<PAGE>
As filed with the Securities and Exchange Commission on February 1, 1999
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 or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Baxter Parkway
Deerfield, Illinois 60015
(Address of Principal Executive Offices)
1998 Incentive Compensation Program
Stock Option Plan adopted February 17, 1998
Special Stock Option Plan adopted February 17, 1998
1997 Scientific Advisory Board Option Plan
Stock Option Plan adopted November 18, 1997
Stock Option Plan adopted August 4, 1997
Stock Option Plan adopted March 14, 1997
Stock Option Plan adopted February 17, 1997
1994 Incentive Compensation Program
(Full Title of Plans)
Jan Stern Reed
Corporate Secretary
and Assistant General Counsel
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
847/948-2000
(Name, Address and Telephone Number,
Including Area Code, of Agent For Service)
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
Proposed Proposed
Title of securities Amount to be maximum offering maximum aggregate Amount of
to be registered registered price per share offering price registration fee
- ------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock 25,080,823 shares (1) $53.99(2) $1,354,113,634 (2) $376,444
$1.00 par value
</TABLE>
<PAGE>
(1) Consists of 10,000,000 shares issuable pursuant to the 1998 Incentive
Compensation Program (the "1998 Program"), 2,624,950 shares issuable
pursuant to the Stock Option Plan adopted February 17, 1997 (the "February
1997 Plan"), 1,436,800 shares issuable pursuant to the Stock Option Plan
adopted November 18, 1997 (the "November 1997 Plan"), 6,500 shares issuable
pursuant to the 1997 Scientific Advisory Board Option Plan (the "Scientific
Advisory Plan"), 2,992,045 shares issuable pursuant to the Stock Option
Plan adopted February 17, 1998 (the "February 1998 Plan"), 950,000 shares
issuable pursuant to the special Stock Option Plan adopted February 17,
1998 (the "Special Plan"), 100,100 shares issuable pursuant to the Stock
Option Plan adopted August 4, 1997 (the "August 1997 Plan"), 39,952 shares
issuable pursuant to the Stock Option Plan adopted March 14, 1997 (the
"March 1997 Plan"), and 6,930,476 shares issuable pursuant to the 1994
Incentive Compensation Program (the "1994 Program," together with the 1998
Program, the February 1997 Plan, the November 1997 Plan, the Scientific
Advisory Plan, the February 1998 Plan, the March 1997 Plan, the August 1997
Plan, and the Special Plan, the "Plans"). This Registration Statement also
covers Common Stock of the Registrant to be issued pursuant to the anti-
dilution provisions of the Plans.
(2) Estimated solely for the purpose of calculating the registration fee and,
pursuant to Rules 457(h)(1) and 457(c) under the Securities Act of 1933,
based upon (i) as to options to purchase 1,422,150 shares granted pursuant
to the 1998 Program, the weighted average exercise price of $61.0625 per
share, (ii) as to options to purchase 374,270 shares granted pursuant to the
1998 Program, the weighted average exercise price of $59.5625 per share,
(iii) as to options to purchase 2,992,045 shares granted pursuant to the
February 1998 Plan, the weighted average exercise price of $56.1875 per
share, (iv) as to options to purchase 1,436,800 shares granted pursuant to
the November 1997 Plan, the weighted average exercise price of $47.125 per
share, (v) as to options to purchase 6,500 shares granted pursuant to the
Scientific Advisory Plan, the weighted average exercise price of $47.125 per
share, (vi) as to options to purchase 2,624,950 shares granted pursuant to
the February 1997 Plan, the weighted average exercise price of $47.50 per
share, (vii) as to options to purchase 950,000 shares granted pursuant to
the Special Plan, the weighted average exercise price of $65.945, (viii) as
to options to purchase 100,100 shares granted pursuant to the August 1997
Plan, the weighted average exercise price of $57.1875 per share, (ix) as to
options to purchase 39,952 shares granted pursuant to the March 1997 Plan,
the weighted average exercise price of $46.50 per share, (x) as to options
to purchase 6,920,839 shares granted pursuant to the 1994 Program, the
weighted average exercise price of $42.391 per share, and (xi) as to the
remaining 8,203,580 shares available for grants under the 1998 Program, and
9,637 shares reserved for issuance for grants made under the 1994 Program,
the average of the high and low sale prices of the Common Stock on January
25, 1999, which was $63.375 per share as reported by The Wall Street Journal
under New York Stock Exchange Composite Transactions.
2
<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 have been or
will be given to employees participating in each of the Plans and are not
required to be filed with the Securities and Exchange Commission (the
"Commission") as part of this Registration Statement or an exhibits hereto.
