<PAGE>
As filed with the Securities and Exchange Commission on February 27, 1998.
Registration No. 333-
- --------------------------------------------------------------------------------
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 of incorporation) (I.R.S. Employer Identification No.)
One Baxter Parkway
Deerfield, Illinois 60015
(Address of principal executive offices)
BAXTER INTERNATIONAL INC. AND SUBSIDIARIES
INCENTIVE INVESTMENT PLAN
(Full title of the Plan)
Jan Stern Reed
Corporate Counsel
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
(847) 948-2000
(Name, address and telephone number of agent for service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Proposed maximum Proposed maximum
Titles of securities Amount to be offering price per aggregate offering Amount of
to be registered registered share price registration fee
- ---------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock
$1.00 par value/1/ 1,500,000 shares $55.9375 $83,906,250 $24,753
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>
/1/ Pursuant to Rule 416(c) under the Securities Act of 1933, this Registration
Statement also covers an indeterminate amount of interests to be offered or sold
pursuant to the employee benefit plan described herein.
/2/ Computed pursuant to Rule 457(c) under the Securities Act of 1933 (the
"Securities Act") solely for the purpose of calculating the registration fee
based on the average of the high and low prices of the Common Stock for
February 24, 1998, as reported by The Wall Street Journal under New York Stock
Exchange Composite Transactions. This Registration Statement also covers Common
Stock of the Registrant to be issued pursuant to the anti-dilution provisions
of the Plan.
<PAGE>
PART I
INFORMATION REQUIRED IN THE SECTION 10(A) PROSPECTUS
Item 1. Plan Information; Item 2. Registrant Information and Employee Plan
Annual Information.
The documents containing the information required by these items will be
given to employees participating in the Baxter International Inc. and
Subsidiaries Incentive Investment Plan (the "Plan") and are not required to be
filed with the Securities and Exchange Commission (the "Commission") as part of
the Registration Statement or as an exhibit thereto.
PART II
INFORMATION REQUIRED IN THE REGISTRATION STATEMENT
Item 3. Incorporation of Documents by Reference.
Baxter International Inc. (the "Registrant") incorporates herein by
reference the following documents, as filed with the Securities and Exchange
Commission (the "Commission"):
(i) the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1996;
(ii) the Registrant's Quarterly Reports on Form 10-Q for the quarters
ended March 31, 1997, June 30, 1997 and September 30, 1997;
(iii) the Registrant's current reports on Form 8-K filed on January 29,
1997, March 18, 1997 and February 12, 1998;
(iv) the descriptions of the Registrant's Common Stock which are
contained in the registration statements filed under Section 12 of the
Securities Exchange Act of 1934, including any amendment or report filed for the
purpose of updating such descriptions; and
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14
and 15(d) of the Exchange Act subsequent to the date hereof and prior to the
filing of a post-effective amendment, which indicates that all of the securities
offered hereby have been sold or which deregisters all such securities remaining
unsold, shall be deemed to be incorporated by reference herein and to be part
hereof from the date of filing such documents.
Item 4. Description of Securities.
The Registrant's Common Stock is registered under Section 12 of the
Exchange Act. The Registrant also has Common Share Purchase Rights which are
registered under the Exchange Act and which automatically trade at this time
with the Common Stock.
<PAGE>
Item 5. Interests of Named Experts and Counsel.
Not applicable.
Item 6. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law ("DGCL") provides that
the Registrant may, and in some circumstances must, indemnify the directors and
officers of the Registrant against liabilities and expenses incurred by any such
person by reason of the fact that such person was serving in such capacity,
subject to certain limitations and conditions therein set forth. The
Registrant's Restated Certificate of Incorporation 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 7. Exemption from Registration Claimed.
Not applicable.
Item 8. Exhibits.
--------
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
4.1 Summary Plan Description for the Baxter
International Inc. and Subsidiaries Incentive
Investment Plan
5 The Registrant hereby undertakes that it: (i)
will submit or has submitted the Plan and any
amendment thereto to the Internal Revenue
Service ("IRS") in a timely manner and (ii)
has made or will make all changes required by
the IRS in order to qualify the Plan.
15 Awareness of Price Waterhouse LLP
23 Consent of Price Waterhouse LLP
24 Powers of Attorney of officers/directors of
the Registrant
</TABLE>
-2-
<PAGE>
Item 9. Undertakings.
(a) The Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being
made, a post-effective amendment to this Registration Statement:
(i) to include any prospectus required by Section 10(a)(3) of
the Securities Act of 1933;
(ii) to reflect in the Prospectus any facts or events arising
after the effective date of the Registration Statement (or the most
recent post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth
in the Registration Statement; and
(iii) to include any material information with respect to the
plan of distribution not previously disclosed in the Registration
Statement or any material change to such information in the
Registration Statement;
provided, however, that paragraphs (i) and (ii) do not apply if the Registration
Statement is on Form S-3 or Form S-8, and the information required to be
included in a post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, 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.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
(b) The Registrant and the Plan further undertake that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of the
Exchange Act and each filing of the Plan's Annual Report pursuant to Section
15(d) of the Exchange Act that is incorporated by reference in the Registration
Statement shall be deemed to be a new registration statement relating to the
securities offered herein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the
Securities Act 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 Commission such
indemnification is against public policy as expressed in the Securities Act and
is, therefore,
-3-
<PAGE>
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 of whether such indemnification by it is against
public policy as expressed in the Securities Act and will be governed by the
final adjudication of such issue.
-4-
<PAGE>
SIGNATURES
THE REGISTRANT Pursuant to the requirements of the Securities Act, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form S-8 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Deerfield, State of Illinois, on February 27, 1998.
BAXTER INTERNATIONAL INC.
(Registrant)
By: /s/ Vernon R. Loucks, Jr.
---------------------------------
Its: Chief Executive Officer
--------------------------------
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signatures Title Date
<S> <C> <C>
Chairman of the Board of
/s/ Vernon R. Loucks, Jr. Directors, Principal February 27, 1998
- -------------------------------- Executive Officer and --------------------------
Vernon R. Loucks, Jr. Director
/s/ Harry M. Jansen Kraemer, Jr. February 27, 1998
- -------------------------------- President and Director --------------------------
Harry M. Jansen Kraemer, Jr.
/s/ Brian P. Anderson February 27, 1998
- -------------------------------- Chief Financial Officer, --------------------------
Brian P. Anderson Principal Financial Officer
and Principal Accounting
Officer
</TABLE>
<TABLE>
<S> <C>
*Walter E. Boomer Director
*John W. Colloton Director
*Susan Crown Director
*Pei-yuan Chia Director
*Mary Johnston Evans Director
*Frank R. Frame Director
*Martha R. Ingram Director
*Arnold J. Levine Director
*Monroe E. Trout, M.D. Director
*Reed V. Tuckson, M.D. Director
*Fred L. Turner Director; and
*George C. St. Laurent, Jr. Director
</TABLE>
* /s/ Harry M. Jansen Kraemer, Jr.
- ------------------------------------- Date: February 27, 1998
By: Harry M. Jansen Kraemer, Jr. ---------------------------
(attorney-in-fact)
-5-
<PAGE>
THE PLAN Pursuant to the requirements of the Securities Act of 1933, the
trustee has duly caused this registration statement to be signed on its behalf
by the undersigned, thereunto duly authorized, in the City of Boston, State of
Massachusetts, on February 27, 1998.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ David B. Hill
-------------------------
Its: Vice President
------------------------
-6-
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<C> <S>
4.1 Summary Plan Description for the Baxter International Inc. and
Subsidiaries Incentive Investment Plan
15 Awareness of Price Waterhouse LLP
23 Consent of Price Waterhouse LLP
24 Powers of Attorney of officers/directors of the Registrant
</TABLE>
<PAGE>
EXHIBIT 4.1
-----------
Baxter
Your Incentive
Investment
Plan Benefits
This book constitutes part of a prospectus covering securities that have
been registered under the Securities Act of 1993.
-2-
<PAGE>
For non-English speaking employees
This book contains a summary in English of your plan rights and benefits under
the Baxter Incentive Investment Plan. If you have any questions regarding the
information in this book, please call the Baxter Benefits Line at 800-254-3780
for assistance.
================================================================================
This summary is intended to describe the Plan. It is based on official
documents such as plan documents and trust agreements. Even though this summary
is intended to be accurate, the official documents contain all of the specific
plan provisions. If there are any discrepancies between this summary and the
official plan documents, the official documents will govern. Nothing in this
book says or implies that your plan participation is a guarantee of your
continued employment with Baxter. Nor is it a guarantee that participation in
the Plan by an active employee, a totally and permanently disabled employee,
retiree, or other participant will exist or remain unchanged in future years.
Baxter has the right--and sole discretion--to suspend, amend, or terminate this
Plan at any time in any manner--to the extent permitted by law.
================================================================================
-i
<PAGE>
Introduction
The Baxter International Inc. and Subsidiaries Incentive Investment Plan (IIP)
offers a range of investment options to help you tailor your savings and
investment strategy. It's important to learn how these tools can help build
your retirement savings.
