<PAGE>
Filed Pursuant to Rule 424(b)(2)
Registration No. 333-19025
PROSPECTUS SUPPLEMENT TO PROSPECTUS DATED FEBRUARY 18, 1998
$250,000,000
LOGO
Baxter International Inc.
6 5/8% Debentures due February 15, 2028
Interest payable February 15 and August 15
------------
The Debentures are redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i)
100% of the principal amount of such Debentures and (ii) the sum of
the present values of the remaining scheduled payments of
principal and interest thereon discounted to the redemption
date on a semiannual basis at the Adjusted Treasury Rate
(as defined herein) plus 15 basis points, together in
either case with accrued interest to the date of
redemption. See "Description of Debentures--
Optional Redemption."
The Debentures will be represented by one or more global Debentures
registered in the name of the nominee of The Depository Trust Company
("DTC"). Beneficial interests in the global Debentures will be
shown on, and transfers thereof will be effected only through,
records maintained by DTC and its participants. Except as
described herein, Debentures in definitive form will not
be issued. The Debentures will be issued only in
registered form in denominations of $1,000 and
integral multiples thereof. See "Description
of Debentures."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
<TABLE>
<CAPTION>
UNDERWRITING
PRICE TO DISCOUNTS AND PROCEEDS TO
PUBLIC(1) COMMISSIONS COMPANY(1)(2)
--------- ------------- -------------
<S> <C> <C> <C>
Per Debenture......... 99.122% .875% 98.247%
Total................. $247,805,000 $2,187,000 $245,617,500
</TABLE>
(1) Plus accrued interest from February 15, 1998.
(2) Before deduction of expenses payable by the Company estimated at $85,000.
The Debentures are offered by the several Underwriters when, as and if
issued by the Company, delivered to and accepted by the Underwriters and
subject to their right to reject orders in whole or in part. It is expected
that delivery of the Debentures in book-entry form will be made through the
facilities of DTC on or about February 23, 1998, against payment in
immediately available funds.
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
Prospectus Supplement dated February 18, 1998.
<PAGE>
CERTAIN PERSONS PARTICIPATING IN THIS OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN OR OTHERWISE AFFECT THE PRICE OF THE SECURITIES
OFFERED HEREBY, INCLUDING OVER-ALLOTMENT, STABILIZING TRANSACTIONS, SYNDICATE
SHORT COVERING TRANSACTIONS AND PENALTY BIDS. FOR A DESCRIPTION OF THESE
ACTIVITIES, SEE "UNDERWRITING."
----------------
THE COMPANY
Baxter International Inc., through its subsidiaries (the "Company"),
operates in a single industry segment as a global developer, manufacturer and
marketer of products and technologies related to the blood and circulatory
system. It has market-leading positions in four businesses within this segment
of the medical products and services industry: Blood Therapies, which develops
biopharmaceutical and blood collection and separation products and
technologies; I.V. Systems/Medical Products, which develops technologies and
systems to improve intravenous medication delivery and distributes medical
products; Renal, which develops products and provides services to treat kidney
disease; and CardioVascular, which develops products and provides services to
treat late-stage heart disease and vascular disorders.
RECENT DEVELOPMENTS
VIMRX PHARMACEUTICALS INC.
In December 1997, the Company and VIMRX Pharmaceuticals Inc. formed a new
cell therapy company to develop innovative treatments for cancer and other
life-threatening diseases. The Company transferred certain assets of its
Immunotherapy division to the new company and holds a minority-ownership
position along with warrants to acquire an additional ownership interest in
the future.
OHMEDA PHARMACEUTICAL PRODUCTS DIVISION
In January 1998, the Company signed a definitive agreement to acquire the
Pharmaceutical Products Division of BOC Group's Ohmeda health-care business, a
manufacturer of gases and drugs used for general and local anesthesia. The
transaction is subject to customary antitrust review and is expected to close
in 1998.
SELECTED FINANCIAL DATA
The table on the facing page sets forth selected consolidated financial
information of the Company on an historical basis. This information should be
read in conjunction with the consolidated financial statements and notes
thereto incorporated by reference into the Prospectus. Selected unaudited
historical financial information for the nine months ended September 30, 1996
and 1997 includes all adjustments necessary for a fair presentation of the
interim periods. Results for the interim periods are not necessarily
indicative of results for the full year.
S-2
<PAGE>
SELECTED FINANCIAL DATA
BAXTER INTERNATIONAL INC.
(IN MILLIONS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
YEAR ENDED DECEMBER 31, (UNAUDITED)
-------------------------------------------- ---------------------
1992 1993(1) 1994 1995(2) 1996 1996 1997(3)
------ ------- ------ ------- ------- ------ -------------
<S> <C> <C> <C> <C> <C> <C> <C>
STATEMENT OF INCOME
DATA:
Net sales............... $3,857 $4,116 $4,479 $5,048 $5,438 $3,944 $4,506
Income (loss) from
continuing operations.. 373 (193) 406 371 575 417 118
Income (loss) from
continuing operations
per common share(4):
Basic................. 1.34 (0.70) 1.45 1.34 2.11 1.53 0.43
Diluted............... 1.32 (0.70) 1.44 1.33 2.07 1.50 0.42
Cash dividends declared
per common share....... 0.86 1.00 1.025 1.11 1.17 .8875 .8475
Ratio of earnings to
fixed charges:
As reported........... 5.18x 0.63x(6) 4.80x 4.64x 5.99x 5.91x 2.60x
Supplemental(5)....... N/A 4.53x N/A 6.12x N/A N/A 4.64x
CASH FLOW DATA:
Capital expenditures(7). 362 332 380 399 398 255 267
Depreciation and
amortization........... 251 273 302 336 348 255 299
<CAPTION>
SEPTEMBER 30,
DECEMBER 31, (UNAUDITED)
-------------------------------------------- -------------
1992 1993(1) 1994 1995 1996(9) 1997
------ ------- ------ ------- ------- -------------
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE SHEET DATA:
Total assets............ $8,310 $9,211 $9,039 $9,437 $7,596 $8,155
Net debt (8)............ 2,902 3,139 2,404 2,115 1,280 2,344
Long-term debt and lease
obligations............ 2,433 2,800 2,341 2,372 1,695 2,560
Stockholders' equity.... 3,795 3,185 3,720 3,704 2,504 2,469
</TABLE>
- --------
(1) Results include a restructuring charge of a pretax amount of $216 million
and a net charge for litigation of a pretax amount of $330 million.
