Attached files
file | filename |
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10-Q - FORM 10-Q - BAXTER INTERNATIONAL INC | c63383e10vq.htm |
EX-15 - EX-15 - BAXTER INTERNATIONAL INC | c63383exv15.htm |
EXCEL - IDEA: XBRL DOCUMENT - BAXTER INTERNATIONAL INC | Financial_Report.xls |
EX-32.2 - EX-32.2 - BAXTER INTERNATIONAL INC | c63383exv32w2.htm |
EX-31.2 - EX-31.2 - BAXTER INTERNATIONAL INC | c63383exv31w2.htm |
EX-31.1 - EX-31.1 - BAXTER INTERNATIONAL INC | c63383exv31w1.htm |
EX-32.1 - EX-32.1 - BAXTER INTERNATIONAL INC | c63383exv32w1.htm |
EXHIBIT 10.1
Baxter International Inc.
Equity Plan
Adopted as of March 4, 2011
Equity Plan
Adopted as of March 4, 2011
1. Purpose
This Equity Plan (the Plan) has been adopted by the Compensation Committee (the
Committee) of the Board of Directors (the Board) of Baxter International Inc.
(Baxter).
2. Participants
Participants in this Plan (each a Participant) shall be select employees of Baxter or its
subsidiaries (the Company) to whom the Committee may make awards of Stock Options (each
an Option), Performance Share Units (each a PSU) and Restricted Stock Units (each a
RSU, and together with Options and PSUs, Awards) under this Plan.
3. Awards
Awards shall be made pursuant to and for the purposes stated in the Company incentive compensation
program or plan (the Program) identified in the individual grant materials provided to
the Participant (the Grant). Such Grant materials consist of a communication letter to
Participants notifying them of their Awards and may include alternative terms with respect to
vesting, in which case the vesting terms in the Grant communication letter shall govern. All
Awards granted hereunder shall be subject to the Companys Incentive Compensation Recoupment Policy
or Executive Compensation Recoupment Policy, as applicable. Each Award shall be granted as of the
date approved and as provided in the Grant, or for eligible French employees as soon thereafter as
practicable pursuant to applicable French law (as provided in the attached French Addendum which
shall govern such Awards) (the Grant Date). Each Award shall be granted as of the date
approved and as provided in the Grant (the Grant Date). The purchase price for each
share of Common Stock subject to an Option shall be the Fair Market Value of a share of Common
Stock on the Grant Date. The terms of each Award will be as set forth in this Plan. Unless
otherwise indicated, terms defined in the Program shall have the same meaning in these terms and
conditions. Options are not intended to qualify as Incentive Stock Options within the meaning of
section 422 of the United States Internal Revenue Code, as amended (the Code).
4. Options
4.1. Except for Options granted to employees of the Companys subsidiaries in France, Options shall
become exercisable as follows: (i) one-third on the first anniversary of the Grant Date, (ii)
one-third on the second anniversary of the Grant Date, and (iii) the remainder on the third
anniversary of the Grant Date. Options granted to employees of the Companys subsidiaries in
France shall become exercisable on the fourth anniversary of the Grant Date. If Options would
become exercisable on a date that is not a business day, they will become exercisable on the next
business day. A business day is any day on which the Companys Common Stock is traded on the New
York Stock Exchange. After Options become exercisable (in each case, in whole or in part) and until
they expire, the Options may be exercised in whole
or in part, in the manner specified by the
Committee. Under no circumstances may Options be exercised after they have expired. Shares of
Common Stock may be used to pay the purchase price for shares of Common Stock to be acquired upon
exercise of Options or fulfill any tax withholding obligation, subject to any requirements or
restrictions specified by the Committee.
4.2. If a Participants employment with the Company terminates before the Participants Options
becomes exercisable, the Options will expire when the Participants employment with the Company
terminates, except (i) in connection with a Qualifying Retirement or death or disability (each as
outlined below) or (ii) if the Participant is rehired by the Company within ninety days of
termination, in which case the Participant shall be construed to have been continuously employed by
the Company for purposes of vesting and exercise.
4.3. If a Participants employment with the Company terminates after the Participants Options
become exercisable, the Options will not expire immediately but will remain exercisable. Subject
to Section 4.6, and except in the event of a Qualifying Retirement (as provided in Section 4.4),
the Options will expire ninety days after the Participants employment with the Company terminates.
If the Participant dies or becomes disabled during the ninety-day period, the Options will expire
on the first anniversary of the termination date.
4.4. If the employment of a Participant who is at least 65 years of age, or at least 55 years of
age with at least 10 years of employment with the Company, is terminated other than for Cause or by
reason of the Participants death or disability (a Qualifying Retirement) then (i) if the
date of such termination is after the calendar year of the Grant Date, the Options shall continue
to vest as provided in Section 4.1, or (ii) if the date of such termination is in the calendar year
of the Grant Date, a portion of the Options shall continue to vest as provided in Section 4.1,
which portion shall be determined as follows: (# shares covered by Option award) * (# of months
worked in that year, rounded to nearest whole month) / 12. Subject to Section 4.6, the
Participants Options (whether vesting pursuant to (i) or (ii) or previously vested) shall expire
on the fifth anniversary of the termination date.
