Exhibit 10.7

 

ABBOTT LABORATORIES

PERFORMANCE RESTRICTED STOCK AGREEMENT

 

This Performance Restricted Stock Agreement (the “Agreement”), made on
«DateAwded» (the “Grant Date”), between Abbott Laboratories, an Illinois
corporation (the “Company”), and «Name» (the “Employee”), provides for the grant
by the Company to the Employee of a Performance Restricted Stock Award (the
“Award”) under the Company’s 2009 Incentive Stock Program (the “Program”).  This
Agreement incorporates and is subject to the provisions of the Program.  To the
extent not defined herein, capitalized terms shall have the same meaning as in
the Program, and in the event of any inconsistency between the provisions of
this Agreement and the provisions of the Program, the Program shall control.

 

The terms and conditions of the Award are as follows:

 

1.       Grant of Shares.  Pursuant to action of the Compensation Committee of
the Board of Directors of the Company, and in consideration of valuable services
heretofore rendered and to be rendered by the Employee to the Company and of the
agreements hereinafter set forth, the Company has granted to the Employee
«NoShares12345» Shares.  The Shares shall be issued from the Company’s available
treasury shares.  The Employee shall have all the rights of a shareholder with
respect to the Shares, including the right to vote and to receive all dividends
or other distributions paid or made with respect to the Shares.  However, the
Shares (and any securities of the Company which may be issued with respect to
the Shares by virtue of any stock split, combination, stock dividend or
recapitalization, which securities shall be deemed to be “Shares” hereunder)
shall be subject to all the restrictions hereinafter set forth.

 

2.       Restriction.  Until the restriction imposed by this Section 2 (the
“Restriction”) has lapsed pursuant to Section 3 or 4 below, the Shares shall not
be sold, exchanged, assigned, transferred, pledged or otherwise disposed of, and
shall be subject to forfeiture as set forth in Section 5 below.

 

3.       Lapse of Restriction Based on Performance.  The restrictions on
one-third of the total number of Shares will lapse and have no further force on
the last business day of February, 2010, provided that the Company’s prior year
Return on Equity is a minimum of 18 percent; the restrictions on an additional
one-third of the total number of Shares will lapse and have no further force on
the last business day of February, 2011, provided that the Company’s prior year
Return on Equity is a minimum of 18 percent; the restrictions on the remaining
one-third of the total number of Shares will lapse and have no further force on
the last business day of February, 2012, provided that the Company’s prior year
Return on Equity is a minimum of 18 percent.  Notwithstanding the foregoing, any
remaining Shares that have not previously vested in 2010, 2011 or 2012 shall
remain outstanding and shall vest on the last business day of February, 2013
and/or 2014, provided that the Company’s prior year Return on Equity is a
minimum of 18 percent, and provided further that no more than one-third of the
Shares will vest in any one year.

 

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4.       Retirement.  The Restriction shall continue to apply (and may lapse in
accordance with the provisions of Section 3 above) in the event that the
Employee’s employment with the Company and its Subsidiaries is terminated by the
Employee due to retirement.

 

5.       Lapse of Restriction Due to Death or Disability.  The Restriction shall
lapse and have no further force or effect upon the date of the Employee’s death
or disability. For purposes of this Agreement, the term “disability” shall mean
the Employee’s disability as defined in subsection 4.1(a) of the Abbott
Laboratories Extended Disability Plan for twelve consecutive months.  Once the
Employee has been disabled as defined in this Section for twelve consecutive
months, the disability shall be deemed to have occurred on the first day of such
twelve-month period.

 

6.       Forfeiture of Shares.  In the event of termination of the Employee’s
employment with the Company and its Subsidiaries, other than under the
circumstances described in Section 4 or Section 5 above, (including, without
limitation, due to the Employee’s voluntary resignation (other than due to
retirement) or involuntary discharge for cause), any Shares with respect to
which the Restriction has not lapsed as of the date of termination shall be
forfeited as of the date of termination, without consideration to the Employee
or the Employee’s executor, administrator, personal representative or heirs
(“Representative”), provided, however, that in the event that the Employee is
involuntarily discharged by the Company and its Subsidiaries other than for
cause, the Company shall have the authority (but not the obligation) to act, in
its sole discretion, to accelerate the lapse of the Restriction set forth in
Section 3 above in whole or in part and to cause some or all of the Shares that
have not previously been paid out on a Delivery Date set forth in Section 3
above to be settled in the form of Shares on the date of such involuntary
discharge.  The term discharge “for cause” shall have the meaning given that
term by Section 9.