(2) Results include a restructuring charge of a pretax amount of $103 million
and a net charge for litigation of a pretax amount of $96 million and an
in-process research and development charge of $18 million.
(3) Results include an in-process research and development charge of $352
million.
(4) Per share amounts are calculated in accordance with Statement of Financial
Accounting Standards No. 128, Earnings per Share.
(5) Excludes the charges described in notes (1), (2) and (3).
(6) As a result of the loss incurred during this period, the Company's
earnings did not fully cover the indicated fixed charges. The earnings
required to attain a ratio of one-to-one are $52 million.
(7) Includes additions to the pool of equipment leased or rented to customers.
(8) Total debt and lease obligations net of cash and equivalents.
(9) Certain balance sheet data were significantly affected by the spin-off of
Allegiance Corporation, which occurred on September 30, 1996.
S-3
<PAGE>
DESCRIPTION OF DEBENTURES
The 6 5/8% Debentures due February 15, 2028 (the "Debentures") are an issue
of the Company's Debt Securities (as described in the accompanying Prospectus,
to which this Prospectus Supplement relates, as "Offered Securities"). The
following description of the terms of the Debentures supplements the
description of the Debt Securities contained in the Prospectus and is
qualified in its entirety by reference to the terms and provisions of the
Debentures.
GENERAL
The Debentures will be issued under an amended and restated indenture dated
as of November 15, 1985, as supplemented (the "Indenture"), between the
Company and First Trust National Association, as trustee (the "Trustee"), and
will be limited to $250,000,000 in aggregate principal amount. Each Debenture
will mature on February 15, 2028. The Debentures will be issued in
denominations of $1,000 and integral multiples of $1,000. The Debentures will
not be entitled to the benefit of any sinking fund.
The Debentures will bear interest from February 15, 1998, payable semi-
annually on February 15, and August 15 of each year, commencing August 15,
1998, to the persons in whose names the Debentures are registered at the close
of business on the January 30 or July 30, respectively, preceding the interest
payment date. Interest on the Debentures will be calculated based on a 360-day
year of twelve 30-day months.
So long as the Debentures are each represented by a global certificate, the
interest payable on the Debentures will be paid to Cede & Co., the nominee of
DTC, as depositary (the "Depository"), or its registered assigns as the
registered owner of the global certificate, by wire transfer of immediately
available funds on each of the applicable interest payment dates, not later
than 2:30 p.m. Eastern Standard Time. If the Debentures are no longer
represented by a global certificate, payment of interest may, at the option of
the Company, be made by check mailed to the address of the person entitled
thereto. No service charge will be made for any transfer or exchange of
Debentures but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
OPTIONAL REDEMPTION
The Debentures will be redeemable, in whole or in part, at the option of the
Company at any time at a redemption price equal to the greater of (i) 100% of
the principal amount of such Debentures or (ii) as determined by an
Independent Investment Banker, the sum of the present values of the remaining
scheduled payments of principal and interest thereon discounted to the
redemption date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate, plus, in each case,
accrued interest thereon to the date of redemption.
"Adjusted Treasury Rate" means, with respect to any redemption date, the
rate per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the Comparable
Treasury Price for such redemption date, plus 0.15%.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable
to the remaining term of the Debentures to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial practice,
in pricing new issues of corporate debt securities of comparable maturity to
the remaining term of such Debentures. "Independent Investment Banker" means
one of the Reference Treasury Dealers appointed by the Trustee after
consultation with the Company.
"Comparable Treasury Price" means, with respect to any redemption date, (i)
the average of the bid and asked prices for the Comparable Treasury Issue
(expressed in each case as a percentage of its principal amount) on the third
Business Day preceding such redemption date, as set forth in the daily
statistical release (or any successor release) published by the Federal
Reserve Bank of New York
S-4
<PAGE>
and designated "Composite 3:30 p.m. Quotations for U.S. Government Securities"
or (ii) if such release (or any successor release) is not published or does
not contain such prices on such Business Day, (A) the Reference Treasury
Dealer Quotations for such redemption date, after excluding the highest and
lowest such Reference Treasury Dealer Quotations, or (B) if the Trustee
obtains fewer than three such Reference Treasury Dealer Quotations, the
average of all such Quotations. "Reference Treasury Dealer Quotations" means,
with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Trustee, of the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Trustee by such Treasury Reference
Dealer at 5:00 p.m. on the third Business Day preceding such redemption date.
"Reference Treasury Dealer" means each of Credit Suisse First Boston
Corporation, Goldman, Sachs & Co., and J.P. Morgan Securities Inc. and their
respective successors; provided, however, that if any of the foregoing shall
cease to be a primary U.S. Government securities dealer in New York City (a
"Primary Treasury Dealer"), the Company shall substitute therefor another
Primary Treasury Dealer.
Notice of any redemption will be mailed at least 30 days but not more than
60 days before the redemption date to each holder of the Debentures to be
redeemed.
Unless the Company defaults in payment of the redemption price, on and after
the redemption date, interest will cease to accrue on the Debentures or
portions thereof called for redemption.
BOOK-ENTRY, DELIVERY AND FORM
The Debentures will be represented by one or more global certificates (a
"Global Security"), that will be deposited with, or on behalf of, the
Depository and registered in the name of Cede & Co., the nominee of the
Depository.
The Depository has advised the Company and the Underwriters as follows: The
Depository is a limited-purpose trust company organized under the New York
Banking Law, a "banking organization" within the meaning of the New York
Banking Law, a member of the Federal Reserve System, a "clearing corporation"
within the meaning of the New York Uniform Commercial Code and a "clearing
agency" registered pursuant to the provisions of Section 17A of the Securities
Exchange Act of 1934. The Depository was created to hold securities of its
participating organizations ("participants") and to facilitate the clearance
and settlement of securities transactions, such as transfers and pledges,
among its participants in such securities through electronic computerized
book-entry changes in accounts of the participants, thereby eliminating the
need for physical movement of securities certificates. Participants include
securities brokers and dealers (including the Underwriters), banks, trust
companies, clearing corporations and certain other organizations, some of whom
(and/or their representatives) own the Depository. Access to the Depository's
book-entry system is also available to others, such as banks, brokers, dealers
and trust companies that clear through or maintain a custodial relationship
with a participant, either directly or indirectly. Persons who are not
participants may beneficially own securities held by the Depository only
through participants.
