Baxter 10-K Annual Report Provides Comprehensive Business and Financial Overview

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<SEC-DOCUMENT>0000950131-98-001860.txt : 19980323
<SEC-HEADER>0000950131-98-001860.hdr.sgml : 19980323
ACCESSION NUMBER: 0000950131-98-001860
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 14
CONFORMED PERIOD OF REPORT: 19971231
FILED AS OF DATE: 19980320
SROS: CSX
SROS: NYSE
SROS: PCX
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: BAXTER INTERNATIONAL INC
CENTRAL INDEX KEY: 0000010456
STANDARD INDUSTRIAL CLASSIFICATION: SURGICAL & MEDICAL INSTRUMENTS &
APPARATUS [3841]
IRS NUMBER: 360781620
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-04448
FILM NUMBER: 98570280
BUSINESS ADDRESS:
STREET 1: ONE BAXTER PKWY
CITY: DEERFIELD
STATE: IL
ZIP: 60015
BUSINESS PHONE: 7089482000
MAIL ADDRESS:
STREET 1: ONE BAXTER PARKWAY
CITY: DEERFIELD
STATE: IL
ZIP: 60015
FORMER COMPANY:
FORMER CONFORMED NAME: BAXTER TRAVENOL LABORATORIES INC
DATE OF NAME CHANGE: 19880522
FORMER COMPANY:
FORMER CONFORMED NAME: BAXTER LABORATORIES INC
DATE OF NAME CHANGE: 19760608
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<PAGE>
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-K
FOR ANNUAL AND TRANSITION REPORTS
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(MARK ONE)
[X]ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 1997
OR
[_]TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________ TO __________
COMMISSION FILE NUMBER 1-4448
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LOGO
Baxter International Inc.
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(Exact Name of Registrant in its Charter)
DELAWARE 36-0781620
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(State or Other Jurisdiction of Incorporation or (I.R.S. Employer
Organization) Identification No.)
ONE BAXTER PARKWAY, DEERFIELD, ILLINOIS 60015
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(Address of Principal Executive Offices) (Zip Code)
847.948.2000
Registrant's telephone number, including area code ____________________________
Securities registered pursuant to Section 12(b) of the Act:
NAME OF EACH EXCHANGE
TITLE OF EACH CLASS ON WHICH REGISTERED
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Common stock, $1 par value New York Stock Exchange
Chicago Stock Exchange
Preferred Stock Purchase Rights Pacific Stock Exchange
(currently traded with common stock) New York Stock Exchange
Chicago Stock Exchange
Pacific Stock Exchange
Securities registered pursuant to Section 12(g) of the Act: None
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Indicate by check mark whether the registrant (1) has filed all reports

required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
X
Yes No
Indicate by check mark if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein and will not be contained, to
the best of registrant's knowledge, in the definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K. [_]
The aggregate market value of the voting common equity held by non-
affiliates of the registrant (based on the per share closing sale price of
$55.38 on March 6, 1998, and for the purpose of this computation only, the
assumption that all registrant's directors and executive officers are
affiliates) was approximately $15.3 billion. There is no non-voting common
equity held by non-affiliates of the registrant.
The number of shares of the registrant's common stock, $1 par value,
outstanding as of March 6, 1998, was 280,661,677.
DOCUMENTS INCORPORATED BY REFERENCE
Those sections or portions of the registrant's annual report to stockholders
for fiscal year ended December 31, 1997 and of the registrant's proxy
statement for use in connection with its annual meeting of stockholders to be
held on May 5, 1998, described in the cross reference sheet and table of
contents attached hereto are incorporated by reference in this report.
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<PAGE>
CROSS REFERENCE SHEET
AND
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
Page Number
(Reference)
(1)
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<C> <S> <C>
Item 1. Business
(a)General Development of Business.................... 1(2)
(b)Financial Information about Industry Segments...... 1(3)
(c)Narrative Description of Business.................. 1(4)
(d)Financial Information about Foreign and Domestic
Operations and
Export Sales.......................................... 5(5)
Item 2. Properties............................................ 5
Item 3. Legal Proceedings..................................... 6(6)
Item 4. Submission of Matters to a Vote of Security Holders... 6
Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters................................... 6(7)
Item 6. Selected Financial Data............................... 6(8)
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations................... 6(9)
Item 7A. Quantitative and Qualitative Disclosures about Market

Risk.................................................. 6(10)
Item 8. Financial Statements and Supplementary Data........... 6(11)
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure................... 6
Item 10. Directors and Executive Officers of the Registrant
(a)Identification of Directors........................ 7(12)
(b)Identification of Executive Officers............... 7
(c)Compliance with Section 16(a) of the Securities
Exchange Act of 1934.................................. 9(13)
Item 11. Executive Compensation................................ 9(14)
Item 12. Security Ownership of Certain Beneficial Owners and
Management............................................ 9(15)
Item 13. Certain Relationships and Related Transactions........ 9
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K.............................................. 9
(a)Financial Statements............................... 9
(a)Reports on Form 8-K................................ 9
(c)Exhibits........................................... 9
</TABLE>
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(1) Information incorporated by reference to the Company's Annual Report to
Stockholders for the year ended December 31, 1997 ("Annual Report") and
the board of directors' proxy statement for use in connection with the
Registrant's annual meeting of stockholders to be held May 5, 1998
("Proxy Statement").
(2) Annual Report, pages 31-46, section entitled "Notes to Consolidated
Financial Statements" and pages 17-24, section entitled "Management's
Discussion and Analysis."
Financial Statements--Industry and Geographic Information."
(4) Annual Report, pages 17-24, section entitled "Management's Discussion and
Analysis" and pages 44-45, section entitled "Notes to Consolidated
Financial Statements--Legal Proceedings."
(7) Annual Report, page 46, section entitled "Notes to Consolidated Financial
Statements--Quarterly Financial Results and Market for the Company's
Stock (Unaudited)."
(8) Annual Report, inside back cover, section entitled "Five-Year Summary of
Selected Financial Data."
(9) Annual Report, pages 17-24, section entitled "Management's Discussion and
Analysis."
(10) Annual Report, pages 21-22, section entitled "Financial Instrument Market
Risk."
(11) Annual Report, pages 26-46, sections entitled "Report of Independent
Accountants," "Consolidated Balance Sheets," "Consolidated Statements of
Income," "Consolidated Statements of Cash Flows," "Consolidated
Statements of Stockholders' Equity" and "Notes to Consolidated Financial
Statements."
(12) Proxy Statement, pages 2-5, section entitled "Proposal 1--Election of
Directors."
(13) Proxy Statement, page 16, section entitled "Section 16(a) Beneficial
Ownership Reporting Compliance."
(14) Proxy Statement, pages 6-10, sections entitled "Compensation of
Directors" and "Executive Compensation," and pages 14-15, section
entitled "Pension Plan, Excess Plans and Supplemental Plans."
(15) Proxy Statement, pages 16-17, section entitled "Ownership of Company
Securities."
<PAGE>
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LOGO
Baxter International Inc., One Baxter Parkway, Deerfield, Illinois 60015.
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PART I
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ITEM 1. BUSINESS.
(a) General Development of Business.
Baxter International Inc. was incorporated under Delaware law in 1931. As
used in this report, except as otherwise indicated in information incorporated
by reference, "Baxter" means Baxter International Inc. and the "Company" means
Baxter and its subsidiaries.
The Company is engaged in the worldwide development, distribution and
manufacture of a diversified line of products, systems and services used
primarily in the health-care field. Products are manufactured by the Company in
25 countries and sold in approximately 100 countries. Health-care is concerned
with the preservation of health and with the diagnosis, cure, mitigation and
treatment of disease and body defects and deficiencies. The Company's products
are used by hospitals, clinical and medical research laboratories, blood and
dialysis centers, rehabilitation centers, nursing homes, doctors' offices and
at home under physician supervision. See "Recent Developments."
For information regarding acquisitions, investments in affiliates and
divestitures, see the Company's Annual Report to Stockholders for the year
ended December 31, 1997 (the "Annual Report"), pages 32-33, sections entitled
"Notes to Consolidated Financial Statements--Acquisitions and Divestitures,"
and "--Subsequent Events" which are incorporated by reference.
(b) Financial Information About Industry Segments.
Incorporated by reference from the Annual Report, pages 44-45, section
entitled "Notes to Consolidated Financial Statements--Industry and Geographic
Information."
(c) Narrative Description of Business.
Recent Developments
VIMRX
In December 1997, the Company and VIMRX Pharmaceuticals Inc. formed a new
cell therapy company to develop innovative treatments for cancer and other
life-threatening diseases. The Company transferred certain assets of its
Immunotherapy division to the new company and holds a minority-ownership
position along with warrants to acquire an additional ownership interest in the
future.
Ohmeda
In January 1998, the Company signed a definitive agreement to acquire the
Pharmaceutical Products Division of the BOC Group's Ohmeda health-care
business, a manufacturer of gases and drugs used for general and local
anesthesia. The transaction is subject to customary anti-trust review and is
expected to close in 1998.
Somatogen