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 Commission:
(a) The Registrant's Annual Report on Form 10-K for the year ended December
31, 1997;
(b) The Registrant's Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1998, June 30, 1998, and September 30, 1998;
(c) The Registrant's current reports on Form 8-K filed on February 12, 1998,
June 4, 1998, September 17, 1998, December 2, 1998, and December 15, 1998;
and
(d) The descriptions of the Registrant's Common Stock which are contained in
the registration statements filed with the Commission under Section 12 of
the Securities Exchange Act of 1934 (the "Exchange Act"), including any
subsequent amendment or any report filed for the purpose of updating such
descriptions.
All documents filed by the Registrant pursuant to Sections 13(a), 13(c), 14 and
15(d) of the Exchange Act after the date of this Registration Statement and
prior to the filing of a post-effective amendment to this Registration Statement
which indicates that all securities offered hereby have been sold or which
deregisters all securities then remaining unsold, shall be deemed to be
incorporated by reference into this Registration Statement and to be a part
hereof from the respective dates of filing of 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 Stock Purchase Rights which are registered
under the Exchange Act and are attached to each share of Common Stock at this
time.
Item 5. Interests of Named Experts and Counsel.
The validity of the shares of Common Stock offered hereby has been passed upon
for the Registrant by Thomas J. Sabatino, Jr., Corporate Vice President and
General Counsel of the Registrant. Mr. Sabatino is an officer of the Registrant
and beneficially owns shares of Common Stock.
3
<PAGE>
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.
See the Exhibit Index immediately preceding the exhibits to this Registration
Statement.
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 (a)(1)(i) and (a)(1)(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 Section 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 of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(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 further undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the Registrant's
annual report pursuant to Section 13(a) or Section 15(d) of the Securities
Exchange Act of 1934 that is incorporated by reference in the Registration
Statement
4
<PAGE>
shall be deemed to be a new registration statement relating to the
securities offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
(c) - (g) Not applicable.
(h) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling
persons of the Registrant pursuant to the foregoing provisions, or
otherwise, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against
public policy as expressed in the Securities Act of 1933 and is,
therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of
expenses incurred or paid by a director, officer or controlling person
of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will,
unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act of 1933 and will be governed by the
final adjudication of such issue.
(i) - (j) Not applicable.
5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, 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 1, 1999.
BAXTER INTERNATIONAL INC.
By:/s/ Harry M. Jansen Kraemer, Jr.
-----------------------------------
Harry M. Jansen Kraemer, Jr.
Chief Executive Officer
Each person whose signature appears below constitutes and appoints Harry M.
Jansen Kraemer, Jr. and Jan Stern Reed, and each of them, his or her true and
lawful attorney-in-fact and agent, with full power of substitution, for him or
her and in his or her name, place and stead, in any and all capacities, to sign
any and all amendments to this Registration Statement, and to file the same,
with all exhibits thereto and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto such attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act and thing requisite and necessary to be done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying all that such attorneys-in-fact and agents, or any of
them or their or his or her substitute or substitutes, may lawfully do or cause
to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed by the following persons in the capacities indicated
on February 1, 1999.
Signature Title
- --------- -----
/s/ Harry M. Jansen Kraemer, Jr. Chief Executive Officer and Director
- --------------------------------
Harry M. Jansen Kraemer, Jr.
/s/ Brian P. Anderson Chief Financial Officer and Principal
- -------------------------------- Accounting Officer
Brian P. Anderson
/s/ Vernon R. Loucks Jr. Chairman of the Board of Directors
- --------------------------------
Vernon R. Loucks Jr.
/s/ Walter E. Boomer Director
- --------------------------------
Walter E. Boomer
/s/ Pei-yuan Chia Director
- --------------------------------
Pei-yuan Chia
/s/ John W. Colloton Director
- --------------------------------
John W. Colloton
6
<PAGE>
/s/ Susan Crown Director
- -------------------------------
Susan Crown
/s/ Mary Johnston Evans
- ------------------------------- Director
Mary Johnston Evans
- ------------------------------- Director
Frank R. Frame
/s/ Martha R. Ingram Director
- -------------------------------
Martha R. Ingram
/s/ Arnold J. Levine Director
- -------------------------------
Arnold J. Levine
/s/ Georges C. St. Laurent, Jr. Director
- -------------------------------
Georges C. St. Laurent, Jr.
