BAXTER INTERNATIONAL INC (Form: 8-K, Received: 10/03/2023 09:07:58)

BAXTER INTERNATIONAL INC.

Date: October 3, 2023

/s/ Ellen K. Bradford

Ellen K. Bradford

Senior Vice President and Corporate Secretary

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D)

OF THE SECURITIES EXCHANGE ACT OF 1934

Date of Report (Date of earliest event reported): September 29, 2023

Baxter International Inc.

(Exact name of registrant as specified in its charter)

Delaware

(State or other jurisdiction of incorporation)


1-4448		36-0781620
(Commission File Number)		(I.R.S. Employer Identification No.)


One Baxter Parkway, Deerfield, Illinois		60015
(Address of principal executive offices)		(Zip Code)

(224) 948-2000

(Registrant’s telephone number, including area code)

(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d 2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock, $1.00 par value	BAX (NYSE)	New York Stock Exchange
		Chicago Stock Exchange
1.3% Global Notes due 2025	BAX 25	New York Stock Exchange
1.3% Global Notes due 2029	BAX 29	New York Stock Exchange
0.4% Global Notes due 2024	BAX 24	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter):

☐ Emerging growth company

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act: ☐

Item 5.02

Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.

On September 29, 2023, Baxter International Inc. (the “Company”) appointed Mr. Joel T. Grade as its Executive Vice President and Chief Financial Officer, effective as of October 18, 2023. In connection with his appointment, on October 18, 2023, Brian Stevens will cease serving as the Company’s interim Chief Financial Officer and will continue serving as the Company’s Senior Vice President, Chief Accounting Officer and Controller.

Mr. Grade, 53, has served in various capacities at Sysco Corporation across his 25-year career with the company, including most recently as Executive Vice President, Corporate Development since December 2020 and Executive Vice President and Chief Financial Officer of Sysco Corporation from 2015 to December 2020. Mr. Grade holds a bachelor’s degree in accounting and finance from the University of Wisconsin and an MBA from Northwestern University.

Mr. Grade does not have any family relationships with any of the Company’s directors or executive officers, there are no arrangements or understandings between Mr. Grade and any other persons pursuant to which he was selected as an officer, and there are no transactions between Mr. Grade and the Company that would be required to be reported under Item 404(a) of Regulation S-K.

In connection with Mr. Grade’s appointment as Executive Vice President and Chief Financial Officer, the Company entered into an offer letter with Mr. Grade, dated September 26, 2023 (the “Offer Letter”). Pursuant to the Offer Letter (which was subject to Board approval of his appointment as an executive officer), Mr. Grade is entitled to the following:

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Annual base salary of $800,000;

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Eligibility to participate in the Company’s Management Incentive Compensation Program with a target bonus of 100% of annual base salary, including eligibility for a prorated bonus opportunity for 2023 based on the number of days worked in 2023;

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Eligibility to receive an annual equity-based grant pursuant to the Company’s long-term incentive program (the “LTIP”) commencing in 2024 with a target grant value of $3,600,000;

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Two one-time equity grants under the LTIP, which, in each case, will be made during the first quarterly off-cycle grant date after October 18, 2023: (i) the first with a target grant value of $3,600,000 consisting of 50% performance share units (“PSUs”), 25% restricted stock units (“RSUs”) and 25% stock options, and (ii) the second with a target grant value of $1,000,000 consisting solely of RSUs, with all RSUs and stock options under both grants vesting one-third per year on the first three anniversaries of the grant date, subject to continuing employment through the vesting dates, and with the performance period against which PSUs under the first grant will be measured being January 1, 2023 through December 31, 2025, using the metrics and targets set for that performance period for all other eligible participants under the LTIP;

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One-time supplemental cash payment of $500,000 after 90 days of employment, subject to full repayment upon resignation or termination by Baxter (except through an involuntary termination for which Mr. Grade is eligible for severance under Baxter’s Executive Severance Plan) within 12 months of October 18, 2023 and 50% repayment upon the same occurring within 12 to 24 months of October 18, 2023; and

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Participation in the Company’s other benefit plans in accordance with practices for other executives of a similar level (including participation in Baxter’s Executive Severance Plan and entry into the Company’s form of Change in Control agreement for executive officers).

The foregoing summary of the Offer Letter is qualified in its entirety by the complete text of the Offer Letter, a copy of which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

Item 7.01.

Regulation FD Disclosure.

On October 3, 2023, the Company issued a press release announcing Mr. Grade’s appointment as Executive Vice President and Chief Financial Officer. A copy of the press release is furnished as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.