- --------------------------------------------------------------------------------
State Street Bank and Trust Company is the trustee and the recordkeeper for the
IIP. You can reach State Street Bank as well as the IIP's automated telephone
system through the Baxter Benefits Line (800-254-3780).
You can use the toll-free number to check your account balance, make investment
elections and request distributions. Each of these activities is described
later in this book. Once you receive a "PIN" (as described under Enrolling in
the Plan in the "Plan Participation" section), just call the Baxter Benefits
Line and listen closely to the prompts. Select prompt #2, then select prompt
#1, to access the IIP's automated telephone system. (If you do not have touch-
tone telephone, you may say your prompt selection instead.)
This book is a summary of the IIP -- in effect on July 1, 1997. It describes
each IIP investment option, and includes other important facts about investing
in the Plan. Please review this summary carefully before you make your
investment elections. If you would like more information about the investment
options, the "Where to Get Additional Information" section includes other
information you may request.
<PAGE>
Plan Participation
The Baxter IIP offers a way to build income for your retirement years. Through
the IIP, you can contribute up to 12% of your eligible pay on a pre-tax basis.
Baxter encourages you to save by matching your contributions, dollar for dollar,
up to 3% of your eligible pay.
- --------------------------------------------------------------------------------
Who is eligible
Generally, you are eligible to participate on the first day of the month after
you complete one full year of employment, provided you are:
. employed by, and on the U.S. payroll of, Baxter or a subsidiary, division,
or facility of Baxter which has adopted the Plan;
. not a member of a collective bargaining unit (unless participation is part
of the bargaining agreement); and
. not a leased employee who is employed by another company that provides
services to Baxter.
If you are hired on or after July 1, 1997, you become eligible to participate
and can enroll, make pre-tax contributions and receive Baxter matching
contributions as of the first day of the month following one full year of
employment. You may, however, make rollover contributions to the IIP before you
complete on full year of employment. (See Rollover contributions under the
"Contributions to Your Account" section, page 4, for details.)
If you are rehired
If you stop working for Baxter before you complete one full year of employment,
but are rehired within 12 months, you can begin making pre-tax contributions on
the first day of the month following one full year from your original hire date,
or on your rehire date (whichever is later).
-2
<PAGE>
If you stop working for Baxter before you complete on full year of employment,
but are rehired after 12 months, you can begin making pre-tax contributions on
the first day of the month following one full year of employment from your
rehire date.
Enrolling in the Plan
You receive a Personal Identification Number (PIN) from State Street Bank
approximately 30 days before you are eligible to enroll. You need to use your
PIN when you enroll.
To enroll in the IIP, call the Baxter Benefits Line (800-254-3780; prompt #2,
then prompt #1), and follow the IIP's automated telephone system's enrollment
instructions. When you enroll, you need to use the touch-tone buttons on your
telephone to:
. invest your money among the six IIP investment funds; and
. elect the percentage of your eligible pay you want to contribute on a pre-
tax basis.
-3
<PAGE>
Contributions to Your Account
You may make two type of contributions to the Plan:
. pre-tax contributions; and
. rollover contributions
- --------------------------------------------------------------------------------
Your pre-tax contributions are deducted from each of your paychecks. Baxter then
matches a portion of your pre-tax contributions--known as "Baxter matching
contributions"--and contributes these amounts to your account. You may also make
rollover contributions. Rollover contributions are amounts you may contribute to
your account from another retirement plan.
Your pre-tax contributions
You may contribute between 1% and 12% (in whole percentages) of your eligible
pay on a pre-tax basis. Because the IIP is a "401(k)" plan, your contributions
are allocated to the Plan before federal income taxes are withheld. In most
areas, this tax advantage also applies to state and local income taxes. Because
you contribute on a pre-tax basis, you reduce your current taxable income. As a
result, you also reduce your taxes, which means tax-deferred saving for you. To
see how pre-tax savings work, see "The Advantage of Pre-Tax Contributions"
section on page 6.
Your eligible pay* includes your:
. salary or other regular pay;
. commissions;
. overtime and shift differentials;
. paid absences, lead pay, call-in pay, jury duty pay and military pay;
. mileage pay for long haul truckers; and
. cash bonuses under the MICP (or any other bonus programs approved by the
Administrative Committee for this purpose).
-4-
<PAGE>
A calendar-year maximum established by the Internal Revenue Services (IRS)
applies to your pre-tax contributions. In 1997, the annual maximum is $9,500,
which may increase in future years to account for inflation. If you reach this
limit, the Plan automatically stops your contributions. Your contributions
automatically resume at the same percentage at the beginning of the next year,
unless you change your contributions election.
Your pre-tax contributions are based on your eligible pay./*/ In general, your
eligible pay under the Plan does not include special payments such as one-time
bonuses, educational reimbursements, expense allowances, severance pay,
disability income not paid by Baxter, imputed income, discretionary awards,
reimbursement from other benefit plans, workers' compensation payments, or
company contributions to the Flexible Benefits Plan. If you are a commissioned
sales representative and you are not reimbursed for expenses, the Plan uses 85%
of your eligible pay. If you would like to know whether a particular type of
compensation is included or excluded from eligible pay, refer to the legal plan
document.
For 1997, the IRS limits eligible pay to $160,000. If you reach this amount
during the year, the Plan automatically stops your contributions for the rest of
the year. The IRS indexes this dollar limit to account for inflation, and may
increase the limit in future years.
The law requires the IIP to place contribution limits on the amounts that
higher-paid employees can contribute to the Plan. This is to ensure that the
higher-paid employees do not contribute a substantially higher percentage of pay
than lower-paid employees. If you exceed this limit, you will be notified and
the Plan may return some of your contributions to you.
Changing or stopping your contributions
In general, if your eligibility ends (for example, you terminate or you transfer
to a division of Baxter that does not participate in the Plan), you may not make
any further contributions or receive Baxter matching contributions.
- -------------
/*/ For a complete definition of eligible pay, please refer to the IIP Plan
document. Please see the "Where to Get Additional Information" section to learn
how to request a copy.
-5-
<PAGE>
You may start, stop or change your pre-tax contributions once each calendar
month. To do so, contact the IIP's automated telephone system through the Baxter
Benefits Line (800-254-3780; prompt #2, then prompt #1). Your new pre-tax
contributions election takes effect the next available pay period.
Remember, the Plan bases your pre-tax contributions on your eligible pay. So,
any change in your eligible pay will automatically affect the amount you
contribute.
Rollover contributions
If you worked for another employer before coming to work for Baxter and
participated in that employer's qualified retirement plan, you may be eligible
to make a rollover contribution from that plan to the IIP. You may make a
rollover contribution at any time--even if you have not yet met the one-year
service requirement.
Within certain limits, you can transfer (or "roll over") the money you
accumulated under another qualified retirement plan to the IIP. If you
transferred your money from another plan to a rollover IRA before joining
Baxter, you can transfer the value of that IRA to the IIP. The rollover IRA,
however, must hold only the money taken from a qualified retirement plan; no
other contributions can be made to the rollover IRA.
----------------------------------------------------------------------
A "qualified retirement plan" is an employer plan that meets IRS
requirements. A rollover Individual Account (IRA) is an IRA that you
set up to receive money from an employer-sponsored qualified
retirement plan. With the IRA, you continue to shelter the money
you've saved under the other plan from taxes. You must keep your
rollover IRA (the IRA you've set up to receive money from an
employer-sponsored qualified retirement plan) completely separate
from any other IRA you might have.
----------------------------------------------------------------------
To make a rollover contribution, call the Baxter Benefits Line (800-254-3780;
prompt #2, then prompt #1), and request a Rollover Contribution Form. If you
have not met your one year of eligibility service requirement, you will need to
talk to a customer service representative to request a Rollover Contribution
Form. Complete the Form and return it to State Street Bank
-6-
<PAGE>
along with your rollover contribution check. State Street Bank must receive your
rollover check within 60 days of the date on the distribution check in order for
the rollover to qualify as a tax-free rollover. To process your request, State
Street Bank must receive the completed Form and your rollover contribution check
at the same time.
Once you terminate, you may not make a rollover contribution to the IIP. In
addition, you may not roll over any benefits your spouse earns under another
employer's plan. However, you may roll over any lump-sum distribution you may
receive from the Baxter International Inc. and Subsidiaries Pension Plan.
----------------------------------------------------------------------
Your Baxter matching contributions for the year equal the amount of
pre-tax contributions you make for the year, up to a maximum of 3%
of your eligible pay. Unlike many other plans, you don't have to
wait until the end of the year to be credited with Baxter matching
contributions. The Baxter matching contributions are credited at the
end of each pay period.
----------------------------------------------------------------------
Baxter matching contributions
Each pay period, Baxter matches your pre-tax contributions--up to your first 3%
of eligible pay--on a dollar-for-dollar basis. Even if your contributions stop
because you reach the annual contribution limit ($9,500 in 1997). you continue
to receive Baxter matching contributions, as long as you continue to participate
in the Plan. Baxter matching contributions continue until you reach the maximum
eligible pay limit ($160,000 in 1997).
You receive matching contributions based on your pre-tax contributions only. The
company does not match your rollover contributions.
Accounts for prior plans with after-tax or profit-sharing contributions
Certain plans that were in effect before the IIP permitted employees to make
after-tax contributions, or provided for employers profit-sharing contributions.