4.5. If the employment of a Participant is terminated due to death or disability, then (i) if the
date of such termination is after the calendar year of the Grant Date, the Options shall vest
immediately, or (ii) if the date of such termination is in the calendar year of the Grant Date, a
portion of the Options shall vest immediately, which portion shall be determined as follows: (#
shares covered by Option award) * (# of months worked in that year, rounded to nearest whole month)
/ 12. Subject to Section 4.6, such Options will expire on the first anniversary of the termination
date.
4.6. Options that have not previously expired will expire at the close of business on the tenth
anniversary of the Grant Date; provided, however, that Options granted to employees residing in
Switzerland on the Grant Date shall expire on the eleventh anniversary of the Grant Date. If
Options would expire on a date that is not a business day, they will expire at the close of
business on the last business day preceding that date. A business day is any day on which the
Common Stock is traded on the New York Stock Exchange.
4.7. Except as the Committee may otherwise provide, Options may only be exercised by the
Participant, the Participants legal representative, or a person to whom the Participants rights
in the Options are transferred by will or the laws of descent and distribution.
4.8. A transfer of employment within the Company will not constitute a termination of employment
within the meaning of the Plan.
4.9. A transfer of employment to a company that assumes an Option or issues a substitute option in
a transaction to which Section 424 of the Code applies will not constitute a termination of
employment within the meaning of the Plan.
4.10. Except to the extent that it would cause the Option to be subject to Section 409(A) of the
Code, the Committee may, in its sole discretion and without receiving permission from any
Participant, substitute stock appreciation rights (SARs) for any or all outstanding
Options. Upon the grant of substitute SARs, the related Options replaced by the substitute SARs
shall be cancelled. The grant price of the substitute SARs shall be equal to the Option Price of
the related Options, the term of the substitute SARs shall not exceed the term of the related
Options, and the terms and conditions applicable to the substitute SARs shall otherwise be
substantially the same as those applicable to the related Options replaced by the substitute SARs.
Upon exercise, the SARs will be settled in Common Stock.
5. Performance Share Units
5.1. The PSUs will be earned based on the rank of Baxters growth in shareholder value
(GSV) relative to the GSV of companies in the healthcare peer group selected by the
Committee. GSV will be measured over a three-year period beginning with the first day of the
calendar year of the Grant Date and ending on the last day of the third calendar year (the
Performance Period).
The PSUs will pay out in shares of Common Stock in a range of 0% to 200% of the number of PSUs
awarded to the Participant as follows:
Baxter Rank | Percentage of Target Grant Earned | |||
85th percentile of peer group or above |
200 | % | ||
75th percentile |
150 | % | ||
60th percentile |
100 | % | ||
25th percentile |
25 | % | ||
Below 25th percentile |
0 | % |
The PSUs will pay out linearly between each set of data points. GSV will be measured based on
the average closing stock prices over the last twenty days of the Performance Period (plus
reinvested dividends) divided by average closing stock prices over the twenty trading days prior to
the beginning of the Performance Period.
Following the end of the Performance Period, the Committee shall determine the payout, which
determination shall be final and binding. Shares of Common Stock earned will be delivered or
otherwise made available to the Participant as soon as practical after the Committee makes its
determination but not later than the March 15 after the end of the Performance Period. PSUs will
only be settled in shares of Common Stock. Any other settlement modality shall be considered an
exception, which would have to be approved separately by the Committee.
5.2. If a Participants employment with the Company terminates before the end of the Performance
Period, any unvested PSUs shall be forfeited on the effective date of termination, except (i) in
connection with a Qualifying Retirement or death or disability (each as outlined below), or (ii) if
the Participant is rehired by the Company within ninety days of termination, in which case the
Participant shall be construed to have been continuously employed by the Company for purposes of
vesting.
5.3. If the employment of a Participant terminates in a Qualifying Retirement then (i) if the date
of such termination is after the calendar year of the Grant Date, the PSUs will remain eligible for
payout at the end of the Performance Period on the terms provided in Section 5.1, or (ii) if the
date of such termination is in the calendar year of the Grant Date a portion of the PSUs shall
remain eligible for payout at the end of the Performance Period on the terms provided in Section
5.1, which portion shall be determined as follows: (# PSUs awarded) * (# of months worked in that
year, rounded to nearest whole month) / 12.