In February 1998, the Company signed a definitive agreement to acquire
Somatogen, Inc., a publicly-held biopharmaceutical developer of recombinant
hemoglobin technology. It is expected that a substantial portion of the
purchase price will be allocated to Somatogen's in-process research and
development, which, under generally accepted accounting principles, will be
immediately expensed by the Company. The transaction is subject to approval of
Somatogen's shareholders and customary anti-trust review; it is expected to
close in 1998.
1
<PAGE>
Company Overview
The Company operates in a single industry segment as a global developer,
manufacturer and marketer of products and technologies related to the blood
and circulatory system. It has market-leading positions in four businesses
within this segment of the medical products and services industry: Blood
Therapies, which develops biopharmaceutical and blood collection and
separation products and technologies; I.V. Systems/Medical Products, which
develops technologies and systems to improve intravenous medication delivery
and distributes medical products; Renal, which develops products and services
to treat kidney disease; and CardioVascular, which develops products and
provides services to treat late-stage heart disease and vascular disorders.
Information about operating results is incorporated by reference from the
Annual Report, pages 17-21, section entitled "Management's Discussion and
Analysis" and pages 44-45, section entitled "Notes to Consolidated Financial
Statements--Industry and Geographic Information."
United States Markets
The health-care marketplace continues to be competitive. There has been
consolidation in the Company's customer base and by its competitors which has
resulted in pricing and market share pressures. These industry trends are
expected to continue. The Company intends to continue to manage these issues
by capitalizing on its market-leading positions, developing new products and
services, leveraging its cost structure and making acquisitions.
International Markets
The Company generates more than 50% of its revenues outside the United
States. While health-care cost containment continues to be a focus around the
world, demand for health-care products and services continues to be strong
worldwide, particularly in developing markets such as Latin America and Asia.
The Company's strategies emphasize global expansion and technological
innovation to advance medical care worldwide.
Joint Ventures
The Company conducts an immaterial portion of its business through joint
ventures. The majority of these joint ventures are accounted for under the
equity method of accounting.
Methods of Distribution
The Company conducts its selling efforts through its subsidiaries and
divisions. Many subsidiaries and divisions have their own sales forces and
direct their own sales efforts. In addition, sales are made to independent
distributors, dealers and sales agents. The Company's distribution centers are
stocked with adequate inventories to facilitate prompt customer service. Sales
and distribution methods include frequent contact by sales representatives,
automated communications via various electronic purchasing systems,

circulation of catalogs and merchandising bulletins, direct mail campaigns,
trade publications and advertising. Customers may return defective merchandise
for credit or replacement. In recent years, such returns have been
insignificant.
International sales and distribution are made in approximately 100 countries
either on a direct basis or through independent local distributors.
International subsidiaries employ their own field sales forces in Argentina,
Australia, Austria, Belgium, Brazil, Canada, Chile, China, Colombia, Denmark,
Ecuador, Finland, France, Germany, Guatemala, Hong Kong, India, Indonesia,
Italy, Japan, Malaysia, Mexico, the Netherlands, New Zealand, Norway, Peru,
the Philippines, Portugal, Singapore, Spain, Switzerland, Taiwan, Thailand,
the United Kingdom and Venezuela. In other countries, sales are made through
independent distributors or sales agents.
Raw Materials
Raw materials essential to the Company's business are purchased worldwide in
the ordinary course of business from numerous suppliers. The vast majority of
these materials are generally available, and no serious shortages or delays
have been encountered. Certain raw materials used in producing some of the
Company's products are available only from a small number of suppliers. In
addition, certain biomaterials for medical implant applications (primarily
polymers) are becoming more difficult to obtain due to market withdrawals by
biomaterial suppliers, primarily as a result of perceived exposures to
liability in the United States.
2
<PAGE>
In some of these situations, the Company has long-term supply contracts with
its suppliers, although it does not consider its obligations under such
contracts to be material. The Company does not always recover cost increases
through customer pricing due to contractual limits and market pressure on such
price increases. See "Contractual Arrangements."
Patents and Trademarks
Products manufactured by the Company are sold primarily under its own
trademarks and trade names. Some products purchased and resold by the Company
are sold under the Company's trade names while others are sold under trade
names owned by its suppliers.
The Company owns a number of patents and trademarks throughout the world and
is licensed under patents owned by others. The Company's policy is to protect
its products and technology through patent and trademark applications on a
worldwide basis. This protection is sought in a manner that balances the cost
of such protection against obtaining the greatest value for the Company. The
Company also recognizes the need to promote the enforcement of its patents and
trademarks. However, while the Company can not make any assurances that any of
its patents will not be circumvented, it does not consider its overall business
to be materially dependent upon any individual patent or trademark.
Competition
Historically, competition in the health-care industry has been characterized
by the search for technological and therapeutic innovations in the prevention,
diagnosis and treatment of disease. The Company believes that it has benefited
from the technological advantages of certain of its products. While others will
continue to introduce new products which compete with those sold by the
Company, the Company believes that its research and development efforts will
permit it to remain competitive in all presently material product areas.
Although no single company competes with the Company in all of its businesses,
the Company is faced with substantial competition in all of its markets.

The changing health-care environment in recent years has led to increasingly
intense competition among United States health-care suppliers. Competition is
focused on price, service and product performance. Pressure in these areas is
expected to continue.
The Company continues to increase its efforts to minimize costs and meet
United States price competition. The Company believes that its cost position
will continue to benefit from improvements in manufacturing technology and
increased economies of scale. The Company continues to emphasize its
investments in innovative and cost-effective technologies and the quality of
its products and services.
Credit and Working Capital Practices
As of February 28, 1998, the Company's debt ratings on senior debt were A3 by
Moody's, A by Standard & Poor's and A- by Duff & Phelps.
The Company's credit practices and related working capital needs are
comparable to those of other market participants. Collection periods tend to be
longer for sales outside the United States.
Quality Management
The Company places significant emphasis on providing quality products and
services to its customers. A major portion of the Company's quality systems
relate to the manufacturing, packaging, sterilization, handling, distribution
and labeling of the products by the Company. These quality systems, including
control procedures that are developed and implemented by technically trained
professionals, result in rigid specifications for raw materials, packaging
materials, labels, sterilization procedures and overall manufacturing process
control. The quality systems integrate the efforts of suppliers of both raw
materials and finished goods to provide the highest value to customers. On a
statistical sampling basis, internal quality assurance organizations test
components and finished goods at different stages in the manufacturing process
to assure that exacting standards are met.
3
<PAGE>
Research and Development
The Company is actively engaged in research and development programs to
develop and improve products, systems and manufacturing methods. These
activities are performed at 21 research and development centers located around
the world and include facilities in Australia, Austria, Belgium, France,
Germany, Italy, Japan, Malta, the Netherlands, Sweden, the United Kingdom and
the United States. Expenditures for Company-sponsored research and development
activities were $392 million in 1997, $340 million in 1996 and $327 million in
1995.
Principal areas of strategic focus for research include hemoglobin
therapeutics, xenotransplantation, medication-delivery systems and left-
ventricular systems. The Company is conducting several clinical trials of its
hemoglobin therapeutic, or "blood substitute," in the United States and
Europe. The Company currently anticipates launching the product by late 1999
or early in the year 2000. The Company's research efforts emphasize self-
manufactured product development, and portions of that research relate to
multiple product lines. For example, many product categories benefit from the
Company's research effort as applied to the human body's circulatory systems.
In addition, research relating to the performance and purity of plastic
materials has resulted in advances that are applicable to a large number of
the Company's products.

Government Regulation
Most products manufactured or sold by the Company are subject to regulation
by the Food and Drug Administration (the "FDA"), as well as by other agencies,
both within and outside the United States. In the United States, the federal
agencies which regulate the Company's facilities, operations and personnel
include the FDA, the Environmental Protection Agency, the Occupational Health
& Safety Administration, the Customs Department, the Commerce Department, and
others. State agencies also regulate the facilities, operations and personnel
of the Company within their respective states. The federal agencies possess
authority to regulate the introduction and advertising of the Company's
products and devices as well as manufacturing procedures, labeling and
recordkeeping. In addition, the FDA has the power, among other powers, to
enjoin the manufacture or sale of products and devices, to seize adulterated
or misbranded products and devices and to require the manufacturer to remove
them from the market. From time to time, the Company has removed products from
the market that were found not to meet acceptable standards. This may occur in
the future. Product regulatory laws exist in most other countries where the
Company does business. These foreign government agencies also regulate public
health, environmental, employment, export, customs, and other aspects of the
Company's global operations.
Environmental policies of the Company mandate compliance with all applicable
regulatory requirements concerning environmental quality and contemplate,
among other things, appropriate capital expenditures for environmental
protection. Various non-material capital expenditures for environmental
protection were made by the Company during 1997 and similar expenditures are
planned for 1998. See Item 3.--"Legal Proceedings."
Employees
As of December 31, 1997, the Company employed approximately 41,000 people.
Contractual Arrangements
A substantial portion of the Company's products are sold through contracts
with both international and domestic purchasers. Some of these contracts are
for terms of more than one year and include limits on price increases. In the
case of hospitals, clinical laboratories and other facilities, these contracts
may specify minimum quantities of a particular product or categories of
products to be purchased by the customer.
4
<PAGE>
Cautionary Statement for Purposes of the "Safe Harbor" Provisions of the
Private Securities Litigation Reform Act of 1995
Statements throughout this report that are not historical facts, including
but not limited to, statements in the "Company Overview," "International
Markets" and "Recent Developments" sections of this report (including material
incorporated therein by reference) are forward looking statements. These
statements are based on the Company's current expectations and involve numerous
risks and uncertainties. Some of these risks and uncertainties are factors that
affect all international businesses, while some are specific to the Company and
the health-care arenas in which it operates.
The factors below in some cases have affected and could affect the Company's
actual results, causing results to differ, and possibly differ materially, from
those expressed in any such forward looking statements. These factors include
technological advances in the medical field, economic conditions, demand and
market acceptance risks for new and existing products, technologies and health-
care services, the impact of competitive products and pricing, manufacturing

