As filed with the Securities and Exchange Commission on November 8, 2002.
Registration No. 333-_________
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SECURITIES AND EXCHANGE COMMISSION
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Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
BAXTER INTERNATIONAL INC.
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(Exact name of registrant as specified in its charter)
Delaware 36-0781620
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
One Baxter Parkway
Deerfield, Illinois 60015
(847) 948-2000
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(Address, including zip code of registrant's principal executive offices)
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J. Patrick Fitzsimmons
Senior Counsel
Baxter International Inc.
One Baxter Parkway
Deerfield, Illinois 60015
(847) 948-2000
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(Name, address, and telephone number,
including area code, of agent for service)
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
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From time to time after the effective date of this Registration Statement
as determined in light of market conditions and other factors.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [_]
If any of the securities registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
The prospectus included in this Registration Statement is a combined
prospectus relating also to all the debt securities previously registered
pursuant to the Registration Statement on Form S-3 (No. 333-82988), of which
$500,000,000 remain available for future sale, and as to which, pursuant to Rule
429 under the Securities Act of 1933, a separate post-effective amendment will
not be filed. A filing fee has previously been paid as to these debt securities.
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
====================================================================================================
TITLE OF EACH PROPOSED PROPOSED MAXIMUM PROPOSED AMOUNT
CLASS OF AMOUNT TO BE MAXIMUM OFFERING AGGREGATE OF REGIST-
SECURITIES TO BE REGISTERED PRICE(1) OFFERING RATION
REGISTERED PRICE(1) FEE(3)
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Common Stock, $1 par value (2)
(together with the associated
Preferred Stock Purchase Rights,
traded with the Common Stock) (2)
Preferred Stock (2)
Stock or Debt Warrants (2)
Convertible Preferred Stock (2)
Convertible Debt Securities (2)
Equity Purchase Contracts (2)
Equity Purchase Units (2)
Debt Securities $2,000,000,000 100% $2,000,000,000(4) $184,000(5)
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(1) Estimated solely for purposes of calculating the registration fee, and
exclusive of any dividends thereon or accrued interest thereon, if any.
(2) Registered hereunder are an indeterminate number of shares of common
stock, $1 par value per share, an indeterminate amount and number of
shares of preferred stock or convertible preferred stock or convertible
debt securities as may be sold from time to time, an indeterminate amount
and number of equity purchase contracts as may be sold from time to time,
an indeterminate amount and number of equity purchase units as may be
sold from time to time, an indeterminate amount and number of debt or
stock warrants as may be sold from time to time, and an indeterminate
amount and number of other securities as may be sold from time to time
(collectively the "offered securities"), all as may be sold from time to
time by the Registrant, including all such shares as may be issued upon
conversion of, or exchange for, any securities being registered hereunder
that provide for conversion or exchange into any other offered security.
(3) The registration fee has been calculated in accordance with Rule 457(o)
under the Securities Act of 1933 in respect of the up to $2,000,000,000
aggregate offering price of securities registered hereunder. An
additional aggregate registration fee of $92,000 was paid by the
Registrant in connection with an aggregate of $1,000,000,000 principal
amount of securities filed March 29, 2002, pursuant to its
Registration Statement on Form S-3 (No. 333-82988) (of which $500,000,000
remains available for future sale).
(4) Prospectuses included herein relate to $2,500,000,000 of offered
securities. Such amount represents the principal amount of any debt
securities or convertible debt securities issued at their principal
amount, the issue price rather than the principal amount of any debt
securities or convertible debt securities issued at an original issue
discount, the liquidation preference of any preferred stock, the amount
computed pursuant to Rule 457(c) for any common stock, the issue price of
any warrants, the exercise price of any offered securities issuable upon
the exercise of any warrants and the initial public offering price of any
preferred or convertible preferred stock. An indeterminate amount and/or
number of each of the offered securities is registered hereunder. Any
securities registered hereunder may be sold separately or as units with
any other securities registered hereunder.
(5) No separate consideration will be received for the debt securities,
preferred stock or common stock issuable upon conversion of or in
exchange for any securities registered hereunder that provide for
conversion or exchange into such securities.
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THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR DATES
AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL FILE
A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION EFFECTIVE
SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF THE
SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SECURITIES AND EXCHANGE COMMISSION, ACTING
PURSUANT TO SAID SECTION 8(a), MAY DETERMINE.
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Prospectus
The information in this prospectus is not
complete and may be changed. We may not sell
these securities until the registration
statement filed with the Securities and Exchange
Commission is effective. This prospectus is not an
offer to sell these securities and it is not
soliciting an offer to buy these
securities in any jurisdiction where
the offer or sale is not permitted.
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[LOGO]
Baxter International Inc.
Up to $2,000,000,000 of
Common Stock, $1 Par Value
Preferred Stock
Convertible Preferred Stock
Warrants to Purchase Common Stock or Debt Securities
Convertible Debt Securities
Equity Purchase Contracts
Equity Purchase Units
Debt Securities
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Baxter International Inc. may offer from time to time up to $2,000,000,000
of any combination of the securities described in this prospectus. The terms of
each such offering will be determined when an agreement to sell is made.
Securities we may sell include:
. common stock . preferred stock
. convertible debt securities . convertible preferred stock
. stock or debt warrants . debt securities
. equity purchase contracts . equity purchase units
Unless the context otherwise requires, the terms "Company," "we," "us," and
"our" in this prospectus refer to Baxter International Inc., a Delaware
corporation, together with its subsidiaries. Unless the context otherwise
indicates, "common stock" refers to the common stock, $1 par value per share, of
Baxter International Inc. and the associated Series B junior participating
preferred stock purchase rights (currently traded with our common stock). Any or
all of the above securities are referred to as "offered securities" in this
prospectus.
We will provide specific terms of the offered securities to be sold in
supplements to this prospectus. You should read this prospectus and any
supplement carefully before you invest. A supplement may also change or update
information contained in this prospectus. We will not use this prospectus to
confirm sales of any of our securities unless it is attached to a prospectus
supplement. Unless we state otherwise in a prospectus supplement, we will not
list any of these securities on any securities exchange.
Neither the Securities and Exchange Commission nor any state securities
commission has determined whether this prospectus is truthful or complete. They
have not made, nor will they
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make, any determination as to whether anyone should buy these securities. Any
representation to the contrary is a criminal offense.
The date of this preliminary prospectus is November 11, 2002
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NOTICE TO INVESTORS
YOU SHOULD RELY ONLY ON THE INFORMATION CONTAINED, OR INCORPORATED BY
REFERENCE, IN THIS PROSPECTUS. WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH
DIFFERENT OR ADDITIONAL INFORMATION. YOU SHOULD NOT ASSUME THAT THE INFORMATION
CONTAINED IN THIS PROSPECTUS IS ACCURATE AS OF ANY DATE OTHER THAN THE DATE ON
THE FRONT OF THIS PROSPECTUS.
This prospectus is part of a registration statement that we filed with
the Securities and Exchange Commission (the "SEC") utilizing a universal "shelf"
registration process for a delayed, or continuous, or intermittent offering
process. Under this shelf registration process, we may issue and sell, from time
to time, the offered securities in one or more offerings.
This prospectus provides you with a general description of the securities
which may be offered by us. Each time we sell securities, we are required to
provide you with a prospectus and a prospectus supplement containing specific
information about us and the terms of that particular offering. That prospectus
supplement may include additional risk factors or other special considerations
applicable to those offered securities. Any prospectus supplement may also add,
update or change information in this prospectus. If there is any inconsistency
between the information in this prospectus and the applicable prospectus
supplement, you should rely on the information in that prospectus supplement.
You should read both this prospectus and the applicable prospectus supplement
together with additional information described under "Where You Can Find More
Information."
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WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports, proxy statements and other
information with the SEC. You may read and copy any document we file with the
SEC at the SEC's Public Reference Room at 450 Fifth Street, N.W., Washington,
D.C. 20549. You may obtain further information on the operation of the Public
Reference Room by calling the SEC at 1-800-SEC-0330. Our SEC filings are also
available to the public over the Internet at the SEC's Web site at
http://www.sec.gov. Our SEC filings are also available at the offices of the New
York Stock Exchange, 20 Broad Street, New York, New York 10005.
We incorporate by reference in this prospectus the following documents filed by
us with the SEC:
. our Annual Report on Form 10-K for the year ended December 31, 2001;
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. our Quarterly Reports on Form 10-Q for the quarters ended March 31,
June 30, and September 30, 2002;
. our Current Reports on Form 8-K dated August 7, and September 16,
2002;
. the description of our common stock in our registration filed with
the SEC under Section 12 of the Securities Exchange Act of 1934,
including any subsequent amendment or any report filed for the
purpose of updating such description; and
. the description of our Series B Junior Participating Preferred Stock
Purchase Rights (currently traded with our common stock), filed in
our Form 8-A dated May 30, 2001.
Any statement made in a document incorporated by reference or deemed
incorporated herein by reference is deemed to be modified or superseded for
purposes of this prospectus if a statement contained in this prospectus or in
any other subsequently filed document which also is incorporated or deemed
incorporated by reference herein modifies or supersedes that statement. Any such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus. We also incorporate by
reference all documents filed pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Securities Exchange Act after the date of this prospectus until we or the
underwriters sell all of the offered securities.
Statements made in this prospectus or in any document incorporated by
reference in this prospectus as to the contents of any contract or other
document referred to herein or therein are not necessarily complete, and in each
instance reference is made to the copy of such contract or other document filed
as an exhibit to the documents incorporated by reference, each such statement
being qualified in all material respects by such reference.
You may request a copy of these filings at no cost, by writing or calling
us at the following address: Corporate Secretary, Baxter International Inc., One
Baxter Parkway, Deerfield, Illinois 60015 (847) 948-2000.
