EXHIBIT 10.28
BAXTER INTERNATIONAL INC.
NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN ADOPTED APRIL 30, 2001
[PLAN FOR ANNUAL GRANT]
TERMS AND CONDITIONS
1. PURPOSE
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This Non-Employee Director Stock Option Plan (the "Plan") is adopted by the
Compensation Committee (the "Committee") of the Board of Directors (the "Board")
of Baxter International Inc. ("Baxter"). This Plan is adopted pursuant to the
Baxter International Inc. 2001 Incentive Compensation Program (the "Program"),
for the purposes stated in the Program. Capitalized terms defined in the
Program that are used without being defined in the Plan will have the same
meaning as in the Program.
2. PARTICIPANTS
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Each member of the Board who is not an employee of Baxter or any of its
subsidiaries shall participate in the Plan (a "Participant").
3. AWARDS
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3.1 On the date of Baxter's annual meeting of stockholders (the "Annual
Meeting") in each year beginning with the Annual Meeting on May 1,
2001, and subject to availability of shares of Common Stock under
Section 4.2, each Participant upon completion of the Annual Meeting
shall, automatically and without necessity of any action by the Board
or any committee thereof, be granted an option (an "Option") to
purchase the number of shares of Common Stock determined pursuant to
Section 4.1 of this Plan.
3.2 Each Participant elected or appointed on a date other than the date of
an Annual Meeting shall, on the date of such election or appointment
and automatically and without necessity of any action by the Board or
any committee thereof, be granted an Option to purchase that number of
shares of Common Stock equal to the product of (A) the Annual Stock
Option Grant Amount (as defined in Section 4.1) for each Option granted
on the date of the immediately preceding Annual Meeting, multiplied by
(B) the quotient of (i) the number of full calendar months before the
next Annual Meeting divided by (ii) 12 (rounded to the nearest whole
number which is a multiple of ten). The number of shares of Common
Stock subject to any Option granted under this Section 3.2 shall not
exceed the number available under Section 4.2 on the date of grant.
3.3 The purchase price for each share of Common Stock subject to an Option
shall be the Fair Market Value of a share of Common Stock on the date
of
grant. The terms of each Option will be as set forth in the Plan and
the Program. To the extent that any provision of the Plan is
inconsistent with the Program, the Program shall control. The Options
are not intended to qualify as Incentive Stock Options within the
meaning of Section 422 of the United States Internal Revenue Code.
4. NUMBER OF SHARES
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4.1 The number of shares of Common Stock subject to each Option granted
pursuant to this Plan on the date of an Annual Meeting ("Annual Stock
Option Grant Amount") shall be determined in accordance with this
Section 4.1. Each Participant shall be assigned an annual stock
option target equal to 5,000 shares of Common Stock, subject to
adjustment in accordance with the Program ("Annual Stock Option
Target"). The Annual Stock Option Grant Amount shall be equal to the
product of (A) the Annual Stock Option Target multiplied by (B) the
stock performance multiplier ("Stock Performance Multiplier") set forth
on Exhibit A attached to this Plan, which is based on Baxter's total
shareholder return ("Baxter TSR") compared to the total shareholder
return for the Standard and Poor's (S&P) Health Care Composite Index
("HCCI TSR") for the 12-month period ending on the most recent
September 30 prior to the date of an Annual Meeting. The Annual Stock
Option Grant Amount shall not be more than 150% of the Annual Stock
Option Target or less than 75% of the Annual Stock Option Target.
4.2 The total number of shares of Common Stock available for Options
granted under this Plan shall be 250,000 shares, subject to adjustment
in accordance with the Program. If on any grant date, the number of
shares of Common Stock which would otherwise be subject to Options
granted under the Plan shall exceed the number of shares of Common
Stock then remaining available under the Plan, the available shares
shall be allocated among the Options to be granted Participants in
proportion to the number of shares subject to Options that Participants
would otherwise be entitled to receive.