Unless and until it is exchanged in whole or in part for certificated Debt
Securities, in definitive form, each Global Security may not be transferred
except as a whole by the Depository to a nominee of the Depository or by a
nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor depository
or a nominee of such successor depository.
A further description of the Depository's procedures with respect to the
Debentures is set forth in the accompanying Prospectus under the heading
"Description of Securities--Payment of Interest and Exchange--Global
Securities and Book-Entry System."
DEFEASANCE
The Company may terminate all of its obligations under certain restrictive
covenants in the Indenture, as described in the Prospectus, by irrevocably
depositing in trust with the Trustee, money or U.S. Government Obligations, or
any combination of the two, sufficient to pay principal of and interest on the
Debentures to maturity. See "Prospectus--Description of Securities--Defeasance
and Termination of Obligations."
S-5
<PAGE>
TRUSTEE
The Company may from time to time borrow money from the Trustee or its
affiliates, maintain deposit accounts with the Trustee or its affiliates and
conduct other banking transactions with it in the ordinary course of business.
UNDERWRITING
Subject to the terms and conditions set forth in the Underwriting Agreement
dated February 18, 1998 (the "Underwriting Agreement"), the Company has agreed
to sell to each of the Underwriters named below (the "Underwriters"), and each
of the Underwriters has severally but not jointly agreed to purchase, the
respective principal amounts of the Debentures set forth opposite its name
below.
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
UNDERWRITER OF DEBENTURES
----------- -------------
<S> <C>
Credit Suisse First Boston Corporation...................... $ 83,400,000
Goldman, Sachs & Co......................................... 83,300,000
J.P. Morgan Securities Inc.................................. 83,300,000
------------
Total................................................... $250,000,000
============
</TABLE>
Under the terms and conditions of the Underwriting Agreement, each of the
Underwriters is obliged to purchase all of its Debentures, if any Debentures
are purchased. The Underwriting Agreement provides that, in the event of
default by an Underwriter, in certain circumstances the purchase commitments
of non-defaulting Underwriters may be increased or the Underwriting Agreement
may be terminated.
The Company has been advised that the Underwriters propose to offer the
Debentures to the public initially at the public offering price set forth on
the cover page of this Prospectus Supplement, and to certain dealers at such
price less a concession not in excess of 0.50% of the principal amount of the
Debentures. The Underwriters may allow, and such dealers may reallow, a
concession not in excess of 0.25% the principal amount of the Debentures to
certain other dealers. After the initial offering, the offering price and
other selling terms may be changed by the Underwriters.
The Debentures are a new issue of securities with no established trading
market. The Underwriters have informed the Company that they intend to make a
market in the Debentures, but are under no obligation to do so and such market
making may be terminated at any time. Therefore, no assurance can be given as
to the existence or the liquidity of a trading market in the Debentures in the
future. The Debentures will not be listed on any national securities exchange.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933, as
amended.
From time to time, the Underwriters have provided various investment
banking, commercial banking and other services to the Company for which each
received customary compensation.
The Underwriters may engage in over-allotment, stabilizing transactions,
syndicate covering transactions and penalty bids. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate
short position. Stabilizing transactions permit bids to purchase the
underlying security so long as the stabilizing bids do not exceed a specified
maximum. Syndicate covering transactions involve purchases of the Debentures
in the open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the Underwriters to reclaim a
selling concession from a syndicate member when the Debentures originally sold
by such syndicate member are purchased in a syndicate covering transaction to
cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Debentures
to be higher than it would otherwise be in the absence of such transactions.
These transactions, if commenced, may be discontinued at any time.
S-6
<PAGE>
PROSPECTUS
LOGO
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
847.948.2000
DEBT SECURITIES
Baxter International Inc. (the "Company") intends to offer from time to time
up to $550,000,000 aggregate principal amount (or the equivalent in foreign
denominated currency or European Currency Units ("ECU")) of its senior,
unsecured debt securities (the "Securities") on terms to be determined when an
agreement to sell is made. The specific designation, aggregate principal
amount, rate or method of calculation of any interest, the time of payment of
any interest, maturity, authorized denominations, any initial public offering
price, any redemption terms or prepayment rights, repurchase rights, other
specific terms, currency of payment, and any listing on a securities exchange
for each issue of Securities in respect of which this Prospectus is being
delivered (the "Offered Securities") are set forth in the accompanying
prospectus supplement (the "Prospectus Supplement"), together with the terms
of the offering of the Offered Securities, the net proceeds to the Company
from their sale, and the ratio of earnings to fixed charges for appropriate
periods.
The Securities may be sold directly, through agents, or through underwriters
or dealers. If any agents of the Company or any underwriters are involved in
the sale of the Offered Securities in respect of which this Prospectus is
being delivered, the names of such agents or underwriters and any applicable
commissions and discounts are set forth in the Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is February 18, 1998.
<PAGE>
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended, (the "1934 Act"), and in accordance
therewith files reports, proxy statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy
statements and other information can be inspected and copied at the public
reference facilities of the Commission at Room 1024, 450 Fifth Street, N.W.,
Washington, D.C. 20549 and at the Commission's regional offices at Seven World
Trade Center, 13th Floor, New York, New York 10048 and 500 West Madison
Street, 14th Floor, Chicago, Illinois 60661. Copies of such material can be
obtained at prescribed rates from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549. In addition,
electronic copies of all such reports are available on the World Wide Web at
http://www.sec.gov/edgarhp.htm. Such reports, proxy statements and other
information concerning the Company can also be inspected at the offices of the
stock exchanges on which the Company's common stock is listed: New York Stock
Exchange, 20 Broad Street, New York, New York 10005; Chicago Stock Exchange,
440 South LaSalle Street, Chicago, Illinois 60605; and Pacific Stock Exchange,
301 Pine Street, San Francisco, California 94104.
DOCUMENTS INCORPORATED BY REFERENCE
The following documents filed by the Company under the 1934 Act with the
Commission are incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the year ended December
31, 1996;
(2) The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31, June 30, and September 30, 1997; and
(3) The Company's Current Reports on Form 8-K dated January 29, and March
18, 1997 and February 11, 1998.
All documents filed by the Company pursuant to sections 13(a), 13(c), 14 or
15(d) of the 1934 Act after the date of this Prospectus and prior to
termination of the offering of the Securities shall be deemed to be
incorporated in this Prospectus by reference and to be a part hereof from the
date of filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference herein shall be deemed
to be modified or superseded for purposes of this Prospectus to the extent
that a statement contained herein or in any other subsequently filed document
which also is or is deemed to be incorporated by reference herein or in the
Prospectus Supplement modifies or supersedes such statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this Prospectus or the Prospectus
Supplement.