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CAUTION REGARDING FORWARD-LOOKING STATEMENTS
Statements throughout this prospectus that are not historical facts,
(including material incorporated herein by reference) are forward-looking
statements. These statements are based on our 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 us
and the health care arenas in which we operate.
Many factors could affect our actual results, causing results to differ,
and possibly differ materially, from those expressed in any such forward-looking
statements. These factors include, but are not limited to, interest rates;
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; global regulatory, trade and tax
policies; regulatory, legal or other developments relating to the company's
Series A, AF and AX dialyzers; continued price
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competition; product development risks, including technological difficulties;
ability to enforce patents; actions of regulatory bodies and other government
authorities; reimbursement policies of government agencies; commercialization
factors; results of product testing; and other factors described in this
prospectus and in our other filings with the SEC.
Additionally, as discussed in the "Legal Proceedings" section of our most
recently filed Quarterly Report on Form 10-Q, upon the resolution of certain
legal matters, we may incur charges in excess of presently established reserves.
Any such charge could have a material adverse effect on our results of
operations or cash flows in the period in which it is recorded or paid.
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 strengthens against most foreign currencies, growth rates in our sales
and net earnings could be negatively impacted. We believe that our expectations
with respect to forward-looking statements are based upon reasonable assumptions
within the bounds of our knowledge of our 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.
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ABOUT THE COMPANY
Baxter International Inc. and our Subsidiaries
We were incorporated under Delaware law in 1931. Throughout the rest of
this section, except as otherwise indicated in information incorporated by
reference, "we" or "our" means Baxter International Inc., taken together with
its subsidiaries as a consolidated enterprise. We engage in the worldwide
development, manufacture and distribution of a diversified line of products,
systems and services used primarily in the health care field. We manufacture
products in 28 countries and sell them in over 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. Our
products are used by hospitals, clinical and medical research laboratories,
blood and blood dialysis centers, rehabilitation centers, nursing homes,
doctors' offices and by patients, at home, under physician supervision.
We operate as a global leader in critical therapies for
life-threatening conditions. Our continuing operations are comprised of three
segments: Medication Delivery, which provides a range of intravenous solutions
and specialty products that are used in combination for fluid replenishment,
nutrition therapy, pain management, antibiotic therapy and chemotherapy;
BioScience, which develops biopharmaceuticals, biosurgery products, vaccines and
blood collection, processing and storage products and technologies; and Renal,
which develops products and provides services to treat end-stage kidney disease.
Our three businesses enjoy leading positions in the medical products and
services fields.
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USE OF PROCEEDS
Except as otherwise set forth in any Prospectus Supplement relating to
the Offered Securities, we will use the net proceeds from the sale of the
Offered Securities for working capital, to repay our existing debt, to fund
acquisitions, for our capital expenditures and for general corporate purposes.
We will include a more detailed description of the use of proceeds from
any specific offering of securities in the prospectus supplement relating to the
offering.
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COMMON STOCK
In General
This description of our common stock is a summary. You should keep in
mind, however, that it is our certificate of incorporation and our bylaws, and
not this summary, which defines any rights you may acquire as a securityholder.
There may be other provisions in these documents which are also important to
you. You should read these documents for a full description of the terms of our
capital stock. Our certificate of incorporation and our bylaws are incorporated
by reference as exhibits to the registration statement that includes this
prospectus. See "Where You Can Find More Information" for information on how to
obtain copies of these documents.
Subject to any preferential rights of any preferred stock created by our
board of directors, as a holder of our common stock you are entitled to such
dividends as our board of directors may declare from time to time out of funds
that we can legally use to pay dividends. The holders of common stock possess
exclusive voting rights, except to the extent our board of directors specifies
voting power for any preferred stock that, in the future, may be issued.
As a holder of our common stock, you are entitled to one vote for each
share of common stock and do not have any right to cumulate votes in the
election of directors. In the event of our liquidation, dissolution or
winding-up, you will be entitled to receive on a proportionate basis any assets
remaining after provision for payment of creditors and after payment of any
liquidation preferences to holders of preferred stock. Our common stock is
listed on the New York Stock Exchange under the symbol "BAX".
Rights Plan
In November 1998, our board of directors declared a dividend distribution
of one right for each outstanding share of common stock. In February 2001, our
board of directors declared a two-for-one stock split in the form of a 100%
stock distribution to holders of our common stock.
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As a result of the stock split, our rights plan was adjusted as of the end of
May 2001, so that each share of our common stock is now accompanied by one-half
of one right. Each full right entitles the holder to purchase from the Company
one one-hundredth of a share of series B junior participating preferred stock at
a price of $275 per one one-hundredth of a share, subject to adjustment.
Initially, the rights are attached to all certificates representing our common
stock and no separate rights certificates have been issued. The rights will
separate from our common stock upon the earlier of:
. ten business days following the public announcement that a person or
group has acquired or obtained the right to acquire beneficial
ownership of 15% or more of the outstanding shares of our common
stock; or
. ten business days following the commencement of a tender or an
exchange offer that would result in a person or group owning 15% or
more of the outstanding shares of our common stock;
unless the person or group has offered to acquire all of the outstanding shares
of our common stock and our independent directors have determined that such
offer is in the best interests of the Company and its stockholders. The rights
are not exercisable until one of the two events listed above has occurred and
will expire on March 23, 2009.
Upon the happening of one of the events listed above, each right (other
than rights held by the acquiring person) will be exercisable for our common
stock having a value equal to two times the exercise price of the right. If the
Company is acquired or sells 50% or more of its assets, then each right will be
exercisable for common stock in the surviving or transferee corporation having a
value equal to two times the exercise price of the right.
At any time up to ten days after the happening of one of the events
listed above, Baxter may redeem the rights at a price of $.01 per right.
Other Charter and Bylaw Provisions
In addition, our restated certificate of incorporation (the "charter")
may have anti-takeover effects. Our charter provides, among other things, for a
classified board of directors divided into three classes and stockholder action
only at a stockholders' meeting and not by written consent. In addition, our
bylaws provide, among other things, that stockholders wishing to nominate a
director at an annual meeting or at a special meeting called for the purpose of
electing directors must comply with strict advance written notice provisions.
Our bylaws also provide that special meetings of stockholders may be called only
by the chairman of our board of directors, or certain of our officers, or by
resolution of our directors.
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PREFERRED STOCK
We will describe the particular terms of any series of preferred stock
in the prospectus supplement relating to the offering of any such offered
securities.
We will fix or designate the rights, preferences, privileges and
restrictions, including any dividend rights, voting rights (if any), terms of
redemption, retirement and sinking fund provisions (if any) and liquidation
preferences (if any), of any series of preferred stock through a certificate of
designation adopted by our board of directors or a duly authorized committee of
our board of directors. We will describe the terms, if any, on which shares of
any series of preferred stock are redeemable, convertible or exchangeable into
common stock in the prospectus supplement relating to the offering. The
redemption, conversion or exchange may be mandatory, at your option, or at our
option. The applicable prospectus supplement will describe the manner in which
the shares of common stock that you will receive as a holder of preferred stock
would be converted or exchanged or redeemed.
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CONVERTIBLE PREFERRED STOCK
We will describe the particular terms of any series of convertible
preferred stock in the prospectus supplement relating to the offering of any
such offered securities.
We will fix or designate the conversion rights, preferences, privileges
and restrictions, including any dividend rights, voting rights (if any), terms
of redemption, retirement and sinking fund provisions (if any) and liquidation
preferences (if any), of any series of convertible preferred stock through a
certificate of designation adopted by our board of directors or a duly
authorized committee of our board of directors. We will describe the terms, if
any, on which shares of any series of preferred stock are convertible or
exchangeable into our debt securities or common stock in the prospectus
supplement relating to the offering. The conversion, redemption or exchange may
be mandatory, at your option, or at our option. The applicable prospectus
supplement will describe the manner in which the shares of common stock that you
will receive as a holder of convertible preferred stock would be converted or
exchanged or redeemed.
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STOCK AND DEBT WARRANTS
We may issue warrants, including warrants to purchase debt securities,
preferred stock, common stock or other securities issued by us. We may issue
warrants independently or together with any other securities, and they may be
attached to or separate from those securities. We will issue the warrants under
warrant agreements between us and a bank or trust company, as warrant agent,
that we will describe in the prospectus supplement relating to any warrants that
we offer.
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We will also describe in the applicable prospectus supplement the
amount of securities called for by the warrants, any amount of warrants
outstanding, and any provisions for a change in the exercise price or the
expiration date of the warrants and the kind, frequency and timing of any notice
to be given. Prior to the exercise of your warrants, you will not have any of
the rights of holders of the preferred stock or common stock purchasable upon
any such exercise and will not be entitled to dividend payments, if any, or
voting rights of the preferred stock or common stock purchasable upon the
exercise.
Exercise of Warrants
We will describe in the prospectus supplement relating to the warrants
the principal amount or the number of shares of our securities that you may
purchase for cash upon exercise of a warrant, and the exercise price. Exercise a
warrant may occur, as described in the applicable prospectus supplement relating
to the warrants, at any time up to the close of business on the expiration date
stated in the prospectus supplement. Unexercised warrants will become void after
the close of business on the expiration date, or any later expiration date that
we determine.
We will forward the securities deliverable upon the exercise of any
warrant reasonably promptly after receipt of payment and the properly completed
and executed warrant certificate at the corporate trust office of the warrant
agent or other office stated in the applicable prospectus supplement. If you
exercise less than all of the warrants represented by the warrant certificate,
we will issue you a new warrant certificate for the remaining warrants.
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CONVERTIBLE DEBT SECURITIES
We will describe the particular terms of any series of convertible
debentures or other convertible debt issuable by us, in the prospectus
supplement relating to any such offered securities.
We will fix or designate the rights, preferences, privileges and
restrictions, including conversion rights, interest rate and other rights,
including terms of redemption, retirement and sinking fund provisions (if any)
and liquidation preferences, if any, of any series of convertible debt through
an instrument adopted by our board of directors or a duly authorized committee
of our board of directors. We will describe the terms, if any, on which such
instruments are convertible or exchangeable into common stock in the prospectus
supplement relating to the applicable offering. The conversion or exchange may
be mandatory, at your option, or at our option. The applicable prospectus
supplement will describe the manner in which the shares of common stock that you
will receive as a holder of the convertible debt would be converted or exchanged
or redeemed.
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EQUITY PURCHASE CONTRACTS
AND EQUITY PURCHASE UNITS
We may issue any form of equity purchase contracts, including contracts
obligating you to purchase from us, and for us to sell to you, a specific number
of shares of common stock or preferred stock, or other equity, at a future date
or dates. The price per share of preferred stock or common stock or other equity
may be fixed at the time the equity purchase contracts are issued or may be
determined by reference to a specific formula described in the equity purchase
contracts. We may issue the equity purchase contract separately or as a part of
units consisting of an equity purchase contract and debt securities, trust
preferred securities or debt obligations of third parties, including U.S.
Treasury securities, securing your obligations to purchase the preferred stock
or the common stock or other equity under the purchase contracts. The equity
purchase contracts may require us to make periodic payments to you or vice versa
and the payments may be unsecured or pre-funded on some basis. The equity
purchase contracts may require you to secure your obligations in a specified
manner. We will describe in the applicable prospectus supplement the terms of
any equity purchase contracts or equity purchase units.
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DEBT SECURITIES
The debt securities will be our unsecured and unsubordinated
obligations issued in one or more series and will rank equally with each other
and with all of our other unsecured and unsubordinated indebtedness. The debt
securities will be issued under an indenture to be entered into between us and
Bank One Trust Company, N.A., as trustee. The terms of any series of debt
securities will be those specified in the indenture, as amended or supplemented
from time to time, and in the certificates evidencing that series of debt
securities.
The following summary of selected provisions of the indenture and the
debt securities is not complete, and the summary of selected terms of a
particular series of debt securities included in the applicable prospectus
supplement also will not be complete. You should review the indenture and the
form of certificate evidencing the applicable debt securities, each of which
have been or will be filed as exhibits to the registration statement of which
this prospectus is a part or as exhibits to documents which have been or will be
incorporated by reference in this prospectus. To obtain a copy of the indenture
or the form of certificate for the debt securities, see "Where You Can Find More
Information" in this prospectus. The following summary and the summary in the
applicable prospectus supplement are qualified in their entirety by reference to
all of the provisions of the indenture and the certificates evidencing the debt
securities. The provisions of the indenture and the debt certificates, including
defined terms, are incorporated by reference in this prospectus. Terms used in
this section have the meanings assigned to those terms in the indenture. When we
refer to "we", "us" or "our" in this section or when we otherwise refer to
ourselves in this section, we mean Baxter International Inc., excluding, unless
otherwise expressly stated or the context otherwise requires, our subsidiaries.
The following description of debt securities describes general terms
and provisions of the series of debt securities to which any prospectus
supplement may relate. When we offer to sell a series of debt securities, we
will describe the specific terms of the series in the applicable prospectus
supplement. If any particular terms of the debt securities described in a
prospectus supplement differ from any of the terms described in this prospectus,
the terms described in the applicable prospectus supplement will supersede the
terms described in this prospectus.
General
The debt securities may be issued from time to time in one or more
series. We can issue an unlimited amount of debt securities under the indenture.
The indenture provides that we may issue debt securities of any series in an
amount up to the aggregate principal amount which is authorized from time to
time by us. Please read the applicable prospectus supplement relating to the
series of debt securities being offered for specific terms including, where
applicable:
. the title of the series of debt securities;
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. any limit on the aggregate principal amount of debt
securities of the series;
. the price or prices at which we will issue debt
securities of the series;
. the date or dates on which we will pay the principal of
and premium, if any, on debt securities of the series, or
the method or methods, if any, that will used to determine
those dates;
. the rate or rates, which may be fixed or variable, at
which debt securities of the series will bear interest, if
any, or the method or methods, if any, that will be used to
determine those rates;
. the basis used to calculate interest, if any, on the
debt securities of the series if other than a 360-day year
of twelve 30-day months;
. the date or dates, if any, from which interest on the
debt securities of the series will accrue, or the method or
methods, if any, that will be used to determine those dates;
. the dates on which the interest, if any, on the debt
securities of the series will commence accruing and will be
payable and the record dates for the payment of interest;
. the place or places where amounts due on the debt
securities of the series will be payable and where the debt
securities of the series may be surrendered for registration
of transfer and exchange;
. the terms and conditions, if any, upon which we may, at
our option, redeem debt securities of the series;
. the terms and conditions, if any, upon which we will
repurchase debt securities of the series at the option of
the holders of debt securities of the series;
. the terms of any sinking fund or analogous provision;
. if other than United States dollars, the currency to be
used to purchase the debt securities of the series and the
currency to be used for payments on debt securities of the
series, and the ability or the ability of the holders of
debt securities of the
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series, if any, to have payments made in any other currency;
. any addition to, or modification or deletion of, any
covenant or event of default with respect to debt securities
of the series;
. whether the debt securities of the series are to be
issuable in registered or bearer form or both and, if in
bearer form, whether we will issue any debt securities of
the series in temporary or permanent global form and, if so,
the identity of the depositary for the global debt security;
. whether and under what circumstances we will pay any
additional amounts in respect of certain taxes, assessments
or other governmental charges imposed on holders of the
series of debt securities who are United States Aliens
("additional amounts") and, if so, whether we will have the
option to redeem the series of debt securities rather than
pay any additional amounts;
. the person to whom any interest on any registered
securities of the series of debt securities will be payable,
if different than the person in whose name a registered
security is registered at the close of business on the
regular record date for that payment;
. the manner in which, or the person to whom, any interest
on any bearer security of the series of debt securities will
be payable, if different than upon presentation and
surrender of the coupons relating to the bearer security;
. the extent to which, or the manner in which, any
interest payable on a temporary global debt security will be
paid, if other than in the manner provided in the indenture;
. the portion of the principal amount of the series of
debt securities which will be payable upon acceleration if
other than the full principal amount;
. the authorized denominations in which the series of debt
securities will be issued, if other than denominations of
$1,000 and any integral multiple of $1,000, in the case of
registered securities, or $5,000, in the case of bearer
securities;
. if the amount of payments on the series of debt
securities may be determined with reference to an index,
formula or other
15
method or methods ("indexed securities") and the manner used
to determine those amounts; and
. any other terms of debt securities of the series.
As used in this prospectus and any prospectus supplement relating to
the offering of debt securities, references to the principal of and premium, if
any, and interest, if any, on the series of debt securities include the payment
of additional amounts, if any, required by the series of debt securities in that
context.
Debt securities may be issued as original issue discount securities to
be sold at a substantial discount below their principal amount. In the event of
an acceleration of the maturity of any original issue discount security, the
amount payable to the holder upon acceleration will be determined in the manner
described in the applicable prospectus supplement. Material federal income tax
and other considerations applicable to original issue discount securities will
be described in the applicable prospectus supplement.
If the purchase price of any debt securities is payable in a foreign
currency or currency unit or if the principal of, or premium, if any, or
interest, if any, on any of the debt securities is payable in a foreign currency
or currency unit, the specific terms of those debt securities and the applicable
foreign currency or currency unit will be specified in the prospectus supplement
relating to those debt securities.
The terms of the debt securities of any series may differ from the
terms of the debt securities of any other series, and the terms of particular
debt securities within any series may differ from each other. If expressly
provided in the applicable prospectus supplement, we may, without the consent of
the holders of the debt securities of any series, reopen an existing series of
debt securities and issue additional debt securities of that series or establish
additional or different terms of that series.
Registration, transfer, payment and paying agent
Unless otherwise indicated in the applicable prospectus supplement,
each series of debt securities will be issued in registered form only, without
coupons. The indenture, however, provides that we may also issue debt securities
in bearer form only, or in both registered and bearer form. Bearer securities
may not be offered, sold, resold or delivered in connection with their original
issuance in the United States or to any United States person, as defined below,
other than offices located outside the United States of specified United States
financial institutions. "United States person" means any citizen or resident of
the United States, any corporation, partnership or other entity created or
organized in or under the laws of the United States, any estate the income of
which is subject to United States federal income taxation regardless of its
source, or any trust whose administration is subject to the primary supervision
of a United States court and which has one or more United States fiduciaries who
have the authority to control all substantial decisions of the trust. "United
States" means the United States of America, including the states thereof and the
District of Columbia, its territories, its possessions
16
and other areas subject to its jurisdiction. Purchasers of bearer securities
will be subject to certification procedures and may be affected by limitations
under United States tax laws. The applicable procedures and limitations will be
described in the prospectus supplement relating to the offering of the bearer
securities.
Unless otherwise indicated in the applicable prospectus supplement, the
debt securities will be payable and may be surrendered for registration of
transfer or exchange and, if applicable, for conversion into or exchange for
other types of securities, at an office or agency maintained by the trustee in
the Borough of Manhattan, The City of New York. However, we, at our option, may
make payments of interest on any registered security by check mailed to the
address of the person entitled to receive that payment or by wire transfer to an
account maintained by the payee with a bank located in the United States. No
service charge will be made for any registration of transfer or exchange,
redemption or repayment of debt securities, or for any conversion or exchange of
debt securities for other types of securities, but we may require payment of a
sum sufficient to cover any tax or other governmental charge that may be imposed
in connection with that transaction.
Unless otherwise indicated in the applicable prospectus supplement,
payment of principal, premium, if any, and interest, if any, on bearer
securities will be made, subject to any applicable laws and regulations, at an
office or agency outside the United States. Unless otherwise indicated in the
applicable prospectus supplement, payment of interest due on bearer securities
on any interest payment date will be made only against surrender of the coupon
relating to that interest payment date. Unless otherwise indicated in the
applicable prospectus supplement, no payment of principal, premium, if any, or
interest, if any, with respect to any bearer security will be made at any office
or agency in the United States or by check mailed to any address in the United
States or by wire transfer to an account maintained with a bank located in the
United States. However, if any bearer securities are payable in United States
dollars, payments on those bearer securities may be made at the corporate trust
office of the trustee or at any office or agency designated by us in the Borough
of Manhattan, The City of New York, if, but only if, payment of the full amount
due on the bearer securities for principal, premium, if any, or interest, if
any, at all offices outside of the United States maintained for that purpose by
us is illegal or effectively precluded by exchange controls or similar
restrictions.
Unless otherwise indicated in the applicable prospectus supplement, we
will not be required to:
. issue, register the transfer of or exchange debt
securities of any series during a period beginning at the
opening of business 15 days before any selection of debt
securities of that series having the same terms to be
redeemed and ending at the close of business on the day of
that selection;
. register the transfer of or exchange any registered
security, or portion of any registered security, selected
for redemption, except the unredeemed portion of any
registered security being
17
redeemed in part;
. exchange any bearer security selected for redemption,
except to exchange a bearer security for a registered
security of that series having the same terms that is
simultaneously surrendered for redemption; or
. issue, register the transfer of or exchange a debt
security which has been surrendered for repayment at the
option of the holder, except the portion, if any, of the
debt security not to be repaid.
Book-entry debt securities
The debt securities of a series may be issued in whole or in part in
the form of one or more global debt securities. Global debt securities will be
deposited with, or on behalf of, a depositary identified in the applicable
prospectus supplement relating to the series. Global debt securities may be
issued in either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for individual
certificates evidencing debt securities, a global debt security may not be
transferred except as a whole by the depositary to its nominee or by the nominee
to the depositary, or by the depositary or its nominee to a successor depositary
or to a nominee of the successor depositary.
We anticipate that global debt securities will be deposited with, or on
behalf of, The Depository Trust Company ("DTC"), New York, New York, and that
global debt securities will be registered in the name of DTC's nominee, Cede &
Co. We also anticipate that the following provisions will apply to the
depository arrangements with respect to global debt securities. Additional or
differing terms of the depository arrangements will be described in the
applicable prospectus supplement.
DTC has advised us that it is:
. a limited-purpose trust company organized under the
New York Banking Law;
. a "banking organization" within the meaning of the New
York Banking Law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New
York Uniform Commercial Code; and
. a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act.
18
DTC holds securities that its participants deposit with DTC. DTC also
facilitates the settlement among its participants of securities transactions,
including transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, which eliminates the
need for physical movement of securities certificates. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations and other organizations. DTC is owned by a number of its direct
participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, LLC. and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to others, sometimes referred to in this
prospectus as indirect participants, that clear transactions through or maintain
a custodial relationship with a direct participant either directly or
indirectly. Indirect participants include securities brokers and dealers, banks
and trust companies. The rules applicable to DTC and its participants are on
file with the SEC.
Purchases of debt securities within the DTC system must be made by or
through direct participants, which will receive a credit for the debt securities
on DTC's records. The ownership interest of the actual purchaser or beneficial
owner of a debt security is, in turn, recorded on the direct and indirect
participants' records. Beneficial owners will not receive written confirmation
from DTC of their purchases, but beneficial owners are expected to receive
written confirmations providing details of the transactions, as well as periodic
statements of their holdings, from the direct or indirect participants through
which they purchased the debt securities. Transfers of ownership interests in
debt securities are to be accomplished by entries made on the books of
participants acting on behalf of beneficial owners. Beneficial owners will not
receive certificates representing their ownership interests in the debt
securities, except under the limited circumstances described below.
To facilitate subsequent transfers, all debt securities deposited by
direct participants with DTC will be registered in the name of DTC's nominee,
Cede & Co. The deposit of debt securities with DTC and their registration in the
name of Cede & Co. will not change the beneficial ownership of the debt
securities. DTC has no knowledge of the actual beneficial owners of the debt
securities. DTC's records reflect only the identity of the direct participants
to whose accounts the debt securities are credited. Those participants may or
may not be the beneficial owners. The direct and indirect participants are
responsible for keeping account of their holdings on behalf of their customers.
Conveyance of notices and other communications by DTC to direct
participants, by direct participants to indirect participants and by direct and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any legal requirements in effect from time to time.
Redemption notices will be sent to DTC or its nominee. If less than all
of the debt securities of a series are being redeemed, DTC's practice is to
determine by lot the amount of the interest of each direct participant in the
debt securities to be redeemed.
19
In any case where a vote may be required with respect to the debt
securities of any series, neither DTC nor Cede & Co. will give consents for or
vote the global debt securities. Under its usual procedures, DTC will mail an
omnibus proxy to us as soon as possible after the record date. The omnibus proxy
assigns the consenting or voting rights of Cede & Co. to those direct
participants to whose accounts the debt securities are credited on the record
date identified in a listing attached to the omnibus proxy.
Principal and premium, if any, and interest, if any, on the global debt
securities will be paid to Cede & Co., as nominee of DTC. DTC's practice is to
credit direct participants' accounts on the relevant payment date unless DTC has
reason to believe that it will not receive payments on the payment date.
Payments by direct and indirect participants to beneficial owners will be
governed by standing instructions and customary practices, as is the case with
securities held for the account of customers in bearer form or registered in
"street name." Those payments will be the responsibility of participants and not
of DTC or us, subject to any legal requirements in effect from time to time.
Payment of principal, premium, if any, and interest, if any, to Cede & Co. is
our responsibility, disbursement of payments to direct participants is the
responsibility of DTC, and disbursement of payments to the beneficial owners is
the responsibility of direct and indirect participants.
Except under the limited circumstances described in this prospectus,
beneficial owners of interests in a global debt security will not be entitled to
have debt securities registered in their names and will not receive physical
delivery of debt securities. Accordingly, each beneficial owner must rely on the
procedures of DTC to exercise any rights under the debt securities and the
indenture.
The laws of some jurisdictions may require that some purchasers of
securities take physical delivery of securities in definitive form. These laws
may impair the ability to transfer or pledge beneficial interests in global debt
securities.
DTC is under no obligation to provide its services as depositary for
the debt securities of any series and may discontinue providing its services at
any time by giving reasonable notice to use or the trustee. Neither we nor the
trustee will have any responsibility for the performance by DTC or its
participants or indirect participants under the rules and procedures governing
DTC. As noted above, beneficial owners of debt securities generally will not
receive certificates representing their ownership interests in the debt
securities. However, if
. DTC notifies us that it is unwilling or unable to continue as a
depositary for the global debt securities of any series or if DTC
ceases to be a clearing agency registered under the Securities
Exchange Act and a successor depositary for the debt securities
of the series is not appointed within 90 days of the notification
or of our becoming aware of DTC's ceasing to be so registered, as
the case may be,
. we determine, in our sole discretion, not to have the debt
20
securities of any series represented by one or more
global debt securities, or
. an event of default under the indenture has occurred
and is continuing with respect to the debt securities of
any series,
we will prepare and deliver to the trustee certificates for the debt
securities of that series, which will deliver the certificates in exchange for
beneficial interests in the global debt securities. Any beneficial interest in a
global debt security that is exchangeable under the circumstances described in
the preceding sentence will be exchangeable for debt securities in definitive
certificated form registered in the names that DTC will direct. It is expected
that these directions will be based upon directions received by DTC from its
participants with respect to ownership of beneficial interests in the global
debt securities.
We obtained the information in this section and elsewhere in this
prospectus concerning DTC and DTC's book-entry system from sources that we
believe to be reliable, but we take no responsibility for the accuracy of this
information.
Outstanding debt securities
In determining whether the holders of the requisite principal amount of
outstanding debt securities have given any request, demand, authorization,
direction, notice, consent or waiver under the indenture:
. the principal amount of an original issue discount
security that will be deemed to be outstanding for these
purposes will be that portion of the principal amount of
the original issue discount security that could be
declared to be due and payable upon a declaration of
acceleration of the original issue discount security as
of the date of the determination;
. the principal amount of any indexed security that
will be deemed to be outstanding for these purposes will
be the principal face amount of the indexed security
determined on the date of its original issuance;
. the principal amount of a debt security denominated
in a foreign currency that will be deemed to be
outstanding for these purposes will be the United States
dollar equivalent, determined on the date of original
issue of the debt security, of the principal amount of
the debt security; and
. a debt security owned by us or any obligor on the
debt security or any affiliate of ours or the other
obligor will not be deemed to be outstanding.
21
Redemption and repurchase
The debt securities of any series may be redeemable at our option or
may be subject to mandatory redemption by us as required by a sinking fund or
otherwise. In addition, the debt securities of any series may be subject to
repurchase by us at the option of the holders. The applicable prospectus
supplement will describe the terms, the times and the prices regarding any
optional or mandatory redemption or option to repurchase any series of debt
securities.
Restrictive Covenants
Restrictions on the creation of secured debt. The indenture provides
that we will not, and will not cause or permit a restricted subsidiary to,
create, incur, assume or guarantee any indebtedness borrowed by us or our
restricted subsidiaries that is secured by a security interest in any of our
principal facilities or shares of stock owned directly or indirectly by us or a
restricted subsidiary or by indebtedness borrowed by one of our restricted
subsidiaries from us or another of our restricted subsidiaries ("secured debt")
unless the debt securities will be secured equally and ratably with or prior to
the secured debt, with exceptions as listed in the indenture. These restrictions
do not apply to indebtedness secured by:
. security interests on any property, which is a
parcel of real property at a manufacturing plant, a
warehouse or an office building and which is acquired,
constructed, developed or improved by us or a restricted
subsidiary, which secures or provides for the payment of
all or any part of the acquisition cost of the property
or the cost of the construction, development or
improvement of the property and which is created prior
to, at the same time or within 120 days after the
completion of the acquisition of the property or the
later to occur of the completion, development or
improvement or the commencement or operation, use or
commercial production of the property;
. security interests on property at the time of its
acquisition by us or a restricted subsidiary which secure
obligations assumed by us or a restricted subsidiary;
. security interests arising from conditional sales
agreements or title retention agreements with respect to
property acquired by us or any of our restricted
subsidiaries;
. security interests existing on the property or on
the outstanding shares or indebtedness of a corporation
or firm at the time the corporation or firm becomes a
restricted subsidiary or is merged or consolidated with
us or a restricted subsidiary or or sells, leases or
otherwise disposes of substantially all of its
22
property to us or one of our restricted subsidiaries;
. security interests securing indebtedness of a
restricted subsidiary owed to us or to another restricted
subsidiary;
. mechanics' and other statutory liens in respect of
obligations not due or being contested;
. security interests for taxes, assessments or
governmental changes or levies not yet delinquent or
security interests for taxes, assessments or governmental
changes or levies already delinquent but which are being
contested;
. security interests arising in connection with legal
proceedings, including judgment liens, so long as the
proceedings are being contested and, in the case of
judgment liens, the execution has been stayed;
. landlords' liens on fixtures;
. security interests arising in connection with
contracts and subcontracts with or made at the request of
the United States, any state, or any department, agency
or instrumentality of the Unites States or any state;
. security interests that secure an obligation issued
by the United States of America or any state, territory
or possession of the United States or any of their
political subdivisions or the District of Columbia, in
connection with the financing of the cost of
construction or acquisition of a principal facility or a
part of a principal facility;
. security interests by reason of deposits to qualify
us or a restricted subsidiary to conduct business, to
maintain self-insurance, or to comply with law;
. the extension of any security interest existing on
the date of the indenture on a principal facility to
additions, extensions or improvements to the principal
facility and not as a result of borrowing money or the
securing of indebtedness incurred after the date of the
indenture; and
. any extension, renewal or refunding, or successive
extensions, renewals or refundings, in whole or in part
of by secured debt secured by any security interest
listed to above,
23
provided that the principal amount of the secured debt
does not exceed the principal amount outstanding
immediately prior to the extension, renewal or refunding
and that the security interest securing the secured debt
is limited to the property which, immediately prior to
the extension, renewal or reducing, secured the secured
debt and additions to the property.
For purposes of the indenture, our "principal facilities" are our
manufacturing plants, warehouses, office buildings or parcels of real property
owned by us or any of our restricted subsidiaries, provided each plant,
warehouse, office building or parcel of real property has a gross book value,
without deduction for any depreciation reserves, in excess of 2% of consolidated
net tangible assets other than any facility which is determined by our board of
directors to not be of material importance. For purposes of the indenture, our
consolidated net tangible assets are the total amount of assets which would be
included on our consolidated balance sheet under generally accepted accounting
principles after deducting all short-term liabilities and liability items,
except for indebtedness payable more than one year from the date of incurrence
and all goodwill, trade names, trademarks, patents, unamortized debt discount,
unamortized expense incurred in the issuance of debt and other like intangibles
except for prepaid royalties.
In addition to the foregoing, we and our restricted subsidiaries may
create, incur, assume or guarantee secured debt, without equally and ratably
securing the debt securities, if and only to the extent that, the sum of
. the amount of secured debt entered into after the
date of the indenture, other than secured debt permitted
as listed in the preceding paragraph, plus
. the aggregate value of sale and leaseback
transactions entered into after the date of the
indenture, other than sale and leaseback transactions
permitted under the second bullet point under
"Restrictions on sale and leaseback transactions,"
does not exceed 5% of our consolidated net tangible assets.
For purposes of the indenture, our "restricted subsidiaries" are those
corporations in which we own voting securities entitling us to elect a majority
of the directors and which are either designated as restricted subsidiaries in
accordance with the indenture or:
. existed as such on the date of the indenture or is
the successor to, or owns, any equity interest in, a
corporation which so existed;
. has its principal business and assets in the United
States;
24
. the business is other than the obtaining of
financing in capital markets outside the United States or
the financing of the acquisition or disposition of real
or personal property or dealing in real property for
residential or office building purposes; and
. does not have assets substantially all of which
consist of securities of one or more corporations which
are not restricted subsidiaries.
Restrictions on sale and leaseback transactions. The indenture provides
that we will not, and will not permit any restricted subsidiary to, enter into
any sale or transfer of any principal facility which has been in operation, use
or commercial production for more than 120 days prior to the sale or transfer,
or which, in the case of a principal facility which is a parcel of real property
other than a manufacturing plant, warehouse or office building, has been owned
by us or one of our restricted subsidiaries for more than 120 days prior to the
sale or transfer, if the sale or transfer is made with the intention of leasing,
or as part of an arrangement involving the lease, of the principal facility to
us or one of our restricted subsidiaries, except a lease for a period not
exceeding 36 months or that secures or relates to obligations issued by the
United States, or any state, in connection with the financing of the cost of
construction or acquisition of the principal facility ("sale and leaseback
transaction"), unless:
. we or our restricted subsidiary would be entitled to
incur secured debt permitted by the indenture only by
reason of the provision described in the second
paragraph under the sub-heading "Restrictions on the
creation of secured debt" equal in amount to the value
of the sale and leaseback transaction without equally
and ratably securing the debt securities; or
. we or our restricted subsidiary apply within one
year, or commit to apply within one year, an amount equal
to the net proceeds of the property sold pursuant to the
sale and leaseback transaction to:
- the acquisition, construction or improvement of
properties which are or will be a principal facility, or
- the optional redemption of debt securities or to
the repayment of other superior indebtedness of us or of
any restricted subsidiary.
For purposes of the indenture, "superior indebtedness" means any of our
obligations, or the obligations of any of our restricted subsidiaries, which:
. when created, are payable at least one year later;
25
. should be shown on our consolidated balance sheet in
accordance with generally accepted accounting
principles; and
. are not subordinate and junior in right of payment
to the prior payment of our debt securities.
Instead of applying all or any part of the proceeds of a sale and
leaseback transaction to the redemption of debt securities, we may deliver to
the trustee, within one year of the transfer, debt securities for cancellation
and thereby reduce the amount to be applied to the redemption of debt securities
by an amount equivalent to the aggregate principal amount of the debt securities
delivered. Debt securities so redeemed or delivered will not be used as credits
against any mandatory sinking fund payments.
Restrictions on transfers of principal facilities. The indenture
provides that we will not, nor will we permit any restricted subsidiary to,
transfer any principal facility to any of our subsidiaries which is not a
restricted subsidiary unless we or it apply within one year, or commit to apply
within one year, an amount equal to the fair value of the principal facility at
the time of the transfer:
. to the acquisition, construction, development or
improvement of a principal facility or part of a
principal facility; or
. to the optional redemption of debt securities or to
the repayment of our superior indebtedness or the
superior indebtedness of any of our restricted
subsidiaries.
In lieu of applying all or any part of the amount to the redemption of
securities, we may deliver to the trustee securities for cancellation and
thereby reduce the amount to be applied to the redemption of securities by the
principal amount of the securities so delivered. Securities so redeemed or
delivered will not be used as credits against any mandatory sinking fund
payments.
Restrictions on mergers, consolidations and transfers of assets.
The indenture provides that we will not consolidate or merge into or
transfer or lease all or substantially all of our assets to another person
unless:
. in the case of a merger, we are the surviving
corporation in the merger; or
. the person into which we are merged or which
acquires all or substantially all of our assets is a
corporation organized under the laws of the United
States, any state or the District of Columbia, and
assumes all of our obligations relating to the securities
and the indenture, and immediately after the
26
transaction no default exists.
Upon any the consolidation, merger or transfer, the successor corporation
will be substituted for us under the indenture. The successor corporation may
then exercise all of our powers and rights under the indenture, and we will be
released from all of our liabilities and obligations in respect of the
securities and the indenture. In the event we lease all or substantially all of
our assets, the lessee corporation will be our successor and may exercise all of
our powers and rights under the indenture but we will not be released from our
obligations to pay the principal of and interest on the securities.
Events of default
Unless otherwise specified in the applicable prospectus supplement, an
"event of default" with respect to the debt securities of any series is defined
in the indenture as being:
. default in payment of any interest on, or any additional amounts
payable with respect to any interest on, any of the debt securities
of that series or any coupon relating to the debt securities when
due, and continuance of the default for a period of 30 days;
. default in payment of any principal of or premium, if any, on, or
any additional amounts payable with respect to any principal of or
premium, if any, on, any of the debt securities of that series when
due, whether at maturity, upon redemption, upon repayment or
repurchase at the option of the holder or otherwise;
. default in the deposit of any sinking fund payment or payment
under any analogous provision when due with respect to any of the
debt securities of that series;
. default by us in the performance, or breach, of any other
covenant or warranty in the indenture or in any debt security of
that series, other than a covenant or warranty included in the
indenture solely for the benefit of a series of debt securities
other than that series, and continuance of that default or breach,
without that default or breach having been cured or waived, for a
period of 60 days after the trustee or the holders of not less than
25% in aggregate principal amount of the debt securities of that
series then outstanding give notice to us, or in the case of notice
by the holders, to us and the trustee, specifying the default or
breach;
. our failure to make any payment when due, including any
applicable grace period, relating to our indebtedness which is in
an amount in excess of $50,000,000, or our default with respect to
27
any of our indebtedness that results in acceleration of
indebtedness which is in an amount in excess of $50,000,000;
. specified events of bankruptcy, insolvency or reorganization
with respect to us or any of our restricted subsidiaries; or
. any other event of default established for the debt securities of
that series.