The information in this Item 7.01, including Exhibit 99.1 to this Current Report on Form 8-K, shall not be deemed filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liabilities of that Section, nor shall it be deemed incorporated by reference in any registration statement or other filing under the Securities Act of 1933, as amended, or the Exchange Act, except in the event that the Company expressly states that such information is to be considered filed under the Exchange Act or incorporates it by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits.

(d) Exhibits


Exhibit No.		Description of Exhibits

10.1		Offer Letter, dated September 26, 2023, by and between Baxter International Inc. and Joel Grade

99.1		Press Release, dated October 3, 2023

104		Cover Page Interactive Data File (embedded within the Inline XBRL document)

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Exhibit 10.1

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September 26, 2023

Joel Grade

Dear Joel,

We are pleased to welcome you to Baxter International Inc. (“Baxter” or the “Company”) and to confirm our verbal offer of employment. This is where your purpose accelerates our mission to Save and Sustain Lives. At Baxter, you will join around 60,000 colleagues, in 100 countries, who share common traits like being reliable, ethical, and caring. Together, we create a place where we are happy, successful and inspire each other.

Your first day of employment will be October 18, 2023. Your job title will be Executive Vice President and Chief Financial Officer, reporting to Joe Almeida, Chairman, Chief Executive Officer & President. This role, which is a full-time exempt position, is based in Deerfield, Illinois and is not remote. Subject to formal appointment by the Board of Directors of Baxter (the “Board”), it is anticipated you will be appointed as an executive officer of the Company.

TERMS OF EMPLOYMENT

The following explains the terms of your employment. Please note that all compensation actions have been approved by the Compensation and Human Capital Committee (“CHCC”) of the Board.

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Your salary will be $800,000 annualized, less applicable deductions and withholdings.

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You will be eligible to participate in the Management Incentive Compensation Program (the “Program”) with a bonus target of 100% of your annual salary. For 2023, you will be eligible for a prorated bonus opportunity based on the number of days worked in 2023. The actual bonus you will receive will vary depending on both Baxter’s performance and your individual assessment for the year, and the bonus is subject to the other terms and conditions of the Program.

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In addition, you will receive a one-time, supplemental cash payment of $500,000 minus applicable taxes. You will receive this supplemental cash payment after ninety (90) days of employment with Baxter, provided you are actively employed on the date of payment. This supplemental payment will not be considered eligible earnings for Baxter’s qualified retirement or welfare benefit plans. Should your employment with the Company be terminated for any reason by you or by Baxter (except through an involuntary termination for which you are eligible for severance under Baxter’s Executive Severance Plan) within twelve (12) months of your start date, you will be responsible for 100% re-payment of this bonus, and if within 12-24 months you will be responsible for 50% re-payment of this bonus.

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You will be eligible to participate in the Company’s annual equity program. The next annual equity grant is scheduled for March 2024. Your target annual equity grant value will be $3,600,000. The annual equity grant is expected to be a mix of 50% performance share units (“PSUs”), 25% restricted stock units (“RSUs”) and 25% stock options. Your target grant value will be converted into the applicable number of PSUs, RSUs and stock options using the Company’s standard calculation methodology. The Company’s equity targets and mix are assessed annually and are subject to change based on market competitiveness and the Company’s financial performance. Therefore, your equity target grant value and mix in the future may be greater or less than what is stated in this letter. Your actual equity target grant value will be based on a combination of your equity target and an assessment of your individual performance and potential.

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All equity grants are subject to the terms and conditions of the underlying equity plan and corresponding agreements, including the Agreement Regarding Competition and Protection of Proprietary Interests (the “CPPI Agreement”).

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You will receive two off-cycle equity grants:

The first has a target grant value of $3,600,000, which will be delivered 50% in PSUs, 25% in RSUs, and 25% in stock options

The second has a target grant value of $1,000,000, which will be fully delivered in RSUs.

Both grants will be made during the first quarterly off-cycle grant date after your date of hire (customarily the first business day of March, June, September or December). All RSUs and stock options will vest one-third per year on the first three anniversaries of the grant date, so long as you remain employed with the Company through the vesting dates. The performance period against which the PSUs will be measured will be January 1, 2023 through December 31, 2025, using the metrics and targets set for that performance period for all other eligible participants, and are expected to vest following CHCC certification of the results in the first quarter of 2026.

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As an executive officer, your compensation increases are approved by the CHCC through a “pay for performance” philosophy.

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You will be eligible for the Company’s standard Change in Control agreement, which governs in the event of a change in control of the Company. Upon joining the Company, you will be provided a copy of the agreement.