capacity, new plant start-ups, the United States and global regulatory, trade
and tax policies, continued price competition related to the Company's United
States operations, product development risks, including technological
difficulties, ability to enforce patents and unforeseen foreign
commercialization and regulatory factors. In particular, the Company, as well
as other companies in its industry, is experiencing increased regulatory
activity by the United States FDA with respect to its plasma-based biologicals
and its complaint-handling systems. Additionally, as discussed in Item 3.--
"Legal Proceedings," upon the resolution of certain legal matters, the Company
may incur charges in excess of presently established reserves. Any such charge
could have a material adverse effect on the Company's results of operations or
cash flows in the period in which it is recorded.
Currency fluctuations are also a significant variable for global companies,
especially fluctuations in local currencies where hedging opportunities are
unreasonably expensive or unavailable. If the United States dollar continues to
strengthen against most foreign currencies, the Company's ability to realize
projected growth rates in its sales and net earnings outside the United States
will continue to be negatively impacted.
The Company believes that its expectations with respect to forward looking
statements are based upon reasonable assumptions within the bounds of its
knowledge of its business and operations, but there can be no assurance that
the actual results or performance of the Company will conform to any future
results or performance expressed or implied by such forward looking statements.
(d) Financial Information About Foreign and Domestic Operations and Export
Sales.
International operations are subject to certain additional risks inherent in
conducting business outside the United States, such as changes in currency
exchange rates, price and currency exchange controls, import restrictions,
nationalization, expropriation and other governmental action.
Financial information is incorporated by reference from the Annual Report,
pages 44-45, section entitled "Notes to Consolidated Financial Statements--
Industry and Geographic Information."
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ITEM 2. PROPERTIES.
The Company owns or has long-term leases on substantially all of its major
manufacturing facilities. The Company maintains 21 manufacturing facilities in
the United States, including six in Puerto Rico, and also manufactures in
Australia, Austria, Belgium, Brazil, Canada, China, Colombia, Costa Rica, the
Dominican Republic, France, Indonesia, Ireland, Italy, Japan, Malta, Mexico,
the Netherlands, the Philippines, Singapore, Spain, Switzerland, Tunisia,
Turkey and the United Kingdom. The Company owns or operates distribution
facilities throughout the world, including 90 located in 26 foreign countries.
The Company maintains a continuing program for improving its properties,
including the retirement or improvement of older facilities and the
construction of new facilities. This program includes improvement of
manufacturing facilities to enable production and quality control programs to
conform with the current state of technology and government regulations.
Capital expenditures were $403 million in 1997, $318 million in 1996 and $309
million in 1995. In addition, the Company added to the pool of equipment leased
or rented to customers, spending $93 million in 1997, $80 million in 1996 and
$90 million in 1995.
5
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ITEM 3. LEGAL PROCEEDINGS.
entitled "Notes to Consolidated Financial Statements--Legal Proceedings."
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ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
None.
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PART II
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ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER
MATTERS.
Incorporated by reference from the Annual Report, page 46, section entitled
"Notes to Consolidated Financial Statements--Quarterly Financial Results and
Market for the Company's Stock (Unaudited)."
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ITEM 6. SELECTED FINANCIAL DATA.
Incorporated by reference from the Annual Report, inside back cover, section
entitled "Five-Year Summary of Selected Financial Data."
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ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
entitled "Management's Discussion and Analysis."
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ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
entitled "Financial Instrument Market Risk."
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ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.
Incorporated by reference from the Annual Report, pages 26-46, sections
entitled "Report of Independent Accountants," "Consolidated Balance Sheets,"
"Consolidated Statements of Income," "Consolidated Statements of Cash Flows,"
"Consolidated Statements of Stockholders' Equity" and "Notes to Consolidated
Financial Statements."

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ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
FINANCIAL DISCLOSURE.
None.
6
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PART III
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ITEM 10. DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT.
(a) Identification of Directors
Incorporated by reference from the board of directors' proxy statement for
use in connection with Baxter's annual meeting of stockholders to be held on
May 5, 1998 (the "Proxy Statement"), pages 2-5, section entitled "Proposal 1--
Election of Directors."
(b) Identification of Executive Officers
Following are the names and ages, as of March 1, 1998, of the executive
officers of Baxter International Inc. ("Baxter"), and one or both of its two
principal direct subsidiaries, Baxter Healthcare Corporation ("Healthcare") and
Baxter World Trade Corporation ("World Trade"), their positions and summaries
of their backgrounds and business experience. All executive officers of Baxter
are elected or appointed by the board of directors and hold office until the
next annual meeting of directors and until their respective successors are
elected and qualified. The annual meeting of directors is held after the annual
meeting of stockholders. All executive officers of Healthcare and World Trade
are elected or appointed by the boards of directors of the applicable
subsidiary and hold office until their respective successors are elected and
qualified. As permitted by applicable law, actions by these boards (and their
sole stockholder, Baxter) may be taken by written consent in lieu of a meeting.
(1) Baxter International Inc. Executive Officers
Vernon R. Loucks Jr., age 63, has been chairman of the board of directors
since 1987 and chief executive officer of Baxter since 1980. Mr. Loucks was
first elected an officer of Baxter in 1971.
Harry M. Jansen Kraemer Jr., age 43, has been president of Baxter since March
1997. Mr. Kraemer previously was the senior vice president and chief financial
officer of Baxter from 1993, and the vice president of finance and operations
for a subsidiary of Baxter since 1992. Prior to that, he was employed as
controller, group controller, and president of various divisions of
subsidiaries of Baxter.
Brian P. Anderson, age 47, has the been senior vice president and chief
financial officer of Baxter since February 1998. Mr. Anderson previously was
the vice president of finance of Baxter since March 1997, the corporate
controller since 1993, and the vice president of corporate audit of a
subsidiary of Baxter since 1991. Prior to that, he was a partner in the
international accounting firm of Deloitte & Touche.
Arthur F. Staubitz, age 58, has been a senior vice president of Baxter since
December 1997. From 1993 to December 1997, he was senior vice president and
general counsel of Baxter. From 1993 to 1994, he was also secretary of Baxter.
Mr. Staubitz previously was vice president/general manager of the ventures

group of a subsidiary of Baxter. Prior to that, he was senior vice president,
secretary and general counsel of Amgen, Inc. Prior to that, he was a vice
president of a Baxter subsidiary, and prior to that he was a vice president and
deputy general counsel of Baxter.
Michael J. Tucker, age 45, has been senior vice president of Baxter since
1995. From 1994 to 1995, he was a corporate vice president of World Trade. Mr.
Tucker previously was a vice president of a division of World Trade, and prior
to that, was a vice president of another division of a subsidiary of Baxter.
Fabrizio Bonanni, age 51, has been a vice president of Baxter since 1995.
From 1994 to 1995, he was a corporate vice president of World Trade. Mr.
Bonanni previously was a vice president of a division of World Trade.
John F. Gaither, Jr., age 48, has been a vice president of Baxter since 1994.
Between 1991 and 1994, Mr. Gaither was vice president of law and strategic
planning for a subsidiary of Baxter, and prior to that, was secretary and
deputy general counsel of Baxter.
David C. McKee, age 50, has been a vice president of Baxter since 1996, and
was also secretary from February 1997 to February 1998. Since 1994, Mr. McKee
has been deputy general counsel of Baxter. Prior to that, he was associate
general counsel of a subsidiary of Baxter.
7
<PAGE>
Kshitij Mohan, age 53, has been a vice president of Baxter since 1995. In
1995, Mr. Mohan also was a corporate vice president of World Trade. Mr. Mohan
previously was a vice president of a division of Healthcare.
John L. Quick, age 53, has been a vice president of Baxter since 1995. From
1994 to 1995, he was a corporate vice president of Healthcare. Mr. Quick
previously was a vice president of a division of Healthcare, and prior to
that, was a vice president of another division of that subsidiary.
Thomas J. Sabatino, age 39, has been vice president and general counsel of
Baxter since December 1997. He was also assistant secretary from February 1997
to December 1997. From 1995 to December 1997, Mr. Sabatino was associate
general counsel of Healthcare. Prior to that, he was vice president and
assistant general counsel of Tenet Healthcare Corporation from March 1995 to
July 1995. From April 1994 to March 1995, he was vice president and general
counsel of American Medical International, Inc., and from September 1993 to
March of 1994, he was acting general counsel of that company; from 1992 to
September 1993, he was its associate general counsel.
Steven J. Meyer, age 41, has been treasurer of Baxter since February 1997.
From 1993 to 1997, Mr. Meyer was a vice president of international finance of
a business group of World Trade. Mr. Meyer previously was the international
controller of a business group of World Trade.
Jan Stern Reed, age 38, has been corporate secretary of Baxter since
February 1998. She was assistant secretary from February 1997 to February
1998. From 1995 to 1997, Ms. Reed was assistant secretary of, and counsel to
Wheelabrator Technologies, Inc. From 1992 to 1995, she was counsel to Waste
Management, Inc. and Wheelabrator Technologies, Inc.
(2) Healthcare and World Trade Executive Officers
Timothy B. Anderson, age 51, has been a group vice president of Healthcare
and World Trade since 1994. Between 1992 and 1994, Mr. Anderson was a vice
president of Baxter. Mr. Anderson previously was president of several
divisions of a subsidiary of Baxter.