/s/ Monroe E. Trout Director
- -------------------------------
Monroe E. Trout
- ------------------------------- Director
Fred L. Turner
7
<PAGE>
INDEX TO EXHIBITS
Exhibit Number Description (1)
- -------------- -----------
4.1 1998 Incentive Compensation Program (incorporated by
reference to Exhibit 10.37 to Registrant's Annual Report on
Form 10-K for the year ended December 31, 1997 (the "1997
10-K"))
4.2* Stock Option Plan adopted February 17, 1997
4.3 Stock Option Plan adopted November 18, 1997 (incorporated by
reference to Exhibit 10.36 to the 1997 10-K)
4.4* 1997 Scientific Advisory Board Option Plan
4.5* Stock Option Plan adopted February 17, 1998
4.6* Special Stock Option Plan adopted February 17, 1998
4.7 1994 Incentive Compensation Program (incorporated by
reference to Exhibit 10.25 to the 1997 10-K)
4.8* Stock Option Plan adopted March 14, 1997
4.9* Stock Option Plan adopted August 4, 1997
5* Opinion of Thomas J. Sabatino, Jr.
15* Awareness Letter of PricewaterhouseCoopers LLP
23.1* Consent of PricewaterhouseCoopers LLP
23.2* Consent of Thomas J. Sabatino, Jr. (included in Exhibit 5)
24* Powers of Attorney of officers and directors of the
Registrant (included on signature page to this Registration
Statement)
- --------------------------------------------------------------------------------
* Filed herewith
(1) In the case of incorporation by reference to documents filed under the
Securities Exchange Act of 1934, the Registrant's file number under that Act
is 1-4448.
8
<PAGE>
Exhibit 4.2
Baxter International Inc. Stock Option Plan
Adopted February 17, 1997
1. Purpose
This Stock Option Plan ("Plan") is adopted by the Compensation Committee of
the Board of Directors ("Committee") of Baxter International Inc. Although
this Plan is not adopted pursuant to the Baxter International Inc. 1994
Incentive Compensation Program ("Program"), it is granted for the purposes
stated in the Program.
2. Participants
Participants in this Plan ("Optionee") shall be valued employees of Baxter
International Inc. or its subsidiaries ("Company") who have been selected
by the Committee and to whom the Committee makes an award of an option
("Option") under this Plan.
3. Awards
Each Option shall consist of a Stock Option as defined in the Program and
is granted under the terms and conditions contained in this Plan. All of
the provisions of the Program which apply to Stock Options granted pursuant
to the Program shall apply to the Stock Options granted pursuant to this
Plan, except for Section 4 of the Program (relating to shares subject to
the Program). To the extent that any of the terms and conditions contained
in this Plan are inconsistent with the applicable terms of the Program, the
applicable terms of the Program shall control. Terms defined in the
Program shall have the same meaning in these terms and conditions. The
Option is not intended to qualify as an Incentive Stock Option within the
meaning of section 422 of the United States Internal Revenue Code.
Residents of the United Kingdom may also be subject to additional terms and
conditions in the form contained in the Baxter International Inc. Rules of
the Baxter International United Kingdom Stock Option, to the extent deemed
necessary by the Committee.
4. Vesting, Exercise and Expiration
4.1 The Option becomes vested five years from the date of grant, subject to
acceleration in accordance with the following. One hundred percent of the
Option shall become vested on the first Business Day (as defined in section
4.4) after the ninetieth consecutive calendar day during which the average
Fair Market Value (as defined in the Program) of the Common Stock (as
defined in the Program) equals or exceeds $65.00 per share. The Option
shall not vest more than three years after the Optionee's employment is
terminated by retirement at or after age 55 but shall otherwise continue to
vest until the Option expires pursuant to section 4.4.
4.2 When vested and until it expires, the Option may be exercised in whole or
in part in the manner specified by the Stockholder Services Department of
Baxter International Inc. If exercised in part, the Option must be
exercised in installments consisting of at least 100 shares or, if options
for less than 100 shares are then exercisable, for the number of shares
then exercisable. Shares of Common Stock may not be used to pay the
exercise price of the Option unless certificates representing such shares
have been issued and are delivered by the Optionee in accordance with the
requirements specified by the Stockholder Services Department. Residents of
the United Kingdom may not use shares of Common Stock to pay the exercise
price of the Option in any circumstances.
4.3 If the Optionee's employment by the Company is terminated by death or
disability more than 12 months after the date on which the Option is
granted, the Optionee or the Optionee's legal representative or the person
or persons to whom the Optionee's rights under the Option are transferred
by will or the laws of descent and distribution shall have the right to
exercise the Option until it expires in accordance with its terms with
respect to all or any part of the shares remaining subject to the Option
(whether or not such shares were purchasable by the Optionee under section
4.1 at the time of death).
