exv10w1






Exhibit 10.1




BAXTER INTERNATIONAL INC.

Non-Employee Director Compensation Plan




(As amended and restated effective January 1, 2009)




Terms and Conditions





	1.	 	Purpose
	 
	 	 	This Non-Employee Director Compensation Plan (the “Plan”) is adopted by the Board of
Directors (the “Board”) of Baxter International Inc. (“Baxter”). This Plan is adopted
pursuant to the Baxter International Inc. 2003 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
	 
	 	 	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.	 	Restricted Stock Units






	 	3.1	 	On the date of Baxter’s annual meeting of stockholders (the “Annual Meeting”)
in each year beginning with the Annual Meeting held in May 2007, and subject to
availability of shares of Common Stock under the Program, each Participant upon
completion of the Annual Meeting shall, automatically and without necessity of any
action by the Board or any committee thereof, receive the number of Restricted Stock
Units equal to the quotient of (A) $65,000 divided by (B) the Fair Market Value of a
share of Common Stock on the date of grant (rounded to the nearest whole number which
is a multiple of ten) (the “Annual Restricted Stock Unit Grant Amount”).
	 
	 	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, receive
the number of Restricted Stock Units equal to the product of (A) the Annual
Restricted Stock Unit Grant Amount (as defined in Section 3.1, subject to adjustment
in accordance with the Program) for the Restricted Stock Units awarded 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
Restricted Stock Units granted under this Section 3.2 shall not exceed the number
available under the Program on the date of grant.
	 
	 	3.3	 	Restricted Stock Units may not be sold, transferred, assigned, pledged,
hypothecated or otherwise encumbered or disposed of, whether voluntarily,
involuntarily or by operation of law.





 









 






	 	3.4	 	Subject to Section 11.10 of the Program and except as expressly provided in
Sections 3.6 and 3.7, all Restricted Stock Units shall vest on the date of and
immediately prior to the next Annual Meeting following the date of grant.
	 
	 	3.5	 	Except as provided in Sections 3.6 and 3.7, if a Participant ceases service
as a member of the Board before his or her Restricted Stock Units vest, the
Participant will forfeit his or her unvested Restricted Stock Units immediately upon
ceasing service as a member of the Board.
	 
	 	3.6	 	If a Participant dies while serving as a member of the Board, his or her
unvested Restricted Stock Units will not be forfeited and will be fully vested
immediately.
	 
	 	3.7	 	If a Participant becomes disabled and unable to continue service as a member
of the Board, his or her Restricted Stock Units will not be forfeited and will, when
the Participant ceases to serve as member of the Board, be fully vested.
	 
	 	3.8	 	No Participant receiving Restricted Stock Units shall have the rights of a
stockholder with respect to those shares of Common Stock underlying the Restricted
Stock Units. Participants shall not be permitted to vote the Restricted Stock Units.
Participants shall be permitted to receive cash payments equal to the dividends and
distributions paid on shares of Common Stock to the same extent as if each Restricted
Stock Unit was a share of Common Stock, and those shares were not subject to the
restrictions imposed by this Plan; provided, however, that no dividends or
distributions shall be payable to or for the benefit of the Participant with respect
to the record dates for such dividends or distributions occurring on or after the
date, if any, on which the Participant has forfeited the Restricted Stock Units. Cash
dividend and distribution equivalents paid on those shares of Common Stock underlying
the Restricted Stock Units pursuant hereto shall be reinvested in additional
Restricted Stock Units.
	 
	 	3.9	 	Participants shall be eligible to defer payment and taxation of those shares
of Common Stock underlying the Restricted Stock Units otherwise payable under this
Section 3 pursuant to the terms and conditions of the Baxter Non-Employee Director
Deferred Compensation Plan.
	 
	 	3.10	 	If requested by Baxter, each Participant receiving Restricted Stock Units
shall enter into an agreement with Baxter incorporating the terms and conditions of
this Plan. Subject to the terms of the Program, after the Restricted Stock Units
vest, shares of Common Stock free and clear of all restrictions will be delivered to
the Participant (or to the Participant’s legal representative, beneficiary or heir).






	4.	 	Stock Options






	 	4.1	 	On the date of Baxter’s Annual Meeting in each year beginning with the Annual
Meeting on May 6, 2003, and subject to availability of shares of Common Stock under
the Program, upon completion of the Annual Meeting each Participant shall be granted
Stock Options having a value equal to $65,000, to be





 









 






	 	 	 	determined by the Board or the Compensation Committee of the Board (the
“Committee”) based on a Black-Scholes or other option valuation model in the
discretion of the Board or the Committee (rounded to the nearest whole number
which is a multiple of ten) (the “Annual Stock Option Grant Amount”).
	 
	 	4.2	 	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
a Stock 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, subject to
adjustment in accordance with the Program) for each Stock 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 Stock Option granted under this Section 4.2
shall not exceed the number available under the Program on the date of grant.
	 
	 	4.3	 	The purchase price for each share of Common Stock subject to a Stock Option
shall be the Fair Market Value of a share of Common Stock on the date of grant. The
terms of each Stock Option will be as set forth in this Plan and the Program. To the
extent that any provision of the Plan is inconsistent with the Program, the Program
shall control. The Stock Options are not intended to qualify as Incentive Stock
Options within the meaning of Section 422 of the United States Internal Revenue Code.
	 
	 	4.4	 	Subject to Section 11.10 of the Program and except as expressly provided in
Sections 4.8, 4.9 and 4.10, Stock Options shall first become exercisable on the date
of and immediately prior to the next Annual Meeting following the date of grant.
	 