Donald W. Joseph, age 60, has been a group vice president of Healthcare and
World Trade since 1994. Between 1990 and 1994, Mr. Joseph was a vice president
of Baxter.
Jack L. McGinley, age 51, has been a group vice president of Healthcare
since 1994. Between 1992 and 1994, Mr. McGinley was a vice president of
Baxter. Mr. McGinley previously was president of a division of Healthcare, and
prior to that, he was president of the Japanese subsidiary of World Trade.
Michael A. Mussallem, age 45, has been a group vice president of Healthcare
since 1994. From 1993 to 1994, Mr. Mussallem was president of a division of
Healthcare, and prior to that, was president of another division of that
subsidiary.
Carlos del Salto, age 55, has been a senior vice president of World Trade
since 1996. From 1994 to 1996, Mr. del Salto was a corporate vice president of
World Trade. Between 1992 and 1994, Mr. del Salto was a vice president of
Baxter. Mr. del Salto previously was president--Latin
America/Switzerland/Austria of a subsidiary of Baxter, and prior to that, he
was vice president--Latin America of that subsidiary.
David F. Drohan, age 59, has been a corporate vice president of Healthcare
since 1996. Between 1991 and 1996, Mr. Drohan was president of a division of
Healthcare.
James M. Gatling, age 48, has been a corporate vice president of Healthcare
since 1996. Between 1991 and 1996, Mr. Gatling was a vice president of a
division of Healthcare.
J. Robert Hurley, age 48, has been a corporate vice president of World Trade
since 1993. Mr. Hurley previously was vice president of a division of World
Trade.
Roberto E. Perez, age 48, has been a corporate vice president of Healthcare
and World Trade since 1995. Between 1992 and 1995, Mr. Perez was president of
a division of a subsidiary of Baxter, and prior to that, was a vice president
of that division.
8
<PAGE>
(c) Compliance with Section 16(a) of the Securities Exchange Act of 1934.
Incorporated by reference from the Proxy Statement, page 16, section entitled
"Section 16(a) Beneficial Ownership Reporting Compliance."
-
--------------------------------------------------------------------------------
ITEM 11. EXECUTIVE COMPENSATION.
Incorporated by reference from the Proxy Statement, pages 6-10, sections
entitled "Compensation of Directors" and "Executive Compensation" and pages 14-
15, section entitled "Pension Plan, Excess Plans and Supplemental Plans."
-
--------------------------------------------------------------------------------
ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT.
Incorporated by reference from the Proxy Statement, pages 16-17, section
entitled "Ownership of Company Securities."
-

--------------------------------------------------------------------------------
ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS.
None.
-
--------------------------------------------------------------------------------
PART IV
-
--------------------------------------------------------------------------------
ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K.
The following documents are filed as a part of this report:
(a) Financial Statements Location
Financial Statements Required By Item 8 of This Form
Consolidated Balance Sheets Annual Report, page 27
Consolidated Statements of Income Annual Report, page 28
Consolidated Statements of Cash Flows Annual Report, page 29
Consolidated Statements of Stockholders' Equity Annual Report, page 30
Notes to Consolidated Financial Statements Annual Report, pages 31-
Report of Independent Accountants 46
Annual Report, page 26
Schedules Required By Article 12 of Regulation S-X
Report of Independent Accountants on Financial
Statement Schedule page 10
II Valuation and Qualifying Accounts page 11
All other schedules have been omitted because they are not applicable or
not required.
(b) Reports on Form 8-K
A report on Form 8-K, dated February 11, 1998, was filed with the SEC under
Item 5, Other Events, to file a press release disclosing Baxter's 1997
results.
(c) Exhibits required by Item 601 of Regulation S-K are listed in the Exhibit
Index, which is incorporated herein by reference. Exhibits in the Exhibit
Index marked with a "C" in the left margin constitute management contracts
or compensatory plans or arrangements contemplated by Item 14(a) of Form
10-K. The list of exhibits so designated is incorporated by reference in
this Part IV, Item 14.
9
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS ON THE FINANCIAL STATEMENT SCHEDULE
To the Board of Directors of
Our audits of the consolidated financial statements referred to in our report
dated February 5, 1998 appearing on page 26 of the 1997 Annual Report to
Stockholders of Baxter International Inc. (which report and consolidated
financial statements are incorporated by reference in the Annual Report on Form
10-K) also included an audit of the Financial Statement Schedule listed in Item
14(a) of this Form 10-K. In our opinion, this Financial Statement Schedule
presents fairly, in all material respects, the information set forth therein

when read in conjunction with the related consolidated financial statements.
PRICE WATERHOUSE LLP
Chicago, Illinois
February 5, 1998
10
<PAGE>
SCHEDULE II
-
--------------------------------------------------------------------------------
VALUATION AND QUALIFYING ACCOUNTS
(In millions)
<TABLE>
-
--------------------------------------------------------------------------------
--------
<CAPTION>
Additions
-----------------------
Balance at Charged to Charged to Deductions Balance
beginning costs and other from at end of
Description of period expenses accounts (A) reserves period
-
--------------------------------------------------------------------------------
--------
<S> <C> <C> <C> <C> <C>
<C> <C>
Year ended December 31,
1997:
Accounts receivable $24 $ 9 $(1) $(3) $29
-
--------------------------------------------------------------------------------
--------
1996:
Accounts receivable $22 $ 5 $(2) $(1) $24
-
--------------------------------------------------------------------------------
--------
1995:
Accounts receivable $21 $ 9 $ 1 $(9) $22
-
--------------------------------------------------------------------------------
--------
</TABLE>
(A) Valuation accounts of acquired or divested companies and foreign currency
translation adjustments.
11
<PAGE>
SIGNATURES
Pursuant to the requirements of section 13 or 15(d) of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

/s/ Vernon R. Loucks Jr.
By:____________________________________
Vernon R. Loucks Jr.
Chairman of the Board and
Chief Executive Officer
Date: March 17, 1998
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the date indicated.
(i) Principal Executive Officers:
(iv)A Majority of the Board of
Directors
/s/ Vernon R. Loucks Jr. Walter E. Boomer
Vernon R. Loucks Jr. Pei-yuan Chia
Director, Chairman of the Board John W. Colloton
and Chief Executive Officer Susan Crown
/s/ Harry M. Jansen Kraemer Jr. Mary Johnston Evans
Harry M. Jansen Kraemer Jr. Martha R. Ingram
President Harry M. Jansen Kraemer Jr.
(ii) Principal Financial Officer: Arnold J. Levine
/s/ Brian P. Anderson Georges C. St. Laurent, Jr.
Brian P. Anderson Monroe E. Trout, M.D.
Senior Vice President and Chief Reed V. Tuckson, M.D.
Financial Officer Fred L. Turner
/s/ Vernon R. Loucks Jr.
(iii) Controller: By: ____________________________________
/s/ Brian P. Anderson Vernon R. Loucks Jr.
Brian P. Anderson Director and Attorney-in-Fact
Senior Vice President and Chief
Accounting Officer
12
<PAGE>
-
--------------------------------------------------------------------------------
APPENDICES
<TABLE>
<CAPTION>
DESCRIPTION PAGE
- ----------- ----
<S> <C>
Computation of Ratio of Earnings to Fixed Charges (Exhibit 12) 16
Subsidiaries of the Company (Exhibit 21) 17
</TABLE>
-

--------------------------------------------------------------------------------
EXHIBITS FILED WITH SECURITIES AND EXCHANGE COMMISSION
<TABLE>
<CAPTION>
NUMBER AND DESCRIPTION OF EXHIBIT
---------------------------------
<C> <C> <S>
3. Certificate of Incorporation and Bylaws
3.1* Restated Certificate of Incorporation, filed as exhibit 3.1 to
the Company's annual report on Form 10-K for the year ended
December 31, 1992, file number 1-4448 (the "1992 Form 10-K").
3.2* Certificate of Designation of Series A Junior Participating
Preferred Stock, filed under the Securities Act of 1933 as
exhibit 4.3 to the Company's registration statement on Form S-
8 (No. 33-28428).
3.3 Amended and Restated Bylaws.
Instruments defining the rights of security holders, including
4. indentures
4.1* Indenture dated November 15, 1985 between the Company and
Bankers Trust Company, filed as exhibit 4.8 to the Company's
current report on Form 8-K dated December 16, 1985, file no.
1-4448.
4.2* Amended and Restated Indenture dated November 15, 1985 (the
"Indenture"), between the Company and Continental Illinois
National Bank and Trust Company of Chicago ("Continental"),
filed under the Securities Act of 1933 as exhibit 4.1 to the
Company's registration statement on Form S-3 (No. 33-1665).
4.3* First Supplemental Indenture to the Indenture between the
Company and Continental, filed under the Securities Act of
1933 as exhibit 4.1(A) to the Company's registration statement
on Form S-3 (No. 33-6746).
4.4* Supplemental Indenture dated as of January 29, 1997, between
the Company and First Trust National Association (as successor
to Continental), filed under the Securities Act of 1933 as
exhibit 4.1B to the Company's debt securities shelf
registration statement on Form S-3 (No. 333-19025) (the "1997
Shelf").
4.5* Fiscal and Paying Agency Agreement dated as of April 26, 1984,
among American Hospital Supply International Finance N.V., the
Company and The Toronto-Dominion Bank, as amended, filed as
exhibit 4.9 to the Company's annual report on Form 10-K for
the year ended December 31, 1985 (the "1985 Form 10-K").
4.6* Fiscal and Paying Agency Agreement dated as of November 15,
1984, between the Company and Citibank, N.A., as amended,
filed as exhibit 4.16 to the Company's annual report on Form
10-K for the year ended December 31, 1987, file no. 1-4448
(the "1987 Form 10-K").
4.7* Specimen 9 1/2% Note, filed as exhibit 4.3(a) to the Company's
current report on Form 8-K dated June 23, 1988, file no. 1-
4448.
current report on Form 8-K dated September 13, 1989, file
number 1-4448.
current report on Form 8-K dated December 7, 1989, file number
1-4448.
4.10* Specimen 7.125% Note, filed as exhibit 4.10 to the Company's
annual report on Form 10-K for the year ended December 31,
1996 (the "1996 Form 10-K").
4.11* Specimen 7.65% Debenture, filed as exhibit 4.11 to the 1996
Form 10-K.
</TABLE>