5.4. If the employment with the Company of a Participant is terminated due to death or disability,
the PSUs shall vest as follows: (i) if the date of such termination is after the calendar year of
the Grant Date, the PSUs shall pay out within sixty days at 100% of the Target Grant (as depicted
in the table in Section 5.1.), or (ii) if the date of such termination is in the calendar year of
the Grant Date a portion of the PSUs shall pay out as provided in (i), which portion shall be
determined as follows: (# PSUs awarded) * (# of months worked in that year, rounded to nearest
whole month) / 12.
5.5. The PSUs shall not be transferable and may not be sold, assigned, pledged, hypothecated or
otherwise encumbered.
5.6. A transfer of employment within the Company will not constitute a termination of employment
within the meaning of the Plan.
5.7. Until the shares of Common Stock have been delivered or otherwise made available as provided
in Section 5.1, the Participant shall not be treated as a shareholder as to those shares of Common
Stock relating to the PSUs. Notwithstanding the foregoing, the Participant shall be permitted to
receive additional PSUs with respect to the PSUs based upon the dividends and distributions paid on
shares of Common Stock to the same extent as if each PSU were a share of Common Stock (without
adjustment prior to vesting for payment levels set forth in the table in Section 5.1), which
additional PSUs shall be determined in amount and value in the Companys discretion and shall be
delivered or made available at the same time and to the same extent as the PSUs to which they
relate or as otherwise determined by the Company.
6. Restricted Stock Units
6.1. Except for RSUs granted to the employees of the Companys subsidiaries in France, RSUs are
subject to being earned and vested as follows: (i) one-third on the first anniversary of the Grant
Date, (ii) one-third on the second anniversary of the Grant Date, and (iii) the remainder on the
third anniversary of the Grant Date (as applicable, the Vesting Date). RSUs granted to
the employees of the Companys subsidiaries in France are subject to being earned and vested on the
second anniversary of the Grant Date in accordance with the attached French Addendum. If RSUs
would become earned and vested on a date that is not a business day, the next business day shall be
the Vesting Date. The Company will deliver or otherwise make available to the Participant within
21/2 months following the applicable Vesting Date one share of Common Stock for each RSU that vests.
RSUs will only be settled in shares of Common Stock. Any other settlement method would be
considered an exception and would have to be approved separately by the Committee.
6.2. If a Participants employment with the Company terminates before an RSU Vesting Date, the RSU
will be forfeited when the Participants employment with the Company terminates, except (i) in
connection with a Qualifying Retirement or death or disability (each as outlined below), or (ii) if
the Participant is rehired by the Company within ninety days of termination, in which case the
Participant shall be construed to have been continuously employed by the Company for purposes of
vesting and payout.
6.3. If the employment of a Participant terminates in a Qualifying Retirement then (i) if the date
of such termination is after the calendar year of the Grant Date, the RSUs will remain eligible for
payout on the terms provided in Section 6.1, or (ii) if the date of such termination is in the
calendar year of the Grant Date a portion of the RSUs shall remain eligible for payout on the terms
provided in Section 6.1, which portion shall be determined as follows: (# RSUs awarded) * (# of
months worked in that year, rounded to nearest whole month) / 12.
6.4. If the employment with the Company of a Participant is terminated due to death or disability,
the RSUs shall vest as follows: (i) if the date of such termination is after the calendar year of
the Grant Date, all the RSUs shall pay out within sixty days, or (ii) if the date of such
termination is in the calendar year of the Grant Date a portion of the RSUs shall pay out as
provided in (i), which portion shall be determined as follows: (# RSUs awarded) * (# of months
worked in that year, rounded to nearest whole month) / 12.
6.5. The RSUs shall not be transferable and may not be sold, assigned, pledged, hypothecated or
otherwise encumbered.
6.6. A transfer of employment within the Company will not constitute a termination of employment
within the meaning of the Plan.
6.7. Until the shares of Common Stock have been delivered or otherwise made available as provided
in Section 6.1, the Participant shall not be treated as a shareholder as to those shares of Common
Stock relating to the RSUs. Notwithstanding the foregoing, the Participant shall be permitted to
receive additional RSUs with respect to the RSUs based upon the dividends and distributions paid on
shares of Common Stock to the same extent as if each RSU were a share of Common Stock, which
additional RSUs shall be delivered or made available at the same time and to the same extent as the
RSUs to which they relate or as otherwise determined by the Company.
7. Change in Control
Notwithstanding any other provision of the Program or this Plan (and in lieu of vesting at the
times otherwise provided in the Program), if the termination of employment of a Participant occurs
upon or within twenty-four (24) months following a Change in Control by reason of (a) termination
by the Company for reasons other than for Cause or (b) termination by the Participant for Good
Reason, then (i) all Awards shall become immediately vested and exercisable, and (ii) in the case
of PSUs, all performance targets shall be deemed to be met at 100% of the Target Grant (consistent
with the table in Section 5.1), as may be equitably increased in the discretion of the Committee to
reflect actual performance through the date of the Change in Control.
8. Additional Definitions
For purposes of the Plan, the following capitalized terms shall have the meanings provided below.
