Exhibit 10.3

BAXTER INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL PENSION PLAN

(Amended and Restated Effective January 5, 2018)

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C E R T I F I C A T E

Baxter International, Inc., acting through a duly authorized member of the
Baxter International Inc. Administrative Committee, as the duly authorized
delegate of the Board of Directors, hereby adopts this amendment and restatement
of the Baxter International Inc. and Subsidiaries Supplemental Pension Plan,
effective January 5, 2018, in the form attached hereto.

Dated this 5th day of January, 2018.

 

Baxter International Inc. By:   /s/ Salvatore Dadouche Salvatore Dadouche
Administrative Committee Member

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TABLE OF CONTENTS

 

ARTICLE I GENERAL      1  

1.1

  Purpose and Effective Date      1  

1.2

  Plan Administration; Source of Benefit Payments      1  

1.3

  Limitation on Provisions      1  

1.4

  Inactive Participation      1  

1.5

  Plan Supplements      2   ARTICLE II DEFINITIONS      3  

2.1

  Accrued Benefit      3  

2.2

  Administrative Committee      3  

2.3

  Beneficiary      3  

2.4

  Benefit      3  

2.5

  Code      3  

2.6

  Controlled Group      3  

2.7

  Corporation      3  

2.8

  Deferred Compensation Plan      3  

2.9

  Effective Date      3  

2.10

  Employer      3  

2.11

  ERISA      4  

2.12

  Excess Benefit      4  

2.13

  Non-Participating Employer      4  

2.14

  Participant      4  

2.15

  Participating Employer      4  

2.16

  Pension Make-Whole Benefit      4  

2.17

  Pension Plan      4  

2.18

  Pension Plan II      4  

2.19

  Plan      4  

2.20

  Points      4  

2.21

  Qualified Benefit      4  

2.22

  Section 409A      4  

2.23

  Special Supplemental Benefit      4  

2.24

  Termination of Employment      5   ARTICLE III PARTICIPATION IN THE PLAN     
6  

3.1

  Eligibility      6  

3.2

  Restricted Participation      6  

3.3

  No Contract of Employment      6  

3.4

  Participation Freeze      6   ARTICLE IV AMOUNT AND PAYMENT OF PLAN BENEFITS
     8  

4.1

  Plan Benefits      8  

4.2

  Excess Benefit      8  

4.3

  Pension Make-Whole Benefit      8  

4.4

  Special Supplemental Benefits      8  

4.5

  Actuarial Equivalence      9  

4.6

  Time and Form of Payment      9  

4.7

  Death Benefits      11  

4.8

  Withholding Taxes      12  

4.9

  Compliance with Section 409A      13  

4.10

  Correction of Errors      13  

 

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TABLE OF CONTENTS

 

ARTICLE V ADMINISTRATION

     14  

5.1

  Administrative Committee      14  

5.2

  Administrative Committee Powers      14  

5.3

  Effect of Administrative Committee Decisions      15  

5.4

  Claims Procedure      15  

5.5

  Action by Administrative Committee      16  

5.6

  Indemnity      16  

ARTICLE VI AMENDMENT AND TERMINATION

     17  

6.1

  Amendment and Termination      17  

6.2

  Successors and Assigns      17  

ARTICLE VII MISCELLANEOUS

     18  

7.1

  Unfunded Plan      18  

7.2

  Unsecured General Creditor      18  

7.3

  Nonassignability      18  

7.4

  Not a Contract of Employment      18  

7.5

  Protective Provisions      18  

7.6

  Governing Law      19  

7.7

  Severability      19  

7.8

  Notice      19  

7.9

  Successors      19  

7.10

  Action by Corporation      19  

7.11

  Effect on Benefit Plans      19  

7.12

  Participant Litigation      19  

 

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BAXTER INTERNATIONAL INC. AND SUBSIDIARIES

SUPPLEMENTAL PENSION PLAN

(Amended and Restated Effective January 5, 2018)

ARTICLE I

GENERAL

1.1 Purpose and Effective Date. Baxter International Inc. (the “Corporation”)
established the Baxter International Inc. and Subsidiaries Supplemental Pension
Plan (the “Plan”), effective as of January 1, 1989, to assist in providing
retirement and other benefits to certain employees of the Corporation and its
affiliates which are in addition to those provided under the Baxter
International Inc. and Subsidiaries Pension Plan (the “Pension Plan”). The Plan
was previously amended effective January 1, 2005, January 1, 2009, and
January 1, 2015. Effective January 1, 2018, the Plan was again amended and
restated in its entirety to reflect the spin-off and transfer of assets and
liabilities under the Pension Plan attributable to participants who were
eligible employees of a Participating Employer or a Non-Participating Employer
on January 1, 2018 from the Pension Plan to the Baxter International Inc. and
Subsidiaries Pension Plan II (the “Pension Plan II”). On and after January 1,
2018, the Plan will provide retirement and other benefits to certain employees
of the Corporation and its affiliates in addition to those provided under the
Pension Plan or Pension Plan II, as applicable. The following provisions
constitute an amendment and restatement of the Plan effective January 5, 2018,
the “Effective Date” of the Plan set forth herein. Effective December 31, 2022,
Benefits under the Plan will be frozen, and Participants will not accrue
additional benefits of any type under this Plan. The Plan is intended to
constitute an unfunded plan maintained primarily for the purpose of providing
deferred compensation to a select group of management or highly compensated
employees for purposes of ERISA.

1.2 Plan Administration; Source of Benefit Payments. The authority to control
and manage the operation and administration of the Plan will be vested in the
Administrative Committee, as set forth in Article V. A Participating Employer’s
obligation under the Plan will be reduced to the extent that any amounts due
under the Plan are paid from one or more trusts, the assets of which are subject
to the claims of general creditors of the Participating Employer or any
affiliate thereof, provided, however, that nothing in the Plan will require the
Corporation or any Participating Employer to establish any trust to provide
benefits under the Plan.