5. EXERCISE AND EXPIRATION
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5.1 Subject to Section 11.10 of the Program and except as expressly
provided in Sections 5.5, 5.6 and 5.7, Options shall first become
exercisable on the first anniversary of the date of grant, or if that
date is not a Business Day, then on the next succeeding Business Day. A
"Business Day" is any day on which the Common Stock is traded on the
New York Stock Exchange.
5.2 After an Option becomes exercisable and until it expires, it may be
exercised in whole or in part, in the manner specified by the Company.
If exercised in part, the Option must be exercised in increments of 100
shares
of Common Stock or, if the Option is not then exercisable for 100
shares of Common Stock, to the full extent the Option can then be
exercised. Under no circumstances may an Option be exercised after it
has expired. Shares of Common Stock may be used to pay the purchase
price for shares of Common Stock to be acquired upon exercise of an
Option in accordance with the requirements specified by the Company.
5.3 Except as provided in Sections 5.5, 5.6 and 5.7, if a Participant
ceases service as a member of the Board before his or her Option
becomes exercisable, the Option will expire when the Participant ceases
service as a member of the Board.
5.4 If a Participant ceases service as a member of the Board after his or
her Option becomes exercisable, the Option will not expire but will
remain exercisable. Subject to Sections 5.5, 5.6, 5.7 and 5.8, the
Option will expire three months after the Participant ceases service as
a member of the Board, unless the Participant dies or becomes disabled
during such three month period in which case the Option will expire on
the first anniversary of the date the Participant ceased serving as a
member of the Board.
5.5 If a Participant dies while serving as a member of the Board, his or
her Option will not expire and will remain, or immediately become,
fully exercisable, as the case may be. Subject to Sections 5.7 and 5.8,
the Option will expire on the first anniversary of the Participant's
death.
5.6 If a Participant becomes disabled and unable to continue service as a
member of the Board, his or her Option will not expire and will remain,
or when the Participant ceases to serve as member of the Board become,
fully exercisable, as the case may be. Subject to Sections 5.7 and 5.8,
the Option will expire on the first anniversary of the date the
Participant ceases service as a member of the Board.
5.7 If a Participant who has served as a member of the Board for a
continuous period of at least ten years or who is at least 72 years of
age ceases to serve as a member of the Board (including without
limitation by reason of death or disability), his or her Option will
not expire and will remain, or when the Participant ceases to serve as
member of the Board become, fully exercisable, as the case may be.
Subject to Section 5.8, the Option will expire on the fifth anniversary
of the date the Participant ceases service as a member of the Board.
5.8 Options that have not previously expired will expire at the close of
business on the tenth anniversary of the date of grant. If an Option
would expire on a date that is not a Business Day, it will expire at
the close of business on the last Business Day preceding that date.
5.9 An exercisable Option may only be exercised by the Participant, his or
her legal representative, or a person to whom the Participant's rights
in the Option are transferred by will or the laws of descent and
distribution or in accordance with rules and procedures established by
the Committee.
6. GENERAL PROVISIONS
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6.1 Subject to the limitations contained in Section 11.9 of the Program,
the Board or the Committee may, at any time and in any manner, amend,
suspend, or terminate the Plan or any Option outstanding under the
Plan.
6.2 Participation in the Plan does not give any Participant any right to
continue as a member of the Board for any period of time or any right
or claim to any benefit unless such right or claim has specifically
accrued hereunder.
EXHIBIT A
To
Plan For Annual Grants
STOCK OPTION PERFORMANCE MULTIPLIER
ANNUAL STOCK
Baxter TSR Performance TSR MULTIPLIER TARGET OPTION AWARD
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Above HCCI TSR by 25% 150% 5,000 7,500
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Above HCCI TSR by 15% 130% 5,000 6,500
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Above HCCI TSR by 10% 120% 5,000 6,000
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EQUAL TO HCCI TSR 100% 5,000 5,000
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Below HCCI TSR by 10% 90% 5,000 4,500
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Below HCCI TSR by 15% 85% 5,000 4,250
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Below HCCI TSR by 25% 75% 5,000 3,750
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NOTE:
Results that fall between performance levels will be interpolated (e.g., A
performance of 12.5% above HCCI TSR would equate to a 125% multiplier)