Affiliate shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of
the Securities Exchange Act of 1934, as amended.
Cause means (i) the willful and continued failure by the Participant to substantially
perform his duties with the Company that has not been cured within 30 days after written demand for
substantial performance is delivered by the Company, which demand specifically identifies the
manner in which the Participant has not substantially performed (other than any such failure
resulting from the Participants incapacity due to physical or mental illness), (ii) the willful
engaging by the Participant in conduct which is demonstrably and materially injurious to the
Company, monetarily or otherwise, or (iii) the engaging by the Participant in egregious misconduct
involving serious moral turpitude, determined in the reasonable judgment of the Committee. For
purposes hereof, no act, or failure to act, on the Participants part shall be deemed willful
unless done, or omitted to be done, by the Participant not in good faith and without reasonable
belief that such action was in the best interest of the Company. Notwithstanding the foregoing, if
a Participant is a party to a Change in Control Agreement, Cause with respect to such Participant
shall have the meaning given to such term in the Change in Control Agreement.
Change in Control means the first to occur of any of the following: (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 Baxter (not including in the securities beneficially owned by such
Person any securities acquired directly from the Company or its Affiliates) representing 30% or
more of the combined voting power of Baxters then outstanding securities, excluding any Person who
becomes such a beneficial owner in connection with a merger or consolidation of Baxter or any
direct or indirect subsidiary of Baxter with any other corporation immediately following which the
individuals who comprise the Board immediately prior thereto constitute at least a majority of the
board of directors of (A) any parent of Baxter or the entity surviving such merger or consolidation
or (B) if there is no such parent, of Baxter or such surviving entity; (ii) the following
individuals cease for any reason to constitute a majority of the number of directors then serving:
individuals who, on the Grant Date, constitute the Board 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 Baxter) whose appointment or election by the Board or nomination for election by Baxters
shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors
then still in office who either were directors on the Grant Date or whose appointment, election or
nomination for election was previously so approved or recommended; (iii) there is consummated a
merger or consolidation of Baxter or any direct or indirect subsidiary of Baxter with any other
corporation or other entity, other than a merger or consolidation immediately following which the
individuals who comprise the Board immediately prior thereto constitute at least a majority of the
board of directors of (A) any parent of Baxter or the entity surviving such merger or consolidation
or (B) if there is no such parent, of Baxter or such surviving entity; or (iv) the shareholders of
Baxter approve a plan of complete liquidation
or dissolution of Baxter or there is consummated an
agreement for the sale or disposition by Baxter of all or substantially all of Baxters assets,
other than a sale or disposition by Baxter of all or substantially all of Baxters assets
immediately following which the individuals who comprise the Board immediately prior thereto
constitute at least a majority of the board of directors of (A) any parent of Baxter or of the
entity to which such assets are sold or disposed or (B) if there is no such parent, of Baxter or
such entity.
Change in Control Agreement means an employment agreement, change in control agreement or
plan, severance agreement or plan, or other agreement between the Company and a Participant or
Company plan covering a Participant that provides for benefits upon termination for good reason or
cause in connection with a change in control of Baxter and that has been approved by the Board or
the Committee.
Good Reason means the occurrence (without the Participants express written consent) of
any of the following which occur on or after a Change in Control: (i) reduction by the Company in
the Participants annual base salary as in effect on the Grant Date or as the same may be increased
from time to time; (ii) the relocation of the Participants principal place of employment to a
location more than fifty (50) miles from the Participants principal place of employment
immediately prior to the Change in Control or the Companys requiring the Participant to be based
anywhere other than such principal place of employment (or permitted relocation thereof) except for
required travel on the Companys business to an extent substantially consistent with the
Participants business travel obligations as in effect immediately prior to the Change in Control;
or (iii) the failure by the Company to pay to the Participant any portion of the Participants
current compensation or to pay to the Participant any portion of an installment of deferred
compensation under any deferred compensation program of the Company, within seven (7) days of the
date such compensation is due. Notwithstanding the foregoing, if a Participant is a party to a
Change in Control Agreement, Good Reason with respect to such Participant shall have the meaning
given to such term in the Change in Control Agreement.
Person shall have the meaning given in Section 3(a)(9) of the Securities Exchange Act of
1934, as amended, as modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) Baxter or any of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of Baxter or any of its Affiliates, (iii) an underwriter
temporarily holding securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of Baxter in substantially the same proportions
as their ownership of stock of Baxter.
9. Withholding
Except as otherwise provided by the Committee, all Awards (including the payout of Awards) under
the Plan are subject to withholding of all applicable taxes, which withholding obligations may be
satisfied, with the consent of the Committee, through the surrender of shares of Company Common
Stock that the Participant already owns or to which a Participant is otherwise entitled under the
Plan; provided, however, with the consent of the Committee, previously-owned Shares that have been
held by the Participant or Shares to which the Participant is entitled under the Plan may only be
used to satisfy the minimum tax withholding required by applicable law (or other rates that will
not have a negative accounting impact).