For example, if you were employed by Baxter Travenol or American Hospital Supply
before their merger, you may have participated in the Baxter Profit Sharing and
Thrift Savings Plan or the American Profit Sharing
-7-
<PAGE>
Plan. If this was the case, a special profit-sharing account and/or after-tax
contributions account will be maintained for you under the IIP.
Similarly, if you were employed by a company that was acquired by Baxter, the
acquired company maintained a defined contribution retirement plan with profit-
sharing and/or after-tax contributions for its employees, and the plan was
merged into the IIP a special profit-sharing account and/or after-tax
contributions account will be maintained for you under the IIP.
-8-
<PAGE>
THE ADVANTAGE OF PRE-TAX CONTRIBUTIONS
When you enroll in the IIP, you direct Baxter to treat a certain percentage of
your eligible pay as pre-tax contributions. In addition, you direct Baxter to
deposit your pre-tax contributions to your account.
- --------------------------------------------------------------------------------
Since the dollars you contribute on a pre-tax basis are not included in your
taxable pay, you defer paying income taxes on these amounts until you receive a
payment from the Plan. Because you pay lower taxes, you have more money to save,
use as you wish or contribute to the IIP. The example below shows how this
works.
An example
To show the effect of pre-tax savings through the IIP, lets assume you earn
$30,000 per year. Let's also assume you are married, you file a joint federal
income tax return, you have two dependent children, and you contribute 6% of
your pay on a pre-tax basis.
In this example, you save $1,800 whether you save on a pre-tax or after-tax
basis. But, by making pre-tax contributions to the Plan, your spendable income
increases by $270. In addition, you are eligible for Baxter matching
contributions--in this case, an additional 3% of pay (or $900). You earn
ownership rights to Baxter matching contributions through vesting. For a
definition of "vesting," see the "Service and Vesting" section of this book.
-9-
<PAGE>
This example is based on 1997 federal income tax rates. However, your personal
savings on current taxes depends on your own tax status and financial situation.
<TABLE>
<CAPTION>
=========================================================================================
Pre-Tax Savings After-Tax Savings
Through the IIP Through Savings Account
-----------------------------------------------------------------------------------------
<S> <C> <C>
Annual Pay $30,000 $30,000
-----------------------------------------------------------------------------------------
Contributions before taxes -1,800 -0
-----------------------------------------------------------------------------------------
Taxable income $28,200 $30,000
-----------------------------------------------------------------------------------------
Federal income taxes -1,605 -1,875
-----------------------------------------------------------------------------------------
Contribution after taxes -0 -1,800
-----------------------------------------------------------------------------------------
Pay after federal income taxes $26,595 $26,325
-----------------------------------------------------------------------------------------
Additional take-home pay $270
------------------------------------------------------------------------------------------
</TABLE>
-10-
<PAGE>
INVESTMENT OPTIONS
You can invest your pre-tax contributions, rollover contributions (if any) and
Baxter matching contributions in one or more of the IIP's available investment
funds. You may divide your contributions among the six funds in any whole
percentage increments, as long as they add up to 100%. (To learn how to allocate
your contributions among the various funds, see Investment election examples,
page 10, later in this section.)
- --------------------------------------------------------------------------------
How to invest in the funds
To invest in the funds, first indicate how you want to invest your pre-tax
contributions. Then, indicate how you want to invest your Baxter matching
contributions. If you make a rollover contribution before you are eligible to
make pre-tax contributions to the IIP, you need to make a separate investment
election for these amounts.
You also may change the way you invest your existing IIP account balance among
the available funds. This is called a "reallocation."
And, you can make this change without affecting how you invest your future
contributions. For example, you may want to invest your existing account balance
in relatively lower-risk funds while you invest your future contributions in
higher-risk funds.
All investments involve some degree of risk. Several factors determine the risk
level, including:
. changes in interest rates;
. the level of inflation;
. fluctuations in the stock market; and
. the earnings of a company.
As the level of risk increases, you can generally expect a higher rate of
return. However, the value of your account will fluctuate depending on the
options you select and the contributions
-11
<PAGE>
you and Baxter make. You should choose the level of risk and return that best
suits your investment needs and goals.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------
<S> <C>
Relative Investment Risk
Other Investment Options IIP Funds
- --------------------------------------------------------------------------------
Lower Risk
- --------------------------------------------------------------------------------
Money Market Funds
Stable Income Fund
Bonds
Composite Fund
S&P 500 Equity Index Fund
Larger Company Stocks General Equity Fund
International Stock International EAFE
Equity Index Fund
Small Company Stocks
Single Company Stocks Baxter Common Stock Fund
Allegiance Common Stock Fund
- --------------------------------------------------------------------------------
Higher Risk
</TABLE>
The IIP is covered by a special provision of federal law-Section 404(c) of the
Employee Retirement Income Security Act (ERISA) and its related Department of
Labor regulations. Under this provision, Baxter provides you with detailed
information about the IIP investment options so that you can make informed
decisions about how to invest your money. Because Baxter provides this
information, the IIP fiduciaries (the people responsible for running the Plan)
are not liable for any losses that are the direct and necessary result of your
or your beneficiary's investment elections.
Except for the Baxter Common Stock Fund and the Allegiance Common Stock Fund,
the funds are not publicly traded, although individual stocks within the funds
may be publicly traded.
-12-
<PAGE>
Stable Income Fund
This fund is designed to offer stable earnings from investments in interest-
paying securities. A portion of these securities consists of investment
contracts purchased from insurance companies. Generally, the interest rates on
investment contracts are set at a fixed rate for the life of the contract.
A majority of the fund assets are invested in fixed income securities, such as
corporate bonds and U.S. Treasury notes. Currently approximately 80% of the
fund is invested in these actively managed fixed income securities.
ACTIVELY MANAGED (General Equity Fund and Composite Fund)
Use various strategies to identify companies believed to offer above-average
expected returns. An actively managed fund's performance depends on the
security selection, and its return may vary relative to the comparable index.
- -------------------------------------------------------------------------------
Composite Fund
This actively managed fund offers you an investment portfolio of stocks and
bonds. The bonds earn a fixed rate of interest. The rest of the portfolio
consists of stocks. By including bonds, the fund reduces some of the risk (and
some of the possible rewards) associated with a pure stock fund.
At the present time, approximately 20% of the fund is invested in government and
corporate bonds. Even though the fund's mix of investments will vary in
response to changing market conditions, the overall goal is to maintain a mix of
about 65% stocks and 35% bonds.
S&P 500 Equity Index Fund
The S&P 500 Equity Index Fund is a passively managed fund that seeks to reflect
the performance of the Standard & Poor's 500 Index--a widely recognized measure
of large-company stock performance. The Standard & Poor's 500 Index is composed
of 500 stocks traded on the NYSE, AMEX and Nasdaq National Market, and is
designed to be a performance
-13
<PAGE>
benchmark for the U.S. stock markets. Since the stock market can be volatile,
this fund is primarily designed for the longer-term investor.
General Equity Fund
This actively managed fund invests in the stocks of U.S. companies that the
investment managers determine to have good value and growth potential. If the
prices of these stocks increase, the General Equity Fund can realize a high rate
of return on its investments. The fund also profits from dividends on stocks.
This fund is primarily designed for the longer-term investor.
International EAFE Equity Index Fund
In this global economy, many investors know that opportunity exists in markets
outside the U.S. This passively managed international fund invests in equities
of large companies in Europe, Australia and the Far East, known as "EAFE"
countries. The Morgan Stanley Capital International (MSCI) Europe, Australia,
Far East (EAFE) Index is made up of approximately 1,100 stocks representing a
substantial portion of the market capitalization of those markets. This
international fund seeks to reflect the performance of the MSCI EAFE index.
With all assets invested in international stocks, the risk to your principal is
high to very high. Fluctuations in currency exchange rates also contribute to
this fund's risk level. The potential for long-term returns also is high.
Baxter Common Stock Fund
This fund invests primarily in Baxter common stock. The value of this fund
depends upon the changes in the stock's price as well as dividend income. Your
investment has a potential for a high return, but you must consider the
uncertainly of the market. Although the fund holds some cash, it consists
primarily of a single stock asset. This means the fund will move to reflect the
price of the stock.
-14
<PAGE>
- --------------------------------------------------------------------------------
PASSIVELY MANAGED (S&P 500 Equity Index Fund and International EAFE Equity Index
Fund)
Also called indexing. These managers hold a portfolio of securities that matches
the performance of a market index. The most popular index fund is the S&P 500,
which includes 500 of the largest U.S. companies.
- --------------------------------------------------------------------------------
Allegiance Common Stock Fund
This fund is invested primarily in common stock of Allegiance Corporation, which
was "spun off" from Baxter effective September 30, 1996. Accordingly, a portion
of your IIP account was allocated to this fund only if a portion of your account
was invested in the Baxter Common Stock Fund as of that date. Although the fund
holds some cash, it consists primarily of a single stock asset. This means the
fund will move to reflect the price of the stock.
