, is necessary on any securities exchange or
under any federal or state securities or blue sky law, or that the
consent or approval of any
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governmental regulatory body is necessary or desirable as a condition of,
or in connection with, any incentive, the issuance of shares of Common
Stock pursuant to any incentive, or the removal of any restrictions
imposed on shares subject to an incentive, such incentive shall not be
granted and the shares of Common Stock shall not be issued or such
restrictions shall not be removed, as the case may be, in whole or in
part, unless such listing, registration, qualification, consent or
approval shall have been effected or obtained free of any conditions not
acceptable to Baxter.
(e) All incentives and payments under the Program are subject to
withholding of all applicable taxes and the Company shall have the right
to withhold from any award under the Program or to collect as a condition
of any payment under the Program, as applicable, any taxes required by
law to be withheld. To the extent provided by the Committee, a
Participant may elect to have any distribution, or a portion thereof,
otherwise required to be made under the Program to be withheld or to
surrender to the Company previously owned shares of Common Stock to
fulfill any tax withholding obligation.
11.6 NO CONTINUED EMPLOYMENT. The Program does not constitute a
contract of employment or continued service, and participation in the
Program will not give any employee or Participant the right to be retained
in the employ of the Company or the right to continue as a director of the
Company or any right or claim to any benefit under the Program unless such
right or claim has specifically accrued under the terms of the Program or
the terms of any incentive under the Program.
11.7 TREATMENT AS A STOCKHOLDER. No incentive granted to a Participant
under the Program shall create any rights in such Participant as a
stockholder of Baxter until shares of Common Stock related to the incentive
are registered in the name of the Participant.
11.8 DEFERRAL PERMITTED. Payment of cash to a Participant or
distribution of any shares of Common Stock to which a Participant is
entitled under any incentive shall be made as provided in the terms of the
incentive. Payment may be deferred at the request of the Participant to the
extent provided in the incentive.
11.9 AMENDMENT OF THE PROGRAM. The Board may, at any time and in any
manner, amend, suspend or terminate the Program or any incentive outstanding
under the Program; provided, however, that no such amendment or
discontinuance shall:
(a) be made without stockholder approval to the extent such approval
is required by law, agreement or the rules of any exchange or automated
quotation system upon which the Common Stock is listed or quoted;
(b) alter or impair the rights of Participants with respect to
incentives previously made under the Program without the consent of the
holder thereof; or
(c) make any change that would disqualify the Program, intended to be
so qualified, from the exemption provided by Rule 16b-3 of the Exchange
Act.
11.10 ACCELERATION OF INCENTIVES. Notwithstanding any provision in
this Program to the contrary or the normal terms of vesting in any
incentive, (a) the restrictions on all shares of Restricted Stock awarded
shall lapse immediately, (b) all outstanding Stock Options will become
exercisable immediately, and (c) all performance goals shall be deemed to be
met and payment made immediately if a Change in Control occurs. For purposes
of this Program, a "Change in Control" shall have occurred if:
(1) any "Person", as such term is used in Section 13(d) and 14(d) of
the Exchange Act (other than Baxter, any corporation owned, directly or
indirectly, by the stockholders of Baxter
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in substantially the same proportions as their ownership of stock of
Baxter, and any trustee or other fiduciary holding securities under an
employee benefit plan of Baxter or such proportionately owned
corporation), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of
Baxter representing 30% or more of the combined voting power of Baxter's
then outstanding securities;
(2) during any period of not more than 24 months, individuals who at
the beginning of such period constitute the Board of Directors of Baxter,
and any new director (other than a director designated by a Person who
has entered into an agreement with Baxter to effect a transaction
described in paragraph (1), (3) or (4) of this subsection 11.10) whose
election by the board or nomination for election by Baxter's stockholders
was approved by a vote of at least two-thirds of the directors then still
in office who either were directors at the beginning of the period or
whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority thereof;
(3) the stockholders of Baxter approve a merger or consolidation of
Baxter with any other corporation, other than (A) a merger or
consolidation which would result in the voting securities of Baxter
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) more than 60% of the combined voting power of the
voting securities of Baxter or such surviving entity outstanding
immediately after such merger or consolidation, or (B) a merger or
consolidation effected to implement a recapitalization of Baxter (or
similar transaction) in which no Person acquires more than 30% of the
combined voting power of Baxter's then outstanding securities; or
(4) the stockholders of Baxter approve a plan of complete liquidation
of Baxter or an agreement for the sale or disposition by Baxter of all or
substantially all of Baxter's assets (or any transaction having a similar
effect).
11.11 DEFINITION OF FAIR MARKET VALUE. Except as otherwise determined
by the Committee, the "Fair Market Value" of a share of Common Stock as of
any date shall be equal to the closing sale price of a share of Common Stock
as reported on The National Association of Securities Dealers' New York
Stock Exchange Composite Reporting Tape (or if the Common Stock is not
traded on the New York Stock Exchange, the closing sale price on the
exchange on which it is traded or as reported by an applicable automated
quotation system) ("Composite Tape") on the applicable date or, if no sales
of Common Stock are reported on such date, the closing sale price of a share
of Common Stock on the date the Common Stock was last reported on the
Composite Tape (or such other exchange or automated quotation system, if
applicable).
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EXHIBIT 8
AWARENESS LETTER OF INDEPENDENT ACCOUNTANTS
June 8, 1994
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Sirs:
We are aware that Baxter International Inc. has included our report dated
May 12, 1994 (issued pursuant to the provisions of Statement on Auditing
Standards No. 71) in the Prospectus constituting part of its Registration
Statement on Form S-8 to be filed on or about June 8, 1994. We are also aware
of our responsibilities under the Securities Act of 1933.
Yours very truly,
Price Waterhouse
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EXHIBIT 24
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-8 of Baxter
International Inc. of our report dated February 10, 1994, which appears on page
48 of the 1993 Annual Report to Stockholders, which is incorporated by reference
in its Annual Report on Form 10-K for the year ended December 31, 1993. We also
consent to the incorporation by reference of our report on the Financial
Statement Schedules, which appears on page 18 of such Annual Report on Form
10-K.
PRICE WATERHOUSE
Chicago, Illinois
June 8, 1994
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