10. Program Controls
Except as specifically provided in the Plan, in the event of any inconsistency between the Plan and
the Program, the Program will control, but only to the extent such Program provisions will not
violate the provisions of section 409A of the Code.
BAXTER INTERNATIONAL INC.
French Addendum To 2011 Equity Plan
Adopted as of March 4, 2011
French Addendum To 2011 Equity Plan
Adopted as of March 4, 2011
1. PURPOSES OF THIS ADDENDUM
The Baxter International Inc. 2007 Incentive Plan (the Program) was adopted by the Board
of the Company on February 13, 2007 and approved by the shareholders of the Company on May 1, 2007
for the benefit of employees, officers and directors, of the Company and its Affiliates, including
its French subsidiary(ies).
This Addendum (the Addendum) approved on March 4, 2011, sets out the terms for French
Qualified Stock Options and French Qualified Free Shares granted jointly under the 2007 Incentive
Plan (the Program) and the Equity Plan (the Plan) adopted as of March 4, 2011
by Baxter International Inc. (the Company) to Eligible Participants, residents in France,
or otherwise selected by the Committee for participation under this Addendum. This Addendum is
adopted in accordance with Sections 3 Administration and 9 Amendment and Termination of the
Program to benefit from the specific tax and social security treatment applicable in France to
Qualified Option Awards and Qualified Free Share Awards.
For the avoidance of doubt, the present Addendum is not applicable to awards paid in cash and to
awards of Performance Shares, Restricted Shares, Performance Units, Cash Incentive Awards or Stock
Appreciation Rights. Consequently, dispositions of the Program and/or the Plans applicable to these
are not applicable to Awards made further to the present Addendum.
The rules contained in the Program and the Plans will apply to Awards made under this Addendum,
unless specifically stated otherwise. The terms and conditions of the present Addendum are
identical to the Plan except as provided below. Words and expressions used in this Addendum and not
defined herein shall have the same meaning as those words and expressions used in the Program and
Plans. The additional terms and conditions in this Addendum are to be read in conjunction with the
Program and Plans.
To the extent that the Program and the Plans contradict the provisions set forth hereinafter, the
Addendum provisions shall prevail. In addition, to the extent that the terms and conditions
specified in the applicable grant communication letter contradict the provisions set forth
hereinafter, the Addendum provisions shall prevail.
2. OPTION AWARDS
2.1. General
The Addendum contains the term of Qualified Stock Option which refers to the awards of Options
granted as per Section 6 of the Program jointly with Section 4 of the Equity Plan in accordance
with articles L.225-177 to L.225-185 of the French Commercial Code. Consequently, the terms Stock
Option, Options, Qualified Stock Option Awards and Option Award herein shall be construed
and interpreted accordingly.
2.2. Grant of Options
Notwithstanding the provisions of the Plan, the following rules shall apply to Options Awards
granted under this Addendum.
In no event shall the number of shares of Common Stock subject to outstanding unexercised Options
granted pursuant to this Addendum give right to subscribe shares exceeding one-third (1/3) of the
Companys share capital. The total number of shares of Common Stock that may be granted to
Participants under this Addendum shall not exceed 10% of the Granting Companys share capital at
Grant Date, when Options are over existing shares. Outstanding unvested Full Value Awards shall be
treated as shares of Common Stock in order to determine the threshold of 10% of the granting
Companys share capital.
If an Option provides a right to acquired already existing shares / treasury shares, the Company
shall procure sufficient shares to satisfy the Exercise of such Option at least one day prior to
the Participants having the right to Exercise such Option. Shares acquired by the Participant
upon Option Exercise shall be registered in the name of the Participant or held in an identifiable
account. Participants will have the voting and dividend rights attached to the Shares acquired upon
Exercise Date as of that date. Upon Exercise, no cash replacement of shares of Common Stock is
allowed.
Any market repurchased shares of Common Stock to be delivered to Eligible Individuals upon exercise
of Awards granted hereunder shall be acquired by the Company at least one (1) day before the
applicable vesting date. The Vesting Date designates the date upon which options, in full or in
part, become exercisable by the Participant.
2.3. Grant Date
No Options may be granted under this Addendum: (a) before the end of a period of twenty (20)
trading days following (i) a dividend record date for any dividend or (ii) an agreement by the
shareholders of the Company to increase the issued share capital of the Company; (b) within a
period of ten (10) trading days before and after the publication of consolidated accounting results
of the Company (e.g., the filing of an Annual Report on Form 10-K); or (c) within a period
beginning with the date upon which the Companys executive officers become aware of any nonpublic
information that, if it were to become publicly known, would reasonably be expected to affect the
value of the Companys shares of Common Stock and ending ten (10) trading days after that
information has been publicized.