Unlike the other six investment funds described above, you may not transfer any
of your existing account balances into the Allegiance Common Stock Fund, and you
may not elect that future contributions be invested in the fund. You may,
however, transfer amounts out of this fund into any of the other investment
funds.
Changing your investment elections
You may change your investment choices as often as once each calendar month on
any day of the month. Except for the special restrictions that apply to the
Allegiance Common Stock Fund, the Plan does not restrict your investment
choices, nor does it penalize or adjust the value of your account if you want to
change Your investment elections. If you want to change your investment
elections, here's what you can do:
. You may make a separate investment election for your future employee
contributions and a separate election for your future employer
contributions once each calendar month.
. You may reallocate your accumulated employee contributions (pre-tax, after-
tax and rollover contributions) and your accumulated employer contributions
(matching and profit-sharing contributions) once each calendar month.
-15
<PAGE>
To make investment changes, call the IIP's automated telephone system through
the Baxter Benefits Line (800-254-3780; prompt #2, then prompt #1). Any
investment elections you make after 3:00 p.m. (Central Time) are applied the
following business day.
How $1,000 would have grow in the IIP
The following table shows how a $1,000 investment in each of the IIP investment
funds would have grown if you had invested the $1,000 one, three or five years
ago.*
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
1 Year 3 Years 5 Years
Ago Ago Ago
- -------------------------------------------------------------------------------
<S> <C> <C> <C>
Stable Income Fund $1,064 $1,215 $1,403
- -------------------------------------------------------------------------------
Composite Fund $1,208 $1,541 $1,994
- -------------------------------------------------------------------------------
S&P 500 Equity Index Fund $1,226 * *
- -------------------------------------------------------------------------------
General Equity Fund $1,263 $1,651 $2,202
- -------------------------------------------------------------------------------
International EAFE Equity Index Fund $1,050 * *
- -------------------------------------------------------------------------------
Baxter Common Stock Fund $992** $1,825 $1,246
- -------------------------------------------------------------------------------
</TABLE>
*All estimates are approximate amounts and are based on fund performance for the
period ending December 31, 1996. Long-term data is not available for the S&P
500 Equity Index Fund or the International EAFE Equity Index Fund.
**This does not include the dividend to the Allegiance Common Stock Fund on
October 1, 1996.
Investment election examples
You can divide your money among the IIP's funds in any whole percentage
increments, as long as they add up to 100%. Here are just two possibilities:
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------
Example 1 Example 2
- --------------------------------------------------------------------------------
<S> <C> <C>
Stable Income Fund 20% 15%
- --------------------------------------------------------------------------------
Composite Fund 0% 0%
- --------------------------------------------------------------------------------
S&P 500 Equity Index Fund 45% 70%
- --------------------------------------------------------------------------------
General Equity Fund 30% 0%
- --------------------------------------------------------------------------------
International EAFE Equity Index Fund 2% 0%
- --------------------------------------------------------------------------------
Baxter Common Stock Fund 3% 15%
</TABLE>
-16
<PAGE>
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
Example 1 Example 2
- ---------------------------------------------------------------
<S> <C> <C>
Total 100% 100%
- ---------------------------------------------------------------
</TABLE>
Investment elections and reallocation of current account balances
Take a few minutes to fill out the work sheet on page 12 and have it handy
whenever you call the Baxter Benefits Line to make your IIP investment and/or
reallocation elections. When you call, you may elect the percentage of your
eligible pay you want to contribute to the IIP and you may make separate
investment elections as follows:
. Investment elections for future contributions: You may elect how to
invest your:
. future pre-tax and rollover contributions;
and
. employer's future matching contributions.
. Reallocation of existing accounts balances: You may elect how to
reallocate your existing IIP account balance attributable to your:
. pre-tax, after-tax, and rollover contribution amounts; and
. employer matching and profit-sharing contributions.
If you are enrolling for the first time, you must elect your investment choices
before you can elect the percentage you wish to contribute. Also note that if
you do not already have an account balance, reallocation of current funds will
not apply to you.
- --------------------------------------------------------------------------------
If you want to transfer amounts out of the Allegiance Common Stock Fund, you
must make this election separately through the IIP's automated telephone system.
You cannot transfer amounts out of the Allegiance Common Stock Fund and also
separately reallocate existing account balances among the other investment funds
during any one month.
- --------------------------------------------------------------------------------
-17
<PAGE>
Your Investment Election and Reallocation Work Sheet
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Investment Option Future Future Current Current
Employee Employer Employee Employer
Contributions Contributions Contribution Contribution
Account Account
Balance Balance
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Stable Income Fund _______% _______% _______% _______%
- ---------------------------------------------------------------------------------------------------------------
Composite Fund _______% _______% _______% _______%
- ----------------------------------------------------------------------------------------------------------------
S&P 500 Equity Index Fund _______% _______% _______% _______%
- ----------------------------------------------------------------------------------------------------------------
General Equity Fund _______% _______% _______% _______%
- ----------------------------------------------------------------------------------------------------------------
International EAFE Equity _______% _______% _______% _______%
Index Fund
- ----------------------------------------------------------------------------------------------------------------
Baxter Common Stock Fund _______% _______% _______% _______%
- ----------------------------------------------------------------------------------------------------------------
Total 100% 100% 100% 100%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
-18-
<PAGE>
INVESTMENT FEES AND EXPENSES
The Plan accounts for operating expenses, and handles voting and tender rights
in a certain manner, as described below. In addition, all transactions made on
your behalf remain confidential.
- --------------------------------------------------------------------------------
-----------------------------------------------------------------------
The Plan does not charge any transaction fees, commissions, loads,
deferred sales charges, or redemption or exchange fees to your account.
-----------------------------------------------------------------------
Annual operating expenses
The Plan deducts operating expenses from the assets of each investment option.
Operating expenses include fees paid to State Street Bank and Trust Company for
plan recordkeeping, check processing and accounting services. Operating expenses
also include fees paid to each fund manager for investment management services,
and other expenses associated with operating the Plan. This deduction produces a
minor reduction in each option's overall returns. For information on each
investment option's annual operating expenses, see the IIP "Investment Options
Booklet."
Voting and tender rights
Although you may invest your IIP savings in stocks or other securities that
provide voting and tender rights to owners, these rights are not passed through
to you (except in the case of the Baxter Common Stock Fund). The fund managers
retain and exercise all voting, tender and other similar rights regarding
investments in the Plan.
If you invest in the Baxter Common Stock Fund, you have the opportunity to
exercise voting and tender rights. On occasion, you may receive proxy
materials--when these are sent to all Baxter shareholders--and you may be asked
to vote on selected issues. State Street Bank also is responsible for
distributing proxy and other materials generally provided to Baxter
shareholders. You generally return all voting directions to State Street Bank
(or its agents) for aggregation and action.
-19-
<PAGE>
State Street Bank retains voting and tendering rights with respect to the
Allegiance Common Stock Fund.
Confidentiality of investment directions
State Street Bank and Trust Company administers your investment directions for
all IIP funds, including the Baxter Common Stock Fund and the Allegiance Common
Stock Fund. State Street Bank is able to implement all purchases and sales in
the name of the IIP and does not identify you personally. As a result, your
transactions and information related to your purchase, holding, voting and
tendering of Baxter stock remains confidential.
The Investment Committee, appointed by the Finance Committee of Baxter's Board
of Directors, is responsible for monitoring compliance with the procedures
relating to the confidentiality of this information. You may contact the
Investment Committee at the following address:
Investment Committee
c/o Employee Trusts Department
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
847-948-2000
-20-
<PAGE>
WHERE TO GET ADDITIONAL INFORMATION
You may need additional information about the Plan. Here's where to go to get
the information you need.
- --------------------------------------------------------------------------------
Financial statements
You may obtain prospectuses, financial statements, and other reports relating to
an investment fund to the extent that such reports are provided to the Plan.
Currently, the IIP funds are not required to prepare a prospectus.
Underlying assets
You may receive a list of assets held by each investment fund's portfolio, as
well as the proportion of each asset to the portfolio's total assets.
Investment performance
You may get each fund's past and current investment performance. This
information is available by calling the IIP's automated telephone system through
the Baxter Benefits Line (800-254-3780; prompt #2; then prompt #1). Once you
reach the IIP's automated telephone system, enter your Social Security number
and PIN. To access fund performance information, press #1, followed by #2.
Account value
You can find out the value of each investment fund as it relates to your
personalized account. In addition, you can get the value of your pre-tax
contributions, rollover contributions, and Baxter matching contributions, which
the Plan accounts for separately within your account.
Your account is valued each business day based on the fair market value of the
trust fund at the end of each business day. You receive a quarterly statement
that includes the status of your account, your contributions, contributions made
by Baxter, your investment gains or losses, and your fund balances.
-21-
<PAGE>
----------------------------------------------------
You can request information from State Street
Bank at no charge by writing to:
State Street Bank and Trust Company
c/o Baxter IIP Administration
P.O. Box 1389
Boston, Massachusetts 02104-1389
Or you can request information by calling the IIP's
automated telephone system through the Baxter
Benefits Line (800-254-3780; prompt #2, then
prompt #1).
