Document:

EX-4.2

 Exhibit 4.2 

Execution Version 
  

 
 1.700% SENIOR NOTES DUE 2021

 2.600% SENIOR NOTES DUE 2026 

3.500% SENIOR NOTES DUE 2046 

TENTH SUPPLEMENTAL INDENTURE 

between 
 BAXTER
INTERNATIONAL INC., 
 as Issuer 

and 
 THE BANK OF NEW
YORK MELLON TRUST COMPANY, N.A., 
 as Trustee 

Dated as of August 15, 2016 
  

 

 TABLE OF CONTENTS 

 

					
	 	 	 	  	Page
		
	ARTICLE 1 Definitions	  	1
			
	Section 1.01.	 	Definition of Terms	  	1
		
	ARTICLE 2 The Notes	  	2
			
	Section 2.01.	 	Designation	  	2
			
	Section 2.02.	 	Principal Amount; Series Treatment	  	2
			
	Section 2.03.	 	Maturity	  	3
			
	Section 2.04.	 	Interest	  	3
			
	Section 2.05.	 	Form of Notes	  	3
			
	Section 2.06.	 	Transfer Restrictions	  	4
			
	Section 2.07.	 	Transfers and Exchanges	  	5
		
	ARTICLE 3 Redemption Of The Notes	  	5
			
	Section 3.01.	 	Optional Redemption by Company	  	5
		
	ARTICLE 4 Change of Control	  	5
			
	Section 4.01.	 	Offer to Purchase Upon Change of Control Triggering Event	  	5
		
	ARTICLE 5 Execution Of The Notes	  	5
			
	Section 5.01.	 	Execution; Certificates	  	5
		
	ARTICLE 6 Miscellaneous	  	6
			
	Section 6.01.	 	Ratification of Indenture	  	6
			
	Section 6.02.	 	Trustee Not Responsible for Recitals	  	6
			
	Section 6.03.	 	Governing Law	  	6
			
	Section 6.04.	 	Separability	  	6
			
	Section 6.05.	 	Counterparts	  	6

  
 -i- 

 TENTH SUPPLEMENTAL INDENTURE, dated as of August 15, 2016 (the “Supplemental
Indenture”), between Baxter International Inc., a Delaware corporation (the “Company”), and The Bank of New York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association),
as Trustee, under the Indenture, dated as of August 8, 2006 (the “Indenture”), between the Company and the Trustee. 

WHEREAS, the Company executed and delivered the Indenture to the Trustee to provide for, among other things, the issuance from time to time of
the Company’s debt securities in one or more series as might be authorized under the Indenture; 
 WHEREAS, the Indenture provides that
the Company and the Trustee may enter into an indenture supplemental to the Indenture to establish the form and terms of any series of Securities (as defined in the Indenture) as provided by Sections 2.01 and 3.01 of the Indenture; 

WHEREAS, the Board of Directors of the Company has duly adopted resolutions authorizing the Company to issue the Securities provided for in
this Supplemental Indenture; 
 WHEREAS, the Company desires to enter into this Supplemental Indenture to provide for the establishment of
three series of Securities (as defined in the Indenture) to be known as the (i) 1.700% Senior Notes due 2021 (the “2021 Notes”), (ii) 2.600% Senior Notes due 2026 (the “2026 Notes”) and (iii) 3.500% Senior
Notes due 2046 (the “2046 Notes,” collectively with the 2021 Notes and the 2026 Notes, the “Notes”), the form, substance, terms, provisions and conditions of which shall be set forth in the Indenture and this
Supplemental Indenture; 
 WHEREAS, the Company has requested that the Trustee execute and deliver this Supplemental Indenture and satisfy
all requirements necessary to make (i) this Supplemental Indenture a valid instrument in accordance with its terms and (ii) the Securities provided for hereby, when executed and delivered by the Company and authenticated by the Trustee,
the valid obligations of the Company. 
 NOW THEREFORE, each party agrees as follows for the benefit of the other parties and for the equal
and ratable benefit of the Holders of the Notes: 
 ARTICLE 1 

Definitions 
 Section 1.01.
Definition of Terms. Unless the context otherwise requires: 
 (a) a term defined in the Indenture has the same meaning when
used in this Supplemental Indenture unless the definition of such term is amended and supplemented pursuant to this Supplemental Indenture; 

(b) a term defined anywhere in this Supplemental Indenture has the same meaning throughout; 

(c) the singular includes the plural and vice versa; 

  
 1 

 (d) a reference to a Section or Article is to a Section or Article of this Supplemental
Indenture; 
 (e) headings are for convenience of reference only and do not affect interpretation; 

(f) the following terms have the meanings given to them in this Section 1.01(f):

“Closing Date” means August 15, 2016. 

“Company” shall have the meaning set forth in the first paragraph hereof. 

“Depositary” means the clearing agency registered under the Exchange Act that is designated to act as the Depositary for the
Global Notes. The Depository Trust Company shall be the initial Depositary, until a successor shall have been appointed and become such pursuant to the applicable provisions of the Indenture, and thereafter, “Depositary” shall mean or
include such successor. 
 “Global Notes” shall have the meaning set forth in Section 2.05(b).

 “Initial Notes” means (i) all Notes of each series issued on the first date that Notes were originally issued under
this Supplemental Indenture and (ii) any Notes of such series issued in replacement therefor. 
 “Notes” shall have
the meaning set forth in the recitals above and shall include any Global Note. 
 ARTICLE 2 

The Notes 
 Section 2.01.
Designation. The Company hereby establishes (a) a series of Securities designated the “1.700% Senior Notes due 2021,” (b) a series of Securities designated the “2.600% Senior Notes due 2026” and (c) a series
of Securities designated the “3.500% Senior Notes due 2046” for issuance under the Indenture. 
 Section 2.02. Principal
Amount; Series Treatment. 
 (a) The 2021 Notes shall be initially limited to an aggregate principal amount of $400,000,000, the 2026
Notes shall be initially limited to an aggregate principal amount of $750,000,000 and the 2046 Notes shall be initially limited to an aggregate principal amount of $450,000,000. The Company may, from time to time, without the consent of the
Holders of any series of Notes, issue additional Notes of any series, so that such additional Notes and the outstanding Notes of such series will be consolidated together and form a single series of Securities under the Indenture as supplemented by
this Supplemental Indenture. Any increase in the aggregate principal amount of any series of Notes shall be evidenced by an Officers’ Certificate to be delivered to the Trustee, without any further action by the Company. 

  
 2 

 (b) Any additional Notes issued under Section 2.02(a) shall have the
same terms in all respects as the corresponding series of Notes, except that interest will accrue on the additional Notes from the most recent date to which interest has been paid on the Notes of such series (other than the additional Notes) or if
no interest has been paid on the outstanding Notes of such series from the first date that the outstanding Notes were originally issued under the Indenture, as supplemented by this Supplemental Indenture. 

(c) For all purposes of the Indenture and this Supplemental Indenture, all 2021 Notes, whether Initial Notes, or additional Notes issued under
Section 2.02(a), shall constitute one series of Securities and shall vote together as one series of Securities. 

(d) For all purposes of the Indenture and this Supplemental Indenture, all 2026 Notes, whether Initial Notes, or additional Notes issued under
Section 2.02(a), shall constitute one series of Securities and shall vote together as one series of Securities. 

(e) For all purposes of the Indenture and this Supplemental Indenture, all 2046 Notes, whether Initial Notes, or additional Notes issued under
Section 2.02(a), shall constitute one series of Securities and shall vote together as one series of Securities. 

(f) The Notes shall be issued in minimum denominations of $2,000 and integral multiples of $1,000 in excess thereof. 

Section 2.03. Maturity. The 2021 Notes will become due and payable on August 15, 2021, the 2026 Notes will become due and
payable on August 15, 2026 and the 2046 Notes will become due and payable on August 15, 2046. 
 Section 2.04.
Interest. Interest on the 2021 Notes will accrue at a rate of 1.700% per annum, interest on the 2026 Notes will accrue at a rate of 2.600% per annum and interest on the 2046 Notes will accrue at a rate of 3.500% per annum, from
August 15, 2016 until the principal thereof becomes due and payable or to the date of redemption or repurchase (if any) of the Notes, such interest to be payable semi-annually on February 15 and August 15 of each year, to the Holders
of record of the Notes as of the close of business on the February 1 and August 1 preceding such interest payment dates, commencing, in the case of the Initial Notes or any additional Notes issued prior to such date, on February 15, 2017.

 Section 2.05. Form of Notes. 

(a) The Notes shall contain the terms set forth in, and shall be substantially in the forms of, Exhibit A with
respect to the 2021 Notes, Exhibit B with respect to the 2026 Notes and Exhibit C with respect to the 2046 Notes, each as attached hereto. The terms and provisions contained in the forms of
Notes set forth in Exhibits A, B and C shall constitute, and are hereby expressly made, a part of the Indenture, as supplemented by this Supplemental Indenture. 

Any of the Notes may have such letters, numbers or other marks of identification and such notations, legends, endorsements or changes as the
Authorized Officers executing the same may approve (execution thereof to be conclusive evidence of such approval) and as are not inconsistent with the provisions of the Indenture, as supplemented by this Supplemental Indenture, or as may be required
by the Depositary or as may be required to comply with any applicable law or with any rule or regulation made pursuant thereto or with any rule or regulation of any securities exchange or automated quotation system on which the Notes may be listed,
or to conform to usage, or to indicate any special limitations or restrictions to which any particular Notes are subject. 

  
 3 

 (b) So long as the Notes are eligible for book-entry settlement with the Depositary, or unless
otherwise required by law, or otherwise contemplated herein, each series of the Notes shall be represented by one or more Notes in global form registered in the name of the Depositary or the nominee of the Depositary. 

The Notes shall be issued initially in the form of one or more permanent Global Securities in registered form, substantially in the forms set
forth in Exhibits A, B and C, as applicable (the “Global Notes”), respectively, each registered in the name of the nominee of the Depositary, deposited with the Trustee, as custodian for the Depositary, duly
executed by the Company and authenticated by the Trustee as hereinafter provided. The aggregate principal amount of the Global Notes may from time to time be increased or decreased by adjustments made on the records of the Trustee, as custodian
for the Depositary or its nominee, in accordance with the instructions given by the Holder thereof, as hereinafter provided. 
 The transfer
and exchange of beneficial interests in any such Global Note shall be effected through the Depositary in accordance with the Indenture and the applicable procedures of the Depositary. Except as provided in the Indenture, beneficial owners of a
Global Note shall not be entitled to have certificates registered in their names, will not receive or be entitled to receive physical delivery of certificates in definitive form and will not be considered Holders of such Global Note. 

Any Global Note shall represent such of the Outstanding Notes as shall be specified therein and shall provide that it shall represent the
aggregate amount of Outstanding Notes from time to time endorsed thereon and that the aggregate amount of Outstanding Notes represented thereby may from time to time be increased or reduced to reflect redemptions, transfers or exchanges permitted
hereby. Any endorsement of a Global Note to reflect the amount of any increase or decrease in the amount of outstanding Notes represented thereby shall be made by the Trustee in such manner and upon instructions given by the Holder of such
Notes in accordance with the Indenture and this Supplemental Indenture. Payment of principal of and interest and premium, if any, on any Global Note shall be made to the Holder of such Note. 

Section 2.06. Transfer Restrictions. The following provisions shall apply only to a Global Note: 

(i) Each Global Note authenticated under this Supplemental Indenture shall be registered in the name of the Depositary or a
nominee thereof and delivered to such Depositary or a nominee thereof or Trustee if the Trustee is acting as custodian for the Depositary or its nominee with respect to such Global Note, and each such Global Note shall constitute a single Note, for
the applicable series, for all purposes of the Indenture and this Supplemental Indenture. 
 (ii) Notwithstanding any other
provision in this Supplemental Indenture, no Global Note may be exchanged in whole or in part for Notes registered, and no transfer of a Global Note in whole or in part may be registered, in the name of any Person other

  
 4 

 
than the Depositary or a nominee thereof except as provided in Section 3.05 of the Indenture. Any Note issued in exchange for a Global Note or any portion thereof shall be a Global
Note; provided that any such Note so issued that is registered in the name of a Person other than the Depositary or a nominee thereof shall not be a Global Note. 