The Grant Date shall be the date upon which the Committee approves grants to Eligible Individuals
or as soon thereafter as possible, ensuring that the above dispositions are respected. The Grant
date shall be stated in the grant documentation letter.
2.4. Eligible Individuals
Notwithstanding the provisions of Sections 2(k) and 4 of the Plan, Section 2 of the Equity Plan,
Options may only be granted under this Addendum to Eligible Individuals. No Option Award may be
made to Eligible Individuals holding more than ten percent (10%) of the issued share capital in the
Company.
2.5. Option Price
The Option Price shall be the greatest of: (a) the Fair Market Value of a share of Common Stock on
the Grant Date; (b) eighty percent (80%) of the average opening price of a share of Common Stock
over the twenty (20) trading days preceding Grant Date; (c) if treasury shares are used to satisfy
exercise of the Options, eighty percent (80%) of the average repurchase price per share paid by the
Company for such treasury shares. The Option Price is stated in the grant documentation letter and
is fixed on the Grant Date.
2.6. Adjustment to Option Price
The number of Options and the Option Price for grants made pursuant to this Addendum may be
adjusted in connection with changes in capital operations described in article L.225-181 of the
French Commercial Code so that economic rights are maintained.
2.7. Vesting and Exercise of Options
Options granted pursuant to this Addendum shall first become exercisable on the fourth (4th)
anniversary of the Grant Date. In case of earlier exercise of Options further notably to Change of
Control or Termination of Employment, the Committee may, upon discretionary decision, impose a
share sale restriction to the Participant until the fourth anniversary of grant to secure
eligibility to the French stock-option regime.
2.8. Termination of Employment
Notwithstanding anything to the contrary, no Option may be exercised before the first anniversary
of the Grant Date and shares underlying Options exercised before the fourth anniversary of the
Grant Date shall be subject to a share sale restriction until the fourth anniversary of grant. By
exception, the Committee may discretionarily decide that Options may be exercised at an earlier
date and / or shares sold at an earlier date.
If a Participants employment with the Company terminates after the Participants Options become
exercisable, the Options will not expire immediately but will remain exercisable. Subject to
Section 4.6 of the Plans, and except in the event of a Qualifying Retirement, the Options will
expire ninety days after the Participants employment with the Company terminates. If the
Participant dies or becomes disabled during the ninety-day period, the Options will expire on the
first anniversary of the termination date.
If the employment of a Participant who is at least 65 years of age, or at least 55 years of age
with at least 10 years of employment with the Company, is terminated other than for Cause or by
reason of the Participants death or disability (a Qualifying Retirement) then (i) if the
date of such termination is after the calendar year of the Grant Date, the Options shall continue
to vest as provided in Section 2.7, or (ii) if the date of such termination is in the calendar year
of the Grant Date, a portion of the Options shall continue to vest as provided in Section 2.7,
which portion shall be determined as follows: (# shares covered by Option award) * (# of months
worked in that year, rounded to nearest whole month) / 12. Subject to Section 4.6 of the Plans, the
Participants Options (whether vesting pursuant to (i) or (ii) or previously vested) shall expire
on the fifth anniversary of the termination date.
If the employment of a Participant is terminated due to death, all Options shall vest immediately
and the shares shall be immediately transferable.
If the employment of a Participant is terminated due to disability corresponding to the 2nd or 3rd
categories of Article L.341-4 of the French Social Security Code 1, then (i) if the date of such
termination is after the calendar year of the Grant Date, the Options shall vest immediately, or
(ii) if the date of such termination is in the calendar year of the Grant Date, a portion of the
Options shall vest immediately, which portion shall be determined as follows: (# shares covered by
Option award) * (# of months worked in that year, rounded to nearest whole month) / 12. Subject to
Section 4.6, such Options will expire on the first anniversary of the termination date. The shares
acquired upon option exercise shall be immediately transferable.
If the employment of a Participant is terminated due to disability other than to the 2nd or 3rd
categories of Article L.341-4 of the French Social Security Code, then (i) if the date of such
termination is after the calendar year of the Grant Date, the Options shall continue to vest as
provided in Section 2.7, or (ii) if the date of such termination is in the calendar year of the
Grant Date, a portion of the Options shall continue to vest as provided in Section 2.7, which
portion shall be determined as follows: (# shares covered by Option award) * (# of months worked in
that year, rounded to nearest whole month) / 12. Subject to Section 4.6, such Options will expire
on the first anniversary of the termination date.
2.9. Substitution of SARs for Options Tandem Awards
Neither SARs nor any other incentive may be substituted for Options granted pursuant to this
Addendum. No tandem awards may be made pursuant to this Addendum.
3. FULL VALUE AWARDS
3.1. Definitions
Full Value Award means a grant made by Baxter International Inc. to the Participant of a
right to receive one Share in the future at a nil cost, in the form of a Restricted Stock Unit.