1.3 Limitation on Provisions. Any benefit payable under the Pension Plan or
Pension Plan II will be paid solely in accordance with the terms and conditions
of the applicable pension plan and nothing in the Plan will operate or be
construed in any way to modify, amend or affect the terms and provisions of the
Pension Plan or the Pension Plan II.

1.4 Inactive Participation. Except as otherwise specifically provided herein,
the benefits, if any, payable to or on behalf of Participants who terminated
employment with the Corporation and its affiliates prior to the Effective Date
will be determined in accordance with the terms of the Plan as in effect on such
Termination of Employment; provided that any provision of the Plan that is
required to be effective as of an earlier in order to comply with Code
Section 409A will be effective as of such date.

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1.5 Plan Supplements. The provisions of the Plan as applied to any Participating
Employer or Participant may be modified and/or supplemented from time to time by
the adoption of one or more Supplements. In the event of any inconsistency
between a Supplement and the Plan document, the terms of the Supplement will
govern; provided that no Supplement will alter the provisions of Section 4.9
(except that a Supplement may provide that the portion of any Special
Supplemental Benefit is not subject to the provisions of the Plan intended to
comply with Section 409A to the extent such portion was accrued and vested on
December 31, 2004, and that the Special Supplemental Benefit is not materially
modified after October 3, 2004) or otherwise cause the Plan to be administered
in a manner that does not comply with Section 409A.

 

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ARTICLE II

DEFINITIONS

2.1 Accrued Benefit. Accrued Benefit will have the meaning ascribed to such term
under the Pension Plan.

2.2 Administrative Committee. Administrative Committee will have the meaning
ascribed to such term under the Pension Plan.

2.3 Beneficiary. A Participant’s Beneficiary will be the Participant’s
beneficiary under the Pension Plan or the Pension Plan II (or the person who
would be the Participant’s beneficiary under the Pension Plan or the Pension
Plan II if the Participant’s Qualified Benefit were paid in the same form and at
the same time as his Benefit hereunder).

2.4 Benefit. A Participant’s Benefit means the sum of the Participant’s Excess
Benefit, Make-Whole Benefit, and Special Supplemental Benefit, if any, unless
otherwise provided.

2.5 Code. Code means the Internal Revenue Code of 1986, as amended.

2.6 Controlled Group. Controlled Group means the Corporation and all other
business entities, whether or not incorporated, which, together with the
Corporation, would be considered a single employer under Code Section 414(b) or
(c).

2.7 Corporation. Corporation has the meaning ascribed to such term in
Section 1.1.

2.8 Deferred Compensation Plan. Deferred Compensation Plan means Baxter
International Inc. and Subsidiaries Deferred Compensation Plan.

2.9 Effective Date. Effective Date means January 5, 2018.

2.10 Employer. Employer means:

 

  (a) Controlled Group. A Participating Employer and any corporation, trade or
business, if it and the Participating Employer are members of a controlled group
of corporations as defined in Code Section 414(b) or under common control as
defined in Code Section 414(c); provided, however, that, solely for purposes of
the provisions pertaining to maximum pensions set forth in Section 13.12, the
standard of control under Code Sections 414(b) and 414(c) will be deemed to be
“more than fifty percent (50%)” rather than “at least eighty percent (80%)”;

 

  (b) Affiliated Service Group. A Participating Employer and an organization, if
it and the Participating Employer are members of an affiliated service group as
defined in Code Section 414(m); or

 

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  (c) Other Related Organizations. A Participating Employer and any other
organization described in applicable regulations issued under Code
Section 414(o).

2.11 ERISA. ERISA means the Employee Retirement Income Security Act of 1974, as
amended.

2.12 Excess Benefit. Excess Benefit means the benefit determined under
Section 4.2.

2.13 Non-Participating Employer. A Non-Participating Employer means any Employer
which is not a Participating Employer.

2.14 Participant. Participant means an employee of a Participating Employer who
is eligible for an Excess Benefit, Pension Make-Whole Benefit or Special
Supplemental Benefit, as set forth in Section 3.1.

2.15 Participating Employer. Participating Employer means the Corporation and
any affiliate of the Corporation, which is a Participating Employer under the
Pension Plan or the Pension Plan II.

2.16 Pension Make-Whole Benefit. Pension Make-Whole Benefit means the benefit
determined under Section 4.3.

2.17 Pension Plan. Pension Plan has the meaning ascribed to such term in
Section 1.1.

2.18 Pension Plan II. Pension Plan II has the meaning ascribed to such term in
Section 1.1.

2.19 Plan. Plan has the meaning ascribed to such term in Section 1.1.

2.20 Points. A Participant’s Points will be equal to the number of Points the
Participant has accumulated as of any date under the terms of the Pension Plan
or Pension Plan II, as applicable.

2.21 Qualified Benefit. Qualified Benefit means the Participant’s actual Accrued
Benefit payable under the Pension Plan or Pension Plan II.

2.22 Section 409A. Section 409A means Section 409A of the Internal Revenue Code
of 1986, as enacted by the American Jobs Creation Act of 2004 and as
subsequently amended, and including all Treasury Regulations and other
authoritative guidance issued pursuant thereto.

2.23 Special Supplemental Benefit. Special Supplement Benefit means the benefit
determined under Section 4.4.

 

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2.24 Termination of Employment. A Termination of Employment occurs on the date
on which a Participant incurs a separation from service as defined in Treasury
Regulations issued pursuant to Section 409A. The following rules are intended to
implement the requirements of Section 409A, and may be adjusted by the
Administrative Committee as required to comply with guidance issued under
Section 409A:

 

  (a) The Participant will not be considered to have separated from service so
long as the Participant is on military leave, sick leave, or other bona fide
leave of absence if the period of such leave does not exceed six months, or if
longer, so long as the Participant retains a right to reemployment with an
Employer under an applicable statute or by contract.

 

  (b) Regardless of whether his employment has been formally terminated, the
Participant will be considered to have separated from service as of the date it
is reasonably anticipated that no further services will be performed by the
Participant for any Employer, or that the level of bona fide services the
Participant will perform after such date will permanently decrease to no more
than 20 percent of the average level of bona fide services performed over the
immediately preceding 36-month period (or the full period of employment if the
Participant has been employed for less than 36 months). For purposes of the
preceding test, during any paid leave of absence the Participant will be
considered to have been performing services at the level commensurate with the
amount of compensation received, and unpaid leaves of absence will be
disregarded.

