<DOCUMENT>
<TYPE>EX-10.8
<SEQUENCE>3
<FILENAME>dex108.txt
<DESCRIPTION>NON-EMPLOYEE DIRECTOR STOCK OPTION PLAN
<TEXT>
<PAGE>

                                                                    Exhibit 10.8

                            BAXTER INTERNATIONAL INC.
         Non-Employee Director Stock Option Plan adopted April 30, 2001
                             [Plan for Annual Grant]
                              Terms and Conditions
                  As amended and restated effective May 6, 2003

1.   Purpose

This Non-Employee Director Stock Option Plan (the "Plan") is adopted by the
Compensation Committee (the "Committee") of the Board of Directors (the "Board")
of Baxter International Inc. ("Baxter"). This Plan is adopted pursuant to the
Baxter International Inc. 2001 Incentive Compensation Program (the "Program"),
for the purposes stated in the Program. Capitalized terms defined in the Program
that are used without being defined in the Plan will have the same meaning as in
the Program.

2.   Participants

Each member of the Board who is not an employee of Baxter or any of its
subsidiaries shall participate in the Plan (a "Participant").

3.   Awards

     3.1A Notwithstanding any other provision of this Plan and for the avoidance
          of any doubt, no Options may be granted under this Plan on the date of
          Baxter's annual meeting of stockholders in May 2003, or thereafter.

     3.1  On the date of Baxter's annual meeting of stockholders (the "Annual
          Meeting") in each year beginning with the Annual Meeting on May 1,
          2001 and prior to the Annual Meeting on May 6, 2003, and subject to
          availability of shares of Common Stock under Section 4.2, each
          Participant upon completion of the Annual Meeting shall, automatically
          and without necessity of any action by the Board or any committee
          thereof, be granted an option (an "Option") to purchase the number of
          shares of Common Stock determined pursuant to Section 4.1 of this
          Plan.

     3.2  Each Participant elected or appointed on a date other than the date of
          an Annual Meeting and prior to the Annual Meeting on May 6, 2003,
          shall, on the date of such election or appointment and automatically
          and without necessity of any action by the Board or any committee
          thereof, be granted an Option to purchase that number of shares of
          Common Stock equal to the product of (A) the Annual Stock Option Grant
          Amount

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          (as defined in Section 4.1) for each Option granted on the date of the
          immediately preceding Annual Meeting, multiplied by (B) the quotient
          of (i) the number of full calendar months before the next Annual
          Meeting divided by (ii) 12 (rounded to the nearest whole number which
          is a multiple of ten). The number of shares of Common Stock subject to
          any Option granted under this Section 3.2 shall not exceed the number
          available under Section 4.2 on the date of grant.

     3.3  The purchase price for each share of Common Stock subject to an Option
          shall be the Fair Market Value of a share of Common Stock on the date
          of grant. The terms of each Option will be as set forth in the Plan
          and the Program. To the extent that any provision of the Plan is
          inconsistent with the Program, the Program shall control. The Options
          are not intended to qualify as Incentive Stock Options within the
          meaning of Section 422 of the United States Internal Revenue Code.

4.   Number of Shares

     4.1  The number of shares of Common Stock subject to each Option granted
          pursuant to this Plan on the date of an Annual Meeting ("Annual Stock
          Option Grant Amount") shall be determined in accordance with this
          Section 4.1. Each Participant shall be assigned an annual stock option
          target equal to 10,000 shares of Common Stock, subject to adjustment
          in accordance with the Program ("Annual Stock Option Target"). The
          Annual Stock Option Grant Amount shall be equal to the product of (A)
          the Annual Stock Option Target multiplied by (B) the stock performance
          multiplier ("Stock Performance Multiplier") set forth on Exhibit A
          attached to this Plan, which is based on Baxter's total shareholder
          return ("Baxter TSR") compared to the total shareholder return for the
          Standard and Poor's (S&P) 500 Health Care Index ("HCI TSR") for the
          12-month period ending on the most recent September 30 prior to the
          date of an Annual Meeting. The Annual Stock Option Grant Amount shall
          not be more than 150% of the Annual Stock Option Target or less than
          75% of the Annual Stock Option Target.