----------------------------------------------------
-22-
<PAGE>
SERVICE AND VESTING
In general, "service" means the length of time you work for Baxter. The Plan,
however, uses "vesting service" to determine your ownership rights to Baxter
matching contributions. (You are always 100% vested in your pre-tax and rollover
contributions to the IIP as well as any amounts credited to a special after-tax
or profit-sharing account on your behalf.) The Plan counts vesting based on
"hours of service."
- --------------------------------------------------------------------------------
Hours of service
If you are a regular full-time employee (which means you are regularly scheduled
to work at least 35 hours per week), you automatically earn 45 hours of service
for each week that you work at Baxter, provided you work at least one hour
during that week. Otherwise, you earn hours of service based on the actual
hours that you work during a plan year. Additionally, you earn hours of service
for hours that you are away from work, such as:
. vacations and holidays; and
. jury duty.
You also are credited with hours for which back pay is awarded.
Hours of service are also credited for absences due to the following:
. illness and disability;
. layoff;
. authorized leave of absence (such as family or medical leave, excluding any
absence from work under Baxter's "intermittent family leave" policy); and
. military duty (as long as you are reemployed under laws governing veterans'
reemployment rights).
-23-
<PAGE>
However, you do not receive more than 501 hours of service for any single period
away from your job (except for military service). If you are away from your job
for a single period of time for any one of the above reasons and your time away
extends into the next plan year, you also could be credited with up to 501
additional hours in that next plan year.
Hours of service do not include hours for which you are paid under workers'
compensation, unemployment compensation, or state disability insurance laws.
Vesting
The process of earning ownership rights to your benefit is called "vesting."
Once you are fully vested, you have a right to all Baxter matching contributions
allocated to your account (adjusted for any investment gains or losses).
<TABLE>
<CAPTION>
---------------------------------------------------------------------
After You Your Vesting in Baxter
Earn: Matching Contribution Is:
---------------------------------------------------------------------
<S> <C>
1 years of service 20%
---------------------------------------------------------------------
2 years of service 40%
---------------------------------------------------------------------
3 years of service 60%
---------------------------------------------------------------------
4 years of service 80%
---------------------------------------------------------------------
5 years of service 100%
---------------------------------------------------------------------
</TABLE>
You earn ownership rights to Baxter matching contributions. You own 20% of your
Baxter matching contributions after your first year of service. Your ownership
increases at the rate of 20% per year with each year of service you have with
Baxter, as shown in the following vesting schedule. After five years of
service, you own 100% of your Baxter matching contributions.
You have a year of service for vesting purposes if you earn at least 1,000 hours
of service during a plan year. You are credited with a year of service at the
end of the pay period during which you complete 1,000 hours of service.
You also are fully vested no matter how much service you have with Baxter if
you:
. terminate employment after age 55;
-24-
<PAGE>
. discontinue working due to a total and permanent disability (as determined
by the federal Social Security Administration) prior to termination of
employment with Baxter; or
. terminate due to death.
Forfeitures
If you terminate before you are fully vested, you are entitled only to your
vested Baxter matching contributions (adjusted for any investment gains or
losses). If you are not 100% vested in your Baxter matching contributions, you
forfeit the non-vested portion of this amount. The Plan uses forfeitures to
offset Baxter's future matching contributions. In other words, forfeitures
become part of Baxter's future matching contributions allocated to other
employees' accounts.
Under some circumstances, your forfeited company matching contributions may be
restored if you return to employment with Baxter. See if you return to work
later in this section.
Break in service
Generally, if you are not actively employed, you stop earning service. This is
called a "break in service." If you earn fewer than 501 hours of service in any
plan year, you have a one-year break in service.
If you have a break in service, you may lose the service you earned under the
Plan. But if you return to work for Baxter, any vesting earned before the
break will be restored if you were partially or fully vested under the Plan at
the time of the break. In other cases, you earn vesting service as a new
employee from the date you are reemployed.
To avoid a one-year break in service, you are credited with hours of service if
you are still employed by Baxter but are away from active work due to:
. your pregnancy;
. the birth of your son or daughter;
. the placement of a child with you for adoption or foster care;
-25-
<PAGE>
. caring for your child immediately following birth or placement for adoption
or foster care; or
. caring for your son, daughter, spouse, parent, or legal dependent who has a
certified serious health condition.
You are credited with up to 501 hours of service for such an absence.
If you return to work
----------------------------------------------------------
When you are rehired, State Street Bank will send your
IIP PIN to your home. Once you receive your PIN, call the
Baxter Benefits Line and use the IIP's automated telephone
system to reenroll. You can begin making contributions to
the IIP as of your rehire date.
----------------------------------------------------------
If you return to work at Baxter, you may be credited with your prior vesting
service. The Plan uses your total vesting percentage to determine your
ownership rights to future matching contributions made on your behalf. In
addition, if you begin work before you have five consecutive one-year breaks in
service, any Baxter matching contributions you may have forfeited will be
restored if you repay the vested portion of your Baxter matching contributions
you received from your account. You must repay the previously distributed
Baxter matching contributions within 60 months of your reemployment.
If you are rehired within 30 days of your termination date, your pre-tax
contributions automatically begin at the level in effect at your termination
(unless you contact the IIP's automated telephone system through the Baxter
Benefits Line, using the PIN you had prior to termination, and change your pre-
tax contributions election).
In addition, certain employees who return to work after a period of military
service are entitled to "make-up" pay deferrals. If you recently returned from
military service, please contact the Plan Administrator for more information.
-26-
<PAGE>
If you transfer
If you transfer to an employee group or a facility that is a Baxter affiliate
but that is not participating in the Plan, you continue to earn eligibility and
vesting service. However, you may not make pre-tax contributions under the IIP
(nor do you receive Baxter matching contributions) while you are employed with
the non-participating employee group or facility.
If you are not participating in the Plan at the time of the transfer because you
have not yet completed the eligibility requirement, you still become eligible to
participate after you complete the eligibility requirement. However, you can
begin actively participating in the Plan only if and when you transfer back to a
participating employee group or facility.
If you transfer from an employee group or facility that is not participating in
the Plan, the Plan counts all your years of service with the non-participating
employee group or facility for purposes of determining your eligibility and
vesting service.
You may not begin to receive your IIP benefit until you terminate service from
all Baxter employer groups (including non-participating and foreign employer
groups). For more information regarding participating and non-participating
employers, please refer to the IIP plan document, or contact the Baxter Employee
Benefits Center (BEBC) through the Baxter Benefits Line.
-27
<PAGE>
LOANS
The IIP is designed to be a long-term savings vehicle. However, Baxter
recognizes that there may be instances when you need temporary use of some of
the money in your account.
-----------------------------------------------------------------------
The IIP has a loan feature that enables you to borrow a portion of your
account balance. IIP loans are generally available for any purpose.
-----------------------------------------------------------------------
When you borrow from the IIP, you essentially borrow from yourself at a fixed
interest rate. The interest rate is equal to 1% over the prime rate in effect
on the last day of the calendar month before the day you request your loan.
(The prime rate is the interest rate charged by financial institutions for loans
to business borrowers.) For example, if the prime rate in effect is 9%, the
resulting loan interest rate would be 10%. The actual rate depends on the rate
in effect when you request your loan.
Loan amounts
If you want to request a loan, it must be for at least $500 and cannot be more
than 50% of your vested account balance (up to a maximum loan amount of
$50,000). The Plan reduces the $50,000 maximum by the highest outstanding
balance of all loans to you, if any, during the last 12 months. You may have up
to two outstanding loans at any one time. The Plan charges an application fee
against your account balance for each loan that you request - even if your loan
is not approved. Currently, the fee is $50 and is subject to change.
How to apply for a loan
To apply for an IIP loan, call the IIP's automated telephone system through the
Baxter Benefits Line (800-254-3780; prompt #2, then prompt #1) and follow the
voice instructions. You can apply for two types of loans:
. non-residential loans (for example, tuition, home renovation, etc.), which
may be taken for up to five years; and
-28-
<PAGE>
. residential loans (for the purchase of your primary residence),
which may be taken for up to ten years.
If you request a non-residential loan, you receive a loan check and loan
agreement approximately five days after the Plan processes your loan. By
endorsing the check, you agree to the terms and conditions of the loan as
described in the loan agreement.
If you request a residential loan, you must provide documentation verifying the
purchase. Once you call the IIP's automated telephone system through the Baxter
Benefits Line (800-254-3780; prompt #2, then prompt #1), State Street Bank sends
you a loan agreement and informs you of the type of supporting documentation
needed. (A residential loan application is valid for only 30 days.) State Street
Bank reviews your loan request within approximately five days after receipt of
your application, and if your loan is approved, you receive a loan check in the
mail. By endorsing the check, you agree to the terms and conditions of the loan
as described in the loan agreement. If for some reason your application is
denied, State Street Bank notifies you of the reason.
How a loan affects your account
Because the Plan subtracts the loan amount from your IIP account balance, the
amounts you have invested in the various IIP funds are reduced accordingly on a
pro-rata basis. However, the Plan first takes your loan amounts from your
employer contribution accounts (first from your profit-sharing account and then
from the vested portion of your employer matching account). Then, the Plan takes
your loan amounts from your employee contribution accounts (first from your
rollover account, then from your pre-tax account, and then from your after-tax
account, if any).