4.4 The Option shall expire at the close of business on the earlier of a date
determined as follows or, if such date is not a Business Day, then the last
Business Day preceding such date: (i) one year after the date on which
employment of the Optionee by the Company shall have been terminated by his
death or disability; (ii) five years after the date on which employment of
the Optionee by the Company shall have been terminated by retirement at or
after age 55; (iii) three months after the date on which employment of the
Optionee by the Company shall have been terminated except as provided in
subsection 4.4(i) and (ii), unless the Optionee dies or becomes disabled
during said three-month period, in which case the relevant date shall be
one year after the termination; or (iv) ten years from the date on which
the Option was granted. "Business Day" shall mean any day, other than
Saturday or Sunday, when the corporate headquarters of the Company is open
for the transaction of business and when the Common Stock is traded on the
New York Stock Exchange. A transfer of an Optionee from employment by one
corporation to another among Baxter International Inc. and its
subsidiaries, or a transfer of an Optionee to employment by another
corporation which assumes the Option or issues a substitute option in a
transaction to which section 424 of the Internal Revenue Code applies,
shall not be considered a termination of employment for the purposes of the
Option.
<PAGE>
Exhibit 4.4
BAXTER INTERNATIONAL INC.
Stock Option Plan adopted November 18, 1997
Terms and Conditions
Scientific Advisory Board
1. Purpose
-------
This Stock Option Plan ("Plan") is adopted by the Compensation Committee of the
Board of Directors ("Committee") of Baxter International Inc. The purpose of the
Plan is to increase stockholder value and to advance the interests of Baxter
International Inc. ("Baxter") and its subsidiaries (collectively, the "Company")
by providing an economic incentive designed to retain and motivate the members
of Baxter's Scientific Advisory Board.
2. Participants
------------
Participants in this Plan ("Optionee") are the members of Baxter's Scientific
Advisory Board who have been selected by the Committee and to whom the Committee
makes an award of an option ("Option") under this Plan.
3. Awards
------
Each Option shall consist of a Stock Option as defined in the Baxter
International Inc. 1994 Incentive Compensation Program ("Program") and is
granted under the terms and conditions contained in this Plan. Although this
Plan is not adopted pursuant to the Program, all of the provisions of the
Program which apply to Stock Options granted pursuant to the Program shall apply
to the Stock Options granted pursuant to this Plan, except for Section 4 of the
Program (relating to shares subject to the Program). To the extent that any of
the terms and conditions contained in this Plan are inconsistent with the
applicable terms of the Program, the applicable terms of the Program shall
control. Terms defined in the Program shall have the same meaning in these terms
and conditions. The Option is not intended to qualify as an Incentive Stock
Option within the meaning of section 422 of the United States Internal Revenue
Code.
<PAGE>
4. Vesting, Exercise and Expiration
--------------------------------
4.1 The Option becomes vested three years after the date on which the Option is
granted or, if such date is not a Business Day, then the next Business Day
following such date.
4.2 When vested and until it expires, the Option may be exercised in whole or
in part in the manner specified by the Stockholder Services Department of Baxter
International Inc. If exercised in part, the Option must be exercised in
installments consisting of at least 100 shares or, if options for less than 100
shares are then exercisable, for the number of shares then exercisable. Shares
of Common Stock may be used to pay the exercise price of the Option in
accordance with the requirements specified by the Stockholder Services
Department.
4.3 If the Optionee's service on the Scientific Advisory Board is terminated by
death or disability more than one year after the date on which the Option is
granted, the Optionee or the Optionee's legal representative or the person or
persons to whom the Optionee's rights under the Option are transferred by will
or the laws of descent and distribution shall have the right to exercise the
Option until it expires in accordance with its terms with respect to all or any
part of the shares remaining subject to the Option (whether or not the Option
was vested on the date the Optionee's Scientific Advisory Board service
terminated).
4.4 The Option shall expire at the close of business on the earlier of a date
determined as follows or, if such date is not a Business Day, then the last
Business Day preceding such date: (i) one year after the date on which the
Optionee's Scientific Advisory Board service is terminated by his death or
disability; (ii) three months after the date on which the Optionee's Scientific
Advisory Board service is terminated, except as provided in subsection 4.4(i),
unless the Optionee dies or becomes disabled during the three-month period, in
which case the relevant date shall be one year after the termination; or (iii)
ten years from the date on which the Option is granted. "Business Day" shall
mean any day, other than Saturday or Sunday, when the corporate headquarters of
the Company is open for the transaction of business and when the Common Stock is
traded on the New York Stock Exchange.
<PAGE>
Terms and Conditions
Exhibit 4.5
Baxter International Inc.
Stock Option Plan
Adopted February 17, 1998
1. Purpose
-------
This Stock Option Plan ("Plan") is adopted by the Compensation Committee of the
Board of Directors ("Committee") of Baxter International Inc. Although this Plan
is not adopted pursuant to the Baxter International Inc. 1994 Incentive
Compensation Program ("Program"), it is granted for the purposes stated in the
Program.
2. Participants
------------
Participants in this Plan ("Optionee") shall be valued employees of Baxter
International Inc. or its subsidiaries ("Company") who have been selected by the
Committee and to whom the Committee makes an award of an option ("Option") under
this Plan.