     4.2  The total number of shares of Common Stock available for Options
          granted under this Plan shall be 316,250 shares, subject to adjustment
          in accordance with the Program. If on any grant date, the number of
          shares of Common Stock which would otherwise be subject to Options
          granted under the Plan shall exceed the number of shares of Common
          Stock then remaining available under the Plan, the available shares
          shall be allocated among the Options to be granted Participants in
          proportion to the number of shares subject to Options that
          Participants would otherwise be entitled to receive.

5.   Exercise and Expiration

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     5.1  Subject to Section 11.10 of the Program and except as expressly
          provided in Sections 5.5, 5.6 and 5.7, Options shall first become
          exercisable on the first anniversary of the date of grant, or if that
          date is not a Business Day, then on the next succeeding Business Day.
          A "Business Day" is any day on which the Common Stock is traded on the
          New York Stock Exchange.

     5.2  After an Option becomes exercisable and until it expires, it may be
          exercised in whole or in part, in the manner specified by the Company.
          Under no circumstances may an Option be exercised after it has
          expired. Shares of Common Stock may be used to pay the purchase price
          for shares of Common Stock to be acquired upon exercise of an Option
          in accordance with the requirements specified by the Company.

     5.3  Except as provided in Sections 5.5, 5.6 and 5.7, if a Participant
          ceases service as a member of the Board before his or her Option
          becomes exercisable, the Option will expire when the Participant
          ceases service as a member of the Board.

     5.4  If a Participant ceases service as a member of the Board after his or
          her Option becomes exercisable, the Option will not expire but will
          remain exercisable. Subject to Sections 5.5, 5.6, 5.7 and 5.8, the
          Option will expire three months after the Participant ceases service
          as a member of the Board, unless the Participant dies or becomes
          disabled during such three month period in which case the Option will
          expire on the first anniversary of the date the Participant ceased
          serving as a member of the Board.

     5.5  If a Participant dies while serving as a member of the Board, his or
          her Option will not expire and will remain, or immediately become,
          fully exercisable, as the case may be. Subject to Sections 5.7 and
          5.8, the Option will expire on the first anniversary of the
          Participant's death.

     5.6  If a Participant becomes disabled and unable to continue service as a
          member of the Board, his or her Option will not expire and will
          remain, or when the Participant ceases to serve as member of the Board
          become, fully exercisable, as the case may be. Subject to Sections 5.7
          and 5.8, the Option will expire on the first anniversary of the date
          the Participant ceases service as a member of the Board.

     5.7  If a Participant who has served as a member of the Board for a
          continuous period of at least ten years or who is at least 72 years of
          age ceases to serve as a member of the Board (including without
          limitation by reason of death or disability), his or her Option will
          not expire and will remain, or when the Participant ceases to serve as
          member of the Board become, fully exercisable, as the case may be.
          Subject to Section 5.8, the Option will expire on the fifth
          anniversary of the date the Participant ceases service as a member of
          the Board.

<PAGE>

     5.8  Options that have not previously expired will expire at the close of
          business on the tenth anniversary of the date of grant. If an Option
          would expire on a date that is not a Business Day, it will expire at
          the close of business on the last Business Day preceding that date.

     5.9  An exercisable Option may only be exercised by the Participant, his or
          her legal representative, or a person to whom the Participant's rights
          in the Option are transferred by will or the laws of descent and
          distribution or in accordance with rules and procedures established by
          the Committee.

6.   General Provisions

     6.1  Subject to the limitations contained in Section 11.9 of the Program,
          the Board or the Committee may, at any time and in any manner, amend,
          suspend, or terminate the Plan or any Option outstanding under the
          Plan.

     6.2  Participation in the Plan does not give any Participant any right to
          continue as a member of the Board for any period of time or any right
          or claim to any benefit unless such right or claim has specifically
          accrued hereunder.

</TEXT>
</DOCUMENT>