(iii) Securities issued in exchange for a Global Note or any portion thereof pursuant to clause (ii) above shall be issued
pursuant to Section 3.05 of the Indenture. 
 (iv) At such time as all interests in a Global Note have been redeemed,
repurchased, converted, canceled or exchanged for Notes (of an applicable series) in certificated form, such Global Note shall, upon receipt thereof, be canceled by the Trustee in accordance with standing procedures and instructions existing between
the Depositary and the Trustee. At any time prior to such cancellation, if any interest in a Global Note is redeemed, repurchased, converted, canceled or exchanged for Notes (of an applicable series) in certificated form, the principal amount
of such Global Note shall, in accordance with the standing procedures and instructions existing between the Depositary and the Trustee, be appropriately reduced, and an endorsement shall be made on such Global Note, by the Trustee or at the
direction of the Trustee, to reflect such reduction. 
 Section 2.07. Transfers and Exchanges. Each series of the Notes shall be
transferred and exchanged by the Holders thereof and the Trustee in accordance with the terms and conditions set forth in Section 3.05 of the Indenture. 

ARTICLE 3 
 Redemption Of The Notes

 Section 3.01. Optional Redemption by Company. Each series of the Notes may be redeemed at the option of the Company on the
terms and conditions set forth, as applicable, in the forms of Note set forth as Exhibits A, B and C. 
 ARTICLE 4 

Change of Control 
 Section 4.01.
Offer to Purchase Upon Change of Control Triggering Event. Upon the occurrence of a Change of Control Triggering Event (as defined in the forms of Note set forth as Exhibits A, B, and C), and unless the Company has
exercised its option to redeem a series of the Notes pursuant to Section 3.01, the Company shall be required to make an offer to each holder of such series of the Notes to repurchase all or any part (equal to $2,000 or an
integral multiple of $1,000 in excess thereof) of that holder’s Notes on the terms and conditions set forth, as applicable, in the forms of Note set forth as Exhibits A, B and C. 

ARTICLE 5 
 Execution Of The Notes

 Section 5.01. Execution; Certificates. The Notes and any Officers’ Certificate to be delivered under the Indenture in
connection with the authentication and delivery of the Notes shall be executed and delivered as set forth in the Indenture. 

  
 5 

 ARTICLE 6 

Miscellaneous 
 Section 6.01.
Ratification of Indenture. 
 The Indenture, as supplemented by this Supplemental Indenture, is in all respects ratified and
confirmed, and this Supplemental Indenture shall be deemed part of the Indenture in the manner and to the extent herein and therein provided. 

Section 6.02. Trustee Not Responsible for Recitals. 

The recitals herein contained are made by the Company and not by the Trustee, and the Trustee assumes no responsibility for the correctness
thereof. The Trustee makes no representation as to and shall not be responsible for the validity or sufficiency of this Supplemental Indenture or the Notes. Neither the Trustee nor any Paying Agent shall be responsible for monitoring the
Company’s rating status, making any request upon any Rating Agency, or determining whether any Rating Event or Change of Control Triggering Event has occurred. 

Section 6.03. Governing Law. 

This Supplemental Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York, as applied
to contracts made and performed within the State of New York, without regard to principles of conflicts of law. 
 Section 6.04.
Separability. 
 In case any one or more of the provisions contained in this Supplemental Indenture or in the Notes shall for any
reason be held to be invalid, illegal or unenforceable in any respect, such invalidity, illegality or unenforceability shall not affect any other provisions of this Supplemental Indenture or of the Notes, but this Supplemental Indenture and the
Notes shall be construed as if such invalid or illegal or unenforceable provision had never been contained herein or therein. 
 Section
6.05. Counterparts. 
 This Supplemental Indenture may be executed in any number of counterparts each of which shall be an original;
but such counterparts shall together constitute but one and the same instrument. The exchange of copies of this Supplemental Indenture and of signature pages by facsimile or PDF transmission shall constitute effective execution and delivery of
this Supplemental Indenture as to the parties hereto and may be used in lieu of the original Supplemental Indenture for all purposes. Signatures of the parties hereto transmitted by facsimile or PDF shall be deemed to be their original
signatures for all purposes. 

  
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 IN WITNESS WHEREOF, the parties hereto have caused this Tenth Supplemental Indenture to be
duly executed as of the date first above written. 
  

			
	BAXTER INTERNATIONAL INC.
		
	By:	 	 /s/ James K. Saccaro

	Name:	 	James K. Saccaro
	Title:	 	Corporate Vice President and
		 	Chief Financial Officer

  

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee
		
	By:	 	 /s/ Lawrence M. Kusch

	Name:	 	Lawrence M. Kusch
	Title:	 	Vice President

 [Signature Page to Supplemental Indenture] 

 EXHIBIT A 

[FACE OF NOTE] 
 [Each
Global Note shall bear the following legend:]
 [THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede
& Co., has an interest herein.] 

 CUSIP No. 071813 BR9 

ISIN US071813BR97 
 BAXTER
INTERNATIONAL INC. 
 1.700% Senior Notes due 2021 
  

			
	No. A-	  	$                

 Baxter International Inc., a Delaware corporation (the “Company”), for value received, hereby
promises to pay to                  or registered assigns, at the office or agency of the Company in the City of New York, the principal sum of
                 DOLLARS ($                ) on August 15, 2021, in such coin or currency
of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on February 15 and August 15 of each year, commencing on February 15, 2017, on
said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the February 15 and August 15, as the case may be, next preceding the date of this Note to which interest has
been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Note, or unless no interest has been paid on these Notes, in which case from August 15, 2016 until payment of said principal sum has
been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer to an
account maintained by the payee with a bank located in the United States. 
 Notwithstanding the foregoing, if the date hereof is after the
1st day of February or August, as the case may be, and before the following February 15 or August 15, as the case may be, this Note shall bear interest from such February 15 or August 15; provided, that, if the Company shall
default in the payment of interest due on such February 15 or August 15, then this Note shall bear interest from the next preceding February 15 or August 15, to which interest has been paid or, if no interest has been paid on these Notes,
from August 15, 2016. The interest so payable on any February 15 or August 15, will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at
the close of business on the February 1 or August 1, as the case may be, preceding such February 15 or August 15. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months. 

Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place. 
 This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof. 

 IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed on
the date set forth below. 
 Dated: 
  

			
	BAXTER INTERNATIONAL INC.

 
			
		
	By:	 	 
	Name:	 	
	Title:	 	

 (FORM OF CERTIFICATION OF AUTHENTICATION) 

CERTIFICATE OF AUTHENTICATION 

This is one of the Securities of the series designated herein issued under the within-mentioned Indenture. 

 

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	    as Trustee
		
	By:	 	  

		 	Authorized Signatory

 Dated: 

 REVERSE OF NOTE 

BAXTER INTERNATIONAL INC. 

1.700% Senior Notes due 2021 

This Note is one of a duly authorized issue of Securities of the Company of the series hereinafter specified, all issued or to be issued under
and pursuant to an Indenture, dated as of August 8, 2006, as supplemented by the Tenth Supplemental Indenture, dated as of August 15, 2016 (both together herein called the “Indenture”), between the Company and The Bank of New
York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association), as trustee (herein called the “Trustee” which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. This
Note is one of a series of Securities of the Company designated as the 1.700% Senior Notes due 2021 (the “Notes”), initially limited in aggregate principal amount of $400,000,000, subject to the issuance of additional Notes as
provided in the Indenture. Terms used but not defined herein shall have the respective meanings set forth in the Indenture.
 If any
interest payment date, maturity date or redemption date of this Note falls on a day that is not a Business Day, payment will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the interest payment
date, maturity date or redemption date, as the case may be, to the next succeeding Business Day. As used in this Note, the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in the City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close. 

The Indenture contains provisions for the defeasance at any time of the entire indebtedness of the Notes or certain covenants set forth in the
Indenture applicable to the Notes upon compliance by the Company of certain conditions set forth therein, which provisions apply to this Note. 

This Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, prior to the date that is one month
prior to its maturity date (the “Par Call Date”), at a make whole redemption price equal to the greater of: 

(i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon to the date of
redemption, and 
 (ii) the sum of the present values of the principal amount of the Notes to be redeemed and the scheduled
payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 10 basis points. 
 “Treasury Rate” means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such
redemption date. 

 “Comparable Treasury Issue” means the United States Treasury security selected
by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed calculated as if the maturity date of the Notes were the Par Call Date (the “Remaining
Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes. 

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company. 

“Reference Treasury Dealers” means (1) Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Citigroup Global Markets Inc. and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall
substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New
York City time on the third Business Day preceding such redemption date. 
 On or after the date that is one month prior to its maturity
date, this Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, at a redemption price equal to 100% of its principal amount, plus accrued and unpaid interest thereon to the date of redemption. 

Any redemption made at the option of the Company (an “Optional Redemption”) shall be made upon not less than 30 nor more than
60 days prior notice before the redemption date to the Holders. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be redeemed by such method as the Trustee shall deem fair and appropriate
and in accordance with the Indenture, subject to applicable Depositary procedures as to Notes in global form. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions thereof called for
redemption. 

 If a Change of Control Triggering Event (as defined below) occurs, unless the Company has
exercised its option to redeem the Notes (as described above), the Company shall be required to make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth below. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of
the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice shall be mailed (or, with respect to Notes in global form, to the extent permitted or
required by applicable Depositary procedures, sent electronically) to holders of the Notes with a copy to the Trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the
Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice shall, if mailed or
sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. 

On the Change of Control Payment Date, the Company shall, to the extent lawful: 

 

	 	(1)	accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 

  

	 	(2)	deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

 

	 	(3)	deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased.

 The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering
Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Notes properly tendered and not withdrawn under its
offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment upon a Change
of Control Triggering Event. 
 The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control
Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and regulations and shall not be
deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict. 

 For purposes of the Change of Control Offer provisions of the Notes, the following definitions
shall apply: 
 “Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Company or one of its subsidiaries, becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged
or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the Indenture), other than the Company or one of its subsidiaries or (3) the adoption
of a plan relating to the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction shall not be deemed to be a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a holding
company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction
or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or
indirectly, of more than 50% of the Voting Stock of such holding company. 
 “Change of Control Triggering Event” means the
occurrence of both a Change of Control and a Rating Event. 
 “Investment Grade Rating” means a rating equal to or higher
than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies. 

“Moody’s” means Moody’s Investors Service, Inc. 

“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the
Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act
selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be. 

“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an
Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the

 
Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the Company’s intention to effect a Change of Control;
provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Rating Event for
purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm to the Company in writing at the
Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control
has occurred at the time of the Rating Event). 
 “S&P” means Standard & Poor’s Rating Services, a division of
The McGraw-Hill Companies, Inc. 
 “Voting Stock” means, with respect to any specified “person” (as that term is
used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

The Company’s obligation to make a Change of Control Offer as set forth herein shall be subject to the covenant defeasance provisions of
Section 13.02(c) of the Indenture. 
 If an Event of Default, with respect to the Notes shall have occurred and be continuing, the principal
of this Note may be declared due and payable in the manner and with the effect set forth in the Indenture. 
 The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time Outstanding of each series to be affected to execute supplemental indentures adding
any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes subject to the limitations set forth in the
Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in aggregate principal amount of the Securities at the time
Outstanding of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of
the principal of or premium, if any, or interest on the Notes. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the principal of, and any premium and interest on, this Note in the manner and at the respective times herein provided. 

 The Notes are issuable in registered form without coupons in denominations of $2,000 and any
multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations at the office or agency of the Trustee in the City of New York. 
 There is no sinking fund for the retirement of
the Notes. 
 Upon due presentment for registration of transfer of this Note at the office or agency of the Trustee in the City of New York,
a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith. 
 Prior to due presentment for registration of transfer, the Company, the Trustee and
any agent of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note (whether or not this Note shall be overdue), for the purpose of receiving payment of the principal hereof and premium, if any, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or the Trustee shall be affected by any notice to the contrary. 

No recourse under or upon any obligation, covenant or agreement contained in the Indenture or any indenture supplemental thereto or in any
Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator or against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability and any and all such claims being expressly
waived and released as a condition of, and as a consideration for, the execution of the Indenture and issue hereof of the Notes. 
 This
Note is the senior unsecured and unsubordinated obligation of the Company and will rank on parity with all other unsecured and unsubordinated indebtedness of the Company, including any other Securities issued under the Indenture.

 [FORM OF TRANSFER NOTICE] 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 
  

 
 Please print or typewrite name and address including
zip code of assignee 
  
  

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Note on the books of 

 
  

the Company with full power of substitution in the premises. 