Repaying the loan
You repay the loan principal plus interest through automatic, after-tax payroll
deductions. You can repay the loan over a period of up to five years. However,
if you use your loan to purchase your primary residence, you may repay the loan
over a period of up to ten years. The Plan credits loan repayments to your
account on a pro-rata basis based on your investment elections in effect at the
time of each loan repayment. Repayments are credited first to your employer
-29
<PAGE>
contribution accounts, and then to your employee contribution accounts, in the
same order explained above. You may, however, repay the entire outstanding loan
balance at any time with no prepayment penalty. It's important to note that
federal law prohibits the deduction of interest payments on this type of loan on
individual tax returns.
If you terminate
If you terminate employment, you must repay any outstanding loan balances by the
expiration date of the original term of the loan, or three months after your
termination date (whichever is earlier). Otherwise, the Plan considers your
outstanding loan balance "in default" and treats your loan as a taxable
distribution from your account. Shortly after you terminate, the Plan notifies
you of these repayment requirements.
If you are on a leave of absence
If you are on an unpaid authorized leave of absence from Baxter, contact the
Baxter Benefits Line (800-254-3780; prompt #2, then prompt #1) and a customer
service representative can inform you of how to continue making loan repayments.
If you do not make a payment during your absence, the Plan considers any amounts
due on your loan "in arrears." Once you return to work, to the extent permitted
by law, these amounts are deducted in their entirety from your first paycheck.
If the first paycheck is insufficient to pay these amounts, the amounts will be
deducted from your subsequent paychecks until all loan repayments have been
made. If you do not return to work and your employment with Baxter ends, you
must repay your loan as described above in order to avoid a loan default.
-30
<PAGE>
WITHDRAWALS
The Plan's objective is to provide you with supplemental retirement income.
Therefore, Baxter encourages you to leave your account invested for your future
benefit. However, you may need access to a portion of your account balance when
certain situations arise. The Plan allows for the following types of
withdrawals, and limits all withdrawals to one per calendar month. In addition,
even though the Plan allows withdrawals, the IRS applies certain penalties to
early withdrawals. You may wish to consult a tax advisor before you request a
withdrawal.
- --------------------------------------------------------------------------------
Withdrawal of after-tax contributions
If you made any after-tax contributions, you may withdraw part or all of these
funds (including earnings) at any time. You do not need to prove hardship to
withdraw these funds. In addition, the Plan does not suspend your current pre-
tax contributions if you take an after-tax withdrawal. If you made after-tax
contributions prior to 1987, your withdrawal from your after-tax account will be
tax-free to you up to the amount of these pre-1987 contributions. If you
withdraw any after-tax contributions made after 1986, federal tax law requires
that your withdrawal of post-1986 after-tax contributions be made
proportionately from contributions and taxable earnings.
Withdrawal of rollover contributions
You also may withdraw part or all of the total value of your rollover
contributions and earnings at any time and for any reason. If you take a
withdrawal from your rollover contributions account, you do not incur a
suspension of your current contributions.
Withdrawal of Baxter matching and profit-sharing contributions
If you are 100% vested and have five years of active plan participation (which
means five years have elapsed since you began making pre-tax contributions), you
may withdraw part or all of your Baxter matching and profit-sharing
contributions and earnings. If you make this type of withdrawal, you cannot make
any pre-tax contributions for six months after your withdrawal. In addition, you
do not receive Baxter matching contributions during this six-month period. Your
-31
<PAGE>
pre-tax contributions automatically resume after the suspension period at the
same rate you were contributing before your suspension (unless you contact the
Baxter Benefits Line 800-254-3780; prompt #2, then prompt #1 and change your
pre-tax contributions election).
Age 59 1/2 withdrawal
If you are over age 59 1/2 and 100% vested, you may withdraw your entire account
balance, once per calendar year. The Plan does not suspend your right to make
future contributions, so you can continue your pre-tax contributions.
Hardship withdrawal of pre-tax contributions
Under certain conditions, you may be eligible for a financial hardship
withdrawal of your pre-tax contributions. The IRS requires you to meet specific
financial hardship conditions to receive this type of withdrawal. A hardship
withdrawal may be made for any one of these reasons:
. purchase of your primary residence;
. education expenses for you or your children
. uninsured medical expenses;
. to prevent eviction from or foreclosure on your primary residence; or
. to pay tax liability incurred as a result of the withdrawal.
You cannot withdraw more than the amount you need to satisfy your financial
need, and you must exhaust all other available funds (for example, IIP loans and
all other available IIP withdrawals). Your withdrawal will be distributed from
your pre-tax contributions and pre-January 1, 1989 earnings, if available.
(Under current tax law, you cannot withdraw earnings on your pre-tax
contributions credited to your account on or after January 1, 1989.)
How a hardship withdrawal affects your account
The Plan suspends your pre-tax contributions for 12 months after a hardship
withdrawal, and it may limit the amount you can contribute on a pre-tax basis
during the year the suspension ends.
-32-
<PAGE>
Your pre-tax contributions automatically begin after the 12-month period at the
rate you were contributing before the suspension (unless you contact the Baxter
Benefits Line 800-254-3780; prompt #2, then prompt #1 and change your pre-tax
contributions election).
During the year in which the suspension ends, the Plan reduces the legal limit
on your pre-tax contributions by the amount of contributions you made to the IIP
during the year in which you took your hardship withdrawal. To show how this
works, let's assume that as of May 31, 1996, you contributed $4,000 during 1996.
Let's also assume that you took a hardship withdrawal at that time. After the
12-month suspension (May 31, 1997), you can begin making pre-tax contributions.
However, instead of the full $9,500 (see Your pre-tax contributions in the
"Contributions to Your Account" section), you can contribute only $5,500 to the
IIP during the remainder of 1997.
Daily valuation of withdrawals
The Plan bases all withdrawals on the valuation of your account at the end of
the business day on which the Plan processes and/or approves your application.
Processing of withdrawals
To request a withdrawal, contact the IIP's automated telephone system through
the Baxter Benefits Line (800-254-3780; prompt #2, then prompt #1). Once you
request a withdrawal, State Street Bank sends you a confirmation of your request
and forwards a federally mandated Tax Information Notice to you. Seven days
after your withdrawal request, and after you review the Tax Information Notice,
you must call the IIP's automated telephone system again and instruct that your
check be issued. Your check cannot be issued before the end of this seven-day
period, and once the check is issued, you cannot return the check or request
that the funds be returned to the IIP. Your withdrawal request is valid for
only 30 days.
-33-
<PAGE>
LOANS VS. WITHDRAWALS
If you are considering obtaining funds from the IIP, keep in mind that some
basic differences exist between the loan and withdrawal provisions.
- --------------------------------------------------------------------------------
The chart below summarizes some of the basic differences between the loan and
withdrawal provisions.
<TABLE>
<CAPTION>
======================================================================================================================
Loans Withdrawals
<S> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------
Amount Available 50% of total vested account balance For certain withdrawals, Plan limits amounts
available to certain accounts and funds
- ----------------------------------------------------------------------------------------------------------------------
Length of Service Plan does not require you to participate for For certain withdrawals, Plan requires you
any specific length of time before you can to meet a minimum age requirement or
request a loan participate for a specified number of years
- ----------------------------------------------------------------------------------------------------------------------
Suspension of No suspension applies For certain withdrawals, Plan suspends your
Contributions pre-tax contributions
- ----------------------------------------------------------------------------------------------------------------------
Repayment You repay your loan (plus interest) No repayment
- ----------------------------------------------------------------------------------------------------------------------
Tax Penalties No income tax or excise tax liabilities For certain withdrawals and depending on
(provided you meet the terms of the loan your age, certain income and excise taxes
agreement) apply
- ----------------------------------------------------------------------------------------------------------------------
</TABLE>
Neither Baxter, the Administrative Committee, the Investment Committee, the
trustee, any employee or representative of Baxter, nor State Street Bank is
responsible for advising you on the tax effects of your payments, withdrawals,
or loans. Taxes are a complex subject and tax laws constantly change. Therefore,
you may want to consult a tax advisor before you name a beneficiary or before
you request a payment, withdrawal, or loan from the Plan.
-34-
<PAGE>
PAYMENTS FROM THE PLAN
When you receive your account and how you receive your account may be as
important to you as the amount you receive.
- --------------------------------------------------------------------------------
When your account is paid
The Plan's primary objective is to help you accumulate retirement income. So,
generally, you do not receive the funds in your account until you retire (unless
your employment with Baxter terminates). If you die before you receive your
account balance, your beneficiary--the person or persons you name to receive
your account in case of your death receives your account balance.
Amount you will receive
Regardless of when or why you terminate, you are always entitled to the
following (adjusted for investment gains or losses):
. your contributions to the Plan (your pre-tax and any rollover
contributions);
. your vested Baxter matching contributions; and
. any prior after-tax contributions or profit-sharing contributions.
How your account is paid
When you terminate, you may choose how you want to receive your vested account
balance. You have five payment options:
. lump-sum payment in cash;
. lump-sum payment in cash and actual shares of stock (for amounts invested
in the Baxter Common Stock Fund);
. installments paid monthly, quarterly, semi-annually or annually;
-35-
<PAGE>
. a life annuity; or
. a joint and survivor annuity.
