Assets, Information, Records and Methods of Communication

Accuracy

Communications (Media & Investors)

Company Assets

Confidential Information (Proprietary & Trade Secrets)

Competitive Information

"Inside" Information & Securities Trading

Internet & Electronic Media

Record Retention & Storage

Accurate business records are crucial. They are used for decision-making and strategic planning. They also are the basis for earnings statements, product registrations, reports to governments, and public disclosure documents.

 

Baxter is committed to full, fair, accurate, timely and understandable disclosure and communications. Use good judgment and common sense when preparing any company record. We must record and report facts accurately, honestly and objectively. This includes but is not limited to:

• Time worked
• Business expenses
• Research test results
• Production data
• All other business-related activities
• Accounting entries and adjustments
• Financial statements
• Documents filed with governments

Financial records must be accurate in all material respects. Do not make any false or unsupported entries. Do not hide or fail to record any funds, assets, or transactions. All financial books and records must conform to generally accepted accounting principles. Those standards and any implementation procedures are outlined in Baxter's Financial Policies and Procedures manual. All employees have the responsibility to maintain Baxter's system of internal controls.

 

These obligations apply to all employees with responsibility for preparing business records, including Baxter's senior financial team, the Executive Management Team, and its CEO. Raise any concerns about the accuracy of business records immediately, using the processes described in the section of this manual "What to Do if You Have a Concern About Business Practices."

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The news media and the financial community are important links to Baxter´s internal and external audiences, including:

• Employees
• Existing and potential customers
• Patients
• Clinicians
• Investors
• Government officials
• Suppliers
• Retirees
• Other stakeholders

 

We place great importance on maintaining effective relationships with the news media and the investment community. We try to maintain the company´s credibility by providing information to the media in a timely, accurate and consistent manner.

 

Only authorized spokespersons and executives can speak to the media and financial community on behalf of Baxter. All media inquiries should be directed to Baxter's corporate communications professionals, who will either respond directly or designate the appropriate spokesperson or executive. This is to ensure that information communicated about Baxter is accurate and in compliance with relevant regulatory requirements.

 

For the financial and investment communities, all inquiries should be handled by the corporate investor relations department.

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Baxter provides us with a place to work and with the tools to do our jobs. In return, we are expected to respect and protect company assets, including:

• Facilities
• Computers
• Inventory
• Proprietary information and trade secrets
• Patents, trademarks and copyrights
• Office supplies
• Equipment
• Products
• Confidential information

This property may be used only for company business, unless approved by management.

 

Copying software, tapes and books or downloading, distributing, or reproducing copyrighted information from the Internet may violate copyright laws and is a potential financial and legal liability for Baxter. Baxter's Information Management Center (IMC) can provide additional information on copyright restrictions.

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In our very competitive business, information is valuable. We always need to learn more about our competitors, suppliers and customers. But we must be ethical about how we acquire that information. For example, competitors´ prices should be obtained from sources other than competitors, such as published lists.

 

Our actions must be honest, fair and within the law. Do not request or use information that breaks laws regulating:

• Fair competition
• Proprietary information and data
• Antitrust
• Confidential relationships between employees and employers  

 

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"Confidential information" is a valuable asset. It includes facts, data and knowledge that have not been disclosed to the public.

 

Confidential information that has commercial value to competitors or to others who have an interest in doing business with Baxter is sometimes referred to as "proprietary information" or a "trade secret."

 

Many different types of information have value because they are maintained in confidence. Such information includes unpatented technology as well as non-technical data such as financial, marketing, strategic information, and personal information of employees, patients, health care professionals and consumers.

 

Examples of confidential information, proprietary information, and trade secrets ("confidential information") include:

 

Technical

• Design specifications	• Blueprints
• Formulations	• Prototype devices
• Compilations of data	• Computer programs
• Unsuccessful research	• Engineering designs
• Research and development data	• Inventions

 

Financial

• Pricing	• Profit margins
• Budget forecasts	• Costs

 

Manufacturing

• Manufacturing methods, techniques, and processes	• Unfinished materials
• Plant layouts	• Standard Operating Procedures (SOP´s)
• Manufacturing forecasts	• Manufacturing failures

 

Human  Resources

• Wage, salary, and disability data	• Health insurance plan information
• Stock purchase plan information	• Training logs
• Employee benefits including pension plan information	• Personal employment data
• Employee medical records	• National identification number (i.e., social security, social insurance, etc.)