By:                         
                         

Date:                         
                      
  

 Schedule I 

[Include as Schedule I only for a Global Note] 

BAXTER INTERNATIONAL INC. 

1.700% Senior Notes due 2021 
 No.
     
  

							
	Date	  	Principal Amount	  	 Notation Explaining Principal

Amount Recorded
	  	 Authorized Signature of

Trustee or Custodian

				
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 

 EXHIBIT B 

[FACE OF NOTE] 
 [Each
Global Note shall bear the following legend:]
 [THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede
& Co., has an interest herein.] 

 CUSIP No. 071813 BQ1 

ISIN US071813BQ15 
 BAXTER
INTERNATIONAL INC. 
 2.600% Senior Notes due 2026 
  

			
	No. B-	  	$                

 Baxter International Inc., a Delaware corporation (the “Company”), for value received, hereby
promises to pay to                  or registered assigns, at the office or agency of the Company in the City of New York, the principal sum of
                 DOLLARS ($                ) on August 15, 2026, in such coin or currency
of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on February 15 and August 15 of each year, commencing on February 15, 2017, on
said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the February 15 and August 15, as the case may be, next preceding the date of this Note to which interest has
been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Note, or unless no interest has been paid on these Notes, in which case from August 15, 2016 until payment of said principal sum has
been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer to an
account maintained by the payee with a bank located in the United States.
 Notwithstanding the foregoing, if the date hereof is after the
1st day of February or August, as the case may be, and before the following February 15 or August 15, as the case may be, this Note shall bear interest from such February 15 or August 15; provided, that, if the Company shall
default in the payment of interest due on such February 15 or August 15, then this Note shall bear interest from the next preceding February 15 or August 15, to which interest has been paid or, if no interest has been paid on these Notes,
from August 15, 2016. The interest so payable on any February 15 or August 15, will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at
the close of business on the February 1 or August 1, as the case may be, preceding such February 15 or August 15. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months. 

Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place. 
 This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof. 

 IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed on
the date set forth below. 
 Dated: 
  

			
	BAXTER INTERNATIONAL INC.
		
	By:	 	  

	Name:	 	
	Title:	 	

 (FORM OF CERTIFICATION OF AUTHENTICATION) 

CERTIFICATE OF AUTHENTICATION 

This is one of the Securities of the series designated herein issued under the within-mentioned Indenture. 

 

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	    as Trustee
		
	By:	 	  

		 	Authorized Signatory

 Dated: 

 REVERSE OF NOTE 

BAXTER INTERNATIONAL INC. 

2.600% Senior Notes due 2026 

This Note is one of a duly authorized issue of Securities of the Company of the series hereinafter specified, all issued or to be issued under
and pursuant to an Indenture, dated as of August 8, 2006, as supplemented by the Tenth Supplemental Indenture, dated as of August 15, 2016 (both together herein called the “Indenture”), between the Company and The Bank of New
York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association), as trustee (herein called the “Trustee” which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. This
Note is one of a series of Securities of the Company designated as the 2.600% Senior Notes due 2026 (the “Notes”), initially limited in aggregate principal amount of $750,000,000, subject to the issuance of additional Notes as
provided in the Indenture. Terms used but not defined herein shall have the respective meanings set forth in the Indenture.
 If any
interest payment date, maturity date or redemption date of this Note falls on a day that is not a Business Day, payment will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the interest payment
date, maturity date or redemption date, as the case may be, to the next succeeding Business Day. As used in this Note, the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in the City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close. 

The Indenture contains provisions for the defeasance at any time of the entire indebtedness of the Notes or certain covenants set forth in the
Indenture applicable to the Notes upon compliance by the Company of certain conditions set forth therein, which provisions apply to this Note. 

This Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, prior to the date that is three
months prior to its maturity date (the “Par Call Date”), at a make whole redemption price equal to the greater of: 

(i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon to the date of
redemption, and 
 (ii) the sum of the present values of the principal amount of the Notes to be redeemed and the scheduled
payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 20 basis points. 
 “Treasury Rate” means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such
redemption date. 

 “Comparable Treasury Issue” means the United States Treasury security selected
by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed calculated as if the maturity date of the Notes were the Par Call Date (the “Remaining
Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes. 

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company. 

“Reference Treasury Dealers” means (1) Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Citigroup Global Markets Inc. and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall
substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New
York City time on the third Business Day preceding such redemption date. 
 On or after the date that is three months prior to its maturity
date, this Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, at a redemption price equal to 100% of its principal amount, plus accrued and unpaid interest thereon to the date of redemption. 

Any redemption made at the option of the Company (an “Optional Redemption”) shall be made upon not less than 30 nor more than
60 days prior notice before the redemption date to the Holders. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be redeemed by such method as the Trustee shall deem fair and appropriate
and in accordance with the Indenture, subject to applicable Depositary procedures as to Notes in global form. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions thereof called for
redemption. 

 If a Change of Control Triggering Event (as defined below) occurs, unless the Company has
exercised its option to redeem the Notes (as described above), the Company shall be required to make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth below. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of
the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice shall be mailed (or, with respect to Notes in global form, to the extent permitted or
required by applicable Depositary procedures, sent electronically) to holders of the Notes with a copy to the Trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the
Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice shall, if mailed or
sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. 

On the Change of Control Payment Date, the Company shall, to the extent lawful: 

 

	 	(1)	accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 

  

	 	(2)	deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

 

	 	(3)	deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased.

 The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering
Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Notes properly tendered and not withdrawn under its
offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment upon a Change
of Control Triggering Event. 
 The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control
Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and regulations and shall not be
deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict. 

 For purposes of the Change of Control Offer provisions of the Notes, the following definitions
shall apply: 
 “Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Company or one of its subsidiaries, becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged
or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the Indenture), other than the Company or one of its subsidiaries or (3) the adoption
of a plan relating to the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction shall not be deemed to be a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a holding
company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction
or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or
indirectly, of more than 50% of the Voting Stock of such holding company. 
 “Change of Control Triggering Event” means the
occurrence of both a Change of Control and a Rating Event. 
 “Investment Grade Rating” means a rating equal to or higher
than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies. 

“Moody’s” means Moody’s Investors Service, Inc. 

“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the
Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act
selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be. 

“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an
Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the

 
Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the Company’s intention to effect a Change of Control;
provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Rating Event for
purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm to the Company in writing at the
Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control
has occurred at the time of the Rating Event). 
 “S&P” means Standard & Poor’s Rating Services, a division of
The McGraw-Hill Companies, Inc. 
 “Voting Stock” means, with respect to any specified “person” (as that term is
used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

The Company’s obligation to make a Change of Control Offer as set forth herein shall be subject to the covenant defeasance provisions of
Section 13.02(c) of the Indenture. 
 If an Event of Default, with respect to the Notes shall have occurred and be continuing, the principal
of this Note may be declared due and payable in the manner and with the effect set forth in the Indenture. 
 The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time Outstanding of each series to be affected to execute supplemental indentures adding
any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes subject to the limitations set forth in the
Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in aggregate principal amount of the Securities at the time
Outstanding of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of
the principal of or premium, if any, or interest on the Notes. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the principal of, and any premium and interest on, this Note in the manner and at the respective times herein provided. 

 The Notes are issuable in registered form without coupons in denominations of $2,000 and any
multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations at the office or agency of the Trustee in the City of New York. 
 There is no sinking fund for the retirement of
the Notes. 
 Upon due presentment for registration of transfer of this Note at the office or agency of the Trustee in the City of New York,
a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith. 
 Prior to due presentment for registration of transfer, the Company, the Trustee and
any agent of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note (whether or not this Note shall be overdue), for the purpose of receiving payment of the principal hereof and premium, if any, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or the Trustee shall be affected by any notice to the contrary. 

No recourse under or upon any obligation, covenant or agreement contained in the Indenture or any indenture supplemental thereto or in any
Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator or against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability and any and all such claims being expressly
waived and released as a condition of, and as a consideration for, the execution of the Indenture and issue hereof of the Notes. 
 This
Note is the senior unsecured and unsubordinated obligation of the Company and will rank on parity with all other unsecured and unsubordinated indebtedness of the Company, including any other Securities issued under the Indenture.

 [FORM OF TRANSFER NOTICE] 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 
  

 
 Please print or typewrite name and address including
zip code of assignee 
  
  

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Note on the books of 

 
  

the Company with full power of substitution in the premises. 

By:                         
                        

Date:                         
                      

 Schedule I 

[Include as Schedule I only for a Global Note] 

BAXTER INTERNATIONAL INC. 

2.600% Senior Notes due 2026 
 No.
     
  

							
	Date	  	Principal Amount	  	Notation Explaining Principal
Amount Recorded	  	Authorized Signature of
Trustee or Custodian
				
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 
	 	  	 	  	 	  	 

 EXHIBIT C 

[FACE OF NOTE] 
 [Each
Global Note shall bear the following legend:]
 [THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER
REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY IS EXCHANGEABLE FOR SECURITIES REGISTERED IN THE NAME OF A PERSON OTHER THAN THE DEPOSITARY OR ITS NOMINEE ONLY IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE AND, UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES IN DEFINITIVE REGISTERED FORM, THIS SECURITY MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITARY TO THE NOMINEE OF THE DEPOSITARY OR BY A
NOMINEE OF THE DEPOSITARY TO THE DEPOSITARY OR ANOTHER NOMINEE OF THE DEPOSITARY OR BY THE DEPOSITARY OR ANY SUCH NOMINEE TO A SUCCESSOR DEPOSITARY OR TO A NOMINEE OF SUCH SUCCESSOR DEPOSITARY. 

Unless this certificate is presented by an authorized representative of The Depository Trust Company, a New York corporation
(“DTC”), to the Company or its agent for registration of transfer, exchange or payment, and any certificate issued is registered in the name of Cede & Co., or such other name as requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is required by an authorized representative of DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL since the registered owner hereof, Cede
& Co., has an interest herein.] 

 CUSIP No. 071813 BP3 

ISIN US071813BP32 
 BAXTER
INTERNATIONAL INC. 
 3.500% Senior Notes due 2046 
  

			
	No. C-	  	$                

 Baxter International Inc., a Delaware corporation (the “Company”), for value received, hereby
promises to pay to                  or registered assigns, at the office or agency of the Company in the City of New York, the principal sum of
                 DOLLARS ($                ) on August 15, 2046, in such coin or currency
of the United States of America as at the time of payment shall be legal tender for the payment of public and private debts, and to pay interest, semiannually on February 15 and August 15 of each year, commencing on February 15, 2017, on
said principal sum at said office or agency, in like coin or currency, at the rate per annum specified in the title of this Note, from the February 15 and August 15, as the case may be, next preceding the date of this Note to which interest has
been paid, unless the date hereof is a date to which interest has been paid, in which case from the date of this Note, or unless no interest has been paid on these Notes, in which case from August 15, 2016 until payment of said principal sum has
been made or duly provided for; provided, that payment of interest may be made at the option of the Company by check mailed to the address of the person entitled thereto as such address shall appear on the Security Register or by wire transfer to an
account maintained by the payee with a bank located in the United States.
 Notwithstanding the foregoing, if the date hereof is after the
1st day of February or August, as the case may be, and before the following February 15 or August 15, as the case may be, this Note shall bear interest from such February 15 or August 15; provided, that, if the Company shall
default in the payment of interest due on such February 15 or August 15, then this Note shall bear interest from the next preceding February 15 or August 15, to which interest has been paid or, if no interest has been paid on these Notes,
from August 15, 2016. The interest so payable on any February 15 or August 15, will, subject to certain exceptions provided in the Indenture referred to on the reverse hereof, be paid to the person in whose name this Note is registered at
the close of business on the February 1 or August 1, as the case may be, preceding such February 15 or August 15. Interest on this Note will be calculated on the basis of a 360-day year of twelve 30-day months. 

Reference is made to the further provisions of this Note set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place. 
 This Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee under the Indenture referred to on the reverse hereof. 

 IN WITNESS WHEREOF, Baxter International Inc. has caused this instrument to be duly executed on
the date set forth below. 
 Dated: 
  

			
	 BAXTER INTERNATIONAL INC.

		
	 By:
	 	  

	 Name:
	 	
	 Title:
	 	

 (FORM OF CERTIFICATION OF AUTHENTICATION) 

CERTIFICATE OF AUTHENTICATION 

This is one of the Securities of the series designated herein issued under the within-mentioned Indenture. 