3. Awards
------
Each Option shall consist of a Stock Option as defined in the Program and is
granted under the terms and conditions contained in this Plan. All of the
provisions of the Program which apply to Stock Options granted pursuant to the
Program shall apply to the Stock Options granted pursuant to this Plan, except
for Section 4 of the Program (relating to shares subject to the Program). To the
extent that any of the terms and conditions contained in this Plan are
inconsistent with the applicable terms of the Program, the applicable terms of
the Program shall control. Terms defined in the Program shall have the same
meaning in these terms and conditions. The Option is not intended to qualify as
an Incentive Stock Option within the meaning of section 422 of the United States
Internal Revenue Code. Residents of the United Kingdom may also be subject to
additional terms and conditions in the form contained in the Baxter
International Inc. Rules of the Baxter International United Kingdom Stock
Option, to the extent deemed necessary by the Committee.
4. Vesting, Exercise and Expiration
--------------------------------
4.1 The Option becomes vested three years after the date on which the Option is
granted or, if such date is not a Business Day, then the next Business Day
following such date. The Option shall continue to vest for one year after
the date on which employment of the Optionee by the Company is terminated,
if on the employment termination date the Optionee is age 50 or older and
has completed 15 or more years of employment with the Company.
4.2 When vested and until it expires, the Option may be exercised in whole or
in part in the manner specified by the Stockholder Services Department of
Baxter International Inc. If exercised in part, the Option must be
exercised in installments consisting of at least 100 shares or, if options
for less than 100 shares are then exercisable, for the number of shares
then exercisable. Shares of Common Stock may be used to pay the exercise
price of the Option in accordance with the requirements specified by the
Stockholder Services Department. Residents of the United Kingdom may not
use shares of Common Stock to pay the exercise price of the Option in any
circumstances.
4.3 If the Optionee's employment by the Company is terminated by death or
disability more than one year after the date on which the Option is
granted, the Optionee or the Optionee's legal representative or the person
or persons to whom the Optionee's rights under the Option are transferred
by will or the laws of descent and distribution shall have the right to
exercise the Option until it expires in accordance with its terms with
respect to all or any part of the shares remaining subject to the Option
(whether or not the Option was vested under section 4.1 on the Optionee's
employment termination date).
4.4 The Option shall expire at the close of business on the earlier of a date
determined as follows or, if such date is not a Business Day, then the last
Business Day preceding such date: (i) one year after the date on which
employment of the Optionee by the Company is terminated by his or her death
or disability; (ii) five years after the date on which employment of the
Optionee by the Company is terminated, if on the employment termination
date the Optionee is age 50 or older and has completed 15 or more years of
employment with the Company; (iii) three months after the date on which
employment of the Optionee by the Company is terminated except as provided
in subsection 4.4(i) and (ii), unless the Optionee dies or becomes disabled
during the three-month period, in which case the relevant date shall be one
year after the termination; or (iv) ten years from the date on which the
Option is granted. "Business Day" shall mean any day, other than Saturday
or Sunday, when the corporate headquarters of the Company is open for the
transaction of business and when the Common Stock is traded on the New York
Stock Exchange. A transfer of an Optionee from employment by one
corporation to another among Baxter International Inc. and its
subsidiaries, or a transfer of an Optionee to employment by another
corporation which assumes the Option or issues a substitute option in a
transaction to which section 424 of the Internal Revenue Code applies,
shall not be considered a termination of employment for the purposes of the
Option.
<PAGE>
Exhibit 4.6
Baxter International Inc.
Stock Option Plan
Adopted February 17, 1998
1. Purpose
-------
This Stock Option Plan ("Plan") is adopted by the Compensation Committee of the
Board of Directors ("Committee") of Baxter International Inc. ("Baxter").
Although this Plan is not adopted pursuant to the Baxter International Inc. 1994
Incentive Compensation Program ("Program"), it is granted for the general
purposes stated in the Program and for the specific purpose of motivating
Vernon R. Loucks Jr., ("Mr. Loucks") to implement a smooth transition of his
current responsibilities as Baxter's Chief Executive Officer to Harry M. Jansen
Kraemer, Jr.
2. Participants
------------
The only participant in this Plan is Mr. Loucks. For the reasons explained in
the preceding section, the Committee granted him a Stock Option under this Plan.
3. Option
------
The Stock Option gives Mr. Loucks the right to purchase 950,000 shares of Common
Stock as defined in the Program and it is granted under the terms and conditions
contained in this Plan. All of the provisions of the Program which apply to
Stock Options granted pursuant to the Program shall apply to the Stock Option
granted pursuant to this Plan, except for the portion of Section 4.1 relating to
number of shares available and the portion of Section 5.1 relating to the
calendar year limit. Terms defined in the Program shall have the same meaning
in these terms and conditions. The Stock Option is not intended to qualify as
an Incentive Stock Option within the meaning of section 422 of the United States
Internal Revenue Code.