Such grant can be paid exclusively in shares of Common Stock, is awarded respectively in accordance
with Section 7 of the Program, in accordance with Section 5 of the 2011 Annual Equity Plan for
Restricted Stock Units, and in accordance with articles L.225-197-1 to L.225-197-6 of the French
Commercial Code on Qualified Free Shares Awards. Such grant cannot be subject to conditions,
restrictions and contingencies relating to dividend or dividend equivalent rights and deferred
payment or settlement. The purpose of this Addendum is to ensure that grants over shares of Common
Stock are in conformity with the applicable French legislation, and are entitled to the
corresponding specific French tax and social security treatment. One (1) award gives right to
acquire one (1) share subject to satisfaction of applicable considerations, contingencies,
conditions, restrictions, if any.
Grant Date means the date on which the Committee designates the Participant eligible to
receive a Full Value Award further to the present Addendum, and specifies the terms and conditions
of such Award, including the maximum number of underlying shares, the Vesting and Share Sale
Restriction Periods. The Grant Date is stated in the grant communication letter.
Vesting Date means the date on which the Participant acquires the shares of Common Stock.
The Vesting Date is stated in the grant communication letter.
3.2. Grant
Notwithstanding the provisions of the Plan, the following rules shall apply to Full Value Awards
granted under this Addendum.
The total number of shares of Common Stock that may be granted to Participants under this Addendum
shall not exceed 10% of the Granting Companys share capital at Grant Date. Outstanding unvested
Full Value Awards shall be treated as shares of Common Stock in order to determine the threshold of
10% of the granting Companys share capital. Shares of Common Stock of the Company to be delivered
under the Plan may be market repurchased shares (already existing shares) or newly issued shares.
For Full Value Awards granted over already existing shares, corresponding shares shall be
repurchased by the Company at least one day before the applicable Vesting Date.
A Full Value Award may not be made to employees and/or Corporate Officers holding more than 10% of
the issued share capital in the Company or who, after having received shares under a Full Value
Award granted hereunder, would hold more than 10% of the issued share capital in the Company.
Shares acquired by the Participant upon Vesting Date will be registered in the name of the
Participant or be held in an identifiable account. Participants will have the voting and dividend
rights attached to the Shares acquired upon Vesting Date as of that date.
3.3. Vesting period / Performance period
Notwithstanding anything to the contrary, in relation to Full Value Awards, the Vesting Date shall
not be earlier than the second anniversary of the Grant Date, in any circumstances other than in
the event of the death of the Participant or in the event of disability corresponding to the 2nd or
3rd categories of Article L.341-4 of the French Social Security Code1.
Unless otherwise stated in the grant documentation letter, the Vesting Date for Restricted Stock
Units shall be the second anniversary of the Grant Date. The Board of Directors or the Committee
reserves the right to reduce or modify the Vesting Date in accordance with and to conform with any
amendments to the French Tax Code and/or to the provisions of the French Commercial Code governing
Qualified Free Shares. By exception, the Board or the Committee may discretionarily decide that
Vesting Date may occur before the second (2nd) anniversary of the Grant Date.
1 | For information purposes, please note that | |
- | Second category stands for a disabled person unable to perform any professional activity; and | |
- | Third category stands for a disabled person unable to perform any professional activity and requiring third party assistance in order to perform everyday life tasks. |
3.4. Share Sale Restriction Period
As of the Vesting Date, shares of Common Stock acquired pursuant to Full Value Award are subject to
a minimum of two (2) year share sale restriction, during which the shares may not be sold (the
Share Sale Restriction Period). If the Participant leaves the employment of the Company
or any Affiliate(s), at any time after the Vesting Date, the shares acquired shall not be freely
transferable before the expiration of the Share Sale Restriction Period.
By exception, in the event of the Participants death, the heirs shall not be subject to the Share
Sale Restriction Period, the shares being freely transferable upon the Participants death. By
exception, notwithstanding any provision of the Plan and the present Addendum to the contrary, in
case of disability corresponding to the 2nd or 3rd categories of Article L.341-4 of the French
Social Security Code1, the Participant is entitled to sell the shares prior to the end of the Share
Sale Restriction Period, if any.
For the avoidance of doubt, if the Participant leaves the employment, the Company or any
Affiliate(s), at any time before the term of the Share Sale Restriction Period, due to his/her
Disability other than of second (2nd) or third (3rd) category as defined in Article L.341-4 of the
French Social Security Code1, the Participant shall not be entitled to sale the shares before the
second (2nd) anniversary of the Vesting Date.
By exception, the Board or the Committee may discretionarily decide that a Participant shall not be
subject to the Share Sale Restriction Period.
3.5. Additional Full Value Awards
Notwithstanding anything to the contrary in the Program or the Plans, the Participant shall not be
permitted to receive additional Full Value Awards with respect to the Restricted Stock Units based
upon the dividends and distributions paid on shares of Common Stock as if each Restricted Stock
Unit was a share of Common Stock.