 

			
	THE BANK OF NEW YORK MELLON TRUST COMPANY, N.A.
	    as Trustee
		
	By:	 	  

		 	Authorized Signatory

 Dated:

 REVERSE OF NOTE 

BAXTER INTERNATIONAL INC. 

3.500% Senior Notes due 2046 

This Note is one of a duly authorized issue of Securities of the Company of the series hereinafter specified, all issued or to be issued under
and pursuant to an Indenture, dated as of August 8, 2006, as supplemented by the Tenth Supplemental Indenture, dated as of August 15, 2016 (both together herein called the “Indenture”), between the Company and The Bank of New
York Mellon Trust Company, N.A. (as successor in interest to J.P. Morgan Trust Company, National Association), as trustee (herein called the “Trustee” which term includes any successor Trustee under the Indenture), to which
Indenture and all indentures supplemental thereto reference is hereby made for a description of the rights, limitations of rights, obligations, duties and immunities thereunder of the Trustee, the Company and the Holders of the Securities. This
Note is one of a series of Securities of the Company designated as the 3.500% Senior Notes due 2046 (the “Notes”), initially limited in aggregate principal amount of $450,000,000, subject to the issuance of additional Notes as
provided in the Indenture. Terms used but not defined herein shall have the respective meanings set forth in the Indenture.
 If any
interest payment date, maturity date or redemption date of this Note falls on a day that is not a Business Day, payment will be made on the next succeeding Business Day, and no interest will accrue for the period from and after the interest payment
date, maturity date or redemption date, as the case may be, to the next succeeding Business Day. As used in this Note, the term “Business Day” means each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in the City of New York are authorized or obligated by or pursuant to law, regulation or executive order to close. 

The Indenture contains provisions for the defeasance at any time of the entire indebtedness of the Notes or certain covenants set forth in the
Indenture applicable to the Notes upon compliance by the Company of certain conditions set forth therein, which provisions apply to this Note. 

This Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, prior to the date that is six months
prior to its maturity date (the “Par Call Date”), at a make whole redemption price equal to the greater of: 

(i) 100% of the principal amount of the Notes to be redeemed plus accrued and unpaid interest thereon to the date of
redemption, and 
 (ii) the sum of the present values of the principal amount of the Notes to be redeemed and the scheduled
payments of interest thereon (exclusive of interest accrued to the date of redemption) from the redemption date to the Par Call Date, discounted to the redemption date on a semiannual basis (assuming a 360-day year consisting of twelve 30-day
months) at the Treasury Rate plus 20 basis points. 
 “Treasury Rate” means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such
redemption date. 

 “Comparable Treasury Issue” means the United States Treasury security selected
by an Independent Investment Banker as having an actual or interpolated maturity comparable to the remaining term of the Notes to be redeemed calculated as if the maturity date of the Notes were the Par Call Date (the “Remaining
Life”) that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the Remaining Life of the Notes. 

“Comparable Treasury Price” means, with respect to any redemption date, (1) the average of four Reference Treasury Dealer
Quotations for such redemption date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (2) if the Company obtains fewer than four such Reference Treasury Dealer Quotations, the average of all such quotations. 

“Independent Investment Banker” means one of the Reference Treasury Dealers appointed by the Company. 

“Reference Treasury Dealers” means (1) Goldman, Sachs & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated
and Citigroup Global Markets Inc. and their respective successors; provided, however, that if any of the foregoing shall cease to be a primary U.S. Government securities dealer (“Primary Treasury Dealer”), the Company shall
substitute another nationally recognized investment banking firm that is a Primary Treasury Dealer, and (2) at the option of the Company, additional Primary Treasury Dealers selected by the Company.

“Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any redemption date, the
average, as determined by the Company, of the bid and asked prices for the Comparable Treasury Issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Company by such Reference Treasury Dealer at 5:00 p.m. New
York City time on the third Business Day preceding such redemption date. 
 On or after the date that is six months prior to its maturity
date, this Note is redeemable in whole at any time or in part, from time to time, at the option of the Company, at a redemption price equal to 100% of its principal amount, plus accrued and unpaid interest thereon to the date of redemption. 

Any redemption made at the option of the Company (an “Optional Redemption”) shall be made upon not less than 30 nor more than
60 days prior notice before the redemption date to the Holders. If the Notes are only partially redeemed by the Company pursuant to an Optional Redemption, the Notes will be redeemed by such method as the Trustee shall deem fair and appropriate
and in accordance with the Indenture, subject to applicable Depositary procedures as to Notes in global form. In the event of redemption of this Note in part only, a new Note or Notes of this series for the unredeemed portion hereof shall be
issued in the name of the Holder hereof upon the cancellation hereof. Unless the Company defaults in payment of the redemption price, on and after the redemption date interest will cease to accrue on the Notes or portions thereof called for
redemption. 

 If a Change of Control Triggering Event (as defined below) occurs, unless the Company has
exercised its option to redeem the Notes (as described above), the Company shall be required to make an offer (the “Change of Control Offer”) to each holder of the Notes to repurchase all or any part (equal to $2,000 or an integral
multiple of $1,000 in excess thereof) of that holder’s Notes on the terms set forth below. In the Change of Control Offer, the Company shall be required to offer payment in cash equal to 101% of the aggregate principal amount of Notes
repurchased, plus accrued and unpaid interest, if any, on the Notes repurchased to the date of repurchase (the “Change of Control Payment”). Within 30 days following any Change of Control Triggering Event or, at the option of
the Company, prior to any Change of Control, but after public announcement of the transaction that constitutes or may constitute the Change of Control, a notice shall be mailed (or, with respect to Notes in global form, to the extent permitted or
required by applicable Depositary procedures, sent electronically) to holders of the Notes with a copy to the Trustee describing the transaction that constitutes or may constitute the Change of Control Triggering Event and offering to repurchase the
Notes on the date specified in the notice, which date shall be no earlier than 30 days and no later than 60 days from the date such notice is mailed or sent (the “Change of Control Payment Date”). The notice shall, if mailed or
sent prior to the date of consummation of the Change of Control, state that the offer to purchase is conditioned on the Change of Control Triggering Event occurring on or prior to the Change of Control Payment Date. 

On the Change of Control Payment Date, the Company shall, to the extent lawful: 

 

	 	(1)	accept for payment all Notes or portions of Notes properly tendered pursuant to the Change of Control Offer; 

  

	 	(2)	deposit with the paying agent an amount equal to the Change of Control Payment in respect of all Notes or portions of Notes properly tendered; and 

 

	 	(3)	deliver or cause to be delivered to the Trustee the Notes properly accepted together with an Officers’ Certificate stating the aggregate principal amount of Notes or portions of Notes being repurchased.

 The Company shall not be required to make a Change of Control Offer upon the occurrence of a Change of Control Triggering
Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by the Company and the third party repurchases all Notes properly tendered and not withdrawn under its
offer. In addition, the Company shall not repurchase any Notes if there has occurred and is continuing on the Change of Control Payment Date an Event of Default, other than a default in the payment of the Change of Control Payment upon a Change
of Control Triggering Event. 
 The Company shall comply with the requirements of Rule 14e-1 under the Securities Exchange Act of 1934, as
amended (the “Exchange Act”), and any other securities laws and regulations thereunder to the extent those laws and regulations are applicable in connection with the repurchase of the Notes as a result of a Change of Control
Triggering Event. To the extent that the provisions of any such securities laws or regulations conflict with the Change of Control Offer provisions of the Notes, the Company shall comply with those securities laws and regulations and shall not be
deemed to have breached its obligations under the Change of Control Offer provisions of the Notes by virtue of any such conflict. 

 For purposes of the Change of Control Offer provisions of the Notes, the following definitions
shall apply: 
 “Change of Control” means the occurrence of any of the following: (1) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than the Company or one of its subsidiaries, becomes the beneficial
owner (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or indirectly, of more than 50% of the Company’s Voting Stock or other Voting Stock into which the Company’s Voting Stock is reclassified, consolidated, exchanged
or changed, measured by voting power rather than number of shares; (2) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or
substantially all of the Company’s assets and the assets of its subsidiaries, taken as a whole, to one or more “persons” (as that term is defined in the Indenture), other than the Company or one of its subsidiaries or (3) the adoption
of a plan relating to the Company’s liquidation or dissolution. Notwithstanding the foregoing, a transaction shall not be deemed to be a Change of Control if (1) the Company becomes a direct or indirect wholly-owned subsidiary of a holding
company and (2)(A) the direct or indirect holders of the Voting Stock of such holding company immediately following that transaction are substantially the same as the holders of the Company’s Voting Stock immediately prior to that transaction
or (B) immediately following that transaction no “person” (as that term is used in Section 13(d)(3) of the Exchange Act) (other than a holding company satisfying the requirements of this sentence) is the beneficial owner, directly or
indirectly, of more than 50% of the Voting Stock of such holding company. 
 “Change of Control Triggering Event” means the
occurrence of both a Change of Control and a Rating Event. 
 “Investment Grade Rating” means a rating equal to or higher
than Baa3 (or the equivalent) by Moody’s and BBB- (or the equivalent) by S&P, and the equivalent investment grade credit rating from any replacement Rating Agency or Rating Agencies. 

“Moody’s” means Moody’s Investors Service, Inc. 

“Rating Agencies” means (1) each of Moody’s and S&P, and (2) if either Moody’s or S&P ceases to rate the
Notes or fails to make a rating of the Notes publicly available for reasons outside of the Company’s control, a “nationally recognized statistical rating organization” within the meaning of Section 3(a)(62) of the Exchange Act
selected by the Company (as certified by a resolution of the Company’s Board of Directors) as a replacement agency for Moody’s or S&P, or both of them, as the case may be. 

“Rating Event” means the rating on the Notes is lowered by each of the Rating Agencies and the Notes are rated below an
Investment Grade Rating by each of the Rating Agencies on any day within the 60-day period (which 60-day period will be extended so long as the rating of the Notes is under publicly announced consideration for a possible downgrade by any of the

 
Rating Agencies but no longer than 180 days) after the earlier of (1) the occurrence of a Change of Control and (2) public notice of the Company’s intention to effect a Change of Control;
provided, however, that a Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Rating Event for
purposes of the definition of Change of Control Triggering Event) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm to the Company in writing at the
Company’s request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control
has occurred at the time of the Rating Event). 
 “S&P” means Standard & Poor’s Rating Services, a division of
The McGraw-Hill Companies, Inc. 
 “Voting Stock” means, with respect to any specified “person” (as that term is
used in Section 13(d)(3) of the Exchange Act), as of any date, the capital stock of such person that is at the time entitled to vote generally in the election of the board of directors of such person. 

The Company’s obligation to make a Change of Control Offer as set forth herein shall be subject to the covenant defeasance provisions of
Section 13.02(c) of the Indenture. 
 If an Event of Default, with respect to the Notes shall have occurred and be continuing, the principal
of this Note may be declared due and payable in the manner and with the effect set forth in the Indenture. 
 The Indenture contains
provisions permitting the Company and the Trustee, with the consent of the Holders of not less than a majority in aggregate principal amount of the Notes at the time Outstanding of each series to be affected to execute supplemental indentures adding
any provisions to or changing in any manner or eliminating any of the provisions of the Indenture or of any supplemental indenture or modifying in any manner the rights of the Holders of the Notes subject to the limitations set forth in the
Indenture. It is also provided in the Indenture that, with respect to certain defaults or Events of Default regarding the Securities of any series, the Holders of a majority in aggregate principal amount of the Securities at the time
Outstanding of such series may on behalf of the Holders of all the Securities of such series waive any such past default or Event of Default and its consequences. The preceding sentence shall not, however, apply to a default in the payment of
the principal of or premium, if any, or interest on the Notes. Any such consent or waiver by the Holder of this Note (unless revoked as provided in the Indenture) shall be conclusive and binding upon such Holder and upon all future Holders and
owners of this Note and any Notes which may be issued in exchange or substitution herefor, irrespective of whether or not any notation thereof is made upon this Note or such other Notes. 

No reference herein to the Indenture and no provision of this Note or of the Indenture shall alter or impair the obligations of the Company,
which are absolute and unconditional, to pay the principal of, and any premium and interest on, this Note in the manner and at the respective times herein provided. 

 The Notes are issuable in registered form without coupons in denominations of $2,000 and any
multiple of $1,000 in excess thereof. In the manner and subject to the limitations provided in the Indenture, but without the payment of any service charge, Notes may be exchanged for a like aggregate principal amount of Notes of other
authorized denominations at the office or agency of the Trustee in the City of New York. 
 There is no sinking fund for the retirement of
the Notes. 
 Upon due presentment for registration of transfer of this Note at the office or agency of the Trustee in the City of New York,
a new Note or Notes of authorized denominations for an equal aggregate principal amount will be issued to the transferee in exchange therefor, subject to the limitations provided in the Indenture, without charge except for any tax or other
governmental charge imposed in connection therewith. 
 Prior to due presentment for registration of transfer, the Company, the Trustee and
any agent of the Company, or the Trustee may treat the registered Holder hereof as the owner of this Note (whether or not this Note shall be overdue), for the purpose of receiving payment of the principal hereof and premium, if any, and subject to
the provisions on the face hereof, interest hereon, and for all other purposes, and neither the Company, nor the Trustee nor any agent of the Company, or the Trustee shall be affected by any notice to the contrary. 

No recourse under or upon any obligation, covenant or agreement contained in the Indenture or any indenture supplemental thereto or in any
Note, or because of any indebtedness evidenced thereby, shall be had against any incorporator or against any past, present or future stockholder, employee, officer or director, as such, of the Company or of any successor corporation, either directly
or through the Company or any successor corporation, whether by virtue of any constitution, statute or rule of law, or by the enforcement of any assessment or penalty or otherwise, all such liability and any and all such claims being expressly
waived and released as a condition of, and as a consideration for, the execution of the Indenture and issue hereof of the Notes. 
 This
Note is the senior unsecured and unsubordinated obligation of the Company and will rank on parity with all other unsecured and unsubordinated indebtedness of the Company, including any other Securities issued under the Indenture.

 [FORM OF TRANSFER NOTICE] 

FOR VALUE RECEIVED the undersigned registered holder hereby sell(s), assign(s) and transfer(s) unto 

Insert Taxpayer Identification No. 
  

 
 Please print or typewrite name and address including
zip code of assignee 
  
  

the within Note and all rights thereunder, hereby irrevocably constituting and appointing attorney to transfer said Note on the books of 

 
  

the Company with full power of substitution in the premises. 

By:                         
                            

Date:                         
                            

 Schedule I 

[Include as Schedule I only for a Global Note] 

BAXTER INTERNATIONAL INC. 

3.500% Senior Notes due 2046 

No.     
  

							
	Date	  	Principal Amount	  	 Notation Explaining Principal

Amount Recorded
	  	 Authorized Signature of

Trustee or CustodianAMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

 

EXHIBIT 4.1

HEAT BIOLOGICS, INC.

 

AMENDED AND RESTATED 2014 STOCK INCENTIVE PLAN

 

 

1.  Establishment and Purpose.

 

The purpose of the Heat Biologics, Inc. 2014 Amended and Restated Stock Incentive Plan (the “Plan”) is to promote the interests of the Company and the stockholders of the Company by providing directors, officers, employees and consultants of the Company with appropriate incentives and rewards to encourage them to enter into and continue in the employ or service of the Company, to acquire a proprietary interest in the long-term success of the Company and to reward the performance of individuals in fulfilling long-term corporate objectives.

 

2.  Administration of the Plan.

 

The Plan shall be administered by a Committee appointed by the Board of Directors. The Committee shall have the authority, in its sole discretion, subject to and not inconsistent with the express terms and provisions of the Plan, to administer the Plan and to exercise all the powers and authorities either specifically granted to it under the Plan or necessary or advisable in the administration of the Plan, including, without limitation, the authority to grant Awards; to determine the persons to whom and the time or times at which Awards shall be granted; to determine the type and number of Awards to be granted (including whether an Option granted is an Incentive Stock Option or a Nonqualified Stock Option); to determine the number of shares of stock to which an Award may relate and the terms, conditions, restrictions and performance criteria, if any, relating to any Award; to determine whether, to what extent, and under what circumstances an Award may be settled, cancelled, forfeited, exchanged or surrendered; to make adjustments in the performance goals that may be required for any award in recognition of unusual or nonrecurring events affecting the Company or the financial statements of the Company (to the extent not inconsistent with Section 162(m) of the Code, if applicable), or in response to changes in applicable laws, regulations, or accounting principles; to construe and interpret the Plan and any Award; to prescribe, amend and rescind rules and regulations relating to the Plan; to determine the terms and provisions of Agreements; and to make all other determinations deemed necessary or advisable for the administration of the Plan.

 

The Committee may, in its absolute discretion, without amendment to the Plan, (a) accelerate the date on which any Option granted under the Plan becomes exercisable, waive or amend the operation of Plan provisions respecting exercise after termination of employment or otherwise adjust any of the terms of such Option, and (b) accelerate the vesting date, or waive any condition imposed hereunder, with respect to any share of Restricted Stock, or other Award or otherwise adjust any of the terms applicable to any such Award. Notwithstanding the foregoing, and subject to Sections 4(c) and 4(d), neither the Board of Directors, the Committee nor their respective delegates shall have the authority to re-price (or cancel and/or re-grant) any Option, Stock Appreciation Right or, if applicable, other Award at a lower exercise, base or purchase price without first obtaining the approval of the Company’s stockholders.

 

Subject to Section 162(m) of the Code and except as required by Rule 16b-3 with respect to grants of Awards to individuals who are subject to Section 16 of the Exchange Act, or as otherwise required for compliance with Rule 16b-3 or other applicable law, the Committee may delegate all or any part of its authority under the Plan to an employee, employees or committee of employees.

 

Subject to Section 162(m) of the Code and Section 16 of the Exchange Act, to the extent the Committee deems it necessary, appropriate or desirable to comply with foreign law or practices and to further the purpose of the Plan, the Committee may, without amending this Plan, establish special rules applicable to Awards granted to Participants who are foreign nationals, are employed outside the United States, or both, including rules that differ from those set forth in the Plan, and grant Awards to such Participants in accordance with those rules.

 

All decisions, determinations and interpretations of the Committee or the Board of Directors shall be final and binding on all persons with any interest in an Award, including the Company and the Participant (or any person claiming any rights under the Plan from or through any Participant). No member of the Committee or the Board of Directors shall be liable for any action taken or determination made in good faith with respect to the Plan or any Award.

 

3.  Definitions.

 

(a) “Agreement” shall mean the written agreement between the Company and a Participant evidencing an Award.

1

 

 

(b) “Annual Incentive Award” shall mean an Award described in Section 6(g) hereof that is based upon a period of one year or less.

 

(c) “Award” shall mean any Option, Restricted Stock, Stock Bonus Award, Stock Appreciation Right, Performance Award, Other Stock-Based Award or Other Cash-Based Award granted pursuant to the terms of the Plan.

 

(d) “Board of Directors” shall mean the Board of Directors of the Company.

 

(e) “Cause” shall mean a termination of a Participant’s employment by the Company or any of its Subsidiaries due to (i) the continued failure, after written notice, by such Participant substantially to perform his or her duties with the Company or any of its Subsidiaries (other than any such failure resulting from incapacity due to reasonably documented physical illness or injury or mental illness), (ii) the engagement by such Participant in serious misconduct that causes, or in the good faith judgment of the Board of Directors may cause, harm (financial or otherwise) to the Company or any of its Subsidiaries including, without limitation, the disclosure of material secret or confidential information of the Company or any of its Subsidiaries, or (iii) the material breach by the Participant of any agreement between such Participant, on the one hand, and the Company, on the other hand. Notwithstanding the above, with respect to any Participant who is a party to an employment agreement with the Company, Cause shall have the meaning set forth in such employment agreement.

 

(f) A “Change in Control” shall be deemed to have occurred if the event set forth in any one of the following paragraphs shall have occurred:

 

(i) any Person is or becomes the “Beneficial Owner” (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company) representing 30% or more of the Company’s then outstanding securities, excluding any Person who becomes such a Beneficial Owner in connection with a transaction described in clause (A) of paragraph (iii) below; or

 

(ii) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date, constitute the Board of Directors and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board of Directors or nomination for election by the Company’s stockholders was approved or recommended by a vote of at least two-thirds of the directors then still in office who either were directors on the Effective Date or whose appointment, election or nomination for election was previously so approved or recommended; or

 

(iii) there is consummated a merger or consolidation of the Company with any other corporation other than (A) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 50% of the combined voting power of the voting securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation, or (B) a merger or consolidation effected to implement a re-capitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities Beneficially Owned by such Person any securities acquired directly from the Company) representing 30% or more of the combined voting power of the Company’s then outstanding securities; or

 

(iv) the stockholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Company’s assets, other than a sale or disposition by the Company of all or substantially all of the Company’s assets to an entity at least 75% of the combined voting power of the voting securities of which are owned by Persons in substantially the same proportions as their ownership of the Company immediately prior to such sale.

 

(g) “Code” shall mean the Internal Revenue Code of 1986, as amended from time to time, and any regulations promulgated thereunder. References in the Plan to specific sections of the Code shall be deemed to include any successor provisions thereto.

(h) “Committee” shall mean, at the discretion of the Board of Directors, a Committee of the Board of Directors, which shall consist of two or more persons, each of whom, unless otherwise determined by the Board of Directors, is an 

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“outside director” within the meaning of Section 162(m) of the Code and a “nonemployee director” within the meaning of Rule 16b-3.

 

(i) “Company” shall mean Heat Biologics, Inc., a Delaware corporation, and, where appropriate, each of its Subsidiaries.

 

(j) “Company Stock” shall mean the common stock of the Company, par value $0.0002 per share.

 

(k) “Disability” shall mean permanent disability as determined pursuant to the Company’s long-term disability plan or policy, in effect at the time of such disability.

 

(l) “Effective Date” shall mean the date as of which this Plan is adopted by the Board of Directors.

 

(m) “Exchange Act” shall mean the Securities Exchange Act of 1934, as amended from time to time.

 

(n) The “Fair Market Value” of a share of Company Stock, as of a date of determination, shall mean (1) the closing sales price per share of Company Stock on the national securities exchange on which such stock is principally traded on the date of the grant of such Award, or (2) if the shares of Company Stock are not listed or admitted to trading on any such exchange, the closing price as reported by the Nasdaq Stock Market for the last preceding date on which there was a sale of such stock on such exchange, or (3) if the shares of Company Stock are not then listed on a national securities exchange or traded in an over-the-counter market or the value of such shares is not otherwise determinable, such value as determined by the Committee in good faith upon the advice of a qualified valuation expert. In no event shall the fair market value of any share of Company Stock, the Option exercise price of any Option, the appreciation base per share of Company Stock under any Stock Appreciation Right, or the amount payable per share of Company Stock under any other Award, be less than the par value per share of Company Stock.

 

(o) “Full Value Award” means any Award, other than an Option or a Stock Appreciation Right, which Award is settled in Stock.

 

(p) “Incentive Stock Option” shall mean an Option that is an “incentive stock option” within the meaning of Section 422 of the Code, or any successor provision, and that is designated by the Committee as an Incentive Stock Option.

 

(q) “Long Term Incentive Award” shall mean an Award described in Section 6(g) hereof that is based upon a period in excess of one year.

 

(r) “Nonemployee Director” shall mean a member of the Board of Directors who is not an employee of the Company.

 

(s) “Nonqualified Stock Option” shall mean an Option other than an Incentive Stock Option.

 

(t) “Option” shall mean an option to purchase shares of Company Stock granted pursuant to Section 6(b).

 

(u) “Other Cash-Based Award” shall mean a right or other interest granted to a Participant pursuant to Section 6(g) hereof other than an Other Stock-Based Award.

 

(v) “Other Stock-Based Award” shall mean a right or other interest granted to a Participant, valued in whole or in part by reference to, or otherwise based on, or related to, Company Stock pursuant to Section 6(g) hereof, including but not limited to (i) unrestricted Company Stock awarded as a bonus or upon the attainment of performance goals or otherwise as permitted under the Plan, and (ii) a right granted to a Participant to acquire Company Stock from the Company containing terms and conditions prescribed by the Committee.

 

(w) “Participant” shall mean an employee, consultant or director of the Company to whom an Award is granted pursuant to the Plan, and, upon the death of the employee, consultant or director, his or her successors, heirs, executors and administrators, as the case may be.

 

(x) “Performance Award” shall mean an Award granted to a Participant pursuant to Section 6(f) hereof.

 

(y) “Person” shall have the meaning set forth in Section 3(a)(9) of the Exchange Act, except that such term shall not include (1) the Company, (2) a trustee or other fiduciary holding securities under an employee benefit plan of the Company, 

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(3) an underwriter temporarily holding securities pursuant to an offering of such securities, or (4) a corporation owned, directly or indirectly, by the stockholders of the Company in substantially the same proportions as their ownership of stock of the Company.

 

(z) “Restricted Stock” shall mean a share of Company Stock which is granted pursuant to the terms of Section 6(e) hereof.

 

(aa) “Retirement” shall mean, in the case of employees, the termination of employment with the Company (other than for Cause) during or after the calendar year in which a Participant has or will reach (i) age 55 with ten years of service with the Company, or (ii) age 60 with five years of service with the Company. “Retirement” shall mean, in the case of directors, the termination of service with the Company (other than for Cause) during or after the calendar year in which a Participant has or will reach age 75 with five years of service with the Company.

 

(bb) “Rule 16b-3” shall mean the Rule 16b-3 promulgated under the Exchange Act, as amended from time to time.

 

(cc) “Securities Act” shall mean the Securities Act of 1933, as amended from time to time.

 

(dd) “Stock Appreciation Right” shall mean the right, granted to a Participant under Section 6(d), to be paid an amount measured by the appreciation in the Fair Market Value of a share of Company Stock from the date of grant to the date of exercise of the right, with payment to be made in cash and/or a share of Company Stock, as specified in the Award or determined by the Committee.

 

(ee) “Stock Bonus” shall mean a bonus payable in shares of Company Stock granted pursuant to Section 6(e) hereof.

 

(ff) “Subsidiary” shall mean a “subsidiary corporation” within the meaning of Section 424(f) of the Code.

  

4. Stock Subject to the Plan.

  

(a)  Shares Available for Awards. The maximum number of shares of Company Stock reserved for issuance under the Plan (all of which may be granted as Incentive Stock Options) shall be Three Million (3,000,000) shares. Notwithstanding the foregoing, of the Three Million (3,000,000) shares originally reserved for issuance under this Plan, no more than seven hundred fifty thousand (750,000) of such shares shall be issued as Full Value Awards. Shares reserved under the Plan may be authorized but unissued Company Stock or authorized and issued Company Stock held in the Company’s treasury. The Committee may direct that any stock certificate evidencing shares issued pursuant to the Plan shall bear a legend setting forth such restrictions on transferability as may apply to such shares pursuant to the Plan.

 

(b)  Individual Limitation. To the extent required by Section 162(m) of the Code, the total number of shares of Company Stock subject to Awards awarded to any one Participant during any tax year of the Company, shall not exceed two hundred fifty thousand (250,000) shares (subject to adjustment as provided herein).

 

(c)  Adjustment for Change in Capitalization. In the event that the Committee shall determine that any dividend or other distribution (whether in the form of cash, Company Stock, or other property), recapitalization, Company Stock split, reverse Company Stock split, reorganization, merger, consolidation, spin-off, combination, repurchase, or share exchange, or other similar corporate transaction or event has occurred, , then the Committee shall make such equitable changes or adjustments as it deems necessary or appropriate to any or all of (1) the number and kind of shares of Company Stock which may thereafter be issued in connection with Awards, (2) the number and kind of shares of Company Stock, securities or other property (including cash) issued or issuable in respect of outstanding Awards, (3) the exercise price, grant price or purchase price relating to any Award, and (4) the maximum number of shares subject to Awards which may be awarded to any employee during any tax year of the Company; provided that, with respect to Incentive Stock Options, any such adjustment shall be made in accordance with Section 424 of the Code; and provided further that, no such adjustment shall cause any Award hereunder which is or could be subject to Section 409A of the Code to fail to comply with the requirements of such section.

 

(d)  Reuse of Shares. Except as set forth below, if any shares subject to an Award are forfeited, cancelled, exchanged or surrendered, or if an Award terminates or expires without a distribution of shares to the Participant, the shares of stock with respect to such Award shall, to the extent of any such forfeiture, cancellation, exchange, surrender, withholding, termination or expiration, again be available for Awards under the Plan. Notwithstanding the foregoing, upon the exercise of any Award granted in tandem with any other Awards, such related Awards shall be cancelled to the extent of the number of shares of Company Stock as to which the Award is exercised and such number of shares shall no longer be available for 

4

 

Awards under the Plan. In addition, notwithstanding the forgoing, the shares of stock surrendered or withheld as payment of either the exercise price of an Option (including shares of stock otherwise underlying an Award of a Stock Appreciation Right that are retained by the Company to account for the appreciation base of such Stock Appreciation Right) and/or withholding taxes in respect of an Award shall no longer be available for Awards under the Plan.

 

5. Eligibility.

 

The persons who shall be eligible to receive Awards pursuant to the Plan shall be the individuals the Committee shall select from time to time, who are employees (including officers of the Company and its Subsidiaries, whether or not they are directors of the Company or its Subsidiaries), Nonemployee Directors, and consultants of the Company and its Subsidiaries; provided, that Incentive Stock Options shall be granted only to employees (including officers and directors who are also employees) of the Company or its Subsidiaries.

 

6. Awards Under the Plan.

 

(a)  Agreement.  The Committee may grant Awards in such amounts and with such terms and conditions as the Committee shall determine in its sole discretion, subject to the terms and provisions of the Plan. Each Award granted under the Plan (except an unconditional Stock Bonus) shall be evidenced by an Agreement as the Committee may in its sole discretion deem necessary or desirable and unless the Committee determines otherwise, such Agreement must be signed, acknowledged and returned by the Participant to the Company. Unless the Committee determines otherwise, any failure by the Participant to sign and return the Agreement within such period of time following the granting of the Award as the Committee shall prescribe shall cause such Award to the Participant to be null and void. By accepting an Award or other benefits under the Plan (including participation in the Plan), each Participant, shall be conclusively deemed to have indicated acceptance and ratification of, and consent to, all provisions of the Plan and the Agreement.

 

(b)  Stock Options.

 

(i)  Grant of Stock Options. The Committee may grant Options under the Plan to purchase shares of Company Stock in such amounts and subject to such terms and conditions as the Committee shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan. The exercise price of the share purchasable under an Option shall be determined by the Committee, but in no event shall the exercise price be less than the Fair Market Value per share on the grant date of such Option. The date as of which the Committee adopts a resolution granting an Option shall be considered the day on which such Option is granted unless such resolution specifies a later date.

 

(ii)  Identification. Each Option shall be clearly identified in the applicable Agreement as either an Incentive Stock Option or a Nonqualified Stock Option and shall state the number of shares of Company Stock to which the Option (and/or each type of Option) relates.

 

(c)  Special Requirements for Incentive Stock Options.

 

(i)  To the extent that the aggregate Fair Market Value of shares of Company Stock with respect to which Incentive Stock Options are exercisable for the first time by a Participant during any calendar year under the Plan and any other stock option plan of the Company shall exceed $100,000, such Options shall be treated as Nonqualified Stock Options. Such Fair Market Value shall be determined as of the date on which each such Incentive Stock Option is granted.

 

(ii)  No Incentive Stock Option may be granted to an individual if, at the time of the proposed grant, such individual owns (or is deemed to own under the Code) stock possessing more than 10% of the total combined voting power of all classes of stock of the Company unless (A) the exercise price of such Incentive Stock Option is at least 110% of the Fair Market Value of a share of Company Stock at the time such Incentive Stock Option is granted and (B) such Incentive Stock Option is not exercisable after the expiration of five years from the date such Incentive Stock Option is granted.

 

(d)  Stock Appreciation Rights.

 

(i)  The Committee may grant a related Stock Appreciation Right in connection with all or any part of an Option granted under the Plan, either at the time such Option is granted or at any time thereafter prior to the exercise, termination or cancellation of such Option, and subject to such terms and conditions as the Committee shall from time to time determine in its sole discretion, consistent with the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of a related Stock Appreciation Right shall, 

5

 

subject to the terms and conditions of the Plan and the applicable Agreement, have the right by exercise thereof to surrender to the Company for cancellation all or a portion of such related Stock Appreciation Right, but only to the extent that the related Option is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (i) the aggregate Fair Market Value of the shares of Company Stock subject to the related Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date), over (ii) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered. Upon any exercise of a related Stock Appreciation Right or any portion thereof, the number of shares of Company Stock subject to the related Option shall be reduced by the number of shares of Company Stock in respect of which such Stock Appreciation Right shall have been exercised.

 

(ii)  The Committee may grant unrelated Stock Appreciation Rights in such amount and subject to such terms and conditions, as the Committee shall from time to time determine in its sole discretion, subject to the terms and provisions of the Plan, provided, however, that in no event shall the appreciation base of the shares of Company Stock subject to the Stock Appreciation Right be less than the Fair Market Value per share on the grant date of such Stock Appreciation Right. The holder of an unrelated Stock Appreciation Right shall, subject to the terms and conditions of the Plan and the applicable Agreement, have the right to surrender to the Company for cancellation all or a portion of such Stock Appreciation Right, but only to the extent that such Stock Appreciation Right is then exercisable, and to be paid therefor an amount equal to the excess (if any) of (x) the aggregate Fair Market Value of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered (determined as of the exercise date), over (y) the aggregate appreciation base of the shares of Company Stock subject to the Stock Appreciation Right or portion thereof surrendered.

 

(iii)  The grant or exercisability of any Stock Appreciation Right shall be subject to such conditions as the Committee, in its sole discretion, shall determine.

 

(e)  Restricted Stock and Stock Bonus.

 

(i)  The Committee may grant Restricted Stock awards, alone or in tandem with other Awards under the Plan, subject to such restrictions, terms and conditions, as the Committee shall determine in its sole discretion and as shall be evidenced by the applicable Agreements. The vesting of a Restricted Stock award granted under the Plan may be conditioned upon the completion of a specified period of employment or service with the Company or any Subsidiary, upon the attainment of specified performance goals, and/or upon such other criteria as the Committee may determine in its sole discretion.

 

(ii)  Each Agreement with respect to a Restricted Stock award shall set forth the amount (if any) to be paid by the Participant with respect to such Award and when and under what circumstances such payment is required to be made.

 

(iii)  The Committee may, upon such terms and conditions as the Committee determines in its sole discretion, provide that a certificate or certificates representing the shares underlying a Restricted Stock award shall be registered in the Participant’s name and bear an appropriate legend specifying that such shares are not transferable and are subject to the provisions of the Plan and the restrictions, terms and conditions set forth in the applicable Agreement, or that such certificate or certificates shall be held in escrow by the Company on behalf of the Participant until such shares become vested or are forfeited. Except as provided in the applicable Agreement, no shares underlying a Restricted Stock award may be assigned, transferred, or otherwise encumbered or disposed of by the Participant until such shares have vested in accordance with the terms of such Award.

 

(iv)  If and to the extent that the applicable Agreement may so provide, a Participant shall have the right to vote and receive dividends on the shares underlying a Restricted Stock award granted under the Plan. Unless otherwise provided in the applicable Agreement, any stock received as a dividend on or in connection with a stock split of the shares underlying a Restricted Stock award shall be subject to the same restrictions as the shares underlying such Restricted Stock award.

 

(v)  The Committee may grant Stock Bonus awards, alone or in tandem with other Awards under the Plan, subject to such terms and conditions as the Committee shall determine in its sole discretion and as may be evidenced by the applicable Agreement.

 

(f)  Performance Awards.

 

(i)  The Committee may grant Performance Awards, alone or in tandem with other Awards under the Plan, to acquire shares of Company Stock in such amounts and subject to such terms and conditions as the Committee shall from time to time in its sole discretion determine, subject to the terms of the Plan. To the extent necessary to satisfy the short-term 

6

 

deferral exception to Section 409A of the Code, unless the Committee shall determine otherwise, the Performance Awards shall provide that payment shall be made within 2 1/2 months after the end of the year in which the Participant has a legally binding vested right to such award.

 

(ii)  In the event that the Committee grants a Performance Award or other Award (other than Nonqualified Stock Option or Incentive Stock Option or a Stock Appreciation Right) that is intended to constitute qualified performance-based compensation within the meaning Section 162(m) of the Code, the following rules shall apply (as such rules may be modified by the Committee to conform with Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions thereto): (a) payments under the Performance Award shall be made solely on account of the attainment of one or more objective performance goals established in writing by the Committee not later than 90 days after the commencement of the period of service to which the Performance Award relates (but in no event after 25% of the period of service has elapsed); (b) the performance goal(s) to which the Performance Award relates shall be based on one or more of the following business criteria applied to the Participant and/or a business unit or the Company and/or a Subsidiary: (1) scientific progress, (2) product development progress, (3) business development progress, including in-licensing, (4) sales, (5) sales growth, (6) earnings growth, (7) cash flow or cash position, (8) gross margins, (9) stock price, (10) financings (issuance of debt or equity), (11) market share, (12) total shareholder return, (13) net revenues, (14) earnings per share of Company Stock; (15) net income (before or after taxes), (16) return on assets, (17) return on sales, (18) return on assets, (19) equity or investment, (20) improvement of financial ratings, (21) achievement of balance sheet or income statement objectives or (22) total stockholder return. (23) earnings from continuing operations; levels of expense, cost or liability, (24) earnings before all or any interest, taxes, depreciation and/or amortization (“EBIT”, “EBITA” or “EBITDA”), (25) cost reduction goals, (26) business development goals (including without limitation regulatory submissions, product launches and other business development-related opportunities), (27) identification or consummation of investment opportunities or completion of specified projects in accordance with corporate business plans, including strategic mergers, acquisitions or divestitures, (28) meeting specified market penetration or value added goals, (29) development of new technologies (including patent application or issuance goals), (30) any combination of, or a specified increase or decrease of one or more of the foregoing over a specified period, and (31) such other criteria as the stockholders of the Company may approve; in each case as applicable, as determined in accordance with generally accepted accounting principles; and (c) once granted, the Committee may not have discretion to increase the amount payable under such Award, provided, however, that whether or not an Award is intended to constitute qualified performance-based compensation within the meaning of Section 162(m) of the Code, the Committee, to the extent provided by the Committee at the time the Award is granted or as otherwise permitted under Section 162(m) of the Code, shall have the authority to make appropriate adjustments in performance goals under an Award to reflect the impact of extraordinary items not reflected in such goals. For purposes of the Plan, extraordinary items shall be defined as (1) any profit or loss attributable to acquisitions or dispositions of stock or assets, (2) any changes in accounting standards that may be required or permitted by the Financial Accounting Standards Board or adopted by the Company after the goal is established, (3) all items of gain, loss or expense for the year related to restructuring charges for the Company, (4) all items of gain, loss or expense for the year determined to be extraordinary or unusual in nature or infrequent in occurrence or related to the disposal of a segment of a business, (5) all items of gain, loss or expense for the year related to discontinued operations that do not qualify as a segment of a business as defined in APB Opinion No. 30, and (6) such other items as may be prescribed by Section 162(m) of the Code and the Treasury Regulations thereunder as may be in effect from time to time, and any amendments, revisions or successor provisions and any changes thereto. The Committee shall, prior to making payment under any award under this Section 6(f), certify in writing that all applicable performance goals have been attained. Notwithstanding anything to the contrary contained in the Plan or in any applicable Agreement, no dividends or dividend equivalents will be paid with respect to unvested Performance Awards.

 

(g) Other Stock- or Cash-Based Awards.

 

(i)  The Committee is authorized to grant Awards to Participants in the form of Other Stock-Based Awards or Other Cash-Based Awards, as deemed by the Committee to be consistent with the purposes of the Plan. To the extent necessary to satisfy the short-term deferral exception to Section 409A of the Code, unless the Committee shall determine otherwise, the awards shall provide that payment shall be made within 21⁄2 months after the end of the year in which the Participant has a legally binding vested right to such award. With respect to Other Cash-Based Awards intended to qualify as performance based compensation under Section 162(m) of the Code, (i) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award that is an Annual Incentive Award is $3,000,000, (ii) the maximum value of the aggregate payment that any Participant may receive with respect to any such Other Cash-Based Award that is a Long Term Incentive Award is the amount set forth in clause (i) above multiplied by a fraction, the numerator of which is the number of months in the performance period and the denominator of which is twelve, and (iii) such additional rules set forth in Section 6(f) applicable to Awards intended to qualify as performance-based 

7

 

compensation under Section 162(m) shall apply. The Committee may establish such other rules applicable to the Other Stock- or Cash-Based Awards to the extent not inconsistent with Section 162(m) of the Code.

  

(h)   Exercisability of Awards; Cancellation of Awards in Certain Cases.

 

(i)  Except as hereinafter provided, each Agreement with respect to an Option or Stock Appreciation Right shall set forth the period during which and the conditions subject to which the Option or Stock Appreciation Right evidenced thereby shall be exercisable, and each Agreement with respect to a Restricted Stock award, Stock Bonus award, Performance Award or other Award shall set forth the period after which and the conditions subject to which amounts underlying such Award shall vest or be deliverable, all such periods and conditions to be determined by the Committee in its sole discretion.

 

(ii)  Except as provided in Section 7(d) hereof, no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable more than ten years after the date of grant (the “Stated Expiration Date”).

 

(iii)  Except as provided in Section 7 hereof, no Option or Stock Appreciation Right may be exercised and no shares of Common Stock underlying any other Award under the Plan may vest or become deliverable unless the Participant is at such time in the employ (for Participants who are employees) or service (for Participants who are Nonemployee Directors or consultants) of the Company or a Subsidiary (or a company, or a parent or subsidiary company of such company, issuing or assuming the relevant right or award in a Change in Control) and has remained continuously so employed or in service since the relevant date of grant of the Award.

 

(iv)  An Option or Stock Appreciation Right shall be exercisable by the filing of a written notice of exercise or a notice of exercise in such other manner with the Company, on such form and in such manner as the Committee shall in its sole discretion prescribe, and by payment in accordance with Section 6(i) hereof.

 

(v)  Unless the applicable Agreement provides otherwise, the “Option exercise date” and the “Stock Appreciation Right exercise date” shall be the date that the written notice of exercise, together with payment, are received by the Company.

  

(i)  Payment of Award Price.

 

(i)  Unless the applicable Agreement provides otherwise or the Committee in its sole discretion otherwise determines, any written notice of exercise of an Option or Stock Appreciation Right must be accompanied by payment of the full Option or Stock Appreciation Right exercise price.

 

(ii)  Payment of the Option exercise price and of any other payment required by the Agreement to be made pursuant to any other Award shall be made in any combination of the following: (a) by certified or official bank check payable to the Company (or the equivalent thereof acceptable to the Committee), (b) with the consent of the Committee in its sole discretion, by personal check (subject to collection) which may in the Committee’s discretion be deemed conditional, (c) unless otherwise provided in the applicable Agreement, and as permitted by the Committee, by delivery of previously-acquired shares of Common Stock owned by the Participant having a Fair Market Value (determined as of the Option exercise date, in the case of Options, or other relevant payment date as determined by the Committee, in the case of other Awards) equal to the portion of the exercise price being paid thereby; and/or (d) unless otherwise provided in applicable agreement, and as permitted by the Committee, on a net-settlement basis with the Company withholding the amount of Common Stock sufficient to cover the exercise price and tax withholding obligation. Payment in accordance with clause (a) of this Section 6(i)(ii) may be deemed to be satisfied, if and to the extent that the applicable Agreement so provides or the Committee permits, by delivery to the Company of an assignment of a sufficient amount of the proceeds from the sale of Company Stock to be acquired pursuant to the Award to pay for all of the Company Stock to be acquired pursuant to the Award and an authorization to the broker or selling agent to pay that amount to the Company and to effect such sale at the time of exercise or other delivery of shares of Company Stock.

7.  Termination of Employment.

 

(a)  Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of a Participant’s employment or service with the Company and its Subsidiaries by the Company or its Subsidiary for Cause (or in the case of a Nonemployee Director upon such Nonemployee Director’s failure to be renominated as Nonemployee Director of the Company), the portions of outstanding Options and Stock Appreciation Rights granted to such Participant that are exercisable as of the date of such termination of employment or service shall remain 

8

 

exercisable, and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof that is vested as of the date of such termination of employment or service, may be given, for a period of thirty (30) days from and including the date of termination of employment or service (and shall thereafter terminate). All portions of outstanding Options or Stock Appreciation Rights granted to such Participant which are not exercisable as of the date of such termination of employment or service, and any other outstanding Award which is not vested as of the date of such termination of employment or service shall terminate upon the date of such termination of employment or service.

 

(b)  Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of the Participant’s employment or service with the Company and its Subsidiaries for any reason other than as described in subsection (a), (c), (d) or (e) hereof, the portions of outstanding Options and Stock Appreciation Rights granted to such Participant that are exercisable as of the date of such termination of employment or service shall remain exercisable for a period of ninety (90) days (and shall terminate thereafter), and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof vested as of the date of termination of employment or service may be given, for a period of ninety (90) days from and including the date of termination of employment or service (and shall terminate thereafter). All additional portions of outstanding Options or Stock Appreciation Rights granted to such Participant which are not exercisable as of the date of such termination of employment or service, and any other outstanding Award which is not vested as of the date of such termination of employment or service shall terminate upon the date of such termination of employment or service.

 

(c)   Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, if the Participant voluntarily Retires with the consent of the Company or the Participant’s employment or service terminates due to Disability, all outstanding Options, Stock Appreciation Rights and all other outstanding Awards (except, in the event a Participant voluntarily Retires, with respect to Awards (other than Options and Stock Appreciation Rights) intended to qualify as performance-based compensation within the meaning of Section 162(m) of the Code) granted to such Participant shall continue to vest in accordance with the terms of the applicable Agreements. The Participant shall be entitled to exercise each such Option or Stock Appreciation Right and to make any payment, give any notice or to satisfy other condition under each such other Award, in each case, for a period of one year from and including the later of (i) date such entire Award becomes vested or exercisable in accordance with the terms of such Award and (ii) the date of Retirement, and thereafter such Awards or parts thereof shall be canceled. Notwithstanding the foregoing, the Committee may in its sole discretion provide for a longer or shorter period for exercise of an Option or Stock Appreciation Right or may permit a Participant to continue vesting under an Option, Stock Appreciation Right or Restricted Stock award or to make any payment, give any notice or to satisfy other condition under any other Award. The Committee may in its sole discretion, and in accordance with Section 409A of the Code, determine (i) for purposes of the Plan, whether any termination of employment or service is a voluntary Retirement with the Company’s consent or is due to Disability for purposes of the Plan, (ii) whether any leave of absence (including any short-term or long-term Disability or medical leave) constitutes a termination of employment or service, or a failure to have remained continuously employed or in service, for purposes of the Plan (regardless of whether such leave or status would constitute such a termination or failure for purposes of employment law), (iii) the applicable date of any such termination of employment or service, and (iv) the impact, if any, of any of the foregoing on Awards under the Plan.

 

(d)   Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, if the Participant’s employment or service terminates by reason of death, or if the Participant’s employment or service terminates under circumstances providing for continued rights under subsection (b), (c) or (e) of this Section 7 and during the period of continued rights described in subsection (b), (c) or (e) the Participant dies, all outstanding Options, Restricted Stock and Stock Appreciation Rights granted to such Participant shall vest and become fully exercisable, and any payment or notice provided for under the terms of any other outstanding Award may be immediately paid or given and any condition may be satisfied, by the person to whom such rights have passed under the Participant’s will (or if applicable, pursuant to the laws of descent and distribution) for a period of one year from and including the date of the Participant’s death and thereafter all such Awards or parts thereof shall be canceled.

 

(e)  Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, upon termination of a Participant’s employment or service with the Company and its Subsidiaries (i) by the Company or its Subsidiaries without Cause (including, in case of a Nonemployee Director, the failure to be elected as a Nonemployee Director) or (ii) by the Participant for “good reason” or any like term as defined under any employment agreement with the Company or a Subsidiary to which a Participant may be a party to, the portions of outstanding Options and Stock Appreciation Rights granted to such Participant which are exercisable as of the date of termination of employment or service of such Participant shall remain exercisable, and any payment or notice provided for under the terms of any other outstanding Award as respects the portion thereof vested as of the date of termination of employment or service may be given, for a period of one year from and including the date of termination of employment or service and shall terminate 

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thereafter. Unless the applicable Agreement provides otherwise or the Committee in its sole discretion determines otherwise, any other outstanding Award shall terminate as of the date of such termination of employment or service.