The Company will provide without charge to each person to whom a copy of
this Prospectus and the Prospectus Supplement have been delivered, on the
written or oral request of such person, a copy of any or all of the documents
referred to above which have been or may be incorporated in this Prospectus
and the Prospectus Supplement by reference, other than exhibits to such
documents. Requests for such copies should be directed to: Stockholder
Services Department, Baxter International Inc., One Baxter Parkway, Deerfield,
Illinois 60015, Telephone: (847) 948-4913.
No person has been authorized to give any information or to make any
representation not contained in this Prospectus or, with respect to particular
Offered Securities, the Prospectus Supplement relating thereto, and, if given
or made, such information or representation must not be relied upon as having
been authorized by the Company or any agent, underwriter or dealer. This
Prospectus and any Prospectus Supplement do not constitute an offer to sell or
a solicitation of an offer to buy any of the securities offered hereby in any
jurisdiction to any person to whom it is unlawful to make such offer in such
jurisdiction. Neither the delivery of this Prospectus or, with respect to
particular
2
<PAGE>
Offered Securities, the Prospectus Supplement relating thereto, nor any sale
made under this Prospectus and any Prospectus Supplement shall, under any
circumstances, create an implication that there has been no change in the
affairs of the Company since the date hereof.
THE COMPANY
Baxter International Inc. ("Baxter"), through its subsidiaries (the
"Company"), operates in a single industry segment as a global developer,
manufacturer and marketer of products and technologies related to the blood
and circulatory system. It has market-leading positions in four businesses
within this segment of the medical products and services industry: Blood
Therapies, which develops biopharmaceutical and blood collection and
separation products and technologies; I.V. Systems/Medical Products, which
develops technologies and systems to improve intravenous medication delivery
and distributes medical products; Renal, which develops products and provides
services to treat kidney disease; and CardioVascular, which develops products
and provides services to treat late-stage heart disease and vascular
disorders. Baxter was incorporated in Delaware in 1931.
The Company's principal executive offices are located at One Baxter Parkway,
Deerfield, Illinois 60015, Telephone: (847) 948-2000.
USE OF PROCEEDS
Except as otherwise set forth in the Prospectus Supplement relating to the
Offered Securities, net proceeds from the sale of the Securities will be used
for working capital purposes, to repay existing debt, for capital expenditures
and for general corporate purposes.
DESCRIPTION OF SECURITIES
The Securities are to be issued under an amended and restated indenture
dated as of November 15, 1985, as supplemented (the "Indenture"), a copy of
which is an exhibit to the Registration Statement. The following summary does
not purport to be complete, and where particular provisions of the Indenture
are referred to, such provisions, including definitions of certain terms, are
incorporated by reference as a part of such summary of terms, which is
qualified in its entirety by such reference.
GENERAL
The Securities will be senior unsecured obligations of the Company, ranking
prior to any subordinated debt of the Company.
The Indenture does not limit the amount of Securities which can be issued
thereunder and provides that Securities may be issued in one or more series up
to the aggregate principal amount which may be authorized from time to time by
the Company. The Indenture does not restrict the amount of additional
unsecured debt (whether senior or subordinated) which the Company may incur
nor does the Indenture limit the amount which the Company may apply to the
payment of dividends or the redemption or purchase of shares of its stock.
Except as otherwise described in this Prospectus (see "Description of
Securities--Restrictions on Mergers, Consolidations and Transfers of Assets"),
the Prospectus Supplement, the Indenture and the Securities do not contain any
covenants which restrict the Company's incurring additional indebtedness which
might be deemed a highly-leveraged transaction, or which might result in a
change in ratings of the Securities. If such covenants are included in the
terms of any Offered Securities, they will be described in the related
Prospectus Supplement.
3
<PAGE>
Reference is made to the Prospectus Supplement for the following terms of
the Offered Securities: (i) the designation, aggregate principal amount,
currency and authorized denominations of the Offered Securities; (ii) the
percentage of their principal amount at which the Offered Securities will be
offered; (iii) the date or dates on which the Offered Securities will mature;
(iv) the rate or rates per annum, if any, at which the Offered Securities will
bear interest; (v) the times at which any such interest will be payable; and
(vi) any redemption terms and other special terms.
Except as otherwise provided in the Prospectus Supplement, the principal of
and any interest on the Securities will be payable at the office or agency of
the Company designated in the form of Security and described in the Prospectus
Supplement. Interest may be paid at the option of the Company by check mailed
to the address of the registered owner of the Securities. The Company will
also maintain an office where Securities of a particular series may be
presented for registration of transfer or for exchange for Securities of like
series of different denominations. (Sections 2.01, 2.03, 2.06)
Except as otherwise provided in the Prospectus Supplement, the Securities
will be issued only in fully registered form without coupons. The Registrar or
co-Registrar need not exchange or register the transfer of any Security
selected for redemption. Also, it need not exchange or register the transfer
of any Securities of a series for a period of 15 days before a selection of
Securities of that series to be redeemed. The Company may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Securities. (Section 2.06)
PAYMENT OF INTEREST AND EXCHANGE
Each Security may be represented by either one or more global securities (a
"Global Security") registered in the name of The Depository Trust Company, as
depositary (the "Depository") or a nominee of the Depository (each such
Security represented by a Global Security being herein referred to as a "Book-
Entry Security"), or a certificate issued in definitive registered form (a
"Certificated Security"), as set forth in the applicable Prospectus
Supplement. Except as set forth under "Global Securities and Book-Entry
System" below, Book-Entry Securities will not be issuable in certificate form.
CERTIFICATED SECURITIES. Certificated Securities may be transferred or
exchanged at the Trustee's office or paying agencies in accordance with the
terms of the Indenture. No service charge will be made for any transfer or
exchange of Certificated Securities, but the Company may require payment of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith.
The transfer of Certificated Securities and the right to the principal of,
premium, if any, and interest, if any, on such Certificated Securities may be
effected only by surrender of the old certificate representing such
Certificated Securities and either reissuance by the Trustee of the old
certificate to the new holder or the issuance by the Trustee of a new
certificate to the new holder.
GLOBAL SECURITIES AND BOOK-ENTRY SYSTEM. Each Global Security representing
Book-Entry Securities will be deposited with, or on behalf of, the Depository,
and registered in the name of the Depository or a nominee of the Depository.