 

7.       Withholding Taxes.  The Employee may satisfy any federal, state, local
or foreign taxes arising from delivery of the Shares pursuant to Section 3, 4,
or 5 above by (i) tendering a cash payment, (ii) having the Company withhold
Shares from the Shares to be delivered to satisfy the minimum applicable
withholding tax, (iii) tendering Shares received in connection with the Award
back to the Company, or (iv) delivering other previously acquired Shares having
a Fair Market Value approximately equal to the amount to be withheld.  The
Company shall have the right and is hereby authorized to withhold from the
Shares deliverable to the Employee pursuant to Section 3, 4, or 5 above or from
any other compensation or other amount owing to the Employee such amount as may
be necessary in the opinion of the Company to satisfy all such taxes,
requirements and withholding obligations.  If the Company withholds from the
Shares for tax purposes, the Employee is deemed to have been issued the full
number of Shares underlying the Award, notwithstanding that a number of the
Shares are held back solely for the purpose of satisfying any such taxes,
requirements and withholding obligations.

 

8.       No Right to Continued Employment.  Neither the Program nor this
Agreement shall confer upon the Employee the right to continue in the

 

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employ or service of the Company or any Subsidiary, to be entitled to any
remuneration or benefits not set forth in the Program or this Agreement or other
agreement, or to interfere with or limit in any way the right of the Company or
any such Subsidiary to terminate the Employee’s employment or service or to
exercise any of the other rights of the Company or its Subsidiaries under the
Agreement.

 

9.       Discharge for Cause.  The term discharge “for cause” shall mean
termination of the Employee’s employment with the Company and its Subsidiaries
for (A) the Employee’s failure to substantially perform the duties of the
Employee’s employment (other than any such failure resulting from the Employee’s
disability); (B) material breach by the Employee of the terms and conditions of
the Employee’s employment; (C) material breach by the Employee of business
ethics; (D) an act of fraud, embezzlement or theft committed by the Employee in
connection with the Employee’s duties or in the course of the Employee’s
employment; or (E) wrongful disclosure by the Employee of secret processes or
confidential information of the Company or its Subsidiaries.

 

10.     Voting Rights; Payment of Dividends.  While the Restriction is in
effect, the Employee shall be entitled to vote the Shares granted hereunder and
shall be entitled to receive dividends paid on Shares to the same extent and on
the same date paid to the Company’s shareholders.

 

11.     Compliance with Applicable Laws and Regulations.  Notwithstanding any
other provision of the Program or this Agreement to the contrary, the Company
shall not be required to issue or deliver any Shares pursuant to Section 3, 4,
or 5 above pending compliance with all applicable federal and state securities
and other laws (including any registration requirements or tax withholding
requirements) and compliance with the rules and practices of any stock exchange
upon which the Company’s Shares are listed.

 

12.    Data Privacy.  This grant of Shares shall be interpreted to effect the
original intent of the Company as closely as possible to the fullest extent
permitted by applicable law (including, without limitation, any laws governing
data privacy).  If any condition or provision of this grant is invalid, illegal,
or incapable of being enforced under any applicable law or regulation governing
data privacy, including the privacy laws and regulations of the European
Economic Area, all other conditions and provisions of the Shares shall
nevertheless remain in full force and effect.  By accepting this grant, the
Employee voluntarily and unambiguously acknowledges and consents to the
collection, use, processing and transfer of Personal Data (defined below) as
described in this paragraph, in electronic or other form.  The Employee is not
obliged to consent to such collection, use, processing and transfer of Personal
Data.  However, failure to provide the consent may affect the Employee’s ability
to participate in the Program.  The Employee understands that the Company and
its Subsidiaries hold certain personal information about the Employee,
including, but not limited to, the Employee’s name, home address and telephone
number, date of birth, social security number or other employee identification
number, salary, nationality, job title, the number of Shares (if any) owned by
the Employee, whether the Employee is a member of the Board of Directors of the
Company or of any of its