3.6. Termination of Employment
Notwithstanding anything to the contrary in the Program or the Plans, in case of Participants
death, his/her heirs may request the acquisition of the unvested Restricted Stock Units within six
(6) months following this event.
By exception, if the Participant ceases his employment within the Company or any Affiliate(s) due
to his disability corresponding to the 2nd or 3rd categories of Article L.341-4 of the French
Social Security Code1, the Award shall vest as follows: (i) if the date of such
termination is after the calendar year of the Grant Date, all the RSUs shall pay out within sixty
days, or (ii) if the date of such termination is in the calendar year of the Grant Date a portion
of the RSUs shall pay out as provided in (i), which portion shall be determined as follows: (#
RSUs awarded) * (# of months worked in that year, rounded to nearest whole month) / 12.
Notwithstanding anything to the contrary, if the employment with the Company or any Affiliate(s) is
terminated due to disability other than of second (2nd) or third (3rd) category as defined in
Article L.341-4 of the French Social Security Code, (i) if the date of such termination
is after
the calendar year of the Grant Date, the RSUs will remain eligible for payout on the terms provided
in Section 3.3, or (ii) if the date of such termination is in the calendar year of the Grant Date a
portion of the RSUs shall remain eligible for payout on the terms provided in Section 3.3, which
portion shall be determined as follows: (# RSUs awarded) * (# of months worked in that year,
rounded to nearest whole month) / 12.
Notwithstanding anything to the contrary, if the employment with the Company or any Affiliate(s) is
terminated due to Qualified Retirement, (i) if the date of such termination is after the calendar
year of the Grant Date, the RSUs will remain eligible for payout on the terms provided in Section
3.3, or (ii) if the date of such termination is in the calendar year of the Grant Date a portion of
the RSUs shall remain eligible for payout on the terms provided in Section 3.3, which portion shall
be determined as follows: (# RSUs awarded) * (# of months worked in that year, rounded to nearest
whole month) / 12.
4. Non-Transferability of Awards
No Award granted under the Plan shall be transferable other than by will or the law of descent and
distribution.
4.1. Change in Control
When a tax favourable treatment may be available further to French legislation (article 163 bis C-1
bis of the French Tax Code), the Committee, upon discretionary decision, may give the choice to
French participants, but has no obligation to. When the Company decides to exchange shares with no
cash consideration, pursuant to applicable French legal and tax rules and notably, article
L.225-197-1 § III of the French Commercial Code (as amended), then the dispositions of the Plan as
well as the periods of Vesting and Share Sale Restriction will remain applicable to shares or
rights received in exchange.
5. Tax Withholding
Notwithstanding any provision to the contrary, no shares of Common Stock may be used to satisfy any
social security or tax withholding due for Awards granted further to the present Addendum.
The Company or its Affiliates shall have the right to require payment from a Participant to cover
any applicable withholding or other employment taxes due with respect to Awards granted hereunder
or shall have the right to deduct any applicable withholding or other employment taxes due from
other compensation income paid to the Participant.
6. Amendment, Modifications to this Addendum.
No modification can be made to this Addendum, or to outstanding Awards granted hereunder, which is
disadvantageous to the Participant or which is in contradiction to the French Commercial Code and
French Tax Code provisions, unless the modification is the result of a new law or regulation or any
other obligatory disposition or ruling applied to the Company or any other Subsidiary, having
legal, fiscal or social implications.
The terms of this Addendum shall be interpreted in accordance with the relevant provisions set
forth by French tax and social laws, as well as the regulations issued by the French tax and social
administrations.
In the event of any conflict between the provisions of this Addendum and the Plan, the provisions
of the Addendum shall prevail for any Awards made to Participants under this Addendum.
7. Additional Definitions
Affiliate means any entity:
- | in which the Company holds, directly or indirectly, at least 10% of the voting rights and / or equity; | ||
- | that holds, directly or indirectly, at least 10% of the voting rights and / or equity in the Company; | ||
- | in which at least 50% of the equity or voting rights are held, directly or indirectly, by a company which itself holds at least 50% of the Company. |
Company means Baxter International Inc., a Delaware corporation.
Corporate Officers mean Président du Conseil dAdministration (Chairman of the Board);
Directeur Général (Managing Director); Directeurs Généraux Délégués (Delegated Managing
Directors); Members of the Directoire; Gérant of a Société en Commandite par Actions;
Président (if a private individual) dune Société par Actions Simplifiée.
Eligible Individual means any employee with a valid employment contract (contrat de
travail) at Grant Date, and/or Corporate Officer with or without an employment contract with the
Company or Affiliate(s). For the avoidance of doubt, officers and directors of the Company, or of
Affiliate(s), are eligible Participants if they have a valid employment contract with one of these
entities, or if they are Corporate Officers. Awards cannot be granted under this Addendum to
non-employee members of a Conseil dAdministration (the Board), to consultant, to independent
agent of the Company or Affiliate(s).