 

Patient and Consumer

• Medical and treatment information	• Patient financial (credit card numbers or financial status) information and purchasing trends
• Clinical trial information	• Any personally identifiable information provided via electronic media
• Donor records	• Product complaint records

 

Sales/Marketing

• Customer lists and related information	• Identity of vendors
• Marketing strategies	• Customer pricing
• Personally identifiable information provided via Baxter's website

 

Strategic

• Regulatory plans	• Strategic plans
• Planned business or product acquisitions or divestitures

 

Supplier

• Quality data	• Pricing
• Supplier lists and related information

 

 

Confidential information needed for your job should be used only for that purpose. This information should be shared only with other employees who need it to do their jobs.

 

Confidential information must not be given to persons outside Baxter. If you have a need to share confidential information with others outside Baxter, a confidentiality agreement and/or prior approval from legal counsel is required. Confidentiality agreements with others protect Baxter´s interest in its confidential information. The types of people with whom we should not share confidential information without approval include:

 

• Competitors	• Suppliers
• Customers	• Consultants
• Contractors	• Audiences at meetings where Baxter representatives are presenting and non-Baxter representatives are present

 

Employees with access to confidential information must protect it. Be cautious about discussing confidential company business wherever you may be overheard. Be careful when discussing confidential information on cellular or cordless phones and when sending confidential information over the Internet because information can be intercepted easily. Make sure to remove confidential information from meeting rooms, photocopy machines, and your desk at night. Be cautious about displaying confidential information in public places, including on airplanes and at pay phones. Keep your computer in a secure place, and use a password to limit access to the information stored on it. Limit Baxter-specific information when presenting to audiences that include people outside Baxter.

 

Confidential information remains confidential. It should not be shared even after you no longer work for the company.

 

The actual or possible disclosure of confidential information should be reported to a member of the law function. The law function representative will then consult with business unit management to determine an appropriate course of action.

 

We also have a responsibility to limit our receipt of confidential business and/or technical information from people outside Baxter. Do not sign a confidentiality agreement with another organization before legal counsel reviews it.

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We are encouraged to invest in Baxter common stock as an excellent way to share in the company's success. When buying or selling company stock, all employees and others living in their households must be mindful of legal limitations on trading as well as Baxter policy.

 

What Are the Limitations on Trading?
We may have knowledge about the company's business that other investors do not have. This may create an unfair advantage if we buy or sell stock or other securities. Therefore, any "material, non-public information" that any employee acquires on the job about Baxter or any other company should not be used to buy or sell securities or otherwise used for personal gain. This "material, non-public information" should be treated as confidential and should not be shared with anyone else. These restrictions also may apply to the stock or securities of companies negotiating, competing, doing business or seeking to do business with Baxter. In addition to possible Baxter disciplinary action, violation of these rules could also result in criminal prosecution and/or civil penalties.

 

What is "Material, Non-Public Information?"
"Material" information is any news or fact that a reasonable investor would consider important in deciding to buy, sell or hold securities. The "materiality" of the information must be viewed in light of the impact the information could have on Baxter as a whole as opposed to the affect on a particular business unit or region. Examples include information about:

 

• Acquisitions or divestitures of businesses, product lines or technology
• New products, processes or research initiatives
• Earnings figures and trends or other corporate financial information
• Important litigation, contract, or joint venture information
• Imminent regulatory actions

 

Information becomes "public" after a company announcement is widely distributed and investors have had an opportunity to evaluate the information. If you have any questions about whether information is "material" or "public," consult the General Counsel or Corporate Secretary.

 

Additional Requirements for "Insiders"
The most likely people to be in possession of "material, non-public information" or to be charged with insider trading are Baxter's board of directors, executive officers and certain other designated individuals. These "insiders" must receive clearance from the General Counsel or Corporate Secretary prior to buying or selling Baxter stock. An "executive officer" is an officer of Baxter or one of its subsidiaries who is required to report his or her Baxter stock holdings and transactions to the Securities and Exchange Commission. Other designated individuals are made aware of their "insider" status by the Corporate Secretary.

 

Short-term trading activities and option transactions increase the potential for improper use of insider information. Therefore, "insiders" and any employee with a title of "vice president" or above may not write "put" or "call" options or otherwise buy or sell options on Baxter stock.

 

Executive officers and members of the board of directors may hold shares in a broker's name only if they provide written notice and report any changes in these holdings to the Corporate Secretary.

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The Internet and Baxter's Intranet are powerful communication and information tools. Use them, and other electronic media including the electronic mail system, to serve the business interests of Baxter. (Refer also to the "Confidential Information" policy in this document.)

 

Safeguard the privacy of Baxter's website users by obtaining their consent when gathering personal information. The personal information should be used only for purposes agreed to by the user.

 

Baxter has the ability and reserves the right to monitor all electronic communication.

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Save business unit records, including electronic data, only for the time specified in your business unit or function record retention and storage guidelines. Ask your business unit or function representatives for a copy.

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