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You will be eligible for 30 days of paid time off per year. Should your employment terminate, you will be paid for any earned and unused paid time off in accordance with Baxter’s standard policy.

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The term of your employment is “at will”, which means that you or the Company may end your employment at any time and for any reason.

STOCK OWNERSHIP GUIDELINES

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You will be required to attain and hold Company stock equal in value to four (4) times your annual base salary. Under current guidelines, you will have five years from your date of hire to achieve this level of ownership. Stock held for ownership determination includes common stock held directly or indirectly and unvested RSUs. It does not include stock options or unvested PSUs. The Company reserves the right to change the guidelines at any time.

BENEFITS

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Baxter provides a comprehensive benefits program. More detailed information regarding Baxter’s benefits program will be discussed in your new employee orientation. If you have immediate questions about benefits and coverage, you may contact Martha Peterson, Vice President, Total Rewards at 224-453-2353.

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As of your start date, you will be eligible to participate in Baxter’s Flexible Benefits Program which includes: Medical Benefits, Dental Benefits, Prescription Service, and Personal Accident Insurance, subject to the Plan’s provisions. Please note that you must enroll within 21 days of your start date to receive this coverage. You are also immediately eligible for Basic Employee Term Life Insurance, Long Term Disability Insurance, and Business Travel Insurance. You will be eligible to contribute to the 401(k) plan upon hire. At that time, you will also be eligible to participate in the company’s matching in the plan. All Company benefits are subject to amendment, modification, and cancellation from time to time and are subject to the governing plan documents.

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You will be eligible for reimbursement for an annual executive physical examination. The Company has a preferred vendor relationship with Northwestern Executive Health. Information about the program is available upon request.

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You will be eligible to participate in the U.S. Deferred Compensation Plan. Through this plan, you can elect to defer eligible compensation (base salary and Management Incentive Compensation Program bonuses) and receive Company contributions in respect to amounts above the Internal Revenue Service limits set for qualified 401(k) plans.

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You will be eligible to participate in the Employee Stock Purchase Program (the “Program”). However, as a designated Company insider, your participation in the Program will be contingent on receiving the appropriate pre-clearance to participate. Your subscription will begin on the first day of the calendar quarter (January 1, April 1, July 1 or October 1) following your enrollment. However, the

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deadline for entering your subscription is the 15th day of the month prior to the beginning of each calendar quarter (December 15, March 15, June 15 or September 15). If the first day of your subscription period is not a trading day, then the next preceding trading day will be used. Please also note that these dates are subject to change and additional blackout periods may arise in accordance with the terms of Baxter’s Securities Trading Policy.

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You are eligible for the Baxter International Inc. Executive Severance Plan, as may be amended from time to time, which provides certain benefits if you are involuntarily separated from the Company under qualifying circumstances. A copy of the Baxter International Inc. Executive Severance Plan is available upon request.

Please note that Baxter’s Benefits are subject to change and any such change would supersede this letter.

CONDITIONS OF EMPLOYMENT

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Background Screen: Your employment is contingent upon successful completion of a background screen that will be conducted on behalf of Baxter. You will receive a notification with more information from our background vendor. A Fair Credit Reporting Act Disclosure and A Summary of Your Rights Under the Fair Credit Reporting Act will be enclosed with the background check.

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Reference Verification: Your employment is contingent upon successful completion of and verification by your personal references you provide to Baxter.

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This letter also confirms that you have no obligations, oral or in writing, with any of your former employers which restrict your ability to be employed by Baxter. You understand that your continued employment is contingent upon this representation. Additionally, Baxter has not made this offer of employment to you in order to obtain from you any confidential or trade secret information of your former employers, and Baxter will not ask you to use or disclose such confidential and trade secret information in your Baxter employment. Indeed, you have a continuing obligation not to use or disclose the confidential and trade secret information of your former employers, and, by entering into Baxter employment, you acknowledge that you will not use or disclose any of the confidential and trade secret information of your former employers.

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Drug Screening: Your employment is contingent upon your timely scheduling and completion of a drug screening test in accordance with Company policy and receiving a negative result. If you have not already indicated your consent, you will be asked to do so before the screening is done. Please complete your drug screen within 72 hours of receiving notification to do so.

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Authorization to Work: This offer and continued employment at Baxter are contingent upon providing valid authorization to work in the United States. Federal guidelines require all new employees to complete I-9 forms within 72 hours of their start dates. You will receive an email with instructions on how to electronically complete the Employee Section, or Section 1 prior and a link to the acceptable forms of identification that you must bring on your first day. They will be used by your Human Resources representative to complete Section 2 of the I-9 form.