Except as set forth below, Book-Entry Securities will not be exchangeable for
Certificated Securities and will not otherwise be issuable as Certificated
Securities.
The procedures that the Depository has indicated it intends to follow with
respect to Book-Entry Securities are set forth below.
Ownership of beneficial interests in Book-Entry Securities will be limited
to persons that have accounts with the Depository for the related Global
Security ("participants") or persons that may hold interests through
participants. Upon the issuance of a Global Security, the Depository will
credit, on its book-entry registration and transfer system, the participants'
accounts with the respective principal
4
<PAGE>
amounts of the Book-Entry Securities represented by such Global Security
beneficially owned by such participants. The accounts to be credited shall be
designated by any dealers, underwriters or agents participating in the
distribution of such Book-Entry Securities. Ownership of Book-Entry Securities
will be shown on, and the transfer of such ownership interests will be
effected only through, records maintained by the Depository for the related
Global Security (with respect to interests of participants) and on the records
of participants (with respect to interests of persons holding through
participants). The laws of some states may require that certain purchasers of
securities take physical delivery of such securities in definitive form. Such
limits and such laws may impair the ability to own, transfer or pledge
beneficial interests in Book-Entry Securities.
So long as the Depository for a Global Security, or its nominee, is the
registered owner of such Global Security, such Depository or such nominee, as
the case may be, will be considered the sole owner or holder of the Book-Entry
Securities represented by such Global Security for all purposes under the
Indenture. Except as set forth below, owners of Book-Entry Securities will not
be entitled to have such securities registered in their names, will not
receive or be entitled to receive physical delivery of a certificate in
definitive form representing such securities and will not be considered the
owners or holders thereof under the Indenture. Accordingly, each person owning
Book-Entry Securities must rely on the procedures of the Depository for the
related Global Security and, if such person is not a participant, on the
procedures of the participant through which such person owns its interest, to
exercise any rights of a holder under the Indenture.
The Company understands, however, that under existing industry practice, the
Depository will authorize the persons on whose behalf it holds a Global
Security to exercise certain rights of holders of Securities.
Payments of principal, premium, if any, and interest on Book-Entry
Securities will be made to the Depository or its nominee, as the case may be,
as the registered holder of the related Global Security. Neither the Trustee
nor any agent of the Trustee will have any responsibility or liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in such Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
The Company expects that the Depository, upon receipt of any payment of
principal, premium, if any, or interest on a Global Security, will immediately
credit participants' accounts with payments in amounts proportionate to the
respective amounts of Book-Entry Securities held by each such participant as
shown on the records of such Depository. The Company also expects that
payments by participants to owners of beneficial interests in Book-Entry
Securities held through such participants will be governed by standing
customer instructions and customary practices, as is now the case with the
securities held for the accounts of customers in bearer form or registered in
"street name," and will be the responsibility of such participants.
If the Depository is at any time unwilling or unable to continue as
Depository or ceases to be a clearing agency registered under the Exchange
Act, and a successor Depository registered as a clearing agency under the
Exchange Act is not appointed by the Company within 90 days, the Company will
issue Certificated Securities in exchange for each Global Security. In
addition, the Company may at any time and in its sole discretion determine not
to have any of the Book-Entry Securities represented by one or more Global
Securities and, in such event, will issue Certificated Securities issued in
exchange for a Global Security or Securities. Global Securities will also be
exchangeable for Certificated Securities if an Event of Default with respect
to the Book-Entry Securities represented by such Global Security has occurred
and is continuing. Any Certificated Securities issued in exchange for a Global
Security will be registered in such name or names as the Depository shall
instruct the Trustee. It is expected that such instructions will be based upon
directions received by the Depository from participants with respect to
ownership of Book-Entry Securities relating to such Global Security.
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<PAGE>
The foregoing information in this section concerning the Depository and the
Depository's Book-Entry System has been obtained from sources the Company
believes to be reliable, but the Company takes no responsibility for the
accuracy thereof.
DEFINITIONS
The following terms are defined in the Indenture. (Section 4.01)
The term Consolidated Net Tangible Assets is defined to mean the total
amount of assets which would be included on a consolidated balance sheet of
the Company and its Subsidiaries under generally accepted accounting
principles (less applicable reserves and other properly deductible items)
after deducting therefrom: (i) all short-term liabilities and liability items,
except for indebtedness payable by its terms more than one year from the date
of incurrence thereof (or renewable or extendible at the option of the obligor
for a period ending more than one year after such date of incurrence) and (ii)
all goodwill, trade names, trademarks, patents, unamortized debt discount,
unamortized expense incurred in the issuance of debt, and other like
intangibles (except prepaid royalties).
The term Principal Facility is defined to include any manufacturing plant,
warehouse, office building or parcel of real property owned by the Company, or
any Restricted Subsidiary, that has a gross book value of in excess of 2% of
Consolidated Net Tangible Assets other than any such property which, in the
opinion of the Board of Directors, is not of material importance to the
business conducted by the Company and its Subsidiaries taken as a whole.
The term Restricted Subsidiary is defined to include any corporation in
which the Company owns voting securities entitling it to elect a majority of
the directors and which either is designated a Restricted Subsidiary in
accordance with the Indenture or (i) existed as such on the date of the
Indenture or is the successor to, or owns, any equity interest in, a
corporation which so existed, (ii) has its principal business and assets in
the United States (including Puerto Rico and other territories and
possessions), (iii) such business is other than the obtaining of financing in
capital markets outside the United States or the financing of the acquisition
or disposition of real or personal property or dealing in real property for
residential or office building purposes, and (iv) does not have assets
substantially all of which consist of the securities of one or more
corporations which are not Restricted Subsidiaries.
The term Sale and Leaseback Transaction is defined to include a sale or
transfer made by the Company or a Restricted Subsidiary of any Principal
Facility which has been in operation, use, or commercial production (or in the
case of a parcel of real property, has been owned) by the Company or any
Restricted Subsidiary for more than 120 days prior to such sale or transfer if
such sale or transfer is made with the intention of leasing such Principal
Facility to the Company or a Restricted Subsidiary, except (i) a lease for a
period of not exceeding 36 months and (ii) a lease that secures or relates to
certain governmental obligations issued in connection with the financing of
the cost of construction or acquisition of such Principal Facility.