 

  (c) For purposes of determining whether the Participant has separated from
service, all services provided for any Employer, or for any entity that is a
member of the Controlled Group, will be taken into account, whether provided as
an employee or as a consultant or other independent contractor; provided that
the Participant will not be considered to have not separated from service solely
by reason of service as a non-employee director of the Corporation or any other
such entity. Solely for purposes of this Section 2.25, the term “Controlled
Group” will be modified by substituting “fifty percent (50%)” for “eighty
percent (80%)” for all purposes of Code Sections 414(b) and (c) (and Code
Section 1563 to the extent incorporated therein).

 

  (d) A Participant who is employed by an Employer, and continues to be employed
by the employer following a stock sale, spin-off, or other transaction that
causes the Participant’s employer to cease to be a member of the Controlled
Group, will not be considered to have incurred a Termination of Employment as a
result of such transaction. A Participant who ceases to be employed by the
Corporation or any member of the Controlled Group as a result of a sale of
substantially all of the assets constituting a division, facility, or separate
line of business, will be considered to have incurred a Termination of
Employment unless the Corporation (or Participating Employer selling such
assets) and the purchaser agree in writing, not later than the closing date of
such transaction, that all Participants affected by such transaction will not be
considered to have incurred a Termination of Employment, and that the purchaser
agrees to assume the obligation for payment of the Benefits of all such
Participants in accordance with the Plan.

 

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ARTICLE III

PARTICIPATION IN THE PLAN

3.1 Eligibility. An employee of a Participating Employer will become a
Participant in the Plan on the first date such employee is eligible for an
Excess Benefit, Pension Make-Whole Benefit or Special Supplemental Benefit, in
accordance with the following:

 

  (a) Each participant in the Pension Plan or the Pension Plan II who has a
fully vested interest in his or her Accrued Benefit under the Pension Plan or
the Pension Plan II, as applicable, and whose benefit under the Pension Plan or
the Pension Plan II is limited by reason of the application of Code Section 415
or Code Section 401(a)(17) will be eligible for an Excess Benefit, determined in
accordance with Section 4.2.

 

  (b) Each participant in the Pension Plan or the Pension Plan II who has a
fully vested interest in his or her Accrued Benefit under the Pension Plan or
the Pension Plan II, as applicable, and who also is a participant in the
Deferred Compensation Plan will be eligible for a Pension Make-Whole Benefit,
determined in accordance with Section 4.3.

 

  (c) The Administrative Committee (or the person or persons delegated such
authority by the Administrative Committee), in its sole discretion, will
designate the individuals, if any, who will be eligible for Special Supplemental
Benefits.

3.2 Restricted Participation. Notwithstanding any other provision of the Plan to
the contrary, if the Administrative Committee determines that participation by
one or more Participants will cause the Plan as applied to any Participating
Employer to be subject to Part 2, 3 or 4 of Subtitle B of Title I of ERISA, the
entire interest of such Participants under the Plan will be segregated from the
Plan, and such Participants will cease to have any interest under the Plan. In
the event the Participant has died, the foregoing provisions of this Section 3.2
will apply to the Participant’s interest, if any, which is payable to the
Participant’s surviving spouse or other beneficiary.

3.3 No Contract of Employment. The Plan does not constitute a contract of
employment, and participation in the Plan will not give any employee the right
to be retained in the employ of the Corporation or any Participating Employer
nor any right or claim to any benefit under the Plan, unless such right or claim
has specifically accrued under the terms of the Plan.

3.4 Participation Freeze. Participation in the Plan is frozen effective
December 31, 2006, and no Employees will become Participants after such date,
subject to the following:

 

  (a) No Employee who is hired by a Participating Employer after December 31,
2006, or who was hired by a Non-Participating Employer prior to January 1, 2007,
and transferred to a Participating Employer after December 31, 2006, will be
eligible to participate in the Plan.

 

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  (b) An Eligible Employee (as defined in the Pension Plan) who was employed by
a Participating Employer on December 31, 2006, but who had not satisfied the
requirements of subsection 3.1(b) of the Pension Plan on such date, became a
Participant on the first Entry Date after he satisfied such requirements, unless
he elected not to become a Participant as provided in subsection (c) below.

 

  (c) The election of a Participant or Eligible Employee (as defined in the
Pension Plan) to either cease accruing benefits as of December 31, 2006, under
the Pension Plan, or not to become a Participant in the Pension Plan after
December 31, 2006, will also apply under this Plan. The Plan Benefit of a
Participant who elects under the Pension Plan to cease accruing benefits will
thereafter be equal to his Plan Benefit as of December 31, 2006, which will not
be adjusted for subsequent changes in his Average Monthly Compensation, Years of
Service, Projected Benefit Service, or Primary Social Security Benefit, but such
Participant will continue to earn Years of Service for purposes of vesting, and
Points, and his Benefit will be payable as otherwise provided herein. An
Eligible Employee who elects not to become a Participant in the Pension Plan
will thereafter be ineligible to become a Participant in this Plan.

 

  (d) Notwithstanding the foregoing, an Employee hired prior to December 31,
2006, and who did not elect to cease accruing benefits under the Pension Plan as
of December 31, 2006, but who was not eligible for either an Excess Benefit or a
Make-Whole Benefit prior to December 31, 2006, solely because his Qualified
Benefit was not limited by the application of Code Section 415 or Code
Section 401(a)(17) and he had not deferred any compensation under the Deferred
Compensation Plan, will be eligible to participate beginning with the first year
in which he is eligible for either an Excess Benefit or a Make-Whole Benefit.

 

  (e) To the extent permitted by Section 4.4, an Employee not otherwise eligible
to participate in the Plan may be eligible to receive a Special Supplemental
Benefit.