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Employment Agreement: You have accepted a position of trust, which requires the maintenance of confidence. Therefore, you are required to sign the Company Employment Agreement as part of your job tasks prior to start date. The benefits set forth in this offer letter, including the annual bonus opportunities, supplemental cash bonus, equity grants, Change in Control agreement and participation in the Executive Severance Plan are contingent upon your execution of the Employment Agreement.

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Baxter Code of Conduct and Executive Compensation Recoupment Policy: You will be emailed about our Code of Conduct that communicates Baxter’s business ethics policies and procedures. Please read it as soon as practicable. You will be asked to acknowledge your receipt and understanding of Baxter’s Code of Conduct following your start date. You and all applicable compensation will be subject to the Executive Compensation Recoupment Policy as in effect from time to time.

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Entire Agreement and Modifications: Together with the Employment Agreement and other agreements referenced herein, this offer letter includes the entire agreement between the parties on the subject matter hereof, and supersedes and replaces any prior offer or promise. Any subsequent modifications to this offer letter must be in writing and signed by a duly authorized representative of the Company.

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Joel, we are confident that you will make a significant contribution to the Company. Please indicate your acceptance by signing the offer and returning it to me. Please do not hesitate to contact me at if you need any assistance or have any questions.

Sincerely,

/s/ Jeanne Mason

Jeanne Mason

EVP, Chief Human Resources Officer

T 224.948.3525

jeanne_mason@baxter.com

AGREED TO AND ACCEPTED BY:

/s/ Joel Grade September 26, 2023

Joel Grade Date

cc: Joe Almeida, Chairman, Chief Executive Officer & President

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Exhibit 99.1

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FOR IMMEDIATE RELEASE

BAXTER APPOINTS JOEL GRADE CHIEF FINANCIAL OFFICER

DEERFIELD, Ill., Oct. 3, 2023 – Baxter International Inc. (NYSE:BAX), a global medtech leader, today announced it has appointed Joel Grade as executive vice president and chief financial officer (CFO), reporting to Baxter chairman, president and CEO, José (Joe) E. Almeida, effective Oct. 18, 2023. At that time, Brian Stevens, who has served as the company’s interim CFO since May 31, 2023, will transition to his prior role as senior vice president, chief accounting officer and controller.

“Joel is a seasoned global financial executive with decades of deep operational and broad business experience as well as a proven record of results-driven impact,” said Mr. Almeida. “I am confident we will benefit from Joel’s leadership as we continue to advance the transformational actions announced earlier this year to help fuel enhanced growth, innovation and value for the patients, clinicians, investors and numerous other stakeholder communities that depend on us.” Added Mr. Almeida, “I’d also like to thank Brian for serving as our interim CFO; we’re grateful for his contributions during the transition and look forward to his continued leadership in Baxter’s Finance organization.”

Mr. Grade, 53, joins Baxter following a distinguished 25-year career with Sysco, the world’s global foodservice leader with fiscal-year 2023 sales of more than $76 billion. Mr. Grade brings deep experience from various financial, commercial and executive leadership roles. He most recently served as Sysco’s executive vice president, corporate development, and previously held the roles of executive vice president and CFO as well as senior vice president of finance and chief accounting officer, and senior vice president of foodservice operations. He started his career as a senior auditor at Ernst & Young LLP. Mr. Grade earned a bachelor’s degree in accounting and finance with a specialization in international business from the University of Wisconsin-Madison and an MBA in finance, strategy and marketing from Northwestern University’s Kellogg School of Management.

“I’m very excited to join Baxter, an industry leader with a rich history, compelling future, patient-centric mission, and best-in-class talent,” said Mr. Grade. “The opportunity to contribute to Baxter’s ongoing transformation and make a meaningful difference for our many stakeholders is

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both motivating and well aligned with my experience in driving scale across large organizations and successfully executing against a company’s strategic objectives.”

About Baxter

Every day, millions of patients, caregivers and healthcare providers rely on Baxter’s leading portfolio of diagnostic, critical care, kidney care, nutrition, hospital and surgical products used across patient homes, hospitals, physician offices and other sites of care. For more than 90 years, we’ve been operating at the critical intersection where innovations that save and sustain lives meet the healthcare providers who make it happen. With products, digital health solutions and therapies available in more than 100 countries, Baxter’s employees worldwide are now building upon the company’s rich heritage of medical breakthroughs to advance the next generation of transformative healthcare innovations. To learn more, visit www.baxter.com and follow us on Twitter, LinkedIn and Facebook.

Media Contact

Stacey Eisen, (224) 948-5353

media@baxter.com

Investor Contact

Clare Trachtman, (224) 948-3020

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