	 	4.5	 	After a Stock Option becomes exercisable and until it expires, it may be
exercised in whole or in part, in the manner specified by the Company. Under no
circumstances may a Stock 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 a Stock Option or fulfill any tax withholding obligation, subject to
any requirements or restrictions specified by the Company.
	 
	 	4.6	 	Except as provided in Sections 4.8, 4.9 and 4.10, if a Participant ceases
service as a member of the Board before his or her Stock Option becomes exercisable,
the Stock Option will expire when the Participant ceases service as a member of the
Board.
	 
	 	4.7	 	If a Participant ceases service as a member of the Board after his or her
Stock Option becomes exercisable, the Stock Option will not expire but will remain
exercisable. Subject to Sections 4.8, 4.9, 4.10 and 4.11, the Stock 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 Stock Option will expire on the first anniversary of the
date the Participant ceased serving as a member of the Board.
	 
	 	4.8	 	If a Participant dies while serving as a member of the Board, his or her
Stock Option will not expire and will remain, or immediately become, fully
exercisable, as the case may be. Subject to Sections 4.10 and 4.11, the Stock Option
will expire on the first anniversary of the Participant’s death.
	 
	 	4.9	 	If a Participant becomes disabled and unable to continue service as a member
of the Board, his or her Stock 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 4.10 and 4.11, the Stock Option will expire on the
first anniversary of the date the Participant ceases service as a member of the
Board.
	 
	 	4.10	 	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 Stock 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 4.11, the Stock Option will expire on the fifth anniversary of
the date the Participant ceases service as a member of the Board.
	 
	 	4.11	 	Stock Options that have not previously expired will expire at the close of
business on the tenth anniversary of the date of grant. If a Stock 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. A “Business Day” is any day on which
the Common Stock is traded on the New York Stock Exchange.
	 
	 	4.12	 	An exercisable Stock Option may only be exercised by the Participant, his or
her legal representative, or a person to whom the Participant’s rights in the Stock
Option are transferred by will or the laws of descent and distribution or in
accordance with rules and procedures established by the Committee.
	 
	 	4.13	 	The Board or the Committee may, in its sole discretion and without receiving
permission from any Participant, substitute stock appreciation rights (“SARs”) for
any or all outstanding Stock Options granted on or after May 4, 2004. Upon the grant
of substitute SARs, the related Stock Options replaced by the substitute SARs shall
be cancelled. The grant price of the substitute SAR shall be equal to the Option
Price of the related Stock Option, the term of the substitute SAR shall not exceed
the term of the related Stock Option, and the terms and conditions applicable to the
substitute SAR shall otherwise be substantially the same as those applicable to the
related Stock Option replaced by the substitute SAR.






	5.	 	Cash Compensation






	 	5.1	 	Baxter shall pay each Participant a meeting fee of $1,500 for each meeting of the Board or
any committee thereof attended, and a Participant acting as the





 









 






	 	 	 	chairperson of any meeting of a committee of the Board shall receive an additional
$1,500 for each meeting chaired by him or her. Fees shall be paid quarterly in
arrears and are payable if the Participant attends in person, by conference
telephone, or by any other means permitted by the Delaware General Corporation Law
and Baxter’s Bylaws, as amended.
	 
	 	5.2	 	Baxter shall pay each Participant a total annual cash retainer of $65,000 per
calendar year (“Annual Cash Retainer”). Baxter shall pay an additional annual cash
retainer of $30,000 per calendar year to the Lead Director (“Lead Director
Retainer”). Both the Annual Cash Retainer and Lead Director Retainer shall be paid
quarterly in arrears. For purposes of determining the amount of such quarterly
payment(s), a Participant and/or the Lead Director must be a member of the Board on
or prior to the 15th day of a month in order to be entitled to receive
such payment(s) with respect to that month.
	 
	 	5.3	 	Participants shall be eligible to defer payment of cash compensation
otherwise payable under this Section 5 pursuant to the terms and conditions of the
Baxter Non-Employee Director Deferred Compensation Plan.






	6.	 	Availability of Shares
	 
	 	 	If on any grant date, the number of shares of Common Stock which would otherwise be
granted in the form of Restricted Stock Units or subject to Stock Options granted under
the Plan shall exceed the number of shares of Common Stock then remaining available under
the Program, the available shares shall be allocated among the Stock Options and
Restricted Stock Units to be granted Participants in proportion to the number of shares
subject to Stock Options and Restricted Stock Units that Participants would otherwise be
entitled to receive, and allocated evenly between Restricted Stock Units and Stock
Options.
	 
	7.	 	General Provisions






	 	7.1	 	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 Stock Option outstanding under the Plan.
	 
	 	7.2	 	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.





***     ***     ***




 









 





Amendment No. 1

to

Baxter International Inc.

Non-Employee Director Compensation Plan




     Effective as of July 27, 2009, subsection 5.1 of the Baxter International Inc. Non-Employee
Director Compensation Plan (the “Plan”) is amended to read in its entirety as follows:




	 	5.1	 	Except as provided in the following sentence, Baxter shall pay each
Participant a meeting fee of $1,500 for each meeting of the Board or any committee
thereof attended, and a Participant acting as the chairperson of any meeting of a
committee of the Board shall receive an additional $1,500 for each meeting chaired by
him or her. Baxter shall pay each Participant a meeting fee of $3,000 for each
meeting of the Science and Technology Committee attended, and a Participant acting as
the chairperson of any meeting of the Science and Technology Committee shall receive
an additional $1,500 for each meeting chaired by him or her. Fees shall be paid
quarterly in arrears and are payable if the Participant attends in person, by
conference telephone, or by any other means permitted by the Delaware General
Corporation Law and Baxter’s Bylaws, as amended and restated.