If you elect installment payments, you continue to have the right to reallocate
your remaining account balances. Amounts that are not paid continue to be
invested in the manner you elect. Legal limits restrict the amount of
installments and the period over which installments can be paid. If you elect
the installment payment option, you may be able to change the frequency of your
installment payments from time to time.
If you are married and elect an annuity, you must elect at least a 50% survivor
annuity and you must name your spouse as your beneficiary (unless your spouse
consents otherwise in writing with a notarized signature). If you are married
and name someone other than your spouse as your beneficiary, or you elect a life
annuity form, your spouse must consent to your beneficiary designation and
waiver of the 50% survivor annuity form of benefit in the presence of a notary
public.
Deferred payments
If you terminate and your total vested account balance is $3,500 or less, you
receive your distribution in a lump-sum amount. If your vested account balance
is more than $3,500 when you terminate, you can defer the payout of your
account. If you defer, you can make the same reallocation investment choices as
active participants can, and you may take a partial withdrawal from your account
at any time. If your IIP account exceeded $3,500 at the time of any previous
withdrawal, your account is always treated as if it exceeds $3,500.
Generally, if your employment terminates, the Plan must begin distribution of
your vested account balance to you once you reach age 65. However, you may
elect to continue to defer receiving your distribution until a date no later
than the April 1 of the year following the year in which you turn age 70 1/2.
State Street Bank will notify you of your right to defer past age 65 when you
near your 65th birthday (if you have previously terminated employment with
Baxter) or shortly after your termination (if you terminate at age 65 or later).
This notice will inform you of the steps you need to take to either begin or
defer your distribution.
-36-
<PAGE>
If you continue to work after age 70 1/2, the Plan generally defers the payment
of your account until your retirement. However, to the extent required by
federal tax law, you may be given the opportunity to elect to begin receiving
installment payments while still employed, beginning the April 1 of the year
after the year in which you reach age 70 1/2.
Applying for a distribution
To request a distribution, contact the IIP's automated telephone system through
the Baxter Benefits Line (800-254-3780; prompt #2, then prompt #1). After you
request your distribution, State Street Bank sends you a confirmation of your
request as well as a federally mandated Tax Information Notice. Seven days
after your distribution request, and after you review the Tax Information
Notice, you must call State Street Bank again and instruct that your check be
issued. Your check cannot be issued before the end of the seven-day period.
Once a check is issued, it cannot be returned, and the funds cannot be refunded
to your account. Your distribution election is valid for only 30 days. If you
want to receive your distribution in the form of an annuity, be sure to speak
with a State Street Bank customer service representative.
In the event of your death, your beneficiary should contact the Baxter Employee
Benefits Center (BEBC) through the Baxter Benefits Line. The BEBC will help
your beneficiary apply for any IIP benefits.
Naming a beneficiary
------------------------------------------------------------------
Your Beneficiary is the person who will receive your plan benefits
if you die.
------------------------------------------------------------------
When you become eligible to participate, you receive an IIP Beneficiary
Designation Form with your enrollment materials. You may designate an
individual or a trust as your beneficiary. If you are married and you designate
a beneficiary other than your spouse, your spouse must consent to your
beneficiary designation in writing in the presence of a notary public. After
you complete the IIP Beneficiary Designation Form, be sure to return it to the
BEBC.
-37-
<PAGE>
If you are married and you do not name a beneficiary, the Plan pays your
benefits to your spouse. If you are not married and you do not name a
beneficiary, the Plan pays your benefits to the following in the order listed:
. your surviving children; or if none,
. your surviving parents; or if none,
. your surviving brothers and sisters; or if none,
. your estate.
If you want to change your beneficiary, you can request an IIP Beneficiary
Designation Form from the BEBC or State Street Bank by calling the Baxter
Benefits Line.
-38-
<PAGE>
TAX CONSIDERATIONS
If you take a distribution of all or part of your after-tax contributions, you
do not have to pay any income taxes on that money since you paid taxes on the
amounts before the money went into the Plan. However, you do have to pay taxes
on the earnings on these amounts.
- --------------------------------------------------------------------------------
At the time you take a distribution of your pre-tax contributions, Baxter
matching contributions, rollover contributions, or profit-sharing contributions,
the IRS considers those amounts taxable income. As a result, you owe income
taxes on these contributions as well as any investment earnings at the time you
receive the payment. In addition, a 10% penalty tax may apply to these
withdrawals or distributions if you receive the withdrawal or distribution
before you reach age 59 1/2.
Generally, you can roll over most distributions from the IIP to another
qualified retirement plan or Individual Retirement Account (IRA). If you elect
to have an eligible rollover distribution paid to you, by law, 20% federal
income tax automatically will be withheld.
Contact State Street Bank for additional information on how to roll over your
IIP distribution to another qualified retirement plan or an IRA.
Neither Baxter, the Administrative Committee, the Investment Committee, the
trustee, any employee or representative of Baxter, nor State Street Bank is
responsible for advising you on the tax effects of your payments, withdrawals,
or loans. Taxes are a complex subject and tax laws constantly change.
Therefore, you may want to consult a tax advisor before you name a beneficiary
or before you request a payment, withdrawal, or loan from the Plan.
-39-
<PAGE>
SITUATIONS AFFECTING YOUR PLAN BENEFITS
The IIP is designed to help you accumulate savings for retirement. But, some
situations could affect Plan contributions and distributions.
. If you do not make proper application for benefits, do not provide
necessary information, or do not provide Baxter with your current address,
your benefits could be delayed.
. The law requires that the Plan limit the benefits payable to certain highly
paid employees and to employees who participate in other Baxter plans that
defer income to the future. If these limits affect you, you will be
notified.
- --------------------------------------------------------------------------------
Assignment of benefits
Your IIP benefits belong to you and may not be sold, assigned, transferred,
pledged, or garnisheed. However:
. If you become divorced or legally separated, certain court orders could
require that part of your account be paid to someone else--your former
spouse or children, for example. This is known as a "qualified domestic
relations order" or "QDRO." As soon as you are aware of any court
proceedings that may affect your benefits, call the BEBC. Under Baxter's
written QDRO Procedures, a "hold" will be placed on your account if the
BEBC receives certain legal documents attempting to divide your IIP account
as part of a divorce or other domestic relations proceeding. Under these
circumstances, you are not permitted to take withdrawals, distributions, or
loans from the IIP until the case is resolved. You can request a copy of
the written QDRO Procedures from the BEBC.
. If you are (or your beneficiary is) unable to care for your (or your
beneficiary's) own affairs, the Plan may make payments to someone who is
authorized to conduct your affairs. This person may be a relative or
court-appointed guardian.
If the Plan becomes "top-heavy"
As required by law, alternate plan provisions go into effect if the Plan becomes
top-heavy. A plan is "top-heavy" if more than 60% of accumulated account
balances are payable to "key
-40-
<PAGE>
employees." Currently, the IIP is not top-heavy. If the Plan becomes top-heavy
in the future, you will notified.
---------------------------------------------------------------
"Key employees" include officers, highly paid employees who
are major stockholders, and the beneficiaries of officers
and highly paid employees who are major shareholders.
---------------------------------------------------------------
Plan amendment or termination
The Administrative Committee has the right to amend the terms of the IIP at any
time. Baxter's Board of Directors has the right to terminate the IIP at any
time. If the IIP is terminated, benefits would generally be paid as described
below:
. If the Baxter matching contribution is permanently discontinued for any
reason, you generally will receive information on the continuation of the
Plan.
. If the Plan is terminated, or if there is a partial termination affecting
you, you immediately will be 100% vested in the value of your account as of
the date of termination.
. If the Plan is terminated, the distribution of your account balance could
be delayed until the IRS completes its review. Once this is done, your
account balance could be paid immediately if the Plan is terminated.
Regardless of any delays, you are entitled to the full value of your vested
account.
Mergers, consolidations, or transfers
If the Plan is merged or consolidated with another plan, or if your account is
transferred to another plan, your account balance under the new plan would,
immediately after the change, at least equal the amount you would be entitled to
if the Plan had been terminated just before the change.
Pension Benefit Guaranty Corporation (PBGC)
The IIP is a defined contribution plan, which means that the value of your
account depends on the amount of contributions made and the performance of the
investment funds. Federal law
-41-
<PAGE>
does not provide for benefits under plans of this type to be insured through the
Pension Benefit Guaranty Corporation (PBGC), a federal government agency.
Appealing denied claims
Each person eligible for benefits under the IIP must make a claim for benefits
to State Street Bank, by calling the Baxter Benefits Line. If such person's
claim for benefits is denied in whole or in part, the Administrative Committee
will cause the person to be furnished with a written notice within 90 days after
receipt of such claim (or within 180 days after receipt if special circumstances
require an extension of time). The written notice:
. specifies the reason for the denial;
. refers to the pertinent provisions of the Plan on which the denial is
based;
. describes any additional material or information necessary for property
completing the claim;
. explains why such material or information is necessary; and
. explains the claim review procedures.