4. Option Price, Vesting, Exercise and Expiration
----------------------------------------------
4.1 The Option Price consists of four different prices representing the Fair
Market Value of the Common Stock on the date of this Plan and three different
premium prices, as follows:
Number of Options Option Price
----------------- ------------
500,000 options $56.1875 (Fair Market Value)
250,000 options $73.04 (Fair Market Value +30%)
100,000 options $78.66 (Fair Market Value +40%)
100,000 options $84.28 (Fair Market Value +50%)
----------------
Total 950,000 options
<PAGE>
4.2 The Option becomes vested in four installments, as follows:
400,000 options - vest December 31, 1999
200,000 options - vest December 29, 2000
175,000 options - vest December 28, 2001
175,000 options - vest December 27, 2002
---------------
Total 950,000 options
subject to accelerated vesting, in accordance with the following sentence. If
Baxter's total shareholder return, measured by Common Stock price appreciation
plus dividends, for the two-year period ending December 31, 1999 is a total of
30% or more, then all 950,000 options will vest on December 31, 1999. For
purposes of the vesting installments in this section 4.2, the Option will vest
sequentially such that the portion of the Option with an Option Price equal to
the Fair Market Value will be the first to vest, and the portion of the Option
with the highest Option Price will be the last to vest.
4.3 When vested and until it expires, the Stock Option may be exercised in
whole or in part in the manner specified by the Stockholder Services Department
of Baxter, except as specified in the following sentence. To preserve the tax
deductibility to Baxter of any gain Mr. Loucks receives by exercising the Stock
Option, Mr. Loucks is not permitted, unless otherwise authorized by the
Compensation Committee, to exercise any portion of the Stock Option until Mr.
Loucks' compensation ceases to remain subject to Section 162(m) of the Internal
Revenue Code, as amended. If exercised in part, the Stock Option must be
exercised in installments consisting of at least 100 shares or, if options for
fewer than 100 shares are then exercisable, for the number of shares then
exercisable. Shares of Common Stock may be used to pay the exercise price of
the Stock Option in accordance with the requirements specified by the
Stockholder Services Department.
4.4 If Mr. Loucks' employment by Baxter is terminated by death or disability,
Mr. Loucks, or his legal representative or the person or persons to whom his
rights under the Stock Option are transferred by will, the laws of descent and
distribution or otherwise, shall have the right to exercise the Stock Option
until it expires in accordance with its terms with respect to all or any part of
the shares remaining subject to the Stock Option (whether or not the Stock
Option was vested under section 4.2 on Mr. Loucks' employment termination date).
4.5 If Mr. Loucks' employment by Baxter is terminated for cause, the Stock
Option under this Plan will be forfeited on the effective date of his employment
termination, to the extent it has not previously been exercised. For purposes
of this section 4.5 "for cause" means Mr. Loucks' failure to comply with any of
his obligations specified in section 4.6 of this Plan.
4.6 Mr. Loucks is obligated to: a) perform the duties assigned to him from time
to time by the Board of Directors of Baxter while he remains an employee of
Baxter;
<PAGE>
b) comply with the agreement he signed in January 1966 when his Baxter
employment commenced, including specifically, but not limited to, the non-
competition and confidentiality provisions of that agreement; c) refrain from
rendering services, directly or indirectly, for a period of one year after the
effective date of his Baxter employment termination, to any competing
organization, including himself, engaged in or about to become engaged in
research or development, production, distribution, marketing, providing, or
selling of any competing product; competing products include any products,
processes, or services of any person or organization, other than Baxter, in
existence or under development, which are substantially the same, may be
substituted for, or applied to substantially the same end use as, the products,
processes or services about which he acquired confidential information through
his work with Baxter; d) not intentionally disparage Baxter, its subsidiaries,
employees or products; e) not intentionally engage in actions contrary to the
interest of Baxter and its subsidiaries; and f) conduct the succession described
in section 1 of this Plan in a constructive and positive manner.
4.7 The Stock Option expires at the close of business on February 17, 2005.
<PAGE>
Exhibit 4.8
Baxter International Inc.
Stock Option Plan adopted March 14, 1997
Terms and Conditions
1. Purpose
-------
This Stock Option Plan ("Plan") is adopted by the Compensation Committee of the
Board of Directors ("Committee") of Baxter International Inc. Although this
Plan is not adopted pursuant to the Baxter International Inc. 1994 Incentive
Compensation Program ("Program"), it is granted for the purposes stated in the
Program.
2. Participants
------------
Participants in this Plan ("Optionee") shall be employees of Baxter
International Inc. or its subsidiaries ("Company") who became employees of the
Company as a result of the acquisition of Research Medical Inc., who have been
selected by the Committee and to whom the Committee makes an award of an option
("Option") under this Plan.