The term Secured Debt is defined to include any indebtedness for borrowed
money of the Company or any Restricted Subsidiary which is secured by (i) a
Security Interest in any Principal Facility or portion thereof or (ii) a
Security Interest in shares of stock owned by the Company in a Restricted
Subsidiary or in indebtedness for money borrowed by a Restricted Subsidiary
from the Company or another Restricted Subsidiary. The securing in the
foregoing manner of any debt which immediately prior thereto was not Secured
Debt shall be deemed to be the creation of Secured Debt at the time such
security is given.
The term Superior Indebtedness is defined to include any obligation of the
Company or any Restricted Subsidiary which (i) as of the date of its creation,
was or may be payable by its terms more
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<PAGE>
than one year from the date of incurrence thereof, (ii) under generally
accepted accounting principles should be shown as a liability on a
consolidated balance sheet of the Company, and (iii) in the case of such an
obligation of the Company, is not subordinate and junior in right of payment
to the prior payment of the Securities.
RESTRICTION ON SECURED DEBT
The Indenture provides that the Company will not, and will not cause or
permit a Restricted Subsidiary to, create, incur, assume or guarantee any
Secured Debt unless the Securities will be secured equally and ratably with
(or prior to) such Secured Debt, with certain exceptions. Among permitted
Secured Debt is indebtedness secured by (i) certain Security Interests to
secure payment of the cost of acquisition, construction, development or
improvement of property, (ii) Security Interests on property at the time of
its acquisition by the Company or a Restricted Subsidiary, which Security
Interests secure obligations assumed by the Company or a Restricted
Subsidiary, or on the property or on the outstanding shares of indebtedness of
a corporation at the time it becomes a Restricted Subsidiary or is merged into
the Company or a Restricted Subsidiary or the Company or a Restricted
Subsidiary acquires the properties of such corporation substantially as an
entirety, (iii) Security Interests arising from conditional sales agreements
or title retention agreements with respect to property acquired by the Company
or any Restricted Subsidiary, (iv) Security Interests securing governmental
obligations issued in connection with the financing of the cost of
construction or acquisition of a Principal Facility, (v) Security Interests
securing indebtedness of a Restricted Subsidiary owing to the Company or to
another Restricted Subsidiary, (vi) mechanics' and other statutory liens in
respect of obligations not due or being contested, (vii) liens for taxes not
yet delinquent or being contested in good faith, (viii) judgment liens arising
in connection with legal proceedings so long as such proceedings are being
contested and execution is stayed, (ix) certain landlords' liens on fixtures,
(x) the extension of existing Security Interests on Principal Facilities to
additions, extensions or improvements, (xi) certain Security Interests in
favor, or made at the request, of governmental bodies, and (xii) Security
Interests by reason of deposits to qualify the Company or a Restricted
Subsidiary to conduct business or to maintain self-insurance. Additionally,
such permitted Secured Debt includes any extension, renewal or refunding, in
whole or in part, of any Secured Debt permitted at the time of the original
incurrence thereof.
In addition to the foregoing, the Company and its Restricted Subsidiaries
may create, incur, assume or guarantee Secured Debt, without equally and
ratably securing the Securities, if the sum of (i) the amount of Secured Debt
entered into after the date of the Indenture and otherwise prohibited by the
Indenture plus (ii) the aggregate present value of Sale and Leaseback
Transactions entered into after the date of the Indenture and otherwise
prohibited by the Indenture does not exceed 5% of Consolidated Net Tangible
Assets. (Section 4.04)
RESTRICTIONS ON SALE AND LEASEBACK TRANSACTIONS
The Indenture provides that the Company will not, and will not permit any
Restricted Subsidiary to, enter into any Sale and Leaseback Transaction,
unless (i) the Company or such Restricted Subsidiary would be entitled to
incur Secured Debt permitted by the Indenture only by reason of the provision
described in the preceding paragraph equal in amount to the value of the Sale
and Leaseback Transaction without equally and ratably securing the Securities
or (ii) the Company or a Restricted Subsidiary applies or commits to apply an
amount equal to the net proceeds of the property sold pursuant to the Sale and
Leaseback Transaction (a) to the acquisition, construction or improvement of a
Principal Facility or (b) to the redemption of Securities or to the repayment
of other Superior Indebtedness of the Company or of any Restricted Subsidiary.
In lieu of applying all or any part of such amount to the redemption of
Securities, the Company may deliver to the Trustee
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<PAGE>
Securities for cancellation and thereby reduce the amount to be applied to the
redemption of Securities by an amount equivalent to the aggregate principal
amount of Securities delivered. Securities so redeemed or delivered will not
be used as credits against any mandatory sinking fund payments. (Section 4.05)
RESTRICTIONS ON TRANSFERS OF PRINCIPAL FACILITIES
The Indenture provides that the Company will not itself, or permit any
Restricted Subsidiary to, transfer any Principal Facility to any Subsidiary
which is not a Restricted Subsidiary unless it applies or commits to apply an
amount equal to the fair value of such Principal Facility at the time of such
transfer (i) to the acquisition or improvement of a Principal Facility or (ii)
to the optional redemption of Securities or to the repayment of other Superior
Indebtedness of the Company or of any Restricted Subsidiary. In lieu of
applying all or any part of such amount to the redemption of Securities, the
Company may deliver to the Trustee Securities for cancellation and thereby
reduce the amount to be applied to the redemption of Securities by the
principal amount of the Securities so delivered. Securities so redeemed or
delivered will not be used as credits against any mandatory sinking fund
payments. (Section 4.06)
RESTRICTIONS ON MERGERS, CONSOLIDATIONS AND TRANSFERS OF ASSETS
The Indenture provides that the Company will not consolidate or merge into
or transfer or lease all or substantially all of its assets to another person
unless (i) the person is a corporation organized under the laws of the United
States of America or any state thereof which assumes by supplemental indenture
all the obligations of the Company relating to the Securities and the
Indenture and (ii) immediately after the transaction no Default exists. Upon
any such consolidation, merger or transfer, the successor corporation will be
substituted for the Company under the Indenture. The successor corporation may
then exercise every power and right of the Company under the Indenture, and
the Company will be released from all of its liabilities and obligations in
respect of the Securities and the Indenture. In the event the Company leases
all or substantially all of its assets, the lessee corporation will be the
successor to the Company and may exercise every power and right of the Company
under the Indenture but the Company will not be released from its obligations
to pay the principal of and interest on the Securities. (Article 5)
WAIVERS AND MODIFICATION OF THE INDENTURE
Certain amendments of the Indenture and waivers of its terms may be made by
the Company and the Trustee without the consent of any of the holders of
Securities while others may be made only with the consent of the holders of a