 

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ARTICLE IV

AMOUNT AND PAYMENT OF PLAN BENEFITS

4.1 Plan Benefits. Eligible Participants under the Plan will receive an Excess
Benefit, Pension Make-Whole Benefit or Special Supplemental Benefit, in the
amount and payable at the times set forth in the following provisions of this
Article 4. Notwithstanding the foregoing, effective December 31, 2022, Benefits
under the Plan will be frozen, and Participants will not accrue additional
benefits of any type under this Plan. Effective January 1, 2009, the amount of a
Participant’s Excess Benefit and Pension Make-Whole Benefit will be calculated
as if the Participant’s Qualified Benefit had commenced as of the same date, and
in the same form, as the Participant’s Excess Benefit and Pension Make-Whole
Benefit, regardless of when and in what form the Qualified Benefit is paid, and
no adjustment will be made to the Excess Benefit or Pension Make-Whole Benefit
when the Qualified Benefit commences. To the extent a Supplemental Benefit is
defined in whole or part by reference to the Qualified Benefit, the preceding
sentence will apply unless the terms of the Supplemental Benefit clearly provide
for a different method of calculation.

4.2 Excess Benefit. As of any date, an eligible Participant’s “Excess Benefit”
under the Plan will be an amount equal to the Qualified Benefit the Participant
would be eligible for under the Pension Plan or the Pension Plan II, as
applicable, as of such date if such Qualified Benefit were determined without
regard to limitations of Code Sections 415 and 401(a)(17), reduced by the
Participant’s Qualified Benefit as of such date. A Participant’s Excess Benefit,
if any, will be paid at the time and in the form provided in Section 4.6.

4.3 Pension Make-Whole Benefit. As of any date, an eligible Participant’s
“Pension Make-Whole Benefit” under the Plan will be an amount equal to:

 

  (a) the Qualified Benefit the Participant would be eligible for under the
Pension Plan or the Pension Plan II, as applicable, as of such date if such
Qualified Benefit were determined (i) without exclusion of compensation deferred
under the Deferred Compensation Plan, and (ii) without regard to the limitations
of Code Sections 415 and 401(a)(17),

reduced by

 

  (b) the sum of (i) the Participant’s actual Qualified Benefit under the
Pension Plan or the Pension Plan II, as applicable, as of such date, and
(ii) the amount of any Excess Benefit determined under Section 4.2 without
regard to such deferred compensation.

A Participant’s Pension Make-Whole Benefit, if any, will be paid at the time and
in the form provided in Section 4.6.

4.4 Special Supplemental Benefits. The amount, if any, of a Participant’s
“Special Supplemental Benefit” will be determined by the Administrative
Committee, will be subject to such terms and conditions as the Administrative
Committee may establish, and will be payable at

 

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the times and in the form determined by the Administrative Committee. Effective
as of January 1, 2005, the time and form of payment of any Special Supplemental
Benefit will be specified by the Administrative Committee at the time the
Administrative Committee establishes the Participant’s right to the Special
Supplemental Benefit. In the event that any right to a Special Supplemental
Benefit was not fully vested on December 31, 2004, and is not amended not later
than December 31, 2008 to specify the time and form of payment in a manner that
satisfies the requirements of Section 409A, such Special Supplemental Benefit
will be paid in the form specified in Section 4.6. The Administrative Committee,
in its sole discretion, may delegate its authority under this Section 4.4 to any
person or persons in connection with the award of Special Supplemental Benefits
to a particular Participant, a class of Participants, or all Participants. All
rights to Special Supplemental Benefits will be set forth in writing, which
writing may include an employment contract or similar agreement, and a copy of
all actions taken by the Administrative Committee or its delegate with respect
to Special Supplemental Benefits under the Plan will be sent to the Corporate
Counsel in charge of the Company’s employee benefit plans. Anything else
contained herein to the contrary notwithstanding, no person will have any right
to a Special Supplemental Benefit in the absence of a written instrument setting
forth the terms of such Special Supplemental Benefit.

4.5 Actuarial Equivalence. To the extent applicable, the benefits payable to any
person under the Plan will be determined by applying the appropriate interest
rate and other actuarial assumptions set forth in the Pension Plan or the
Pension Plan II, as applicable.

4.6 Time and Form of Payment.

 

  (a) The Benefit (excluding for all purposes of this Section 4.6 any Special
Supplemental Benefit unless otherwise provided in Section 4.4) of the following
Participants will commence at the same time and be paid in the same manner as
the Participant’s Qualified Benefit: (i) Participants whose Qualified Benefit
commences not later than December 31, 2008, and (ii) Participants whose entire
Benefit was fully accrued and vested on December 31, 2004.

 

  (b) The Benefit of a Participant who is not described in subsection (a) will
become payable upon the later of the occurrence of the first day of the month
following the Participant’s Termination of Employment or, in the case of a
Participant who was a Participant prior to December 31, 2008, a specified date,
if any, elected by the Participant in accordance with subsection (c) (in either
case, the “Commencement Date”). Such Benefit will be paid in the following form:

 

  (i)

If the actuarial present value of the Benefit as of the Commencement Date does
not exceed $50,000, the Benefit will be paid in a lump sum equal to the
actuarial present value, which payment will be in full satisfaction of the
Participant’s right to the Benefit. Such payment will be made not later than 90
days following the Commencement Date, subject to subsection (d). For purposes of
determining whether the present value of the Benefit exceeds $50,000, any
Special Supplemental Benefit will be included if and only if the terms of the
agreement creating the Special Supplemental Benefit provided for the Special
Supplemental Benefit to be paid at the

 

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  same time and in the same form as the remainder of the Benefit not later than
the later of the date the Participant first had a legally binding right to the
Special Supplemental Benefit or December 31, 2008, and in such event the Special
Supplemental Benefit will be included notwithstanding any change in the terms of
the Special Supplemental Benefit after such date. If the preceding sentence does
not apply, the Special Supplemental Benefit will not be included in determining
whether the present value exceeds $50,000, and the provisions of this subsection
(b) will be applied separately to the Special Supplemental Benefit.

