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Item 9A. Controls and Procedures

2023-02-09 compared with 2022-02-23 · 31 added, 30 removed, 229 unchanged (21% of the section changed)

12 unchanged sentences

Based on that assessment under the framework in Internal Control-Integrated Framework (2013) , management concluded that our internal control over financial reporting was effective as of December 31, 2022.

In December 2021, Baxter acquired 100 percent of the voting equity interest in Hillrom.

As permitted by guidance issued by the SEC, management has excluded the internal controls of Hillrom from its annual assessment of the effectiveness of our internal control over financial reporting for December 31, 2021.

Hillrom is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment of internal control over financial reporting represent approximately 6% and 2%, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2021.

The effectiveness of our internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears herein.

Changes in Internal Control Over Financial Reporting

During the three months ended December 31, 2021, we implemented the first phase of a new global treasury management system supporting cash management, external debt, and risk management processes.

In conjunction with the implementation, we modified business processes impacted by the new system, such as transaction processing, user access security, authorization procedures and system reporting.

In subsequent periods, the remaining phases of the treasury management system will be implemented.

Other than as described in the preceding paragraph, there have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

There have been no changes in our internal control over financial reporting (as such term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) during the quarter ended December 31, 2022 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

Other Information.

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— Proposal 1 — Election of Directors,” “— Board of Directors — Nomination of Directors,” “— Committees of the Board — Audit Committee,” “— Board Responsibilities — Code of Conduct,” and “Ownership of Baxter Stock — Delinquent Section 16(a) Reports” in Baxter’s definitive proxy statement to be filed with the Securities and Exchange Commission and delivered to stockholders in connection with the Annual Meeting of Stockholders expected to be held on May 2, 2023 (the Proxy Statement), all of which information is incorporated herein by reference.

Also refer to information regarding executive officers of Baxter under the caption entitled “Executive Officers of the Registrant” in Part I of this Annual Report on Form 10-K.

Also refer to information regarding executive officers of Baxter under the caption entitled “Information about our Executive Officers” in Part I of this Annual Report on Form 10-K.

Executive Compensation.

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(3) Includes (i) 10,409,827 shares of common stock available for purchase under the Employee Stock Purchase Plan and (ii) 33,593,760 shares of common stock available under the 2021 Incentive Plan.

(4) Includes 667,640 replacement RSUs granted to holders of Hillrom equity awards at closing of the Hillrom acquisition.

(4) Includes 146,798 of outstanding replacement RSUs granted to holders of Hillrom equity awards at closing of the Hillrom acquisition.

These replacement RSUs were approved by our Board of Directors, not our stockholders.

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Certain Relationships and Related Transactions, and Director Independence .

Refer to the information under the first paragraph of the caption entitled “Corporate Governance—at Baxter International Inc.—Board of Directors” and the captions entitled “Corporate Governance at Baxter International Inc.—Board of Directors—Director Independence” and “Corporate Governance at Baxter International Inc.—Other Corporate Governance Information—Certain Relationships and Related Person Transactions” in the Proxy Statement, all of which information is incorporated herein by reference.

Refer to the information under the first paragraph of the caption entitled “Corporate Governance—at Baxter International Inc.—Board of Directors” and the captions entitled “Corporate Governance at Baxter International Inc.—Board Responsibilities—Director Independence” and “Corporate Governance at Baxter International Inc.—Other Corporate Governance Information—Certain Relationships and Related Person Transactions” in the Proxy Statement, all of which information is incorporated herein by reference.

Principal Accountant Fees and Services.

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Consolidated Balance Sheets

Consolidated Statements of Income

Consolidated Statements of Comprehensive Income

Consolidated Statements of Income (Loss)

Consolidated Statements of Comprehensive Income (Loss)

Consolidated Statements of Changes in Equity

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Number and Description of Exhibit

2.1 Separation and Distribution Agreement (incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on July 7, 2015).

2.1 Agreement and Plan of Merger, dated September 1, 2021, among Hill-Rom Holdings, Inc., the Company and Bel Air Subsidiary, Inc.