 

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Subsidiaries, details of all stock options or any other entitlement to Shares
awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s
favor for the purpose of managing and administering the Program or this grant
(collectively “Personal Data”).  The Employee understands that the Company and
its Subsidiaries will transfer Personal Data amongst themselves as necessary for
the purpose of implementation, administration and management of the Employee’s
participation in the Program, and the Company and/or any of its Subsidiaries may
each further transfer Personal Data to any third parties assisting the Company
in the implementation, administration and management of the Program, including
UBS or such other stock plan service provider as may be selected by the Company
in the future.  These recipients may be located in the European Economic Area,
or elsewhere throughout the world, such as the United States and the recipients’
country (e.g., the United States) may have different data privacy laws and
protections than the Employee’s country.  The Employee understands that the
Employee may request a list with the names and addresses of any potential
recipients of the Personal Data by contacting the local human resources
representatives.  The Employee hereby authorizes the Company and its
Subsidiaries to receive, possess, use, retain and transfer the Personal Data, in
electronic or other form, for the purposes of implementing, administering and
managing the Employee’s participation in the Program, including any transfer of
such Personal Data as may be required for the administration of the Program
and/or the subsequent holding of Shares on the Employee’s behalf to a broker or
other third party with whom the Employee may elect to deposit any Shares
acquired pursuant to the Program.  The Employee understands that Personal Data
will be held only as long as is necessary to implement, administer and manage
the Employee’s participation in the Program.  The Employee may, at any time,
review Personal Data, request additional information about the storage and
processing of Personal Data, and require any necessary amendments to it.  The
Employee may, at any time, withdraw the consents herein, in any case without
cost, in writing by contacting the Company; however, withdrawing the Employee’s
consent may affect the Employee’s ability to participate in the Program.

 

13.     Succession.  This Agreement shall be binding upon and operate for the
benefit of the Company and its successors and assigns, and the Employee and the
Employee’s Representative.

 

14.     Section 409A.  To the extent applicable, it is intended that
this Agreement comply with, or be exempt from, the provisions of Code
Section 409A.  The Agreement will be administered and interpreted in a manner
consistent with this intent, and any provision that would cause the Agreement to
fail to satisfy Code Section 409A will have no force and effect until amended to
comply therewith (which amendment may be retroactive to the extent permitted by
Code Section 409A).  Notwithstanding anything contained herein to the contrary,
for all purposes of this Agreement, the Employee shall not be deemed to have had
a termination of service unless the Employee has incurred a separation from
service as defined in Treasury Regulation §1.409A-1(h) and, to the extent
required to avoid accelerated taxation and/or tax penalties under Code
Section 409A and applicable guidance issued thereunder, amounts that would
otherwise be payable pursuant to the

 

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Agreement during the six-month period immediately following the Employee’s
termination of service (including retirement) shall instead be paid on the first
business day after the date that is six months following the Employee’s
termination of service (or upon the Employee’s death, if earlier).  For purposes
of this Agreement, “disability” shall mean, as of a particular date, the
Employee is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months, eligible to receive
income replacement benefits under the terms of the Abbott Laboratories Extended
Disability Plan (“EDP”) or, for an Employee whose employer does not participate
in the EDP, such similar accident and health plan, providing income replacement
benefits, in which the Employee’s employer participates, for a period of at
least six months.

 

15.     Severability.  The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, and each other provision of the Agreement shall be
severable and enforceable to the extent permitted by law.  To the extent a court
or tribunal of competent jurisdiction determines that any provision of this
Agreement is invalid or unenforceable, in whole or in part, the Company, in its
sole discretion, shall have the power and authority to revise or strike such
provision to the minimum extent necessary to make it valid and enforceable to
the full extent permitted under local law.

 

16.     Governing Law.  This Agreement shall be governed by and construed in
accordance with the laws of the State of Illinois without giving effect to the
conflict of laws principles thereof.

 

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be executed by its
duly authorized officer as of the grant date above set forth.

 

 

 

 

ABBOTT LABORATORIES

 

 

 

 

By

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Miles D. White

 

 

Chairman and Chief Executive Officer

 

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