 

  (ii) If the actuarial present value of the Benefit exceeds $50,000 as of the
Commencement Date, Benefit will be paid in a monthly life annuity of the type
set forth below. The first annuity payment will be paid, subject to subsection
(d), on the first day of the month following the month that includes the
Commencement Date in which the Participant’s has accumulated at least 65 Points
(the “Annuity Start Date.”)

 

  (A) If the Participant is not married on the Annuity Start Date, his Benefit
will be paid in an annuity for the life of the Participant with no survivor
benefits.

 

  (B) If the Participant is married on Annuity Start Date, his Benefit will be
paid in an annuity that pays an actuarially reduced benefit to the Participant
during the Participant’s life, and pays 50% of such annuity to the Participant’s
spouse for the balance of the spouse’s life if the spouse survives the
Participant. No adjustment to such annuity will be made if the Participant’s
spouse predeceases the Participant or the Participant and this spouse are
divorced after the Annuity Start Date.

 

  (C) The Administrative Committee may permit a Participant to elect a different
form of annuity that is treated as a life annuity for purposes of Section 409A.
Anything else contained herein to the contrary notwithstanding, all forms of
life annuity will be actuarially equivalent as defined in Section 409A, and any
procedures adopted by the Administrative Committee to permit Participant’s to
elect different forms of annuity will comply with the requirements of
Section 409A.

 

  (c)

Each person who was a Participant prior to January 1, 2009, and who is
anticipated to have a Benefit accrued under this Plan as of December 31, 2008
(as determined by the Administrative Committee in its sole discretion) may elect
a Commencement Date, which will be either the first day of a specific month or
the first day of the month following the date on which the Participant attains a
specified age. Such elections will apply to the Participant’s entire Benefit
(including any Special Supplemental Benefit to be paid in the same form as the
Benefit), and will be made, in writing, in accordance with procedures specified
by

 

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  the Administrative Committee, not later than December 31, 2008, and will not
thereafter be revoked or changed; provided that no such election will cause any
amount to be paid in 2008 that would otherwise have been paid in a later year,
or cause any amount that would otherwise have been paid in 2008 to be paid in a
later year, and such elections will otherwise comply with the requirements for
transitional relief under IRS Notice 2007-86. An agreement (including a
provision of an employment agreement) entered into between a Participant and the
Corporation not later than December 31, 2008, that refers specifically to this
Plan and specifies a time and/or form of payment of the Participant’s Benefit
will constitute an election for purposes of this subsection (c), and, in lieu of
a specific date, may provide for the Participant’s Commencement Date to occur
upon the Participant’s separation from service or the occurrence of any other
event that satisfies the requirements of Section 409A.

 

  (d) If a Participant’s Commencement Date is the first day of the month
following his Termination of Employment, and the Participant is a specified
employee as hereinafter defined on the Commencement Date, payment of his Benefit
will be deferred until six months after his Termination of Employment, as
described below. If payment is to be made in a lump sum (based on actuarial
present value as of the Commencement Date), the lump sum will be paid on the
first day of the seventh month following the month that includes the Termination
of Employment, and the amount will be recalculated as of such date even if such
recalculated amount exceeds $50,000. If payment is to be made in an annuity, the
first annuity payment will be paid on the later of the first day of the seventh
month following the month that includes the Termination of Employment or the
Annuity Start Date, but if such date is later than the Annuity Start Date the
annuity payments will be calculated as of the Annuity Start Date, and the
Participant will receive a supplemental payment, with or following the first
annuity payment, equal to the sum, without interest, of the annuity payments
that would have been paid prior to such date but for this subsection (d). For
purposes of this subsection (d), the term “specified employee” will have the
same meaning as in the Baxter International Inc. and Subsidiaries Deferred
Compensation Plan.

 

  (e) Anything else contained herein to the contrary notwithstanding, the
Administrative Committee at any time in its sole discretion may distribute to
any Participant the entire actuarial present value of his Benefit (including any
Special Supplemental Benefit) in a single lump sum in full satisfaction of his
rights under the Plan, provided that the entire interest of the Participant in
all other plans required to be aggregated with the Plan pursuant to Treasury
Regulations Section 1.409A-1(c)(2) is also distributed and that the total amount
distributed does not exceed the limit in effect under Code Section 402(g) at the
time of distribution.

 

  4.7 Death Benefits.

 

  (a) If a Participant whose Benefit is payable in an annuity dies after the
Annuity Start Date, the only death benefit payable will be the survivorship
benefit, if any, payable under the applicable form of annuity.

 

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  (b) If a Participant whose Benefit is payable in a lump sum dies after his
Commencement Date but before actual payment of his Benefit (including but not
limited to a Participant whose benefit is deferred pursuant to subsection
4.6(d)), the lump sum payment will be made to his Beneficiary as soon as
practical, but not more than 90 days after the date of his death.

 

  (c) If a Participant either dies prior to his Commencement Date, or after his
Commencement Date but prior to his Annuity Start Date if his Benefit is payable
as an annuity, and if his Beneficiary is entitled to a preretirement survivor
annuity under the Pension Plan or the Pension Plan II (or would be entitled to a
preretirement survivorship benefit but for the fact that payment of his
Qualified Benefit had commenced at the time of his death), his Beneficiary will
be entitled to a preretirement survivor benefit (the “Survivor Benefit”) under
the terms of this subsection (c). The Survivor Benefit will be paid on the first
day of the first month following the month that includes the Participant’s death
in which the Participant either had completed 65 Points, or would have completed
65 Points had he not died. The Survivor Benefit will be paid in a single lump
sum equal to the actuarial present value of the excess of (i) the amount of the
preretirement survivor annuity that would be paid to the Beneficiary under the
Pension Plan or the Pension Plan II if the Participant’s Benefit were calculated
with the adjustments described in Sections 4.2 and 4.3 (and included the Special
Supplemental Benefit, if applicable), over (ii) the amount of preretirement
survivor annuity actually payable under the Pension Plan or the Pension Plan II,
as applicable, in both cases calculated as if payment of the preretirement
survivor annuity under the Pension Plan or the Pension Plan II commenced on the
date of payment of the Survivor Benefit.