13
<PAGE>
<TABLE>
<C> <C> <S>
10. Material Contracts
C 10.1* Form of Indemnification Agreement entered into with directors
and officers, filed as exhibit 19.4 to the Company's quarterly
report on Form 10-Q for the quarter ended September 30, 1986,
file no. 1-4448.
C 10.2* 1988 Long-Term Incentive Plan, filed as exhibit 10.12 to the
1987 Form 10-K.
C 10.3* 1987-1989 Long-Term Performance Incentive Plan, filed as
exhibit 10.15 to the Company's annual report on Form 10-K for
the year ended December 31, 1986 (the "1986 Form 10-K").
C 10.4* 1989 Long-Term Incentive Plan, filed as exhibit 10.12 to the
Company's annual report on Form 10-K for the year ended
December 31, 1988, file no. 1-4448 (the "1988 Form
10-K").
C 10.5* Stock Option Plan Adopted July 25, 1988, filed as exhibit 10.13
to the 1988 Form
10-K.
C 10.6* 1991 Officer Incentive Compensation Plan, filed as exhibit
10.11 to the Company's annual report on Form 10-K for the year
ended December 31, 1990, file number 1-4448 (the "1990 Form 10-
K").
C 10.7* Baxter International Inc. and Subsidiaries Incentive Investment
Excess Plan, filed as exhibit 10.17 to the 1988 Form 10-K.
C 10.8* Baxter International Inc. and Subsidiaries Supplemental Pension
Plan, filed as exhibit 10.18 to the 1988 Form 10-K.
C 10.9* Limited Rights Plan, filed as exhibit 19.6 to the Company's
quarterly report on Form 10-Q for the quarter ended September
30, 1989, file no. 1-4448 (the "September, 1989 Form 10-Q").
C 10.10* Amendments to various plans regarding disability, filed as
exhibit 19.9 to the September, 1989 Form 10-Q.
C 10.11* Amendments to 1987-1989 Long-Term Performance Incentive Plan
and 1988 Long-Term Incentive Plan, filed as exhibit 19.10 to
the September, 1989 Form 10-Q.
C 10.12* 1987 Incentive Compensation Program, filed as exhibit C to the
Company's proxy statement for use in connection with its May
13, 1987, annual meeting of stockholders, file no. 1-4448.
10.13* Rights Agreement between the Company and The First National
Bank of Chicago, filed as exhibit 1 to a registration statement
on Form 8-A dated March 21, 1989, file no. 1-4448.
C 10.14* Amendment to 1987 Incentive Compensation Program, filed as
exhibit 19.1 to September, 1989 Form 10-Q.
C 10.15* Restricted Stock Grant Terms and Conditions, filed as exhibit
K").
C 10.16* Vernon R. Loucks Restricted Stock Grant Terms and Conditions,
filed as exhibit 10.26 to the 1991 Form 10-K.
C 10.17 Deferred Compensation Plan, amended and restated effective
January 1, 1998.
C 10.18* Restricted Stock Plan for Non-Employee Directors (as amended
and restated in 1992), filed as exhibit 10.28 to the 1992 Form
10-K.
C 10.19* Restricted Stock Grant Terms and Conditions (as amended), filed
as exhibit 10.31 to the 1992 Form 10-K.
10.29 to the 1992 Form 10-K.

10.30 to the 1992 Form 10-K.
K").
</TABLE>
14
<PAGE>
<TABLE>
<C> <C> <S>
C 10.23* Corporate Aviation Policy, filed as exhibit 10.33 to the 1992
Form 10-K.
C 10.24* Plan and Agreement of Reorganization between Baxter and
Caremark International Inc., filed as exhibit 10.34 to the 1992
Form 10-K.
C 10.25* 1994 Incentive Compensation Program, filed as exhibit A to the
Company's proxy statement for use in connection with its April
29, 1994 annual meeting of stockholders, file no. 1-4448.
C 10.26* 1994 Shared Investment Plan and Terms and Conditions, filed as
exhibit 10.1 to the Company's quarterly report on Form 10-Q for
the quarter ended June 30, 1994.
ended December 31, 1994 (the "1994 Form 10-K").
C 10.28* Baxter International Inc. Restricted Stock Plan for Non-
Employee Directors, as amended and restated effective May 8,
1995, filed as exhibit 10.32 to the 1994 Form 10-K.
ended December 31, 1995 (the "1995 Form 10-K").
C 10.30* 1995 Stock Option Grant Terms and Conditions, filed as exhibit
10.34 to the 1995 Form 10-K.
10.31* Reorganization Agreement between Baxter and Allegiance
Corporation, filed as exhibit 2 to the Form 10 registration
statement, file no. 1-11885, dated September 20, 1996.
C 10.32* Supplemental Pension Agreement: Jack L. McGinley, filed as
exhibit 10.32 to the 1996 Form 10-K.
C 10.33* November 1996 Stock Option Grant Terms and Conditions, filed as
exhibit 10.33 to the 1996 Form 10-K.
C 10.34* November 1996 Premium Price Stock Option Grant Terms and
Conditions, filed as exhibit 10.34 to the 1996 Form 10-K.
C 10.35* Officer Incentive Compensation Plan, filed as exhibit 10.35 to
the 1996 Form 10-K.
C 10.36 November 1997 Stock Option Grant Terms and Conditions.
C 10.37 1998 Incentive Compensation Program.
C 10.38 Long Term Incentive Plan.
12. Statements re: computation of ratios.
13. 1997 Annual Report to Stockholders (such report, except to the extent
incorporated herein by reference, is being furnished for the information
of the Securities and Exchange Commission only and is not deemed to be
filed as part of this annual report on Form 10-K).
21. Subsidiaries of the Company.
23. Consent of Price Waterhouse LLP.
24. Powers of Attorney.
27. Financial Data Schedule.
</TABLE>
- -------
*Incorporated herein by reference.
CExhibit contemplated by Item 14(a)(3) of Form 10-K.
(All other exhibits are inapplicable or not required.)

LOGO
Printed on Recycled Paper
15
<PAGE>
EXHIBIT 12
-
--------------------------------------------------------------------------------
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
(In millions, except
ratios) Year ended December 31
-
--------------------------------------------------------------------------------
-
1997 1997 1996 1995 1995 1994 1993 1993
-
--------------------------------------------------------------------------------
-
<S> <C> <C> <C> <C> <C> <C> <C> <C>
(C) (C) (C)
Income (loss) from
continuing operations
before income tax
expense (benefit) $523 $875 $793 $524 $741 $559 $(74) $472
-
--------------------------------------------------------------------------------
-
Add:
Interest costs 206 206 133 117 117 120 109 109
Estimated interest in
rentals (A) 29 29 27 29 29 31 31 31
-
--------------------------------------------------------------------------------
-
Fixed charges as defined 235 235 160 146 146 151 140 140
-
--------------------------------------------------------------------------------
-
Interest costs
capitalized (8) (8) (3) (3) (3) (2) (5)
(5)
Losses of less than
majority owned
affiliates, net of
dividends 0 0 8 10 10 18 27 27
-
--------------------------------------------------------------------------------
-
Income as adjusted $750 $1,102 $958 $677 $894 $726 $ 88 $634
-
--------------------------------------------------------------------------------
-
Ratio of earnings to
fixed charges 3.19 4.69 5.99 4.64 6.12 4.80 (B) 4.53
-
--------------------------------------------------------------------------------
-
</TABLE>

(A) Represents the estimated interest portion of rents.
(B) As a result of the loss incurred during this period, the Company's earnings
did not cover the indicated fixed charges. The earnings required to attain
a ratio of one-to-one are $52 million.
(C) Included in this exhibit are supplemental presentations of the ratio of
earnings to fixed charges which exclude the following significant unusual
charges:
1993: $216 million restructuring charge and $330 million net litigation
charge.
1995: $103 million restructuring charge, $96 million net litigation charge
and $18 million in-process research and development charge.
1997: $352 million in-process research and development charge.
16
<PAGE>
EXHIBIT 21
-
--------------------------------------------------------------------------------
SUBSIDIARIES OF THE COMPANY, AS OF MARCH 13, 1998
<TABLE>
<CAPTION>
Organized % owned by
under immediate
Subsidiary laws of parent (1) (2)
-
-------------------------------------------------------------------------------
<S> <C> <C>
Baxter International Inc......................... Delaware
Baxter Research Medical Inc..................... Utah 100
Baxter Healthcare Corporation................... Delaware 100
Nextran Inc.................................. Delaware 100
Renal Management Strategies Inc.............. Delaware 91
Baxter World Trade Corporation.................. Delaware 100
Baxter Foreign Sales Corporation............. Barbados 100
Baxter Export Corporation.................... Nevada 100
Baxter, S.A.................................. Belgium 98.44(3)
Baxter S.A................................. France 64.57(3)
Baxter Deutschland GmbH...................... Germany 100
Baxter SpA................................... Italy 98.98(3)
Baxter Pharmacy Services Corporation......... Delaware 100(4)
Baxter Sales and Distribution Corp......... Delaware 100
Baxter Healthcare Corporation of Puerto
Rico...................................... Alaska 100
Baxter Healthcare (Holdings) Limited......... United Kingdom 99.99(3)
Baxter Healthcare Limited.................. United Kingdom 99.99(3)
Baxter Healthcare S.A........................ Panama 100
Baxter Healthcare Pte. Ltd................... Singapore 100
Baxter World Trade S.A..................... Belgium 49.29(3)
Baxter Limited............................... Japan 100
Baxter Healthcare Pty. Ltd................... Australia 99.99(3)
Baxter Edwards AG............................ Switzerland 100(1)
Baxter S.A. de C.V........................... Mexico 99.9(3)
Laboratorios Baxter S.A. (Colombia).......... Delaware 100
Baxter Corporation........................... Canada 100
Baxter Biotech Worldwide Ltd.................... Delaware 100
Baxter Biotech Holding AG.................... Switzerland 100
Immuno International AG.................... Switzerland 100
Immuno--U.S., Inc........................ Michigan 100
Immuno AG................................ Austria 100(3)
</TABLE>
-