3. Awards
------
Each Option shall consist of a Stock Option as defined in the Program and is
granted under the terms and conditions contained in this Plan. All of the
provisions of the Program which apply to Stock Options granted pursuant to the
Program shall apply to the Stock Options granted pursuant to this Plan, except
for Section 4 of the Program (relating to shares subject to the Program). To
the extent that any of the terms and conditions contained in this Plan are
inconsistent with the applicable terms of the Program, the applicable terms of
the Program shall control. Terms defined in the Program shall have the same
meaning in these terms and conditions. The Option is not intended to qualify as
an Incentive Stock Option within the meaning of section 422 of the United States
Internal Revenue Code. Residents of the United Kingdom may also be subject to
additional terms and conditions in the form contained in the Baxter
International Inc. Rules of the Baxter International United Kingdom Stock
Option, to the extent deemed necessary by the Committee.
4. Vesting, Exercise and Expiration
--------------------------------
4.1 The Option becomes vested five years from the date of grant, subject to
acceleration in accordance with the following. One hundred percent of the Option
shall become vested on the first Business Day (as defined in section 4.4) after
the ninetieth consecutive calendar day during which the average Fair Market
Value (as defined in the Program) of the Common Stock (as defined in the
Program) equals or exceeds $65.00 per share. The Option shall not vest more than
three years after the Optionee's employment is terminated by retirement at or
after age 55 but shall otherwise continue to vest until the Option expires
pursuant to section 4.4.
4.2 When vested and until it expires, the Option may be exercised in whole or
in part in the manner specified by the Stockholder Services Department of Baxter
International Inc. If exercised in part, the Option must be exercised in
installments consisting of at least 100 shares or, if options for less than 100
shares are then exercisable, for the number of shares then exercisable. Shares
of Common Stock may not be used to pay the exercise price of the Option unless
certificates representing such shares have been issued and are delivered by the
Optionee in accordance with the requirements specified by the Stockholder
Services
<PAGE>
Department. Residents of the United Kingdom may not use shares of Common Stock
to pay the exercise price of the Option in any circumstances.
4.3 If the Optionee's employment by the Company is terminated by death or
disability more than 12 months after the date on which the Option is granted,
the Optionee or the Optionee's legal representative or the person or persons to
whom the Optionee's rights under the Option are transferred by will or the laws
of descent and distribution shall have the right to exercise the Option until it
expires in accordance with its terms with respect to all or any part of the
shares remaining subject to the Option (whether or not such shares were
purchasable by the Optionee under section 4.1 at the time of death.)
4.4 The Option shall expire at the close of business on the earlier of a date
determined as follows or, if such date is not a Business Day, then the last
Business Day preceding such date: (i) one year after the date on which
employment of the Optionee by the Company shall have been terminated by his
death or disability; (ii) five years after the date on which employment of the
Optionee by the Company shall have been terminated by retirement at or after age
55; (iii) three months after the date on which employment of the Optionee by the
Company shall have been terminated except as provided in subsection 4.4(i) and
(ii), unless the Optionee dies or becomes disabled during said three-month
period, in which case the relevant date shall be one year after the termination;
or (iv) ten years from the date on which the Option was granted. "Business Day"
shall mean any day, other than Saturday or Sunday, when the corporate
headquarters of the Company is open for the transaction of business and when the
Common Stock is traded on the New York Stock Exchange. A transfer of an Optionee
from employment by one corporation to another among Baxter International Inc.
and its subsidiaries, or a transfer of an Optionee to employment by another
corporation which assumes the Option or issues a substitute option in a
transaction to which section 424 of the Internal Revenue Code applies, shall not
be considered a termination of employment for the purposes of the Option.
<PAGE>
Exhibit 4.9
Baxter International Inc. Stock Option Plan
Adopted August 4, 1997
1. Purpose
This Stock Option Plan ("Plan") is adopted pursuant to the Baxter
International Inc. 1994 Incentive Compensation Program ("Program") for the
purposes stated in the Program.
2. Participants
Participants in this Plan ("Optionee") shall be valued employees of Baxter
International Inc. or its subsidiaries ("Company") who have been selected
by the Committee and to whom the Committee makes an award of an option
("Option") under this Plan.
3. Awards
Each Option shall consist of a Stock Option as defined in the Program and
is granted under the terms and conditions contained in the Program and this
Plan. To the extent that any of the terms and conditions contained in this
Plan are inconsistent with the Program, the terms of the Program shall
control. Terms defined in the Program shall have the same meaning in these
terms and conditions. The Option is not intended to qualify as an Incentive
Stock Option within the meaning of section 422 of the United States
Internal Revenue Code. Residents of the United Kingdom may also be subject
to additional terms and conditions in the form contained in the Baxter
International Inc. Rules of the Baxter International United Kingdom Stock
Option, to the extent deemed necessary by the Committee.