No event of default with respect to any particular series of debt
securities necessarily constitutes an event of default with respect to any other
series of debt securities. The indenture provides that, within 90 days after the
occurrence of any default with respect to the debt securities of any series, the
trustee will mail to all holders of the debt securities of that series notice of
that default, unless that default has been cured or waived. However, the
indenture provides that the trustee may withhold notice of a default with
respect to the debt securities of that series, except a default in payment of
principal, premium, if any, interest, if any, additional amounts, if any, or
sinking fund payments, if any, if the trustee considers it in the best interest
of the holders to do so. In the case of a default in the performance or the
breach of any covenant or warranty in the indenture with respect to debt
securities or that series, no notice will be given until at least 30 days after
the occurrence of the default or breach. As used in this paragraph, the term
"default" means any event which is, or after notice or lapse of time or both
would become, an event of default with respect to the debt securities of any
series.
The indenture provides that if an event of default, other than an event of
default relating to events of bankruptcy, insolvency or reorganization with
respect to any series of debt securities occurs and is continuing, either the
trustee or the holders of at least 25% in principal amount of the debt
securities of that series then outstanding may declare the principal of, or if
debt securities of that series are original issue discount securities, the
lesser amount as may be specified in the terms of that series of debt
securities, and accrued and unpaid interest, if any, on all the debt securities
of that series to be due and payable immediately. The indenture also provides
that if an event of default relating to events of bankruptcy, insolvency or
reorganization with respect to any series of debt securities occurs, the
principal of, or if debt securities of that series are original issue discount
securities, the lesser amount as may be specified in the terms of that series of
debt securities, and accrued and unpaid interest, if any, on all the debt
securities of that series will automatically become and be immediately due and
payable without any declaration or other action on the part of the trustee or
any holder of the debt securities of that series. However, upon specified
conditions, the holders of a majority in principal amount of the debt securities
of a series then outstanding may rescind and annul an acceleration of the debt
securities of that series and its consequences.
Subject to the provisions of the Trust Indenture Act requiring the trustee,
during the continuance of an event of default under the indenture, to act with
the requisite standard of care, the trustee is under no obligation to exercise
any of its rights or powers under the indenture at the request or direction of
any of the holders of debt securities of any series unless those holders have
offered the trustee reasonable indemnity.
28
Subject to this requirement, holders of a majority in principal amount of
the outstanding debt securities of any series issued under the indenture have
the right to direct the time, method and place of conducting any proceeding for
any remedy available to the trustee under the indenture with respect to that
series. The indenture requires the annual filing by us with the trustee of a
certificate which states whether we are in default under the terms of the
indenture.
Notwithstanding any other provision of the indenture, the holder of a debt
security will have the right, which is absolute and unconditional, to receive
payment of the principal of and premium, if any, and interest, if any, on that
debt security on the respective due dates for those payments and to institute
suit for the enforcement of those payments, and this right will not be impaired
without the consent of the holder.
Modification and waivers
The indenture permits us and the trustee, with the consent of the holders
of a majority in principal amount of the outstanding debt securities of each
series issued under the indenture and affected by a modification or amendment,
to modify or amend any of the provisions of the indenture or of the debt
securities of the applicable series or the rights of the holders of the debt
securities of that series under the indenture. However, no modification or
amendment may, without the consent of the holder of each outstanding debt
security issued under the indenture affected by the modification or amendment,
among other things:
. change the stated maturity of the principal of, or premium, if
any, or any installment of interest, if any, on or any additional
amounts, if any, with respect to any debt securities issued under
the indenture;
. reduce the principal of or any premium on any debt securities or
reduce the rate of interest on or the redemption or repurchase
price of any debt security, or any additional amounts with respect
to any debt securities, or change our obligation to pay additional
amounts;
. reduce the amount of principal of any original issue discount
securities that would be due and payable upon an acceleration of
the maturity of the debt security;
. adversely affect any right of repayment or repurchase at the
option of any holder;
. change any place where or the currency in which the principal of
to, any debt securities are payable;
29
. impair the holder's right to institute suit to enforce the
payment of any debt securities on or after their stated maturity
or, in the case of redemption, on or after the redemption date; or
. reduce the percentage of debt securities of any series issued
under the indenture whose holders must consent to any modification
or amendment or any waiver of compliance with specific provisions
of the indenture or specified defaults under the indenture and
their consequences.
The indenture also contains provisions permitting us and the trustee,
without the consent of the holders of any debt securities issued under the
indenture, to modify or amend the indenture, among other things:
. to evidence the succession of another person to us under the
indenture and the assumption of our obligations contained in the
indenture and the debt securities;
. to add to our covenants for the benefit of the holders of all or
any series of debt securities issued under the indenture or to
surrender any right or power conferred upon us in the indenture
with respect to all or any series of debt securities issued under
the indenture;
. to add to or change any provisions of the indenture to facilitate
the issuance of bearer securities;
. to establish the form or terms of debt securities of any series
and any related coupons, including, deletions from or additions or
changes to the indenture in connection with the modification or
amendment, so long as those deletions, additions and changes are
not applicable to any other series of debt securities then
outstanding;
. to cure any ambiguity or correct or supplement any provision in
the indenture which may be defective or inconsistent with other
provisions in the indenture, or to make any other provisions with
respect to matters or questions arising under the indenture which
will not adversely affect the interests of the holders of the debt
securities of any series then outstanding;
. to add any additional events of default with respect to all or
any series of debt securities; or
. to amend or supplement any provision contained in the
30
indenture, provided that the amendment or supplement does not
apply to any outstanding debt securities issued before the date
of the amendment or supplement that is entitled to the benefits
of that provision.
The holders of a majority in aggregate principal amount of the
outstanding debt securities of any series may waive our compliance
with some of the restrictive provisions of the indenture, which may
include covenants, if any, which are specified in the applicable
prospectus supplement. The holders of a majority in aggregate
principal amount of the outstanding debt securities of any series may,
on behalf of all holders of debt securities of that series, waive any
past default under the indenture with respect to debt securities of
that series and its consequences, except a default in the payment of
the principal of, or premium, if any, or interest, if any, on debt
securities of that series or a default in respect of a covenant or
provision which cannot be modified or amended without the consent of
the holder of each outstanding debt security of the affected series.
Discharge, defeasance and covenant defeasance
Unless otherwise provided in the applicable prospectus supplement,
upon our direction, the indenture will cease to be of further effect with
respect to any series of debt securities issued under the indenture specified by
us, subject to the survival of specified provisions of the indenture, when:
. either
- all outstanding debt securities of that series and, in
the case of bearer securities, all related coupons, have
been delivered to the trustee for cancellation, subject
to exceptions, or
- all debt securities of that series and, if applicable,
any related coupons have become due and payable or will
become due and payable at their stated maturity within
one year or are to be called for redemption within one
year and we have deposited with the trustee, in trust,
funds in United States dollars, in the foreign currency
in which the debt securities of that series are payable,
or direct or indirect obligations of the United States or
the government which issued the applicable foreign
currency ("government obligations") in an amount
sufficient to pay the entire indebtedness on the debt
securities of that series in respect of principal,
premium, if any, and interest, if any, and, to the extent
that the debt securities of that series provide for the
payment of additional amounts and the amount of any
additional amounts which are or will be
31
payable is at the time of deposit reasonably determinable by
us, in the exercise of our sole discretion, those additional
amounts, to the date of the deposit, if the debt securities
of that series have become due and payable, or to the
maturity or redemption date of the debt securities of that
series, as the case may be;
. we have paid all other sums payable under the indenture with
respect to the debt securities of that series; and
. the trustee has received an officers' certificate and an
opinion of counsel called for by the indenture.
If the debt securities of any series provide for the payment of
additional amounts, we will remain obligated, following the deposit described
above, to pay additional amounts on those debt securities to the extent that
they exceed the amount deposited in respect of those additional amounts as
described above.
Unless otherwise provided in the applicable prospectus supplement, we
may elect with respect to any series of debt securities either
. to defease and be discharged from all of our obligations
with respect to that series of debt securities ("defeasance"),
except for, among other things,
- the obligation to pay additional amounts with respect to
payments on that series of debt securities to the extent that
those additional amounts exceed the amount deposited in
respect of those amounts as provided below,
- the obligation to register the transfer or exchange of those
debt securities,
- the obligation to replace temporary or mutilated, destroyed,
lost or stolen debt securities,
- the obligation to maintain an office or agency in respect of
that series of debt securities,
- the obligation to hold moneys for payment in trust, and
- the obligation, if applicable, to repurchase or repay debt
securities of that series at the option of the holders in
accordance with their terms, or
32
. to be released from our obligations with respect to the
debt securities of the series under specified covenants in the
indenture including those described under the heading
"Restrict Covenants" and, if applicable, other covenants as
may be specified in the applicable prospectus supplement, and
any omission to comply with those obligations will not
constitute a default or an event of default with respect to
that series of debt securities ("covenant defeasance"),
in either case upon the irrevocable deposit with the trustee, or other
qualifying trustee, in trust for that purpose, of an amount in United States
dollars or in the foreign currency in which those debt securities are payable at
stated maturity or, if applicable, upon redemption, and/or government
obligations which, through the payment of principal and interest in accordance
with their terms, will provide money in an amount sufficient to pay the
principal of and any premium and any interest on, and, to the extent that the
debt securities of that series provide for the payment of additional amounts and
the amount of the additional amounts which are or will be payable is at the time
of deposit reasonably determinable by us, in the exercise of our sole
discretion, the additional amounts with respect to, that series of debt
securities, and any mandatory sinking fund or analogous payments on that series
of debt securities, on the due dates for those payments.