--------------------------------------------------------------------------------
Subsidiaries omitted from this list, considered in aggregate as a single
subsidiary, would not constitute a significant subsidiary.
* * * * *
(1) Including director's qualifying and other nominee shares.
(2) All subsidiaries set forth herein are reported in the Company's financial
statements through consolidations or under the equity method of accounting.
(3) Remaining shares owned by the Company, its subsidiaries or employees.
(4) Of common stock, with preferred stock held by Baxter Healthcare
Corporation.
17
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-3.3
<SEQUENCE>2
<DESCRIPTION>AMENDED & RESTATED BYLAWS
<TEXT>
<PAGE>
EXHIBIT 3.3
-----------
Amended and Restated March 17, 1998
BAXTER INTERNATIONAL INC.
BYLAWS
ARTICLE I
STOCKHOLDERS
SECTION l. PLACE OF HOLDING MEETINGS. All meetings of the stockholders shall be
held at the office of the Corporation in Deerfield, Illinois, or such other
place as shall be determined by the Board of Directors.
SECTION 2. ELECTION OF DIRECTORS.
(a) The annual meeting of stockholders for the election of directors
and the transaction of other business shall be held at such time and date as
shall be determined by the Board of Directors.
(b) Only persons who are nominated in accordance with the following
procedures shall be eligible for election as directors of the Corporation,
except as may be otherwise provided in the Certificate of Incorporation of the
Corporation with respect to the right of holders of preferred stock of the
Corporation to nominate and elect a specified number of directors in certain
circumstances. Nominations of persons for election to the Board of Directors
may be made at any annual meeting of stockholders, or at any special meeting of
stockholders called for the purpose of electing directors, (i) by or at the
direction of the Board of Directors (or any duly authorized committee thereof)
or (ii) by any stockholder of the Corporation (A) who is a stockholder of record
on the date of the giving of the notice provided for in this Section 2 and on
the record date for the determination of stockholders entitled to vote at such
meeting and (B) who complies with the notice procedures set forth in this
Section 2.
(c) In addition to any other applicable requirements, for a nomination

to be made by a stockholder, such stockholder must have given timely notice
thereof in proper written form to the Corporate Secretary of the Corporation.
(d) To be timely, a stockholder's notice to the Corporate Secretary
must be delivered to or mailed and received at the principal executive offices
of the Corporation (i) in the case of an annual meeting, not less than sixty
(60) days nor more than ninety (90) days prior to the anniversary date of the
immediately preceding annual meeting of stockholders; provided, however, that in
the event that the annual meeting is called for a date that is not within thirty
(30) days before or after such anniversary date, notice by the stockholder in
order to be timely must be so received not later than the close of business on
the tenth (10th) day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure of the date of
<PAGE>
the annual meeting was made, whichever occurs first, and (ii) in the case of a
special meeting of stockholders called for the purpose of electing directors,
not later than the close of business on the tenth (10th) day following the day
on which notice of the date of the special meeting was mailed or public
disclosure of the date of the special meeting was made, whichever occurs first.
(e) To be in proper written form, a stockholder's notice to the
Corporate Secretary must set forth (i) as to each person whom the stockholder
proposes to nominate for election as a director (A) the name, age, business
address and residence address of the person, (B) the principal occupation or
employment of the person, (C) the class or series and number of shares of
capital stock of the Corporation which are owned beneficially or of record by
the person and (D) any other information relating to the person that would be
required to be disclosed in a proxy statement or other filings required to be
made in connection with solicitations of proxies for election of directors
pursuant to Section 14 of the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), and the rules and regulations promulgated thereunder; and (ii)
as to the stockholder giving the notice (A) the name and record address of such
stockholder, (B) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(C) a description of all arrangements or understandings between such stockholder
and each proposed nominee and any other person or persons (including their
names) pursuant to which the nomination(s) are to be made by such stockholder,
(D) a representation that such stockholder intends to appear in person or by
proxy at the meeting to nominate the persons named in its notice and (E) any
other information relating to such stockholder that would be required to be
disclosed in a proxy statement or other filings required to be made in
connection with solicitations of proxies for election of directors pursuant to
Section 14 of the Exchange Act and the rules and regulations promulgated
thereunder. Such notice must be accompanied by a written consent of each
proposed nominee to being named as a nominee and to serve as a director if
elected.
(f) No person shall be eligible for election as a director of the
Corporation, at any annual meeting of stockholders or at any special meeting of
stockholders called for the purpose of electing directors, unless nominated in
accordance with the procedures set forth in this Section 2. If the chairman of
the meeting determines that a nomination was not made in accordance with the
foregoing procedures, the chairman shall declare to the meeting that the
nomination was defective and such defective nomination shall be disregarded.
SECTION 3. VOTING. Each stockholder entitled to vote in accordance with the
terms of the Certificate of Incorporation, these Bylaws or Delaware law shall,
unless the Certificate of Incorporation or Delaware law otherwise provides, be
entitled to one vote, in person or by proxy, for each share of stock entitled to
vote held by such stockholder, but no proxy shall be voted after three years
from its date unless such proxy provides for a longer period. The vote for
directors, and upon the demand of any stockholder, the vote upon any question
before the meeting, shall be by ballot. Except for the election of directors,

which shall be decided by a plurality of the shares present in person or
represented by proxy at the meeting and entitled to vote thereat, all matters
shall be decided by the affirmative vote of a majority of shares present in
person or represented by proxy at any meeting duly called and entitled to vote
thereat, except as otherwise provided by the Certificate of Incorporation or
Delaware law.
Page 2
<PAGE>
The Corporate Secretary shall prepare and make, at least ten days before each
meeting of stockholders, a complete list of the stockholders entitled to vote at
the meeting, arranged in alphabetical order, and showing the address of each
stockholder and the number of shares registered in the name of each stockholder.
Such list shall be open to the examination of any stockholder, for any purpose
germane to the meeting, during ordinary business hours, for a period of at least
ten days prior to the meeting, either at a place within the city where the
meeting is to be held, which place shall be specified in the notice of meeting,
or, if not so specified, at the place where the meeting is to be held. The list
shall also be produced and kept at the time and place of the meeting during the
whole time thereof and may be inspected by any stockholder who is present.
SECTION 4. QUORUM. Except as provided in the next section hereof, any number of
stockholders together holding a majority of the stock issued and outstanding and
entitled to vote thereat, who shall be present in person or represented by proxy
at any meeting duly called, shall constitute a quorum for the transaction of
business.
SECTION 5. ADJOURNMENT OF MEETINGS. If less than a quorum shall be in
attendance at any time for which the meeting shall have been called, the meeting
may, after the lapse of at least half an hour, be adjourned from time to time by
a majority of the stockholders present or represented and entitled to vote
thereat. If notice of such adjourned meeting is sent to the stockholders
entitled by statute to receive the same, and such notice contains a statement of
the purpose of the meeting, that the previous meeting failed for lack of a
quorum, and that under the provisions of this Section it is proposed to hold the
adjourned meeting with a quorum of those present, then any number of
stockholders, in person or by proxy, shall constitute a quorum at such meeting
unless otherwise provided by statute.
SECTION 6. SPECIAL MEETINGS: HOW CALLED. Special meetings of the stockholders
for any purpose or purposes may be called only (a) by the Chairman of the Board,
the Chief Executive Officer or the Corporate Secretary, and shall be called by
the Chairman of the Board, the Chief Executive Officer or the Corporate
Secretary upon a request in writing therefor, stating the purpose or purposes
thereof, delivered to the Chairman of the Board, the Chief Executive Officer or
the Corporate Secretary, signed by a majority of the directors or (b) by
resolution of the directors.
SECTION 7. NOTICE OF STOCKHOLDERS' MEETINGS. Written or printed notice stating
the time and place of regular or special meetings of the stockholders and the
general nature of the business to be considered shall be mailed by the Corporate
Secretary, or such other officer as the Board of Directors may designate, to
each stockholder entitled to vote thereat at such stockholder's address as it
appears on the records of the Corporation, at least twenty (20) days but not
more than sixty (60) days before the date of such meeting.
SECTION 8. CONDUCT OF THE MEETINGS.
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(a) The chairman of the meeting shall have absolute authority over
matters of procedure and there shall be no appeal from the ruling of the

chairman. If the chairman, in his or her absolute discretion, deems it
advisable to dispense with the rules of parliamentary procedure as to any one
meeting of stockholders or part thereof, the chairman shall so state and shall
clearly state the rules under which the meeting or appropriate part thereof
shall be conducted.
(b) If disorder should arise which prevents continuation of the
legitimate business of the meeting, the chairman may quit the chair and announce
the adjournment of the meeting; and upon his or her doing so, the meeting is
immediately adjourned.
(c) The chairman may ask or require that anyone not a bona fide
stockholder or proxy leave the meeting.
(d) A resolution or motion shall be considered for vote only if (i)
proposed by a stockholder or duly authorized proxy, and seconded by an
individual, who is a stockholder or a duly authorized proxy, other than the
individual who proposed the resolution and (ii) all other requirements under
law, the Corporation's Certificate of Incorporation, these Bylaws or otherwise,
for consideration of such a resolution or motion have been duly satisfied as
determined by the chairman in his or her absolute discretion, from which there
shall be no appeal.
SECTION 9. ANNUAL MEETINGS.
(a) No business may be transacted at an annual meeting of
stockholders, other than business that is either (i) specified in the notice of
meeting (or any supplement thereto) given by or at the direction of the Board of
Directors (or any duly authorized committee thereof), (ii) otherwise properly
brought before the annual meeting by or at the direction of the Board of
Directors (or any duly authorized committee thereof) or (iii) otherwise properly
brought before the annual meeting by any stockholder of the Corporation (A) who
is a stockholder of record on the date of the giving of the notice provided for
in this Section 9 and on the record date for the determination of stockholders
entitled to vote at such annual meeting and (B) who complies with the notice
procedures set forth in this Section 9.
(b) In addition to any other applicable requirements, for business to
be properly brought before an annual meeting by a stockholder, such stockholder
must have given timely notice thereof in proper written form to the Corporate
Secretary of the Corporation, which notice is not withdrawn by such stockholder
at or prior to such annual meeting.
(c) To be timely, a stockholder's notice to the Corporate Secretary
must be delivered to or mailed and received at the principal executive offices
of the Corporation not less than sixty (60) days nor more than ninety (90) days
prior to the anniversary date of the immediately preceding annual meeting of
stockholders; provided, however, that in the event that the annual meeting is
called for a date that is not within thirty (30) days before or after such
anniversary date, notice by the stockholder in order to be timely must be so
received not later than the close of business on the tenth (10th) day following
the day on which such notice of the date of
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the annual meeting was mailed or such public disclosure of the date of the
annual meeting was made, whichever occurs first.
(d) To be in proper written form, a stockholder's notice to the
Corporate Secretary must set forth as to each matter such stockholder proposes
to bring before the annual meeting (i) a brief description of the business
desired to be brought before the annual meeting and the reasons for conducting
such business at the annual meeting, (ii) the name and record address of such