4. Vesting, Exercise and Expiration
4.1 The Option becomes vested five years from the date of grant, subject to
acceleration in accordance with the following. One hundred percent of the
Option shall become vested on the first Business Day (as defined in section
4.4) after the ninetieth consecutive calendar day during which the average
Fair Market Value (as defined in the Program) of the Common Stock (as
defined in the Program) equals or exceeds $65.00 per share. The Option
shall not vest more than three years after the Optionee's employment is
terminated by retirement at or after age 55 but shall otherwise continue to
vest until the Option expires pursuant to section 4.4.
4.2 When vested and until it expires, the Option may be exercised in whole or
in part in the manner specified by the Stockholder Services Department of
Baxter International Inc. If exercised in part, the Option must be
exercised in installments consisting of at least 100 shares or, if options
for less than 100 shares are then exercisable, for the number of shares
then exercisable. Shares of Common Stock may not be used to pay the
exercise price of the Option unless certificates representing such shares
have been issued and are delivered by the Optionee in accordance with the
requirements specified by the Stockholder Services Department. Residents
of the United Kingdom may not use shares of Common Stock to pay the
exercise price of the Option in any circumstances.
4.3 If the Optionee's employment by the Company is terminated by death or
disability more than 12 months after the date on which the Option is
granted, the Optionee or the Optionee's legal representative or the person
or persons to whom the Optionee's rights under the Option are transferred
by will or the laws of descent and distribution shall have the right to
exercise the Option until it expires in accordance with its terms with
respect to all or any part of the shares remaining subject to the Option
(whether or not such shares were purchasable by the Optionee under section
4.1 at the time of death.)
4.4 The Option shall expire at the close of business on the earlier of a date
determined as follows or, if such date is not a Business Day, then the last
Business Day preceding such date: (i) one year after the date on which
employment of the Optionee by the Company shall have been terminated by his
death or disability; (ii) five years after the date on which employment of
the Optionee by the Company shall have been terminated by retirement at or
after age 55; (iii) three months after the date on which employment of the
Optionee by the Company shall have been terminated except as provided in
subsection 4.4(i) and (ii), unless the Optionee dies or becomes disabled
during said three-month period, in which case the relevant date shall be
one year after the termination; or (iv) ten years from the date on which
the Option was granted. "Business Day" shall mean any day, other than
Saturday or Sunday, when the corporate headquarters of the Company is open
for the transaction of business and when the Common Stock is traded on the
New York Stock Exchange. A transfer of an Optionee from employment by one
corporation to another among Baxter International Inc. and its
subsidiaries, or a transfer of an Optionee to employment by another
corporation which assumes the Option or issues a substitute option in a
transaction to which section 424 of the Internal Revenue Code applies,
shall not be considered a termination of employment for the purposes of the
Option.
<PAGE>
[Baxter Letterhead]
EXHIBIT 5
---------
February 1, 1999
Baxter International Inc.
One Baxter Parkway
Deerfield, IL 60015
Ladies and Gentlemen:
I refer to the registration statement on Form S-8 (the "Registration Statement")
of Baxter International Inc. (the "Registrant") to be filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended (the
"Securities Act"). The Registration Statement relates to the sale of up to
25,080,823 shares of the Registrant's Common Stock, $1 par value (the "Shares"),
to be issued pursuant to the employee benefit plans (the "Plans"), as specified
in the Registration Statement.
I have examined and am familiar with (i) the Registrant's Restated Certificate
of Incorporation, (ii) its by-laws, as amended, and (iii) the corporate
proceedings relating to the Registration Statement. Upon the basis of the
foregoing, and having satisfied myself as to such other matters of law and fact
as I consider relevant for the purposes of this opinion, I advise you that, in
my opinion under applicable law, the Shares will be, when issued in accordance
with the respective Plans, legally issued, fully paid and non-assessable.
I hereby consent to the filing of this opinion as an exhibit to the Registration
Statement. In giving this consent, I do not admit that I am within the category
of persons whose consent is required by Section 7 of the Securities Act.
Very truly yours,
Thomas J. Sabatino, Jr.
Corporate Vice President and
General Counsel
<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
13, 1998, August 10, 1998 and November 10, 1998 (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 1, 1999. We are also
aware of our responsibilities under the Securities Act of 1933.
Yours very truly,
PricewaterhouseCoopers LLP
Chicago, Illinois
February 1, 1999
<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 5, 1998, which appears on page 26 of the 1997 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, 1997. 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.
PricewaterhouseCoopers LLP
Chicago, Illinois
February 1, 1999