 

  (d) Notwithstanding the foregoing, if a Participant whose benefit is paid in
the form of an annuity and whose Benefit is deferred pursuant to subsection
4.6(d) dies after his Annuity Start Date but before the date to which payment of
his benefit is deferred, his Beneficiary will not receive a Survivor Benefit
under subsection (c), but will instead receive whatever survivorship benefits
are provided by the Participant’s form of annuity, determined as if payment had
commenced on the Annuity Start Date, and in addition will receive a payment
equal to the annuity payments that would have been paid prior to the
Participant’s death but for the requirement of subsection 4.6(d).

 

  (e) Except as otherwise provided in this Section 4.7, no person will receive
any form of death or survivorship benefits following the death of a Participant,
whether before or after his Commencement Date.

4.8 Withholding Taxes. Benefits and payments under the Plan are subject to the
withholding of all applicable taxes. Notwithstanding any provision of the Plan
to the contrary, a Participant’s initial benefit payment under the Plan will be
in an amount sufficient pay any remaining employment tax required to be withheld
with respect to Plan benefits. To the extent such amount is in excess of the
first distribution that would otherwise have been made based on the form of
benefit elected by the Participant, subsequent payments will not begin until the
aggregated payments that would have been made under the form of benefit elected
by the Participant exceed the amount of such initial distribution.

 

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4.9 Compliance with Section 409A. Anything else in this Plan to the contrary
notwithstanding, effective January 1, 2005, the Plan is intended to comply in
all regards with Section 409A and will be so construed and administered. Without
limiting the generality of the preceding sentence, (i) in no event will any
benefit under the Plan be paid at any time other than under the terms of the
Plan as in effect on the date on which the Participant first acquires a legal
right to such benefit (whether or not vested), whether by amendment of the Plan,
exercise of the Administrative Committee’s discretion, or otherwise, except as
permitted by Section 409A, and (ii) in the event that the Administrative
Committee, in its sole discretion, determines that any time or form of payment
provided for in the Plan, or the existence of a right to elect a time or form of
distribution (including without limitation the payment of benefits in the same
form elected by a Participant under the Pension Plan or the Pension Plan II, as
applicable), would cause the Plan to fail to meet the requirements of
Section 409A, or otherwise cause Participants to be subject to any adverse
federal income tax consequences, such provision will to the maximum extent
permitted by law be deemed amended to the extent required to comply with
Section 409A, or the Plan will be construed as if such provision were not
included therein. The restrictions of Section 409A will apply to the entire
benefit of a Participant if any portion of the Participant’s benefit was accrued
or vested on or after January 1, 2005, but will not apply to a Participant whose
entire benefit was accrued and vested prior to such date.

4.10 Correction of Errors. The Administrative Committee will have the authority
to correct any error in the calculation of Benefits, regardless of the reason
for the error and regardless of whether payment of the Benefit has commenced. By
his participation in the Plan and acceptance of Benefits hereunder, each
Participant agrees that he will promptly repay to the Plan any Benefit or other
payment that exceeds the amount to which he was entitled under the Plan (an
“excess payment”), and will hold any excess payment, and any proceeds of any
excess payment, or property acquired with any excess payment, in trust for the
benefit of the Plan, which trust will remain in effect, and will continue to
apply to any excess payment, proceeds or other property even if transferred to a
third party, until the total amount of the excess payment has been repaid to the
Plan. The Administrative Committee may, on behalf of the Plan, commence an
action to enforce such trust, or take any other available action in law or
equity, including setting off any other amount owed to the Participant, to
recover such excess payment.

 

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ARTICLE V

ADMINISTRATION

5.1 Administrative Committee. The Plan is administered by the Administrative
Committee, which is the “administrator” for purposes of Section 3(16)(A) of the
Employee Retirement Income Security Act of 1974, as amended (“ERISA”). Baxter
has appointed the members of the Administrative Committee to administer the
Plan. Members of the Administrative Committee may be Participants in the Plan.

5.2 Administrative Committee Powers. The Administrative Committee has such
powers as may be necessary to discharge its duties hereunder, including, but not
by way of limitation, the following powers, rights and duties:

 

  (a) Interpretation of Plan. The Administrative Committee has the power, right
and duty to construe, interpret and enforce the Plan provisions and to determine
all questions arising under the Plan including, but not by way of limitation,
questions of Plan participation, eligibility for Plan benefits and the rights of
employees, Participants, Beneficiaries and other persons to benefits under the
Plan and to determine the amount, manner and time of payment of any benefits
hereunder;

 

  (b) Plan Procedures. The Administrative Committee has the power, right and
duty to adopt procedures, rules, regulations and forms to be followed by
employees, Participants, Beneficiaries and other persons or to be otherwise
utilized in the efficient administration of the Plan which may alter any
procedural provision of the Plan without the necessity of an amendment, and
which procedures may provide for any election or consent to be made, or any
other action to be taken (including without limitation filing claims and
requesting review of denied claims), by electronic mail, internet website,
telephone or voice response system or other electronic method to the extent
permitted by applicable law;

 

  (c) Benefit Determinations. The Administrative Committee has the power, right
and duty to make determinations as to the rights of employees, Participants,
Beneficiaries and other persons to benefits under the Plan and to afford any
Participant or beneficiary dissatisfied with such determination with rights
pursuant to a claims procedure adopted by the Committee; and

 

  (d) Allocation of Duties. The Administrative Committee is empowered to employ
agents (who may also be employees of Baxter) and to delegate to them any of the
administrative duties imposed upon the Administrative Committee or Baxter.

 

  (e) Plan Amendments. The Administrative Committee has the power and right, at
any time, to amend or supplement the Plan. Notwithstanding the foregoing
provisions of this subsection 5.2(e), no amendment of the Plan will reduce the
benefit to which a Participant would be entitled if he had terminated employment
immediately prior to the adoption of the resolution amending the Plan; provided,
however, the Administrative Committee or Corporation, as applicable, may amend
the Plan at any time to take effect retroactively or otherwise, as deemed
necessary or advisable for purposes of conforming the Plan to any present or
future law, regulations or rulings relating to plans of this or a similar
nature.