majority in principal amount of the outstanding Securities of each series
issued under the Indenture which is affected by the amendment or waiver,
provided that no such amendment or waiver may, without the consent of the
Securityholder affected: (i) reduce the principal of or change the fixed
maturity of any such Security or reduce the amount of or change the time for
payment of any mandatory sinking fund or like payment; (ii) reduce the rate of
or change the time for payment of any interest on any Security; (iii) change
the currency of payment of any Security; (iv) impair the right to institute
suit for the enforcement of any payment of the principal of, or interest on,
any Security; or (v) reduce the amount of Securities whose holders must
consent to an amendment or waive any terms of the Indenture with respect to
the series (Section 9.01, 9.02). The Company is authorized to fix a record
date for the purpose of determining Securityholders whose consents will be
sought and the Trustee is authorized to accept such consents if received
within 60 days of the record date. (Section 9.07)
DEFAULTS AND REMEDIES
The Indenture defines an Event of Default with respect to any series of
Securities as: (i) default for 30 days in the payment of any interest on such
series; (ii) default for five days in any payment of
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<PAGE>
principal on such series when due; (iii) default for 60 days after appropriate
notice in performance of any other agreement in the Indenture with respect to
such series or in the Securities of such series; (iv) uncured or unwaived
default on any other obligation for borrowed money of the Company (including
default by the Company on any guaranty of an obligation for borrowed money of
a Restricted Subsidiary) beyond any period of grace with respect thereto if
(a) the aggregate principal amount of such obligation in respect of which
principal or interest is and remains in default is in excess of $50,000,000,
(b) either the default has resulted in acceleration of the time of payment of
principal or the default is a nonpayment of principal or interest which, under
the terms of the obligation, could result in the immediate acceleration of the
time of payment, and (c) the default is not being contested by the Company in
good faith and by appropriate proceedings; or (v) certain events of
bankruptcy. No Event of Default with respect to a particular series of
Securities necessarily constitutes an Event of Default with respect to any
other series of Securities issued under the Indenture, other than under
preceding clauses (iv) or (v). In case an Event of Default shall occur and be
continuing with respect to any series of Securities, the Trustee or the
holders of not less than 25% in principal amount of the Securities then
outstanding of the series may declare the principal of such series (or such
portion of the principal as may be specified as due upon acceleration at that
time in the terms of that series) to be due and payable. Any Event of Default
with respect to a particular series of Securities may be waived by the holders
of a majority in principal amount of the outstanding Securities of such
series, except a failure to pay the principal of, or interest on, such
Security. (Sections 6.01, 6.02, 6.04)
The Indenture requires the Company to file annually with the Trustee an
Officer's Certificate as to the absence of Defaults under the terms of the
Indenture. The Indenture provides that the Trustee may withhold notice to the
holders of the Securities of any Default (except in payment of principal or
interest) if it considers it in the interest of the holders of the Securities
to do so. (Sections 4.07, 7.05)
Subject to the provisions of the Indenture relating to the duties of the
Trustee in case an Event of Default shall occur and be continuing, the
Indenture provides that the Trustee shall be under no obligation to exercise
any of its rights or powers under the Indenture at the request of the
Securityholders unless the Trustee receives satisfactory Indemnity. Subject to
such provisions for indemnification and certain other rights of the Trustee,
the Indenture provides that the holders of a majority in principal amount of
the outstanding Securities of any series affected may direct the time, method
and place of conducting any proceeding for any remedy for that series which is
available to the Trustee or exercising any trust or power conferred on the
Trustee for the benefit of such series. (Sections 6.05, 7.01)
DEFEASANCE AND TERMINATION OF OBLIGATIONS
By irrevocably depositing in trust with the Trustee an amount of money or
the equivalent in U.S. Government Obligations or, in the case of Securities
denominated in a foreign currency, Foreign Government Obligations which is
sufficient to pay the principal of, interest and any mandatory sinking fund
payments on, a series of Securities to maturity or redemption, (a) the Company
may be relieved of all of its obligations under the Indenture and under such
series of Securities (except certain administrative obligations and
obligations to compensate, reimburse and indemnify the Trustee), if the series
of Securities matures or is to be called for redemption within one year, (b)
the Company may be relieved of all of its obligations under the Indenture and
under such series of Securities (except certain administrative obligations and
obligations to compensate, reimburse and indemnify the Trustee), if such
series of Securities so provides; and (c) the Company may terminate all of its
obligations under restrictive covenants relating to creation of secured debt
(Section 4.04), sale and leaseback transactions (Section 4.05), and transfers
of principal facilities (Section 4.06) and failure to comply with these
provisions will not be an Event of Default with respect to a series of
Securities which so provides. (Section 8.01)
In cases (a) and (b), holders of such a series of Securities would be able
to look only to the trust fund for payment of principal of, interest and any
mandatory sinking fund payments on, such series of Securities until maturity.
9
<PAGE>
In case (c), if a series of Securities were declared due and payable because
of the occurrence of any Event of Default other than for failure to comply
with the restrictive covenants described in case (c), the amount of money and
U.S. Government Obligations or Foreign Government Obligations, as the case may
be, on deposit with the Trustee would be sufficient to pay amounts due on the
Securities of such series at the time of their stated maturity but might not
be sufficient to pay amounts due on the Securities of the series at the time
of the acceleration resulting from such Event of Default. The Company,
however, would remain liable for such payment.
In cases (a) and (b), the deposit of money or U.S. Government Obligations or
Foreign Government Obligations, as the case may be, is likely to be treated as
a taxable exchange of the series of Securities for an issue of obligations of
the trust or a direct interest in the cash and U.S. Government Obligations or
Foreign Government Obligations, as the case may be, held in the trust fund. In
that case holders of the Securities would recognize gain or loss as if the
trust obligations or the cash or U.S. Government Obligations or Foreign
Government Obligations deposited, as the case may be, had actually been
received by them in exchange for their Securities. Such holders thereafter
might be required to include in income a different amount than would be
includable in the absence of the defeasance. Prospective investors are urged
to consult their own tax advisors as to the specific consequences of the
defeasance.
THE TRUSTEE
The Trustee for the Offered Securities will be named and any relationship
between the Trustee and the Company or its affiliates will be described in the
Prospectus Supplement.