(incorporated by reference to Exhibit 2.1 to the Company’s Current Report on Form 8-K, filed on September 2, 2021).

Amended and Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 10, 2013).

3.2 Certificate of Amendment to the Amended and Restated Certificate of Incorporation dated May 3, 2016 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on May 4, 2016).

3.3 Bylaws, as amended and restated on November 13, 2018 (incorporated by reference to Exhibit 3.1 to the Company’s Current Report on Form 8-K, filed on November 15, 2018).

3.1 A mended and Restated Certific ate of Incorporation of Baxt er International Inc.

(incorporated by reference to Exhibit 3.1 to the Company's Current Report on Form 8-K, filed on May 6, 2022).

3.2 B ylaws, as amended and restated on May 5, 2022 (incorporated by refer ence to Exhibit 3.2 to the Company's Curre nt Report on Form 8-K , filed on May 6, 2022).

4.1(P) Form of Common Stock Certificate of the Company (incorporated by reference to Exhibit(a) to the Company’s Registration Statement on Form S-16 (Registration No.

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4.10 First Supplemental Indenture, dated as of March 26, 2020, to the Indenture, dated as of March 26, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee (including form of form of 3.950% Senior Notes due 2030) (incorporated by reference to Exhibit 4.2 to the Company’s Current Report on Form 8-K, filed on March 27, 2020).

Number and Description of Exhibit

4.11 Second Supplemental Indenture, dated as of November 2, 2020, to the Indenture, dated as of March 26, 2020, between the Company and The Bank of New York Mellon Trust Company, N.A., as Trustee, (including form of 1.730% Senior Notes due 2031) (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K, filed on November 6, 2020).

4.12 Description of Securities Registered Under Section 12 of the Exchange Act (incorporated by reference to Exhibit 4.9 to the Company’s Annual Report on Form 10-K, filed on March 17, 2020).

Number and Description of Exhibit

4.13 Indenture, dated as of July 29, 2021, between the Company, as Issuer, and U.S.

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(as representatives of the initial purchasers) (incorporated by reference to Exhibit 4.3 to the Company’s Current Report on Form 8-K, filed on December 2, 2021).

4.17 Indenture, dated July 29, 2021, between Baxter International Inc.

Bank Trust Company, National Association, as successor in interest of U.S.

Bank National Association, as trustee for the debt securities (incorporated by reference to Exhibit 4.1 to the Company's Current Report on Form S-3ASR, filed on April 28, 2022).

4.18 First Amendment, dated as of September 28, 2022, to the Credit Agreement, dated as of September 30, 2021, among Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K, filed on September 30, 2022).

4.19 Second Amendment, dated as of September 28, 2022, to the Credit Agreement, dated as of September 30, 2021, as amended by the First Amendment, dated as of September 28, 2022, amount Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.2 to the Company's Current Report on Form 8-K, filed on September 30, 2022).

4.20 First Amendment, dated as of September 28, 2022, to the Five-Year Credit Agreement, dated as of September 30, 2021, among Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.3 to the Company's Current Report on Form 8-K, filed on September 30, 2022).

4.21 Second Amendment, dated as of September 28, 2022, to the Five-Year Credit Agreement, dated as of September 30, 2021, among Baxter International Inc., as Borrower, JPMorgan Chase Bank, National Association, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.4 to the Company's Current Report on Form 8-K, filed on September 30, 2022).

4.22 Second Amendment, dated as of September 28, 2022, to the Credit Agreement, dated as of December 20, 2019, as amended by the First Amendment, dated as of October 1, 2021, among Baxter Healthcare SA and Baxter World Trade SRL, as Borrowers, JPMorgan SE, as Administrative Agent and certain other financial institutions named therein (incorporated by reference to Exhibit 10.5 to the Company's Current Report on Form 8-K, filed on September 30, 2022).

10.1 Credit Agreement, dated as of December 20, 2019, among Baxter Healthcare SA and Baxter World Trade SPRL, as Borrowers, J.P.

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Morgan AG, as Administrative Agent and each other party thereto (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on October 4, 2021).