The defeasance or covenant defeasance described above will only be
effective if, among other things:
. it will not result in a breach or violation of, or
constitute a default under, the indenture or any other
material agreement or instrument to which we are a party or
are bound;
. in the case of defeasance, we will have delivered to the
trustee an opinion of independent counsel confirming that
- we have received from or there has been published by the
Internal Revenue Service a ruling, or
- since the date of the indenture there has been a change
in applicable federal income tax law,
in either case to the effect that, and based on this ruling
or change the opinion of counsel will confirm that, the
holders of the debt securities of the applicable series will
not recognize income, gain or loss for federal income tax
purposes as a result of the defeasance and will be subject to
federal income tax on the same amounts, in the same manner and
at the same times as would have been the case if the
defeasance had not occurred;
33
. in the case of covenant defeasance, we will have
delivered to the trustee an opinion of independent counsel to
the effect that the holders of the debt securities of that
series will not recognize income, gain or loss for federal
income tax purposes as a result of the covenant defeasance and
will be subject to federal income tax on the same amounts, in
the same manner and at the same times as would have been the
case if the covenant defeasance had not occurred;
. if the cash and/or government obligations deposited are
sufficient to pay the principal of, and premium, if any, and
interest and additional amounts, if any, with respect to the
debt securities of that series provided those debt securities
are redeemed on a particular redemption date, we will have
given the trustee irrevocable instructions to redeem those
debt securities on that date; and
. no event of default or event which with notice or lapse
of time or both would become an event of default with respect
to debt securities of that series will have occurred and be
continuing on the date of the deposit into trust; and, solely
in the case of defeasance, no event of default arising from
specified events of bankruptcy, insolvency or reorganization
with respect to us or any restricted subsidiary or event which
with notice or lapse of time or both would become an event of
default will have occurred and be continuing during the period
through and including the 91st day after the date of the
deposit into trust.
Unless otherwise provided in the applicable prospectus supplement, if
after we have deposited funds and/or government obligations to effect defeasance
or covenant defeasance with respect to debt securities of any series,
. the holder of a debt security of that series is entitled
to, and does, elect under the indenture or the terms of that
debt security to receive payment in a currency other than the
currency in which the deposit has been made, or
. a conversion event, as defined below, occurs in respect
of the foreign currency in which the deposit has been made,
the indebtedness represented by that debt security will be deemed to
have been, and will be, fully discharged and satisfied through the payment of
the principal of and premium, if any, and interest, if any, on that debt
security as it becomes due out of the proceeds yielded by converting the amount
deposited in respect of that debt security into the currency in which that debt
security becomes payable as a result of the election or conversion event based
on, in the case
34
of payments made under the first bullet above, the applicable market exchange
rate for the foreign currency in effect on the second business day before the
payment date, or, with respect to a conversion event, the applicable market
exchange rate for the foreign currency in effect, as nearly as feasible, at the
time of the conversion event.
For purposes of the indenture, a "conversion event" is the cessation of
the use of a foreign currency both by the government of the country or the
confederation which issued the foreign currency and for the settlement of
transactions by a central bank or other public institutions of or within the
international banking community, or any currency unit or composite currency for
the purposes for which it was established.
In the event we effect covenant defeasance with respect to debt
securities of any series and those debt securities are declared due and payable
because of the occurrence of any event of default other than an event of default
with respect to the covenants as to which covenant defeasance has been effected,
which would no longer be applicable to the debt securities of that series after
covenant defeasance, the amount of monies and/or government obligations
deposited with the trustee to effect covenant defeasance may not be sufficient
to pay amounts due on the debt securities of that series at the time of any
acceleration resulting from that event of default. However, we would remain
liable to make payment of those amounts due at the time of acceleration.
The applicable prospectus supplement may further describe the
provisions, if any, permitting or restricting defeasance or covenant defeasance
with respect to the debt securities of a particular series.
Regarding the trustee
We and our subsidiaries may maintain deposit accounts and conduct other
banking transactions with the trustee or its affiliates in the ordinary course
of business, and the trustee and its affiliates may from time to time in the
future provide us with banking and financial services in the ordinary course of
their business.
--------------------------------------------------------------------------------
PLAN OF DISTRIBUTION
We may sell any or all of the offered securities through agents,
underwriters, dealers or directly to purchasers. Agents who we designate may
solicit offers to purchase the securities.
. We will name any agent involved in offering or selling securities, and
any commissions that we will pay to the agent, in our prospectus
supplement.
. Unless we indicate otherwise in our prospectus supplement, our agents
will act on a best efforts basis for the period of their appointment.
. Our agents may be deemed to be underwriters under the Securities Act of
35
1933 of any of the securities that they offer or sell.
We may use an underwriter or underwriters in the offer or sale of our
securities.
. If we use an underwriter or underwriters, we will execute an underwriting
agreement with the underwriter or underwriters at the time that we reach
an agreement for the sale of the securities.
. We will include the names of the specific managing underwriter or
underwriters, as well as any other underwriters, and the terms of the
transactions, including the compensation the underwriters and dealers
will receive, in our prospectus supplement.
. The underwriters will use our prospectus supplement to sell the
securities.
We may use a dealer to sell the securities.
. If we use a dealer, we, as principal, will sell the securities to the
dealer.
. The dealer will then sell the securities to the public at varying prices
that the dealer will determine at the time it sells our securities.
. We will include the name of the dealer and the terms of our transactions
with the dealer in our prospectus supplement.
We may solicit directly offers to purchase the securities, and we may
directly sell the securities to institutional or other investors. We will
describe the terms of our direct sales in our prospectus supplement.
We may indemnify agents, underwriters, and dealers against certain
liabilities, including liabilities under the Securities Act. Our agents,
underwriters, and dealers, or their affiliates, may be customers of, engage in
transactions with or perform services for us, in the ordinary course of
business.
We may authorize our agents and underwriters to solicit offers by
certain institutions to purchase the securities at the public offering price
under delayed delivery contracts.
. If we use delayed delivery contracts, we will disclose that we are using
them in the prospectus supplement and will tell you when we will demand
payment and delivery of the securities under the delayed delivery
contracts.
. These delayed delivery contracts will be subject only to the conditions
that we describe in the prospectus supplement.
. We will describe in our prospectus supplement the commission that
36
underwriters and agents soliciting purchases of the securities under
delayed contracts will be entitled to receive.
In addition, from time to time, underwriters may offer and sell our
common stock (or certain of the other offered securities) at a fixed price or
prices, which may be changed, at market prices prevailing at the time of sale,
at prices related to the prevailing market prices or at negotiated prices. We
also may, from time to time, authorize dealers or agents to offer and sell these
securities upon such terms and conditions as may be set forth in the applicable
prospectus supplement. In connection with the sale of any of these securities,
underwriters may also receive commissions from purchasers of the securities for
whom they may act as agent.
Shares of our common stock may also be sold in one or more of the following
transactions:
.. block transactions (which may involve crosses) in which a broker-dealer
may sell all or a portion of the shares as agent but may position and
resell all or a portion of the block as principal to facilitate the
transaction;
.. purchases by a broker-dealer as principal and resale by the
broker-dealer for its own account pursuant to a prospectus supplement;
.. a special offering, an exchange distribution or a secondary
distribution in accordance with applicable stock exchange rules;
.. ordinary brokerage transactions and transactions in which a
broker-dealer solicits purchasers;
.. sales "at the market" to or through a market maker or into an existing
trading market, on an exchange or otherwise, for shares; and
.. sales in other ways not involving market makers or established trading
markets, including direct sales to purchasers.
Broker-dealers may also receive compensation from purchasers of the
shares which is not expected to exceed that customary in the types of
transactions involved.
Offered securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing upon their
purchase, in accordance with a redemption or repayment pursuant to their terms,
or otherwise, by one or more remarketing firms, acting as principals for their
own accounts or as agents for us. Any remarketing firm will be identified and
the terms of its agreements, if any, with us, and any related compensation
arrangements contemplated thereby will be described in the applicable prospectus
supplement.
In connection with the offering of the securities hereby, certain
underwriters, and selling group members and their respective affiliates, may
engage in transactions that stabilize, maintain or otherwise affect the market
price of the applicable securities. These transactions may include stabilization
transactions effected in accordance with Rule 104 of Regulation M promulgated by
the SEC pursuant to which these persons may bid for or purchase securities for
the purpose of stabilizing their market price.
The underwriters in an offering of securities may also create a "short
position" for their account by selling more securities in connection with the
offering than they are committed to purchase from us. In that case, the
underwriters could cover all or a portion of the short position
37
by either purchasing securities in the open market following completion of the
offering of these securities or by exercising any over-allotment option granted
to them by us. In addition, the managing underwriter may impose "penalty bids"
under contractual arrangements with other underwriters, which means that they
can reclaim from an underwriter (or any selling group member participating in
the offering) for the account of the other underwriters, the selling concession
for the securities that are distributed in the offering but subsequently
purchased for the account of the underwriters in the open market. Any of the
transactions described in this paragraph or comparable transactions that are
described in any accompanying prospectus supplement may result in the
maintenance of the price of the securities at a level above that which might
otherwise prevail in the open market. None of the transactions described in this
paragraph or in an accompanying prospectus supplement are required to be taken
by any underwriters and, if they are undertaken, may be discontinued at any
time.
Each series of securities, except for our common stock, will be a new issue
of securities and will have no established trading market. Any underwriters to
whom we sell securities for public offering and sale may make a market in the
securities, but such underwriters will not be obligated to do so and may
discontinue any market making at any time without notice. The securities, other
than the common stock, may or may not be listed on a national securities
exchange.
38
--------------------------------------------------------------------------------
LEGAL MATTERS
The validity of each of the offered securities when, and if
issued hereunder will be passed upon for us by our Senior Vice
President and General Counsel, Thomas J. Sabatino, Jr. Mr. Sabatino
owns shares of, and options on, our common stock, both directly, and
as a participant in various stock and employee benefit plans. See our
most recent proxy statement for additional details.