stockholder, (iii) the class or series and number of shares of capital stock of
the Corporation which are owned beneficially or of record by such stockholder,
(iv) a description of all arrangements or understandings between such
stockholder and any other person or persons (including their names) in
connection with the proposal of such business by such stockholder and any
material interest of such stockholder in such business and (v) a representation
that such stockholder intends to appear in person or by proxy at the annual
meeting to bring such business before the meeting.
(e) No business shall be conducted at the annual meeting of
stockholders except business brought before the annual meeting in accordance
with the procedures set forth in this Section 9, provided, however, that, once
business has been properly brought before the annual meeting in accordance with
such procedures, nothing in this Section 9 shall be deemed to preclude
discussion by any stockholder of any such business. If the chairman of the
annual meeting determines that business was not properly brought before the
annual meeting in accordance with the foregoing procedures, the chairman shall
declare to the meeting that the business was not properly brought before the
meeting and such business shall not be transacted.
ARTICLE II
DIRECTORS
SECTION 1. QUALIFICATION AND QUORUM. No person shall be eligible for election
or appointment as a director who, at the time of his election or appointment is
72 years old, or older, provided, however, that this provision shall not be
applicable to persons who have been elected or appointed as directors prior to
the 1978 annual meeting of the stockholders.
One-third of the total number of directors (rounded upwards, if necessary, to
the next whole number) shall constitute a quorum for the transaction of business
at any meeting of the Board of Directors. If at any meeting of the Board of
Directors there shall be less than a quorum present, a majority of those present
may adjourn the meeting from time to time until a quorum is obtained, and no
further notice thereof need to be given other than by announcement at said
meeting which shall be so adjourned. The Board of Directors may also transact
business without a meeting if all members of the Board of Directors consent
thereto in writing.
SECTION 2. FIRST MEETING. The newly elected directors may hold their first
meeting for the purpose of organization and the transaction of business if a
quorum be present, immediately after the annual meeting of the stockholders; or
the time and place of such meeting may be fixed by consent in writing of all the
directors.
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SECTION 3. ELECTION OF OFFICERS. At the first meeting or at any subsequent
meeting called for the purpose, the directors shall elect a Chairman of the
Board from their number, and a Chief Executive Officer, a President, one or more
Executive Vice Presidents, one or more Senior Vice Presidents, one or more Group
Vice Presidents, one or more Vice Presidents, a Treasurer, a Corporate
Secretary, and one or more Assistant Corporate Secretaries, who need not be
directors. Such officers shall hold office until the next annual election of
officers, and until their successors are elected and qualified.
SECTION 4. SPECIAL MEETINGS: HOW CALLED: NOTICE. Special meetings of the Board
of Directors may be called by the Chairman of the Board, the Chief Executive
Officer, the President or the Corporate Secretary on the written request of any
two directors on twenty-four (24) hours notice to each director. Such notice,
which need not specify the purpose of the meeting or the matters to be

considered thereat, may be given as provided in Article VIII, personally
(including by telephone) or by telegram or other written communication delivered
to the residence or office of the director. Such personal notice or written
communication shall be effective when delivered.
SECTION 5. PLACE OF MEETING. The directors may hold their meetings and have one
or more offices, and keep the books of the Corporation, outside the State of
Delaware, at any office or offices of the Corporation, or at any place as they
may from time to time by resolution determine.
SECTION 6. GENERAL POWERS OF DIRECTORS. The Board of Directors shall have the
management of the business of the Corporation, and subject to the restrictions
imposed by law, by the Certificate of Incorporation, or by these Bylaws, may
exercise all the powers of the Corporation, including any powers incidental
thereto.
SECTION 7. COMPENSATION OF DIRECTORS. Directors shall not receive any stated
salary for their services as directors, but by resolution of the Board of
Directors a fixed fee may be paid together with expenses for attendance at
meetings. Nothing herein contained shall be construed to preclude any director
from serving the Corporation in any other capacity as an officer, agent or
otherwise, and receiving compensation therefor.
ARTICLE III
COMMITTEES
SECTION 1. The Board of Directors shall create an Executive Committee, an Audit
Committee, a Compensation Committee, a Finance Committee, a Planning and
Organization
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Committee, and a Public Policy Committee, and may create such other committees
as the Board of Directors, from time to time, deems desirable. Each committee
shall consist of three or more of the directors of the Corporation and, to the
extent provided in the resolutions creating the committees or in these Bylaws,
shall have the powers of the Board of Directors in the management of the
business and affairs of the Corporation.
SECTION 2. A majority of the Executive Committee shall consist of directors who
are independent of management and free from any relationships that, in the
opinion of the Board of Directors, would interfere with their exercise of
independent judgment as a committee member. The Policy Statement on audit
committees issued by the New York Stock Exchange shall be applicable in
determining which directors are "independent" for this purpose.
The Executive Committee shall have all the powers and authority of the Board of
Directors, including the authority to declare a regular quarterly dividend, to
authorize the issuance of stock and other securities and to adopt a Certificate
of Ownership and Merger under Delaware law, provided that the Executive
Committee shall not, in any event, have authority to amend the Certificate of
Incorporation, to adopt any agreement of merger or consolidation involving the
Corporation as a merging or consolidating party, to recommend to the
stockholders the sale, lease or exchange of all or substantially all of the
Corporation's property and assets, to recommend to the stockholders a
dissolution of the Corporation or a revocation of a dissolution, to amend the
Bylaws of the Corporation or to declare a dividend other than a regular
quarterly dividend.
SECTION 3. The Audit Committee shall consist solely of directors who are
independent of management as defined in Section 2.

The Audit Committee shall assist the Board of Directors in fulfilling its
responsibilities for the Corporation's accounting and financial reporting
practices and provide a channel of communication between the Board of Directors
and the Corporation's independent auditors.
To accomplish the above purposes, the Audit Committee shall:
(a) Review with the independent auditors the scope of their annual and
interim examinations, placing particular attention where either the committee or
the auditors believe such attention should be directed, and to direct the
auditors to expand (but not to limit) the scope of their audit whenever such
action is, in the opinion of the committee, necessary or desirable. The
independent auditors shall have sole authority to determine the scope of the
audit which they deem necessary for the formation of an opinion on financial
statements.
(b) Consult with the auditors during any annual or interim audit on
any situation which the auditors deem advisable for resolution prior to the
completion of their examination.
(c) Meet with the auditors to appraise the effectiveness of the audit
effort. Such appraisal shall include a discussion of the overall approach to
and the scope of the examination, with particular attention on those areas on
which either the Audit Committee or the auditors believe emphasis is necessary
or desirable.
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(d) Determine through discussions with the auditors and otherwise,
that no restrictions were placed by management on the scope of the examination
or its implementation.
(e) Inquire into the effectiveness of the Corporation's accounting and
internal control functions through discussions with the auditors and appropriate
officers of the Corporation and exercise supervision of the Corporation's
policies which prohibit improper or illegal payments.
(f) Review with the auditors and management any registration statement
which shall be filed by the Corporation in connection with the public offering
of securities and such other public financial reports as the committee or the
Board of Directors shall deem desirable.
(g) Report to the Board of Directors on the results of the Audit
Committee's activities and recommend to the Board of Directors any changes in
the appointment of independent auditors which the Audit Committee may deem to be
in the best interests of the Corporation and its stockholders.
(h) Have such other powers and perform such other duties as the Board
of Directors shall, from time to time, grant and assign to it.
SECTION 4. The Compensation Committee shall consist solely of directors who are
independent of management, as defined in Section 2.
The Compensation Committee shall (a) determine the salaries of officers, other
than the Chairman of the Board, the Chief Executive Officer and the President
and advise the Board of Directors of such determination, (b) exercise the
authority of the Board of Directors concerning benefit plans, including those
plans which are limited in their application to officers and senior management,
(c) serve as the administration committee of the Corporation's stock option
plans, (d) make recommendations to the Board of Directors concerning the
salaries of the Chairman of the Board, the Chief Executive Officer and the
President, (e) advise the Board of Directors and the Chief Executive Officer on