 

(f)  Notwithstanding anything in this Section 7 to the contrary, no Option or Stock Appreciation Right may be exercised and no shares of Company Stock underlying any other Award under the Plan may vest or become deliverable past the Stated Expiration Date.

 

8.  Effect of Change in Control.

 

Unless otherwise determined in an Award Agreement, in the event of a Change in Control:

 

(a)  With respect to each outstanding Award that is assumed or substituted in connection with a Change in Control, in the event of a termination of a Participant’s employment or service by the Company without Cause during the 24-month period following such Change in Control, on the date of such termination (i) such Award shall become fully vested and, if applicable, exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to Awards shall be deemed to be fully achieved at target levels.

 

(b)   With respect to each outstanding Award that is not assumed or substituted in connection with a Change in Control, immediately upon the occurrence of the Change in Control, (i) such Award shall become fully vested and, if applicable, exercisable, (ii) the restrictions, payment conditions, and forfeiture conditions applicable to any such Award granted shall lapse, and (iii) any performance conditions imposed with respect to Awards shall be deemed to be fully achieved at target levels.

 

(c)   For purposes of this Section 8, an Award shall be considered assumed or substituted for if, following the Change in Control, the Award remains subject to the same terms and conditions that were applicable to the Award immediately prior to the Change in Control except that, if the Award related to Shares, the Award instead confers the right to receive Common Stock of the acquiring entity.

 

(d)  Notwithstanding any other provision of the Plan: (i) in the event of a Change in Control, except as would otherwise result in adverse tax consequences under Section 409A of the Code, the Board may, in its sole discretion, provide that each Award shall, immediately upon the occurrence of a Change in Control, be cancelled in exchange for a payment in cash or securities in an amount equal to (x) the excess of the consideration paid per Share in the Change in Control over the exercise or purchase price (if any) per Share subject to the Award multiplied by (y) the number of Shares granted under the Award and (ii) with respect to any Award that constitutes a deferral of compensation subject to Section 409A of the Code, in the event of a Change in Control that does not constitute a change in the ownership or effective control of the Company or in the ownership of a substantial portion of the assets of the Company under Section 409A(a)(2)(A)(v) of the Code and regulations thereunder, such Award shall be settled in accordance with its original terms or at such earlier time as permitted by Section 409A of the Code.

  

9.  Miscellaneous.

 

(a) Agreements evidencing Awards under the Plan shall contain such other terms and conditions, not inconsistent with the Plan, as the Committee may determine in its sole discretion, including penalties for the commission of competitive acts or other actions detrimental to the Company. Notwithstanding any other provision hereof, the Committee shall have the right at any time to deny or delay a Participant’s exercise of Options if such Participant is reasonably believed by the Committee (i) to be engaged in material conduct adversely affecting the Company or (ii) to be contemplating such conduct, unless and until the Committee shall have received reasonable assurance that the Participant is not engaged in, and is not contemplating, such material conduct adverse to the interests of the Company. 

(b) Participants are and at all times shall remain subject to the trading window policies adopted by the Company from time to time throughout the period of time during which they may exercise Options, Stock Appreciation Rights or sell shares of Company Stock acquired pursuant to the Plan. 

10. No Special Employment Rights, No Right to Award.

 

(a)   Nothing contained in the Plan or any Agreement shall confer upon any Participant any right with respect to the continuation of employment or service by the Company or interfere in any way with the right of the Company, subject to the 

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terms of any separate employment agreement to the contrary, at any time to terminate such employment or service or to increase or decrease the compensation of the Participant.

 

(b)   No person shall have any claim or right to receive an Award hereunder. The Committee’s granting of an Award to a Participant at any time shall neither require the Committee to grant any other Award to such Participant or other person at any time or preclude the Committee from making subsequent grants to such Participant or any other person.

 

11. Securities Matters.

 

(a)  The Company shall be under no obligation to effect the registration pursuant to the Securities Act of any interests in the Plan or any shares of Company Stock to be issued hereunder or to effect similar compliance under any state laws. Notwithstanding anything herein to the contrary, the Company shall not be obligated to cause to be issued or delivered any certificates evidencing shares of Company Stock pursuant to the Plan unless and until the Company is advised by its counsel that the issuance and delivery of such certificates is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Company Stock are traded. The Committee may require, as a condition of the issuance and delivery of certificates evidencing shares of Company Stock pursuant to the terms hereof, that the recipient of such shares make such agreements and representations, and that such certificates bear such legends, as the Committee, in its sole discretion, deems necessary or desirable.

 

(b)   The transfer of any shares of Company Stock hereunder shall be effective only at such time as counsel to the Company shall have determined that the issuance and delivery of such shares is in compliance with all applicable laws, regulations of governmental authority and the requirements of any securities exchange on which shares of Company Stock are traded. The Committee may, in its sole discretion, defer the effectiveness of any transfer of shares of Company Stock hereunder in order to allow the issuance of such shares to be made pursuant to registration or an exemption from registration or other methods for compliance available under federal or state securities laws. The Committee shall inform the Participant in writing of its decision to defer the effectiveness of a transfer. During the period of such deferral in connection with the exercise of an Award, the Participant may, by written notice, withdraw such exercise and obtain the refund of any amount paid with respect thereto.

 

12. Withholding Taxes.

 

(a)   Whenever cash is to be paid pursuant to an Award, the Company shall have the right to deduct therefrom an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto.

 

(b)   Whenever shares of Company Stock are to be delivered pursuant to an Award, the Company shall have the right to require the Participant to remit to the Company in cash an amount sufficient to satisfy any federal, state and local withholding tax requirements related thereto. With the approval of the Committee, a Participant may satisfy the foregoing requirement by electing to have the Company withhold from delivery shares of Company Stock having a value equal to the minimum amount of tax required to be withheld. Such shares shall be valued at their Fair Market Value on the date of which the amount of tax to be withheld is determined. Fractional share amounts shall be settled in cash. Such a withholding election may be made with respect to all or any portion of the shares to be delivered pursuant to an Award.

 

13. Non-Competition and Confidentiality.

 

By accepting Awards and as a condition to the exercise of Awards and the enjoyment of any benefits of the Plan, including participation therein, each Participant agrees to be bound by and subject to non-competition, confidentiality and invention ownership agreements acceptable to the Committee or any officer or director to whom the Committee elects to delegate such authority.

  

14. Notification of Election Under Section 83(b) of the Code.

 

If any Participant shall, in connection with the acquisition of shares of Company Stock under the Plan, make the election permitted under Section 83(b) of the Code, such Participant shall notify the Company of such election within 10 days of filing notice of the election with the Internal Revenue Service.

 

15. Amendment or Termination of the Plan.

 

The Board of Directors or the Committee may, at any time, suspend or terminate the Plan or revise or amend it in any respect whatsoever; provided, however, that the requisite stockholder approval shall be required if and to the extent the 

11

 

Board of Directors or Committee determines that such approval is appropriate or necessary for purposes of satisfying Sections 162(m) or 422 of the Code or Rule 16b-3 or other applicable law. Awards may be granted under the Plan prior to the receipt of such stockholder approval of the Plan but each such grant shall be subject in its entirety to such approval and no Award may be exercised, vested or otherwise satisfied prior to the receipt of such approval. No amendment or termination of the Plan may, without the consent of a Participant, adversely affect the Participant’s rights under any outstanding Award.

 

16. Transfers Upon Death; Nonassignability.

 

(a)  A Participant may file with the Committee a written designation of a beneficiary on such form as may be prescribed by the Committee and may, from time to time, amend or revoke such designation. If no designated beneficiary survives the Participant, upon the death of a Participant, outstanding Awards granted to such Participant may be exercised only by the executor or administrator of the Participant’s estate or by a person who shall have acquired the right to such exercise by will or by the laws of descent and distribution. No transfer of an Award by will or the laws of descent and distribution shall be effective to bind the Company unless the Committee shall have been furnished with written notice thereof and with a copy of the will and/or such evidence as the Committee may deem necessary to establish the validity of the transfer and an agreement by the transferee to comply with all the terms and conditions of the Award that are or would have been applicable to the Participant and to be bound by the acknowledgments made by the Participant in connection with the grant of the Award.

 

(b)  During a Participant’s lifetime, the Committee may, in its discretion, pursuant to the provisions set forth in this clause (b), permit the transfer, assignment or other encumbrance of an outstanding Option unless such Option is an Incentive Stock Option and the Committee and the Participant intends that it shall retain such status. Subject to the approval of the Committee and to any conditions that the Committee may prescribe, a Participant may, upon providing written notice to the General Counsel of the Company, elect to transfer any or all Options granted to such Participant pursuant to the Plan to members of his or her immediate family, including, but not limited to, children, grandchildren and spouse or to trusts for the benefit of such immediate family members or to partnerships in which such family members are the only partners; provided, however, that no such transfer by any Participant may be made in exchange for consideration. Any such transferee must agree, in writing, to be bound by all provisions of the Plan.

 

17. Effective Date and Term of Plan.

 

The Plan shall become effective on the Effective Date, but the Plan shall be subject to the requisite approval of the stockholders of the Company at the Company’s next annual meeting of its shareholders. In the absence of such approval, such Awards shall be null and void. Unless earlier terminated by the Board of Directors, the right to grant Awards under the Plan shall terminate on the tenth anniversary of the Effective Date. Awards outstanding at Plan termination shall remain in effect according to their terms and the provisions of the Plan.

 

18. Applicable Law.

 

Except to the extent preempted by any applicable federal law, the Plan shall be construed and administered in accordance with the laws of the State of Delaware, without reference to its principles of conflicts of law.

 

19. Participant Rights.

 

(a)  No Participant shall have any claim to be granted any award under the Plan, and there is no obligation for uniformity of treatment for Participants. Except as provided specifically herein, a Participant or a transferee of an Award shall have no rights as a stockholder with respect to any shares covered by any award until the date of the issuance of a Company Stock certificate to him or her for such shares.

(b)  Determinations by the Committee under the Plan relating to the form, amount and terms and conditions of grants and Awards need not be uniform, and may be made selectively among persons who receive or are eligible to receive grants and awards under the Plan, whether or not such persons are similarly situated.

 

20. Unfunded Status of Awards.

 

The Plan is intended to constitute an “unfunded” plan for incentive and deferred compensation. With respect to any payments not yet made to a Participant pursuant to an Award, nothing contained in the Plan or any Agreement shall give any such Participant any rights that are greater than those of a general creditor of the Company.

 

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21. No Fractional Shares.

 

No fractional shares of Company Stock shall be issued or delivered pursuant to the Plan. The Committee shall determine whether cash, other Awards, or other property shall be issued or paid in lieu of such fractional shares or whether such fractional shares or any rights thereto shall be forfeited or otherwise eliminated. 

22. Interpretation.

 

The Plan is designed and intended to the extent applicable, to comply with Section 162(m) of the Code, and to provide for grants and other transactions which are exempt under Rule 16b-3, and all provisions hereof shall be construed in a manner to so comply. Awards under the Plan are intended to comply with Code Section 409A to the extent subject thereto and the Plan and all Awards shall be interpreted in accordance with Code Section 409A and Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the effective date of the Plan. Notwithstanding any provision in the Plan to the contrary, no payment or distribution under this Plan that constitutes an item of deferred compensation under Code Section 409A and becomes payable by reason of a Participant’s termination of employment or service with the Company will be made to such Participant until such Participant’s termination of employment or service constitutes a “separation from service” (as defined in Code Section 409A). For purposes of this Plan, each amount to be paid or benefit to be provided shall be construed as a separate identified payment for purposes of Code Section 409A. If a participant is a “specified employee” (as defined in Code Section 409A), then to the extent necessary to avoid the imposition of taxes under Code Section 409A, such Participant shall not be entitled to any payments upon a termination of his or her employment or service until the earlier of: (i) the expiration of the six (6)-month period measured from the date of such Participant’s “separation from service” or (ii) the date of such Participant’s death. Upon the expiration of the applicable waiting period set forth in the preceding sentence, all payments and benefits deferred pursuant to this Section 22 (whether they would have otherwise been payable in a single lump sum or in installments in the absence of such deferral) shall be paid to such Participant in a lump sum as soon as practicable, but in no event later than sixty (60) calendar days, following such expired period, and any remaining payments due under this Plan will be paid in accordance with the normal payment dates specified for them herein.

 

 

********

 

 

Amendment to increase the number of shares available for grant from 1,100,000 to 3,000,000 approved and adopted by the Board of Directors this 2nd day of May, 2016.

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