A person (or such person's authorized representative) whose claim is denied
under the procedures described above, or who has not received a response to a
submitted claim within the time periods specified above, may request a review of
the denied claim by written request to the Administrative Committee within 60
days after receiving notice of the denial. In connection with such request, the
person or authorized representative may review pertinent documents and may
submit issues and comments in writing.
If such a request is made, the Administrative Committee will make a full and
fair review of the denial of the claim and will make a decision no later than 60
days after receipt of the request, unless special circumstances (such as further
investigation) require an extension of time in which case a decision will be
made as soon as possible, but no later than 120 days after receipt of the
request for review. Written notice of the extension will be given to the person
before the start of the extension. The decision on the review will be in writing
and will include specific reasons for
-42-
<PAGE>
the decision and specific references to the pertinent provision of the Plan on
which the decision is based.
No person eligible for benefits under the Plan has a right to seek review of a
denial of benefits--or to bring any action to enforce a claim for benefits--in
any court, prior to filing a claim for benefits and exhausting all rights
described in this section.
If you misrepresent a claim
When you file a claim for benefits, you certify that the statements you make on
the claim form are complete and accurate to the best of your knowledge. If you
misrepresent information or file a fraudulent claim, you will be responsible for
repaying any benefits based on that claim.
-43-
<PAGE>
ADMINISTRATIVE INFORMATION
This section provides important legal and administrative information you may
need, such as:
. how to contact the Plan Administrator or plan trustee; and
. information about the recordkeeper and how to contact the recordkeeper, if
necessary.
- --------------------------------------------------------------------------------
Plan sponsor and Administrator
The Plan is sponsored by Baxter. The Administrative Committee is the Plan
Administrator. Each year, the Compensation Committee of Baxter's Board of
Directors appoints the members of the committee. The Administrative Committee
has broad discretion to interpret plan provisions, including, but not limited
to, ambiguous terms. All decisions of the Administrative Committee are
conclusive and binding on all parties. The Plan Administrator's address is:
Administrative Committee
c/o Employee Benefits Management Department
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
847-948-2000
Baxter's address is the same as that of the Administrative Committee.
Plan identification
When dealing with or referring to the IIP in terms of claim appeals or other
correspondence, you will receive a more rapid response if you identify the Plan
fully and accurately. To identify the Plan, you need to use Baxter's employer
identification number (EIN): 36-0781620. You also need to know the Plan's
official name and number. The official name of the IIP is the Baxter
International Inc. and Subsidiaries Incentive Investment Plan, and the plan
number is 023.
-44-
<PAGE>
Trustee
Your IIP account is held under a recordkeeping system maintained by State Street
Bank. The assets of the Plan are managed by the Investment Committee, whose
members are appointed by the Finance Committee of Baxter's Board of Directors.
The Investment Committee uses the services of professional investment managers
to invest certain assets of the Plan.
The assets are held in trust by the trustee, State Street Bank. The trustee can
be reached at the following address:
State Street Bank and Trust Company
P. O. Box 1389
Boston, Massachusetts 02104-1389
Agent for service of legal process
The agent for service of legal process on the Plan is:
Senior Vice President and General Counsel
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
Legal process may also be served on the Plan Administrator or the trustee.
Employers
A complete list of the employers sponsoring the Plan may be obtained by
participants and beneficiaries upon written request to the Plan Administrator,
and is available for examination by participants and beneficiaries.
Plan year
January 1 through December 31.
-45-
<PAGE>
STATEMENT OF ERISA RIGHTS
As a participant in the IIP, you are entitled to certain rights and protections
under the Employee Retirement Income Security Act of 1974 (ERISA).
- --------------------------------------------------------------------------------
ERISA provides that all plan participants shall be entitled to:
. Examine (without charge) at the Plan Administrator's office and at other
specified locations--such as work sites and union halls--all plan
documents. These may include insurance contracts, collective bargaining
agreements and copies of all documents filed by the Plan with the U.S.
Department of Labor, such as detailed annual reports and plan descriptions.
. Obtain copies of all plan documents and other plan information upon written
request to the Plan Administrator. The administrator may make a reasonable
charge for the copies.
. Receive a summary of the Plan's annual financial report. The Plan
Administrator is required by law to furnish each participant with a copy of
this summary annual report.
. Receive a written explanation of the reason for the denial if your claim
for a benefit is denied--in whole or in part. You have the right to have
the Plan review and reconsider your claim.
. Obtain a statement telling you the amount of your benefit under the Plan.
This statement must be requested in writing and is not required to be given
more than once a year. The Plan must provide the statement free of charge.
In addition to creating rights for plan participants, ERISA imposes duties upon
the people who are responsible for the operation of the Plan. The people who
operate the Plan, called "fiduciaries," have a duty to do so prudently and in
the interest of you and other plan participants and beneficiaries.
-46-
<PAGE>
No one, including your employer, your union, or any other person, may fire you
or otherwise discriminate against you in any way to prevent you from obtaining a
benefit or exercising your ERISA rights.
Under ERISA, there are steps you can take to enforce your ERISA rights. For
instance:
. If you request materials from the Plan and do not receive them within 30
days, you may file suit in a federal court. In such a case, the court may
require the Plan Administrator to provide the materials and pay you up to
$100 a day until you receive the materials--unless the materials were not
sent because of reasons beyond the control of the administrator.
. If you have a claim for benefits which is denied or ignored--in whole or in
part--you may file suit in a state or federal court.
. If it should happen that plan fiduciaries misuse the Plan's money, or if
you are discriminated against for asserting your ERISA rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit in a
federal court.
If you file a suit against the Plan, the court will decide who should pay court
costs and legal fees. If you are successful, the court may order the person you
have sued to pay these costs and fees. If you lose, the court may order you to
pay these costs and fees--for example, if it finds your claim is frivolous.
If you have any questions about the Plan, you should contact the Plan
Administrator. If you have any questions about this statement or about your
rights under ERISA, you should contact the nearest office of the Pension and
Welfare Benefits Administration, U.S. Department of Labor, listed in your
telephone directory, or the Division of Technical Assistance and Inquiries,
Pension and Welfare Benefits Administration, U.S. Department of Labor, 200
Constitution Avenue N.W., Washington, D.C. 20210.
-47-
<PAGE>
EXHIBIT 15
----------
AWARENESS LETTER OF INDEPENDENT ACCOUNTANTS
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549
Dear Ladies and Gentlemen:
We are aware that Baxter International Inc. has included our reports dated
May 10, 1997, August 7, 1997 and November 13, 1997 (issued pursuant to the
provisions of Statement of Auditing Standards No. 71) in its Registration
Statement on Form S-8 to be filed on or about February 27, 1998. We are also
aware of our responsibilities under the Securities Act of 1933.
Yours very truly,
PRICE WATERHOUSE LLP
Chicago, Illinois
February 26, 1998
<PAGE>
EXHIBIT 23
----------
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-8 of Baxter International Inc. of our report dated February
10, 1997, which appears on page 26 of the 1996 Annual Report to Stockholders of
Baxter International Inc., which is incorporated by reference in Baxter
International Inc.'s Annual Report on Form 10-K for the year ended December 31,
1996. We also consent to the incorporation by reference of our report on the
Financial Statement Schedules, which appears on page 10 of such Annual Report on
Form 10-K.
PRICE WATERHOUSE LLP
Chicago, Illinois
February 26, 1998
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Walter E. Boomer
--------------------------
Walter E. Boomer
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ John W. Colloton
--------------------------
John W. Colloton
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Susan Crown
--------------------------
Susan Crown
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Pei-yuan Chia
--------------------------
Pei-yuan Chia
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Mary Johnston Evans
--------------------------
Mary Johnston Evans
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Frank R. Frame
--------------------------
Frank R. Frame
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Martha R. Ingram
--------------------------
Martha R. Ingram
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Arnold J. Levine
--------------------------
Arnold J. Levine
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Monroe E. Trout, M.D.
--------------------------
Monroe E. Trout, M.D.
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Reed V. Tuckson, M.D.
--------------------------
Reed V. Tuckson, M.D.
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Fred L. Turner
--------------------------
Fred L. Turner
<PAGE>
EXHIBIT 24
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ George C. St. Laurent, Jr.
------------------------------
George C. St. Laurent, Jr.
<PAGE>
P O W E R O F A T T O R N E Y
REGISTRATION STATEMENT ON FORM S-8
----------------------------------
The undersigned director of Baxter International Inc., a Delaware corporation
(the "Company"), which proposes to file with the Securities and Exchange
Commission a registration statement on Form S-8 to register securities under the
Securities Act of 1933, as approved by the Company's board of directors, hereby
appoints Vernon R. Loucks Jr. or Harry M. J. Kraemer, Jr. (each acting alone and
without the other), for him and in his name to be his lawful attorney-in-fact,
with full power (i) to sign and file with the Securities and Exchange Commission
the proposed registration statement and any amendments, including post-effective
amendments, which such attorney-in-fact may deem necessary or proper and (ii) to
perform every other act which such attorney-in-fact may deem necessary or proper
in connection with such registration statement or any amendments thereto.
Date: February 16, 1998 /s/ Reed V. Tuckson, M.D.
-------------------------
Reed V. Tuckson, M.D.