--------------------------------------------------------------------------------
INDEPENDENT ACCOUNTANTS
The financial statements of Baxter International Inc.
incorporated in this prospectus by reference to Baxter's Annual Report
on Form 10-K for the year ended December 31, 2001, have been audited
by PricewaterhouseCoopers LLP, independent accountants, as stated in
their report appearing therein.
--------------------------------------------------------------------------------
39
--------------------------------------------------------------------------------
PROSPECTUS DATED NOVEMBER __, 2002
[LOGO]
Baxter International Inc.
Up to $2,000,000,000 of
Common Stock, $1 Par Value
Preferred Stock
Convertible Preferred Stock
Warrants to Purchase Common Stock or Debt Securities
Convertible Debt Securities
Equity Purchase Contracts
Equity Purchase Units
Debt Securities
--------------------------------------------------------------------------------
40
--------------------------------------------------------------------------------
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distributions.*
Securities and Exchange Commission
registration fee: ......................... $184,000
Accounting fees ........................... 15,000
Legal fees and expenses ................... 10,000
Miscellaneous ............................. 1,000
--------
Total ................................ $210,000
========
All amounts are estimated except for the Securities and Exchange Commission
registration fee.
Item 15. Indemnification of Directors and Officers.
The registrant, a Delaware corporation, is empowered by section 145 of the
Delaware General Corporation Law, subject to the procedures and limitations
stated therein, to indemnify any person against expenses (including attorney's
fees), judgments, fines and amounts paid in settlement actually and reasonably
incurred by such person in the defense of any threatened, pending or completed
action, suit or proceeding in which such person is made a party by reason of his
or her being or having been a director or officer of the registrant. The statute
provides that indemnification pursuant to its provisions is not exclusive of
other rights of indemnification to which a person may be entitled under any
bylaw, agreement, vote of stockholders or disinterested directors, or otherwise.
The Restated Certificate of Incorporation of the registrant provides that the
registrant shall indemnify its directors and officers substantially to the
fullest extent permitted by the Delaware General Corporation Law.
The registrant is also empowered by section 102(b) of the Delaware General
Corporation Law to include a provision in its certificate of incorporation to
limit a director's liability to the registrant or its stockholders for monetary
damages for breaches of fiduciary duty as a director. Article Eighth of the
Restated Certificate of Incorporation states that directors of the registrant
shall not be liable for monetary damages for breach of fiduciary duty "to the
fullest extent permitted by the General Corporation Law of Delaware as the same
exists or may hereafter be amended." Under currently applicable Delaware law
then, directors will remain liable for damages for (i) a breach of their duty of
loyalty to the registrant and its stockholders; (ii) their
41
failure to act in good faith; (iii) their intentional misconduct or knowing
violation of law; (iv) improper dividend payments, stock repurchases or
redemptions; and (v) any transaction from which the director derived an improper
personal benefit.
Policies of insurance are maintained by the registrant under which the
directors and officers of the registrant are insured, within the limits and
subject to the limitations of the polices, against certain expenses in
connection with the defense of actions, suits or proceedings, and certain
liabilities which might be imposed as a result of such actions, suits or
proceedings, to which they are parties by reason of being or having been such
directors or officers which could include liabilities under the Securities Act
of 1933 or the Securities Exchange Act of 1934.
The registrant has entered into indemnification agreements with its
officers and directors, which its stockholders have approved or ratified. These
agreements provide for full indemnification, including indemnification for
judgments or settlements against an officer or director in favor of the
registrant, with certain exceptions. This indemnity could apply to liabilities
under the Securities Act of 1933 in certain circumstances.
The proposed form of underwriting agreement filed as Exhibit 1.1 to this
registration statement provides for indemnification of directors and officers of
the registrant by the underwriters against certain liabilities. Similar
indemnification provisions were contained in the underwriting agreements
executed in connection with prior offerings and sales of securities by the
registrant.
Item 16. Exhibits.
Exhibits marked with an asterisk (*) are incorporated by reference to
documents previously filed by the Registrant with the Securities and Exchange
Commission, as indicated. All other documents are filed with this Registration
Statement.
Number Description
------ -----------
1.1 Form of underwriting agreement.
4.1* Restated Certificate of Incorporation, as amended, including
Certificate of Designation of Series B Junior Participating
Preferred Stock filed as Exhibit 3.1. to the Company's Form 10-Q
for the quarter ended June 30, 2002
4.2* Amended and Restated Bylaws dated September 24, 2002, filed as
Exhibit 3.3. to the Company's Form 10-Q for the quarter ended
September 30, 2002.
4.3* Indenture dated as of April 26, 2002 by and among the Company
and
42
Bank One Trust Company, N.A. as trustee, filed as Exhibit 4.1 to
the Company's registration statement on Form S-3 (No. 333-82988)
(the "Debt S-3").
4.4* Form of Debenture with optional sinking fund and redemption
provisions, filed as Exhibit 4.2 to the Company's registration
statement on Form S-3 (No. 33-1665) (the "Prior S-3").
4.5* Form of Note with optional redemption provisions, filed as
Exhibit 4.3 to the Prior S-3.
4.6* Form of Deep Discount Note or Debenture, filed as Exhibit 4.4
to the Prior S-3.
4.7* Form of Zero Coupon Note of Debenture, filed as Exhibit 4.5 to
the Prior S-3.
4.8* Form of Extendible Note, filed as Exhibit 4.6 to the Prior S-3.
4.9* Form of Floating Rate Note, filed as Exhibit 4.7 to the Prior
S-3.
4.10* Form of Medium-Term Note, filed as Exhibit 4.9 to the Prior
S-3.
5 Opinion of Thomas J. Sabatino, Jr., Senior Vice President and
General Counsel of Registrant.
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Thomas J. Sabatino, Jr. (included in Exh. 5).
24 Powers of Attorney (contained in the signature page to this
Registration Statement).
25* Form T-1 Statement of Eligibility under the Trust Indenture Act
of 1939, as amended, of Bank One Trust Company, N.A. as trustee
under the Indenture, filed as Exhibit 25 to the Debt S-3.
43
ITEM 17. UNDERTAKINGS.
(a) Rule 415 Offering:
The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration Fee"
table in the effective registration statement;
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the registration statement or any
material change to such information in the registration statement;
Provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by such registrant pursuant to section 13 or section 15(d) of the
Securities Exchange Act of 1934 that are incorporated by reference in the
registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
44
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) Filings Incorporating Subsequent Exchange Act Documents by Reference:
The undersigned registrant hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933, the filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
(c) Acceleration of Effectiveness:
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
registrant pursuant to the foregoing provisions, or otherwise, the registrant
has been advised that in the opinion of the Securities and Exchange Commission
such indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the registrant of expenses incurred
or paid by a director, officer or controlling person, if any, of the registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) Rule 430A Offering:
The undersigned registrant hereby undertakes that:
(1) For purposes of determining any liability under the Securities Act of
1933, the information omitted from the form of prospectus filed as part of this
registration statement in reliance upon Rule 430A and contained in a form of
prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h)
under the Securities Act shall be deemed to be part of this registration
statement as of the time it was declared effective.
(2) For the purpose of determining any liability under the Securities Act
of 1933, each post-effective amendment that contains a form of prospectus shall
be deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
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(e) Qualification of Trust Indentures for Delayed Offerings:
The undersigned registrant hereby undertakes to file an application for the
purpose of determining eligibility of the trustee to act under subsection (a) of
section 310 of the Trust Indenture Act ("Act") in accordance with the rules and
regulations prescribed by the Commission under section 305(b)(2) of the Act.
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
Registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing this Registration Statement or amendment thereto
on Form S-3 and has duly caused this Registration Statement to be signed on its
behalf by the undersigned, thereunto duly authorized, in the City of Deerfield,
State of Illinois, as of November 7, 2002.
BAXTER INTERNATIONAL INC.
By: /s/ Harry M. Jansen Kraemer, Jr.
--------------------------------
Name: Harry M. Jansen Kraemer, Jr.
Title: Chief Executive Officer
KNOW ALL BY THESE PRESENTS, that each person whose signature appears below
constitutes and appoints Harry M. Jansen Kraemer, Jr. and Thomas J. Sabatino,
Jr., and each of them, his or her true and lawful attorneys-in-fact and agents,
with full power of substitution and resubstitution, in any and all capacities,
to sign any or all amendments (including post-effective amendments) to this
Registration Statement, including any filings under Rule 462 promulgated under
the Securities Act of 1933, as amended, and to file the same with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents full power
and authority to do and perform each and every act and thing requisite and
necessary to be done in and about the premises, as fully to all intents and
purposes as he or she might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement amendment has been signed below by the following
persons in the capacities indicated as of November 7, 2002.
Signature Title
------------- -----
46
/s/ Harry M. Jansen Kraemer, Jr. Chairman of the Board of Directors
-------------------------------- Executive Officer
Harry M. Jansen Kraemer, Jr. (principal executive officer)
/s/ Brian P. Anderson Senior Vice President and Chief
-------------------------- Financial Officer (principal
Brian P. Anderson financial officer and
principal accounting officer)
/s/ Walter E. Boomer Director
-------------------------
Walter E. Boomer
/s/ Pei-yuan Chia Director
--------------------
Pei-yuan Chia
/s/ John W. Colloton Director
------------------------
John W. Colloton
/s/ Susan Crown Director
-------------------
Susan Crown
/s/ Gail D. Fosler Director
---------------------
Gail D. Fosler
/s/ Martha R. Ingram Director
-------------------------
Martha R. Ingram
/s/ Joseph Martin Director
---------------------
Joseph Martin, M.D., Ph.D.
/s/ Thomas T. Stallkamp Director
-----------------------
Thomas T. Stallkamp
/s/ Monroe E. Trout Director
-------------------
Monroe E. Trout
/s/ Fred L. Turner Director
------------------
Fred L. Turner
47