 

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5.3 Effect of Administrative Committee Decisions. Any ruling, regulation,
procedure or decision of the Administrative Committee will be conclusive and
binding upon all persons affected by it. There will be no appeal from any ruling
by the Administrative Committee which is within its authority, except as
provided in Section 5.4 below. When making a determination or a calculation, the
Administrative Committee will be entitled to rely on information supplied by any
Employer, accountants and other professionals including, but not by way of
limitation, legal counsel for Baxter or any Employer.

5.4 Claims Procedure. Each person entitled to benefits under the Plan (the
“Applicant”) must submit a written claim for benefits to the Administrative
Committee. Such claim will be filed not more than one year after the Applicant
knows, or with the exercise of reasonable diligence would know, if the basis for
the claim. A formal claim will not be required for the distribution of a
Participant’s Accounts in the ordinary course of business, but in any case a
claim that relates to a dispute over the amount of a distribution will be filed
not more than one year after payment of the distribution commences. The
Administrative Committee may, in its sole discretion accept a claim that is
filed late if it determines that special circumstances warrant acceptance of the
claim.

If a claim for benefits by the Applicant is denied, in whole or in part, the
Administrative Committee, or its delegate, will furnish the Applicant within 90
days after receipt of such claim, a written notice which specifies the reason
for the denial, refers to the pertinent provisions of the Plan on which the
denial is based, describes any additional material or information necessary for
properly completing the claim and explains why such material or information is
necessary, and explains the claim review procedures of this Section 5.4. Such
notice will further describe that the Applicant has a right to bring a civil
action under Section 502 of ERISA if his claim is denied after an appeal and
review. The 90 day period may be extended by up to an additional 90 days if
special circumstances required, in which event the Applicant will be notified in
writing by the end of the initial 90 day period of the reason for the extension
and an estimate of when the claim will be processed.

Any Applicant whose claim is denied under the provisions described above, or who
has not received from the Administrative Committee a response to his claim
within the time periods specified in the provisions described above may request
a review of the denied claim by written request to the Administrative Committee
within 60 days after receiving notice of the denial. If such a request is made,
the Administrative Committee will make a full and fair review of the denial of
the claim and will make a decision not later than 60 days after receipt of the
request, unless special circumstances (such as the need to hold a hearing)
require an extension of time, in which case a decision will be made as soon as
possible but not later than 120 days after receipt of the request for review,
and written notice of the reason for the extension and an estimate of when the
review will be complete will be given to the Applicant before the commencement
of the extension. The decision on review will be in writing and will include
specific reasons for the decision and specific references to the pertinent
provisions of the Plan on which the decision is based. Such notice will further
describe that the Applicant has a right to bring a civil action under
Section 502 of ERISA.

 

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No person entitled to benefits under the Plan will have any right to seek review
of a denial of benefits, or to bring any action to enforce a claim for benefits,
in any court or administrative agency prior to his filing a claim for benefits
and exhausting all of his rights under this Section 5.4, or more than 180 days
after he receives the Administrative Committee’s decision on review of the
denial of his claim. Although not required to do so, an Applicant, or his
representative, may choose to state the reason or reasons he believes he is
entitled to benefits, and may choose to submit written evidence, during the
initial claim process or review of claim denial process. However, failure to
state any such reason or submit such evidence during the initial claim process
or review of claim denial process, will permanently bar the Applicant, and his
successors in interest, from raising such reason or submitting such evidence in
any forum at any later date. An Applicant whose claim is denied initially or on
review is entitled to receive, on request and free of charge, reasonable access
to, and copies of, all documents, records, and other information relevant to
such claim for benefits.

5.5 Action by Administrative Committee. Action by the Administrative Committee
will be subject to the following special rules:

 

  (a) Meetings and Documents. The Administrative Committee may act by meeting or
by document signed without meeting and documents may be signed through the use
of a single document or concurrent documents.

 

  (b) Action by Majority. The Administrative Committee will act by a majority
decision which action will be as effective as if such action had been taken by
all Administrative Committee members, provided that by majority action one or
more Administrative Committee members or other persons may be authorized to act
with respect to particular matters on behalf of all Administrative Committee
members.

 

  (c) Resolving Deadlocks. If there is an equal division among the
Administrative Committee members with respect to any question a disinterested
party may be selected by a majority vote to decide the matter. Any decision by
such disinterested party will be binding.

5.6 Indemnity. To the extent permitted by applicable law and to the extent that
they are not indemnified or saved harmless under any liability insurance
contracts, any present or former Administrative Committee members, officers, or
directors of Baxter, the Employers or their subsidiaries or affiliates, if any,
will be indemnified and saved harmless by the Employers from and against any and
all liabilities or allegations of liability to which they may be subjected by
reason of any act done or omitted to be done in good faith in the administration
of the Plan, including all expenses reasonably incurred in their defense in the
event that Baxter fails to provide such defense after having been requested in
writing to do so.

 

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ARTICLE VI

AMENDMENT AND TERMINATION

6.1 Amendment and Termination. As indicated in Section 5.2 above, the
Administrative Committee may, at any time, amend or supplement the Plan. The
Board of Directors of the Corporation may, at any time, terminate the Plan.
Notwithstanding the foregoing provisions of Sections 5.2 or 6.1, neither an
amendment or termination of the Plan will reduce the benefit to which a
Participant would be entitled if he had terminated employment immediately prior
to the adoption of the resolution amending or terminating the Plan; provided,
however, the Administrative Committee or Corporation, as applicable, may amend
or terminate the Plan at any time to take effect retroactively or otherwise, as
deemed necessary or advisable for purposes of conforming the Plan to any present
or future law, regulations or rulings relating to plans of this or a similar
nature. Upon termination of the Plan, all benefits accrued through the date of
termination will be paid as provided herein; provided that the Administrative
Committee may, to the extent permitted under Section 409A, provide for the
payment of actuarially equivalent lump sums in full satisfaction of some or all
of the accrued benefits.

6.2 Successors and Assigns. The obligations of the Corporation and the
Participating Employers under the Plan will be binding upon any assignee or
successor in interest thereto.