PLAN OF DISTRIBUTION
The Company may sell Securities through underwriters or agents or directly
to other purchasers, including broker-dealers as principals. The Prospectus
Supplement with respect to the Offered Securities sets forth the terms of the
offering of the Offered Securities, including the name or names of any
underwriters and the respective amount of the Securities underwritten, the
names of any agents involved in the offer or sale of the Offered Securities,
the purchase price of the Offered Securities and the proceeds to the Company
from such sale, any underwriting discounts and other items constituting
underwriters' compensation, any commissions payable to agents, any initial
public offering price, and any discounts or concessions allowed or reallowed
or paid to dealers. Any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers may be changed from time
to time.
If the Offered Securities are sold through underwriters, they will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of
sale. The Securities may be offered to the public either (i) through
underwriting syndicates or (ii) directly by one or more firms acting as
underwriters. The underwriter or underwriters with respect to a particular
underwritten offering of Offered Securities are named in the Prospectus
Supplement relating to such offering, and if an underwriting syndicate is
used, the managing underwriter or underwriters are set forth on the cover of
such Prospectus Supplement. Unless otherwise set forth in the Prospectus
Supplement, the obligations of the underwriters to purchase the Offered
Securities will be subject to certain conditions precedent and the
underwriters will be obligated to purchase all the Offered Securities if any
are purchased.
If broker-dealers are used in the sale, the Company will sell the Securities
to the dealers as principals. The dealers may then resell the Securities to
the public at varying prices to be determined by such dealers at the time of
resale.
10
<PAGE>
The Securities may be sold directly by the Company or through agents
designated by the Company from time to time. Unless otherwise indicated in the
Prospectus Supplement, any such agent is acting on a best efforts basis for
the period of its appointment. As one of the means of direct issuance of the
Securities, the Company may, through an agent, conduct an electronic "dutch
auction" of the Securities among potential purchasers who are eligible to
participate in such auction, as more fully described in the Prospectus
Supplement.
In the event that the Offered Securities are not listed on a national
securities exchange, certain broker-dealers may make a market in the Offered
Securities, but will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given that any broker-
dealer will make a market in the Offered Securities or as to the liquidity of
the trading market for the Offered Securities, whether or not the Offered
Securities are listed on a national securities exchange. The Prospectus
Supplement with respect to the Offered Securities will state, if known,
whether or not any broker-dealer intends to make a market in such Offered
Securities. If no such determination has been made, the Prospectus Supplement
will so state.
If so indicated in the Prospectus Supplement, the Company will authorize
agents, underwriters or broker-dealers to solicit offers from certain types of
institutions to purchase Offered Securities from the Company at the public
offering price set forth in the Prospectus Supplement pursuant to delayed
delivery contracts providing for payment and delivery on a specified date in
the future.
Agents, underwriters and broker-dealers may be entitled under agreements
entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act of
1933, as amended, or to contribution with respect to payments which the
agents, underwriters or broker-dealers may be required to make in respect
thereof. Agents, underwriters and broker-dealers may be customers of, engage
in transactions with, or perform services for the Company in the ordinary
course of business.
LEGAL MATTERS
Certain legal matters in connection with this offering will be passed upon
for the Company by
J. Patrick Fitzsimmons, Corporate Counsel of the Company, and for the
Underwriters by Sidley & Austin, One First National Plaza, Chicago, Illinois
60603. Mr. Fitzsimmons is a full-time employee of the Company and as of the
date of this Prospectus, owns and holds options to acquire shares of the
Company's common stock. Sidley & Austin acts as special counsel for the
Company and certain subsidiaries of the Company on various matters.
EXPERTS
The consolidated financial statements incorporated in this Prospectus by
reference to the Annual Report on Form 10-K of the Company for the year ended
December 31, 1996 have been so incorporated in reliance on the report of Price
Waterhouse LLP, independent accountants, given on the authority of said firm
as experts in auditing and accounting.
With respect to the unaudited consolidated financial information of Baxter
for the three-month periods ended March 31, 1997 and 1996, the six-month
periods ended June 30, 1997 and 1996, and the nine-month periods ended
September 30, 1997 and 1996, incorporated by reference in this Prospectus,
Price Waterhouse LLP reported that they have applied limited procedures in
accordance with professional standards for a review of such information.
However, their separate reports dated May 10, 1997, August 7, 1997 and
November 13, 1997, incorporated by reference herein, state that they did not
audit and they do not express an opinion on that unaudited consolidated
financial information. Price Waterhouse LLP has not carried out any
significant or additional audit tests beyond those which would have been
necessary if their report had not been included. Accordingly, the degree of
reliance on their report on such information should be restricted in light of
the limited nature of the review procedures applied. Price Waterhouse LLP is
not subject to the liability provisions of section 11 of the Securities Act of
1933 for their report on the unaudited consolidated financial information
because that report is not a "report" or a "part" of the registration
statement prepared or certified by Price Waterhouse LLP within the meaning of
sections 7 and 11 of the Act.
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NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY IN-
FORMATION OR TO MAKE ANY REPRESENTATION NOT CONTAINED IN THIS PROSPECTUS SUP-
PLEMENT OR THE PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRE-
SENTATION MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY THE COMPANY OR
ANY UNDERWRITER. THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS DO NOT CONSTI-
TUTE AN OFFER TO SELL OR THE SOLICITATION OF AN OFFER TO BUY ANY OF THE SECU-
RITIES OFFERED HEREBY IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER IN SUCH JURISDICTION. NEITHER THE DELIVERY OF THIS PROSPEC-
TUS SUPPLEMENT OR THE PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT THE INFORMATION HEREIN IS CORRECT
AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF OR THAT THERE HAS BEEN NO CHANGE
IN THE AFFAIRS OF THE COMPANY SINCE SUCH DATE.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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PROSPECTUS SUPPLEMENT
<S> <C>
The Company................................................................ S-2
Recent Developments........................................................ S-2
Selected Financial Data.................................................... S-2
Description of Debentures.................................................. S-4
Underwriting............................................................... S-6
PROSPECTUS
Available Information...................................................... 2
Documents Incorporated by Reference........................................ 2
The Company................................................................ 3
Use of Proceeds............................................................ 3
Description of Securities.................................................. 3
Plan of Distribution....................................................... 10
Legal Matters.............................................................. 11
Experts.................................................................... 11
</TABLE>
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LOGO
Baxter International Inc.
$250,000,000
6 5/8% Debentures
due February 15, 2028
PROSPECTUS
SUPPLEMENT
CREDIT SUISSE FIRST BOSTON
GOLDMAN, SACHS & CO.
J.P. MORGAN & CO.
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