other compensation and benefit matters and (f) perform such other duties as
shall be requested by the and Chief Executive Officer or designated by Board of
Directors resolution or specific benefit plans.
SECTION 5. A majority of the Finance Committee shall consist of directors who
are independent of management as defined in Section 2.
The Finance Committee shall exercise the power and authority of the Board of
Directors, and assist the Board of Directors in fulfilling its responsibilities,
in connection with the financial affairs of the Corporation, as follows:
The Finance Committee shall:
(a) have the authority to approve, without further action by the Board
of Directors: (i) financing proposals, including loans and securities offerings
involving not more than
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$100 million, and matters relating thereto, and (ii) proposed capital
expenditures, acquisitions, divestitures, partnerships, strategic alliances
involving the purchase or sale of a security, and other similar transactions
involving a commitment by the Corporation of more than $10 million, but not more
than $50 million (including the issue of the Corporation's common stock in
connection with such transactions); and
(b) review the following and, when appropriate, report or make
recommendations to the Board of Directors: (i) quarterly and extraordinary
dividend proposals, (ii) financing proposals involving more than $100 million,
(iii) results of the management of pension assets and the reasonableness of the
major actuarial assumptions which impact the funding of the pension benefits,
(iv) proposed capital expenditures, acquisitions, divestitures, partnerships,
strategic alliances involving the purchase or sale of a security, and other
similar transactions involving a commitment by the Corporation of more than $50
million, and (v) the risk management program of the Corporation; and
(c) exercise such other authority and duties as the Board of
Directors may from time to time delegate to it.
SECTION 6. The Planning and Organization Committee shall consist solely of
directors who are independent of management, as defined in Section 2.
The Planning and Organization Committee shall assist and advise the Board of
Directors in connection with Board of Directors membership, Board of Directors
committee structure and membership and general organization and planning
matters. To accomplish these purposes, the Planning and Organization Committee
shall:
(a) Develop general criteria for use in selecting potential new Board
of Directors members and assist the Board of Directors in identifying and
attracting qualified candidates for election to the Board of Directors;
(b) Recommend to the Board of Directors annually a slate of nominees
to be proposed by the Board of Directors to the stockholders as nominees for
election as directors and, from time to time, recommend persons to fill any
vacancy on the Board of Directors;
(c) Recommend to the Board of Directors any changes in number,
authority and duties of Board of Directors committees and the chairmen and
members who should serve thereon;
(d) Advise the Board of Directors and the Chief Executive Officer on
major organization matters and issues relating to the organization structure of

the Corporation, as well as management succession plans;
(e) In the event of the death, incapacity, resignation or other
absence (temporary or permanent) of the Chief Executive Officer, the Planning
and Organization Committee shall confer and recommend for election by the full
Board of Directors an acting or successor Chief Executive Officer;
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(f) Make recommendations to the Board of Directors concerning fees
payable for Board of Directors membership, as well as retirement and other
benefits available to Board of Directors members;
(g) Exercise the authority of the Board of Directors concerning
policies relating to service by directors and employees on other unrelated Board
of Directors of directors; and
(h) Have such other duties and authority as shall be assigned or
granted to it from time to time by the Chief Executive Officer or the Board of
Directors.
SECTION 7. The Public Policy Committee shall consist of directors of the
Corporation, a majority of whom are independent of management, as defined in
Section 2.
The Public Policy Committee shall review the policies and practices of the
Corporation to assure that they are consistent with its social responsibility to
employees, to customers, and to society. It is anticipated that emphasis will
include the following areas:
(a) the health and safety of employees and consumers;
(b) the fulfillment of the company's responsibilities to women,
racial minorities, and disadvantaged persons;
(c) the physical and social environment;
(d) contributions to educational, health, cultural, and other social
institutions;
(e) community actions where it is necessary to close or move a
business unit or significantly reduce employment;
(f) the ethical standards of the Corporation; and
(g) other duties and authority as shall be assigned or granted to it
from time to time by the Chief Executive Officer or the Board of Directors.
SECTION 8. The following provisions shall apply to all committees of the Board
of Directors:
(a) Any power or authority granted to a committee by these bylaws may
also be exercised by the Board of Directors or the Executive Committee.
(b) Each member of a committee shall hold office until the next
regular annual meeting of the Board of Directors following his designation and
until his successor is designated as a member of a committee, or until the
committee is dissolved by a majority of the whole Board of Directors or the
member is removed as hereinafter provided.
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(c) Meetings of a committee may be called by any member thereof, the
Chairman of the Board, the Chief Executive Officer, the President, the Corporate
Secretary, or any Assistant Corporate Secretary upon twenty-four (24) hours
notice to each member stating the place, date, and hour of the meeting, which
notice may be written or oral. If mailed, the notice shall be deemed to be
delivered when deposited in the United States mail, addressed to the member of
the committee at his or her business address, provided it is mailed four (4)
days prior to the meeting. Any member of a committee may waive notice of any
meeting and no notice of any meeting need be given to any member thereof who
attends in person. The notice of a meeting of a committee need not state the
business proposed to be transacted at the meeting.
(d) The lesser of a majority of the members or two members of a
committee shall constitute a quorum for the transaction of business at any
meeting thereof and action of a committee must be authorized by the affirmative
vote of a majority of the members present at a meeting at which a quorum is
present.
(e) Any action that may be taken by a committee at a meeting may be
taken without a meeting if a consent in writing, setting forth the action so to
be taken, shall be signed by all of the members of a committee and filed with
the minutes of the committee, which action shall be effective as of the date
stated in such consent.
(f) Any vacancy on a committee may be filled by a resolution adopted
by a majority of the Board of Directors.
(g) Any member of a committee may be removed at any time with or
without cause by resolution adopted by a majority of the Board of Directors.
(h) The chairman of the committee shall, if present, preside at all
meetings of a committee. A committee may fix its own rules of procedure which
shall not be inconsistent with these Bylaws. Each committee shall keep regular
minutes of its proceedings and report its proceedings at the next meeting of the
Board of Directors.
(i) The Chairman of the Board, Chief Executive Officer and the
President shall act in an advisory capacity to all committees other than the
Executive Committee.
ARTICLE IV
OFFICERS
SECTION 1. The officers of the Corporation shall include, when and if
designated by the Board of Directors, a Senior Chairman, a Chairman of the
Board, a Chief Executive Officer, a President, one or more Executive Vice
Presidents, one or more Senior Vice Presidents, one or more Group Vice
Presidents, one or more Vice Presidents, a Corporate Secretary, one or more
Assistant Corporate Secretaries, a Treasurer, and such other officers as may
from time to time be elected or appointed by the Board of Directors. Any one
person may hold any number of offices of the Corporation unless specifically
prohibited therefrom by law.
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SECTION 2. SENIOR CHAIRMAN. The Senior Chairman shall, in the absence of the
Chairman of the Board, the Chief Executive Officer and the President, preside at
all meetings of the stockholders and the Board of Directors. In addition, the
Senior Chairman shall advise the Chief Executive Officer and the President on
matters of long and short term strategic planning, policy and other major
matters affecting the Corporation and shall have such duties, authority and
responsibilities as the Chief Executive Officer, the President or the Board of
Directors shall designate from time to time.

SECTION 3. CHAIRMAN OF THE BOARD. The Chairman of the Board, if any, shall be
an officer of the Corporation and, subject to the direction of the Board of
Directors, shall perform such executive, supervisory and management functions
and duties as may be assigned to him or her from time to time by the Board of
Directors. The Chairman of the Board shall, when present, preside at all
meetings of the stockholders and of the Board of Directors. He or she shall act
as spokesman for the Board of Directors and as a liaison between the Board of
Directors and the Corporation. The Chairman of the Board shall perform all
other duties commonly incident to this office and shall also perform such other
duties and have such other powers as the Board of Directors shall designate from
time to time.
SECTION 4. CHIEF EXECUTIVE OFFICER. The Chief Executive Officer shall have
responsibility for the management of the Corporation, including the general
supervision and control of all the business and affairs of the Corporation, and
shall have such other powers and duties as may be assigned to him or her from
time to time by the Board of Directors. The Chief Executive Officer shall, in
the absence of the Chairman of the Board, preside at all meetings of the
stockholders and of the Board of Directors. The Chief Executive Officer shall
participate in long range planning for the Corporation. He or she may sign
shares of the Corporation, any deeds, mortgages, bonds, contracts or other
instruments which the Board of Directors has authorized to be executed, or which
are in the ordinary course of business of the Corporation. The Chief Executive
Officer may vote, either in person or by proxy, all the shares of the capital
stock of any company which the Corporation owns or is otherwise entitled to vote
at any and all meetings of the stockholders of such company and shall have the
power to accept or waive notice of such meetings. The Chief Executive Officer
shall perform other duties commonly incident to this office and shall also
perform such other duties and have such other powers as the Board of Directors
shall designate from time to time.
SECTION 5. PRESIDENT. The President shall have such duties and authority as the
Chief Executive Officer may determine from time to time. In the absence or
disability of the Chief Executive Officer, the President shall exercise all
powers and discharge all of the duties of the Chief Executive Officer, including
the general supervision and control of all the business and affairs of the
Corporation. The President shall, in the absence of the Chairman of the Board
and the Chief Executive Officer, preside at all meetings of stockholders and the
Board of Directors. The President may sign any deeds, mortgages, bonds,
contracts or other instruments which the Board of Directors has authorized to be
executed or which are in the ordinary course of business of the Corporation.
The President may vote, either in person or by proxy, all the shares of the
capital
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stock of any company which the Corporation owns or is otherwise entitled
to vote at any and all meetings of the stockholders of such company and shall
have the power to accept or waive notice of such meetings. The President shall
perform all other duties commonly incident to this office and shall also perform
such other duties and have such powers as the Chief Executive Officer shall
designate from time to time.
SECTION 6. VICE PRESIDENT. In the absence or disability of the Chief Executive
Officer and the President, the functions of the Chief Executive Officer shall be
performed by the Executive Vice President who was first elected to that office
and who is not then absent or disabled, or, if none, the Senior Vice President
who was first elected to that office and who is not then absent or disabled, or,
if none, the Group Vice President who was first elected to that office and who
is not then absent or disabled, or, if none, the Vice President who was first
elected to that office and who is not then absent or disabled. Each Executive
Vice President, Senior Vice President, Group Vice President and Vice President

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