 

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ARTICLE VII

MISCELLANEOUS

7.1 Unfunded Plan. This Plan is intended to be an unfunded retirement plan
maintained primarily to provide retirement benefits for a select group of
management or highly compensated employees. All credited amounts are unfunded,
general obligations of the appropriate Participating Employer. This Plan is not
intended to create an investment contract, but to provide retirement benefits to
eligible employees who participate in the Plan. Eligible employees are members
of a select group of management or are highly compensated employees, who, by
virtue of their position with a Participating Employer, are uniquely informed as
to such Participating Employer’s operations and have the ability to affect
materially Participating Employer’s profitability and operations.

7.2 Unsecured General Creditor. In the event of a Participating Employer’s
insolvency, Participants and their Beneficiaries, heirs, successors and assigns
will have no legal or equitable rights, interest or claims in any property or
assets of such Participating Employer, nor will they be Beneficiaries of, or
have any rights, claims or interests in any life insurance policies, annuity
contracts or the proceeds therefrom owned or which may be acquired by such
Participating Employer (the “Policies”) greater than those of any other
unsecured general creditors. In that event, any and all of the Participating
Employer’s assets and Policies will be, and remain, the general, unpledged,
unrestricted assets of Participating Employer. Participating Employer’s
obligation under the Plan will be merely that of an unfunded and unsecured
promise of Participating Employer to pay money in the future.

7.3 Nonassignability. Neither a Participant nor any other person will have any
right to commute, sell, assign, transfer, pledge, anticipate, mortgage or
otherwise encumber, transfer, hypothecate or convey in advance of actual receipt
the amounts, if any, payable hereunder, or any part thereof, which are, and all
rights to which are, expressly declared to be nonassignable and nontransferable.
No part of the amounts payable will, prior to actual payment, be subject to
seizure or sequestration for the payment of any debts, judgments, alimony or
separate maintenance owed by a Participant or any other person, nor be
transferable by operation of law in the event of a Participant’s or any other
person’s bankruptcy or insolvency.

7.4 Not a Contract of Employment. The terms and conditions of this Plan will not
be deemed to constitute a contract of employment between a Participant and such
Participant’s Participating Employer, and neither the Participant nor the
Participant’s beneficiary will have any rights against such Participant’s
Participating Employer except as may otherwise be specifically provided herein.
Moreover, nothing in this Plan is deemed to give a Participant the right to be
retained in the service of his or her Participating Employer or to interfere
with the right of such Participating Employer to discipline or discharge him or
her at any time.

7.5 Protective Provisions. A Participant will cooperate with the Corporation by
furnishing any and all information requested by the Corporation, in order to
facilitate the payment of benefits hereunder.

 

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7.6 Governing Law. The provisions of this Plan will be construed and interpreted
according to the laws of the State of Illinois, to the extent not preempted by
ERISA.

7.7 Severability. In the event any provision of the Plan is held invalid or
illegal for any reason, any illegality or invalidity will not affect the
remaining parts of the Plan, but the Plan will be construed and enforced as if
the illegal or invalid provision had never been inserted, and the Corporation
will have the privilege and opportunity to correct and remedy such questions of
illegality or invalidity by amendment as provided in the Plan, including, but
not by way of limitation, the opportunity to construe and enforce the Plan as if
such illegal and invalid provision had never been inserted herein.

7.8 Notice. Any notice or filing required or permitted to be given to the
Corporation or the Administrative Committee under the Plan will be sufficient if
in writing and hand delivered, or sent by registered or certified mail to any
member of the Administrative Committee, or to the Corporation’s Chief Financial
Officer and, if mailed, will be addressed to the principal executive offices of
the Corporation. Notice to a Participant or beneficiary may be hand delivered or
mailed to the Participant or beneficiary at his or her most recent address as
listed in the employment records of the Corporation. Notices will be deemed
given as of the date of delivery or mailing or, if delivery is made by certified
or registered mail, as of the date shown on the receipt for registration or
certification. Any person entitled to notice hereunder may waive such notice.

7.9 Successors. The obligations of the Corporation and the Participating
Employers under the Plan will be binding upon any assignee or successor in
interest thereto. The provisions of this Plan will bind and inure to the benefit
of the Corporation and the Participating Employers, the Participants and
Beneficiaries, and their respective successors, heirs and assigns. The term
successors as used herein will include any corporate or other business entity,
which, whether by merger, consolidation, purchase or otherwise acquires all or
substantially all of the business and assets of the Corporation, and successors
of any such corporation or other business entity.

7.10 Action by Corporation. Except as otherwise provided herein, any action
required of or permitted by the Corporation under the Plan will be by resolution
of the Compensation Committee or any person or persons authorized by resolution
of the Compensation Committee.

7.11 Effect on Benefit Plans. Amounts paid under this Plan, will not by
operation of this Plan be considered to be compensation for the purposes of any
benefit plan maintained by any Participating Employer. The treatment of such
amounts under other employee benefit plans will be determined pursuant to the
provisions of such plans.

7.12 Participant Litigation. In any action or proceeding regarding the Plan,
employees or former employees of the Corporation or a Participating Employer,
Participants, Beneficiaries or any other persons having or claiming to have an
interest in this Plan will not be necessary parties and will not be entitled to
any notice or process. Any final judgment which is not appealed or appealable
and may be entered in any such action or proceeding will be binding and
conclusive on the parties hereto and all persons having or claiming to have any
interest in this Plan. To the extent permitted by law, if a legal action is
begun against the Corporation, a Participating Employer, the Administrative
Committee, or any member of the Administrative

 

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Committee by or on behalf of any person and such action results adversely to
such person or if a legal action arises because of conflicting claims to a
Participant’s or other person’s benefits, the costs to such person of defending
the action will be charged to the amounts, if any, which were involved in the
action or were payable to the Participant or other person concerned. To the
extent permitted by applicable law, acceptance of participation in this Plan
will constitute a release of the Corporation, each Participating Employer, the
Administrative Committee and each member thereof, and their respective agents
from any and all liability and obligation not involving willful misconduct or
gross neglect.

 

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