Number and Description of Exhibit

10.3 Credit Agreement, dated as of September 30, 2021, among the Company, as Borrower, the financial institutions named therein, as Banks, JPMorgan Chase Bank, N.A., as Administrative Agent, and Citibank, N.A., as Syndication Agent (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on October 4, 2021).

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C 10.8 Baxter International Inc.

2007 Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 20, 2007).

Number and Description of Exhibit

C 10.9 Baxter International Inc.

Equity Plan for the 2007 Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on March 16, 2007).

C 10.10 Baxter International Inc.

2011 Incentive Plan (incorporated by reference to Appendix B to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 18, 2011).

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2021 Incentive Plan (incorporated by reference to Appendix A to the Company’s Definitive Proxy Statement on Schedule 14A, filed on March 22, 2021).

C 10.16 Form of Performance Stock Unit Grant Agreement under Baxter International Inc.

2021 Incentive Plan (incorporated by refere nce to Exhibit 10.1 to t he Company's Quarterly Rep ort on Form 10-Q, filed on April 28, 2022).

C 10.17 Form of Restricted Stock Unit Grant Agreement under Baxter International Inc.

2021 Incentive Plan (incorporated by reference to Exhibit 10.2 to the Company's Quarterly Report on Form 10-Q, filed on April 28, 2022).

C 10.18 Form of Stock Option Grant Agreement under Baxter International Inc.

2021 Incentive Plan (incorporated by reference to Exhibit 10.3 to the Company's Quarterly Report on Form 10-Q, filed on April 28, 2022).

C 10.19 Baxter International Inc.

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Almeida, dated as of March 12, 2020 (incorporated by reference to Exhibit 10.25 to the Company’s Annual Report on Form 10-K, filed on March 17, 2020).

Number and Description of Exhibit

C 10.22 Offer letter between Baxter Healthcare SA and Cristiano Franzi, dated June 8, 2017 (incorporated by reference to Exhibit 10.26 to the Company’s Annual Report on Form 10-K, filed on March 17, 2020).

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C 10.27* Baxter International Inc.

Non-Employee Director Compensation Plan (as amended and restated effective July 1, 2021) (incorporated by reference to Exhibit 10.4 to the Company's Quarterly Report on Form 10-Q, filed on October 28, 2021).

Non-Employee Director Compensation Plan (as amended and restated effective January 1, 2023.

C 10.28 Form of Non-Competition, Non-Solicitation and Confidentiality Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K, filed on April 14, 2017).

Number and Description of Exhibit

Commitment Agreement, dated as of October 4, 2019, by and among the Company, The Prudential Insurance Company of America and State Street Global Advisors Trust Company, acting solely in its capacity as the independent fiduciary of the Baxter International Inc.

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C 10.35 Baxter International Inc.

and Subsidiaries Deferred Compensation Plan (As Amended and Restated effective January 1, 2021) ( inco rporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10- K, filed on February 11, 2021).

and Subsidiaries Deferred Compensation Plan (As Amended and Restated effective January 1, 2021) (incorporated by reference to Exhibit 10.31 to the Company's Annual Report on Form 10-K, filed on February 11, 2021).

C 10.36 Baxter International Inc.

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C 10.39 Amended OUS Change-in-Control Agreement, dated as of September 25, 2020, between Baxter Healthcare SA and Cristiano Franzi (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K, filed on September 25, 2020).

Number and Description of Exhibit

C 10.40 Form of Change-in-Control Agreement (incorporated by reference to Exhibit 10.4 to the Company’s Quarterly Report on Form 10-Q, filed on October 29, 2020).

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Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Number and Description of Exhibit

101.INS* XBRL Instance Document

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Chen Director

Forsyth Director

Hellman Director

/s/ Michael F.

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/s/ Nancy Schlichting Director

/s/ Brent Shafer Director

Smith Director

/s/ Thomas T.

Stallkamp Director

/s/ Albert P.

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Wendell Director

Wilver Director

SCHEDULE II – Qualifying and Valuation accounts for each of the three years in the period ended December 31, 2022

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures