Exhibit 10.6

 

Amended and Restated effective December 12, 2003

 

ABBOTT LABORATORIES NON-EMPLOYEE DIRECTORS’ FEE PLAN

SECTION 1.
PURPOSE

ABBOTT LABORATORIES NON-EMPLOYEE DIRECTORS’ FEE PLAN - referred to below as the
“Plan” - has been established by ABBOTT LABORATORIES - referred to below as the
“Company” - to attract and retain as members of its Board of Directors persons
who are not full-time employees of the Company or any of its subsidiaries but
whose business experience and judgment are a valuable asset to the Company and
its subsidiaries.

SECTION 2.
DIRECTORS COVERED

As used in the Plan, the term “Director” means any person who is elected to the
Board of Directors of the Company in April, 1962 or at any time thereafter, and
is not a full-time employee of the Company or any of its subsidiaries.

SECTION 3.
FEES PAYABLE TO DIRECTORS

3.1           Each Director shall be entitled to a deferred monthly fee of Six
Thousand Six Hundred Sixty-Seven Dollars ($6,667.00) for each calendar month or
portion thereof (excluding the month in which he is first elected a Director)
that he holds such office with the Company.

3.2           A Director who serves as Chairman of the Executive Committee of
the Board of Directors shall be entitled to a deferred monthly fee of One
Thousand Six Hundred Dollars ($1,600.00) for each calendar month or portion
thereof (excluding the month in which he is first elected to such position) that
he holds such position.

3.3           A Director who serves as Chairman of the Audit Committee of the
Board of Directors shall be entitled to a deferred monthly fee of One Thousand
Dollars ($1,000.00) for each calendar month or portion thereof (excluding the
month in which he is first elected to such position) that he holds such
position.

3.4           A Director who serves as Chairman of the Compensation Committee of
the Board of Directors shall be entitled to a deferred monthly fee of One
Thousand Dollars ($1,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

3.5           A Director who serves as Chairman of the Nominations Committee of
the Board of Directors shall be entitled to a deferred monthly fee of One
Thousand Dollars ($1,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

 

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3.6           A Director who serves as Chairman of any other Committee created
by this Board of Directors shall be entitled to a deferred monthly fee of One
Thousand Dollars ($1,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

3.7           A Director’s Deferred Fee Account shall be credited with interest
annually. During the calendar years 1968 and prior, the rate of interest
credited to deferred fees shall be four (4) percent per annum. During the
calendar years 1969 through 1992, the rate of interest credited to deferred fees
shall be the average of the prime rates being charged by the two largest
commercial banks in the City of Chicago as of the end of the month coincident
with or last preceding the date upon which said interest is so credited. During
the calendar years 1993 and subsequent, the rate of interest credited to
deferred fees shall be equal to: (a) the average of the prime rates being
charged by the two largest commercial banks in the City of Chicago as of the end
of the month coincident with or last preceding the date upon which said interest
is so credited; plus (b) two hundred twenty-five (225) basis points. For
purposes of the provisions of the Plan, the term “deferred fees” shall include
“deferred monthly fees,” and “deferred meeting fees,” and shall also include any
such interest credited thereon.

SECTION 4.
PAYMENT OF DIRECTORS’ FEES

4.1           A Director’s deferred fees earned pursuant to the Plan shall
commence to be paid on the first day of the calendar month next following the
earlier of his death or his attainment of age sixty-five (65) if he is not then
serving as a Director, or the termination of his service as a Director if he
serves as a Director after the attainment of age sixty-five (65); provided that
any Director may, by written notice filed with the Secretary of the Company,
elect to receive current payment of all or any portion of the monthly and
meeting fees earned by him in calendar years subsequent to the calendar year in
which he files such notice (or all or any portion of such fees earned by him in
the calendar year he first becomes a Director, if such notice is filed within 30
days of becoming a Director), in which case such fees or the portion thereof so
designated earned in such calendar years shall not be deferred but shall be paid
quarterly as earned and no interest shall be credited thereon. Such election may
be revoked or modified by any Director by written notice to the Secretary of the
Company as to fees to be earned by him in calendar years subsequent to the
calendar year in which he files such notice.

4.2           After a Director’s deferred fees shall have commenced to be
payable pursuant to Paragraph 4.1 they shall be payable in annual installments
in the order in which they shall have been deferred (i.e. the deferred fees for
the earliest year of service as a Director will be paid on the date provided for
in Section 4.1, the deferred fees for the next earliest year of service as a
Director will be paid on the anniversary of the payment of the first
installment, etc.).

4.3           A Director’s deferred fees shall continue to be paid until all
deferred fees which he is entitled to receive under the Plan shall have been
paid to him (or, in case of his death, to his beneficiary).

 

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4.4           Notwithstanding any other provisions of the Plan, if a Director’s
service as a Director should terminate for any reason within five (5) years
after the date of a Change in Control, the aggregate unpaid balance of such
Director’s deferred fees plus all unpaid interest credited thereon, shall be
paid to such Director in a lump sum within thirty (30) days following the date
of such termination.

4.5           A “Change in Control” shall be deemed to have occurred on the
earliest of the following dates:

(i)        the date any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates) representing 20% or more of the combined voting power
of the Company’s then outstanding securities, excluding any Person who becomes
such a Beneficial Owner in connection with a transaction described in clause (a)
of paragraph (iii) below; or

(ii)     the date the following individuals cease for any reason to constitute a
majority of the number of directors then serving: individuals who, on the date
hereof, constitute the Board of Directors and any new director (other than a
director whose initial assumption of office is in connection with an actual or
threatened election contest, including but not limited to a consent
solicitation, relating to the election of directors of the Company) whose
appointment or election by the Board of Directors or nomination for election by
the Company’s shareholders was approved or recommended by a vote of at least
two-thirds (2/3) of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination for election was
previously so approved or recommended; or

(iii)  the date on which there is consummated a merger or consolidation of the
Company or any direct or indirect subsidiary of the Company with any other
corporation or other entity, other than (a) a merger or consolidation (I)
immediately following which the individuals who comprise the Board of Directors
immediately prior thereto constitute at least a majority of the Board of
Directors of the Company, the entity surviving such merger or consolidation or,
if the Company or the entity surviving such merger or consolidation is then a
subsidiary, the ultimate parent thereof and (II) which results in the voting
securities of the Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining outstanding or by
being converted into voting securities of the surviving entity or any parent
thereof), in combination with the ownership of any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or any
subsidiary of the Company, at least 50% of the combined voting power of the
securities of the Company or such surviving entity or any parent thereof
outstanding immediately after such merger or consolidation, or (b) a merger or
consolidation effected to implement a recapitalization of the Company (or
similar transaction) in which no Person is or becomes the Beneficial

 

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Owner, directly or indirectly, of securities of the Company (not including in
the securities Beneficially Owned by such Person any securities acquired
directly from the Company or its Affiliates) representing 20% or more of the
combined voting power of the Company’s then outstanding securities; or

(iv) the date the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company’s assets, other than a sale or disposition by the Company of all or
substantially all of the Company’s assets to an entity, at least 50% of the
combined voting power of the voting securities of which are owned by
shareholders of the Company, in combination with the ownership of any trustee or
other fiduciary holding securities under an employee benefit plan of the Company
or any subsidiary of the Company, in substantially the same proportions as their
ownership of the Company immediately prior to such sale.

Notwithstanding the foregoing, a “Change in Control” shall not be deemed to have
occurred by virtue of the consummation of any transaction or series of
integrated transactions immediately following which the record holders of the
common stock of the Company immediately prior to such transaction or series of
transactions continue to have substantially the same proportionate ownership in
an entity which owns all or substantially all of the assets of the Company
immediately following such transaction or series of transactions.

For purposes of this Plan: “Affiliate” shall have the meaning set forth in Rule
12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial Owner” shall
have the meaning set forth in Rule 13d-3 under the Exchange Act; “Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended from time to time;
and “Person” shall have the meaning given in Section 3(a)(9) of the Exchange
Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such
term shall not include (i) the Company or any of its subsidiaries, (ii) a
trustee or other fiduciary holding securities under an employee benefit plan of
the Company or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or (iv) a corporation
owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company.

4.6           A “Potential Change in Control” shall exist during any period in
which the circumstances described in paragraphs (i), (ii), (iii) or (iv), below,
exist (provided, however, that a Potential Change in Control shall cease to
exist not later than the occurrence of a Change in Control):

 

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(i)        The Company enters into an agreement, the consummation of which would
result in the occurrence of a Change in Control, provided that a Potential
Change in Control described in this paragraph (a) shall cease to exist upon the
expiration or other termination of all such agreements.

(ii)     Any Person (without regard to the exclusions set forth in subsections
(i) through (iv) of such definition) publicly announces an intention to take or
to consider taking actions the consummation of which would constitute a Change
in Control; provided that a Potential Change in Control described in this
paragraph (b) shall cease to exist upon the withdrawal of such intention, or
upon a determination by the Board of Directors that there is no reasonable
chance that such actions would be consummated.

(iii)  Any Person becomes the Beneficial Owner, directly or indirectly, of
securities of the Company representing 10% or more of either the then
outstanding shares of common stock of the Company or the combined voting power
of the Company’s then outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly from the
Company or its Affiliates).

(iv) The Board of Directors adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control exists; provided that a
Potential Change in Control described in this paragraph (iv) shall cease to
exist upon a determination by the Board of Directors that the reasons that gave
rise to the resolution providing for the existence of a Potential Change in
Control have expired or no longer exist.

4.7           The provisions of Paragraphs 4.4, 4.5, 4.6 and this Paragraph 4.7
may not be amended or deleted, nor superseded by any other provision of this
Plan, (i) during the pendency of a Potential Change in Control and (ii) during
the period beginning on the date of a Change in Control and ending on the date
five (5) years following such Change in Control.

SECTION 5.
DIRECTORS’ RETIREMENT BENEFIT

5.1           Effective April 30, 1998, each of the persons serving as a
Director on December 12, 1997 shall be credited with a retirement benefit of
$4,167 a month for 120 months of continuous service and no additional retirement
benefits shall accrue under the Plan. Each of the persons serving as a Director
on December 12, 1997 may elect: (a) to have his or her retirement benefit under
the Plan treated as provided in Section 5.2 of the Plan; or (b) to have the
present value of that retirement benefit credited to an unfunded phantom stock
account and converted into phantom stock units based on the closing price of the
Company’s common stock on April 30, 1998, with those phantom stock units then
being credited with the same cash and stock dividends, stock splits and other
distributions and adjustments as are paid on the Company’s common stock. The
phantom stock units shall be payable to the Director in annual payments
commencing on the first day of the calendar month next following the earlier of
the Director’s death or termination of service

 

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as a Director, in an amount determined by the closing price of the Company’s
common stock on the first business day preceding the payment date. Unless the
retirement benefit is terminated, the annual benefit shall continue to be paid
on the anniversary of the day on which the first such retirement benefit payment
was made, until the benefit has been paid for ten years, or until the death of
the Director or surviving spouse, if earlier. If a Director should die with such
benefit still in effect, prior to receipt of all payments due hereunder, the
annual benefit shall continue to be paid to the surviving spouse of such
Director until all payments due hereunder have been made or until the death of
the surviving spouse, if earlier.

5.2           Any person serving as a Director on December 12, 1997 who elects
to have his or her retirement benefit paid pursuant to this Section 5.2 shall
receive a monthly benefit equal to $4,167. Payment of the monthly benefit shall
commence on the first day of the calendar month next following the earlier of
the Director’s death or termination of service as a Director. Unless the
retirement benefit is terminated, the monthly benefit shall continue to be paid
on the first day of each calendar month thereafter, until the benefit has been
paid for one hundred and twenty (120) months, or until the death of the Director
or surviving spouse, if earlier. If a Director should die with such benefit
still in effect, prior to receipt of all payments due hereunder, the monthly
benefit shall continue to the surviving spouse of such Director until all
payments due hereunder have been made or until the death of the surviving
spouse, if earlier.

5.3           Directors who retired on or before December 12, 1997 will receive
the form and amount of retirement benefit payable under the terms of the Plan in
effect at the time of their retirement.

5.4           Each Director who is granted a retirement benefit hereunder shall
make him or herself available for such consultation with the Board of Directors
or any committee or member thereof, as may be reasonably requested from time to
time by the Chairman of the Board of Directors, following such Director’s
termination of service as a Director. The Company shall reimburse each such
Director for all reasonable travel, lodging and subsistence expenses incurred by
the Director at the request of the Company in rendering such consultation. The
Company may terminate the retirement benefit if the Director should fail to
render such consultation, unless prevented by disability or other reason beyond
the Director’s control.

5.5           It is recognized that during a Director’s period of service as a
Director and as a consultant hereunder, a Director will acquire knowledge of the
affairs of the Company and its subsidiaries, the disclosure of which would be
contrary to the best interests of the Company. Accordingly, the Company may
terminate the retirement benefit if, without the express consent of the Company,
the Director accepts election to the Board of Directors of, acquires a
partnership or proprietary interest in, or renders services as an employee or
consultant to, any business entity which is engaged in substantial competition
with the Company or any of its subsidiaries.

 

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5.6           An individual will be considered a Director’s “surviving spouse”
for purposes of this Section 5 only if the Director and such individual were
married in a religious or civil ceremony recognized under the laws of the state
where the marriage was contracted and the marriage remained legally effective at
the date of the Director’s death.

SECTION 6.
CONVERSION TO COMMON STOCK UNITS

6.1           Any Director who is then serving as a director may, by written
notice filed with the Secretary of the Company, elect to have all or any portion
of deferred fees previously earned but not yet paid, transferred from the
Director’s Deferred Fee Account to a Stock Account maintained on his or her
behalf pursuant to paragraph 9.3. Any election as to a portion of such fees
shall be expressed as a percentage and the same percentage shall be applied to
all such fees regardless of the calendar year in which earned or to all deferred
fees earned in designated calendar years, as specified by the Director. A
Director may make no more than one election under this paragraph 6.l in any
calendar year. All such elections may apply only to deferred fees for which an
election has not previously been made and shall be irrevocable.

6.2           Any Director may, by written notice filed with the Secretary of
the Company, elect to have all or any portion of deferred fees earned subsequent
to the date such notice is filed credited to a Stock Account established under
this Section 6. Fees covered by such election shall be credited to such account
at the end of each calendar quarter in, or for which, such fees are earned. Such
election may be revoked or modified by such Director, by written notice filed
with the Secretary of the Company, as to deferred fees to be earned in calendar
years subsequent to the calendar year such notice is filed, but shall be
irrevocable as to deferred fees earned prior to such year.

6.3           Deferred fees credited to a Stock Account under paragraph 6.1
shall be converted to Common Stock Units by dividing the deferred fees so
credited by the closing price of common shares of the Company on the date notice
of election under paragraph 6.1 is received by the Company (or the next business
day, if there are no sales on such date) as reported on the New York Stock
Exchange Composite Reporting System. Deferred fees credited to a Stock Account
under paragraph 6.2 shall be converted to Common Stock Units by dividing the
deferred fees so credited by the closing price of common shares of the Company
as of the last business day of the calendar quarter for which the credit is
made, as reported on the New York Stock Exchange Composite Reporting System.

6.4           Each Common Stock Unit shall be credited with the same cash and
stock dividends, stock splits and other distributions and adjustments as are
received by one common share of the Company. All cash dividends and other cash
distributions credited to Common Stock Units shall be converted to additional
Common Stock Units by dividing each such dividend or distribution by the closing
price of common shares of the Company on the payment date for such dividend or
distribution, as reported by the New York Stock Exchange Composite Reporting
System.

 

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6.5           The value of the Common Stock Units credited each Director shall
be paid the Director in cash on the dates specified in paragraph 4.2 (or, if
applicable, paragraph 4.4). The amount of each payment shall be determined by
multiplying the Common Stock Units payable on each date specified in paragraph
4.2 (or, if applicable, paragraph 4.4) by the closing price of common shares of
the Company on the day prior to that date (or the next preceding business day if
there are no sales on such date), as reported by the New York Stock Exchange
Composite Reporting System.

SECTION 7.
MISCELLANEOUS

7.1           Each Director or former Director entitled to payment of deferred
fees hereunder, from time to time may name any person or persons (who may be
named contingently or successively) to whom any deferred Director’s fees earned
by him and payable to him are to be paid in case of his death before he receives
any or all of such deferred Director’s fees.  Each designation will revoke all
prior designations by the same Director or former Director, shall be in form
prescribed by the Company, and will be effective only when filed by the Director
or former Director in writing with the Secretary of the Company during his
lifetime. If a deceased Director or former Director shall have failed to name a
beneficiary in the manner provided above, or if the beneficiary named by a
deceased Director or former Director dies before him or before payment of all
the Director’s or former Director’s deferred Directors’ fees, the Company, in
its discretion, may direct payment in a single sum of any remaining deferred
Directors’ fees to either:

(a)                                  any one or more or all of the next of kin
(including the surviving spouse) of the Director or former Director, and in such
proportions as the Company determines; or

(b)                                 the legal representative or representatives
of the estate of the last to die of the Director or former Director and his last
surviving beneficiary.

The person or persons to whom any deceased Director’s or former Director’s
deferred Directors’ fees are payable under this paragraph will be referred to as
his “beneficiary.”

7.2           Establishment of the Plan and coverage thereunder of any person
shall not be construed to confer any right on the part of such person to be
nominated for reelection to the Board of Directors of the Company, or to be
reelected to the Board of Directors.

7.3           Payment of deferred Directors’ fees will be made only to the
person entitled thereto in accordance with the terms of the Plan, and deferred
Directors’ fees are not in any way subject to the debts or other obligations of
persons entitled thereto, and may not be voluntarily or involuntarily sold,
transferred or assigned. When a person entitled to a payment under the Plan is
under legal disability or, in the Company’s opinion, is in any way incapacitated
so as to be unable to manage his financial affairs, the Company may direct that
payment be made to such person’s legal representative, or to a relative or
friend of such person for his benefit. Any payment made in accordance with the
preceding sentence shall be in complete discharge of the Company’s obligation to
make such payment under the Plan.

 

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7.4           Any action required or permitted to be taken by the Company under
the terms of the Plan shall be by affirmative vote of a majority of the members
of the Board of Directors then in office.

SECTION 8.
AMENDMENT AND DISCONTINUANCE

While the Company expects to continue the Plan, it must necessarily reserve, and
does hereby reserve, the right to amend or discontinue the Plan at any time;
provided, however, that any amendment or discontinuance of the Plan shall be
prospective in operation only, and shall not affect the payment of any deferred
Directors’ fees theretofore earned by any Director, or the conditions under
which any such fees are to be paid or forfeited under the Plan, unless the
Director affected shall expressly consent thereto.

SECTION 9.
ALTERNATE PAYMENT OF DEFERRED FEES

9.1           By written notice filed with the Secretary of the Company prior to
calendar years beginning after December 31, 1988 (or, for the calendar year he
first becomes a Director within 30 days of becoming a Director), a Director may
elect to receive all or any portion of his deferred fees earned in such calendar
years in a lump sum in accordance with the provisions of this Section 9. An
election under this subsection 9.1 may be revoked or modified by the Director by
written notice to the Secretary of the Company as to deferred fees earned under
Section 3 in calendar years beginning after the calendar year in which he files
such notice. Any amounts that were deferred for calendar years beginning before
January 1, 1989 shall automatically be paid as provided in this Section 9.

9.2           If payment of a Director’s deferred fees is made pursuant to
paragraph 9.1, a portion of such fees shall be paid in cash for the Director
directly to a “Grantor Trust” established by the Director, provided such trust
is in a form which the Company determines to be substantially similar to the
trust attached to this plan as Exhibit A; and the balance of the deferred fees
shall be paid in cash directly to the Director, provided that the payment made
directly to the Director shall approximate the aggregate federal, state and
local individual income taxes attributable to the deferred fees paid pursuant to
this paragraph 9.2.

9.3           The Company will establish and maintain four separate accounts in
the name of each Director, “a Deferred Fee Account”, a “Deferred Fee Trust
Account”, a “Stock Account” and a “Stock Trust Account”. The Deferred Fee
Account shall reflect the deferred fees and interest to be credited to a
Director pursuant to Section 3. The Deferred Fee Trust Account shall reflect any
deferred fees paid in cash to a Director (including amounts paid to a Director’s
Grantor Trust and allocated to the deferred account maintained thereunder)
pursuant to paragraph 9.2 and any adjustments made pursuant to paragraph 9.4.
The Stock Account shall reflect the deferred fees converted to Common Stock
Units pursuant to Section 6 and any adjustments made pursuant to that Section.
The Stock Trust Account shall reflect deferred fees that have been converted to

 

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Common Stock Units under Section 6 and paid in cash to a Director (including
amounts paid to a Director’s Grantor Trust and allocated to the stock account
maintained thereunder) pursuant to paragraph 9.2 and any adjustments made
pursuant to paragraph 9.5. The Accounts established pursuant to this paragraph
9.3 are for the convenience of the administration of the plan and no trust
relationship with respect to such Accounts is intended or should be implied.

9.4           As of the end of each calendar year, the Company shall adjust each
Director’s Deferred Fee Trust Account as follows:

(a)                                  FIRST, charge an amount equal to the
product of: (i) any payments made to the Director during that year from the
deferred account maintained under his or her Grantor Trust (other than
distributions of trust earnings in excess of the Net Interest Accrual authorized
by the administrator of the trust to provide for the Tax Gross Up under
paragraph 9.9 below); multiplied by (ii) a fraction, the numerator of which is
the balance in the Director’s Deferred Fee Trust Account as of the end of the
prior calendar year and the denominator of which is the balance in the deferred
account maintained under the Director’s Grantor Trust (as determined by the
administrator of the trust) as of that same date;

(b)                                 NEXT, credit an amount equal to the deferred
fees that have not been converted to Common Stock Units that are paid that year
to the Director (including the amount paid to the Director’s Grantor Trust and
allocated to the deferred account maintained thereunder) pursuant to paragraph
9.2; and

(c)                                  FINALLY, credit an amount equal to the
Interest Accrual earned for that year pursuant to paragraph 9.6.

9.5           As of the end of each calendar year, the Company shall adjust each
Director’s Stock Trust Account as follows:

(a)                                  FIRST, charge an amount equal to the
product of: (i) any payments made to the Director during that year from the
stock account maintained under his or her Grantor Trust (other than
distributions of trust earnings authorized by the administrator of the trust to
provide for the Tax Gross Up under paragraph 9.9 below); multiplied by (ii) a
fraction, the numerator of which is the balance in the Director’s Stock Trust
Account as of the end of the prior calendar year and the denominator of which is
the balance in the stock account maintained under the Director’s Grantor Trust
(as determined by the administrator of the trust) as of that same date;

(b)                                 NEXT, credit an amount equal to the deferred
fees that have been converted to Common Stock Units that are paid that year to
the Director (including the amount paid to the Director’s Grantor Trust and
allocated to the stock account maintained thereunder) pursuant to paragraph 9.2;
and

 

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(c)                                  FINALLY, credit an amount equal to the Book
Value Adjustments to be made for that year pursuant to paragraph 9.6.

9.6           As of the end of each calendar year, a Director’s Deferred Fee
Trust Account shall be credited with interest at the rate described in paragraph
3.7. Any amount so credited shall be referred to as a Director’s “Interest
Accrual”. As of that same date, a Director’s Stock Trust Account shall be
adjusted as provided in paragraph 6.4, and shall also be adjusted to reflect the
increase or decrease in the fair market value of the Company’s common stock
determined in accordance with paragraph 6.5. Such adjustments shall be referred
to as “Book Value Adjustments.”

9.7           In addition to any fees earned by a Director under Section 3 of
this plan or paid under paragraphs 4.1 or 9.1 the Company shall also make a
payment to a Director’s Grantor Trust (a “Guaranteed Rate Payment”), to be
credited to the deferred account maintained thereunder, for any year in which
the net income credited to the deferred account maintained under such trust does
not equal or exceed the Director’s Net Interest Accrual for that year. A
Director’s “Net Interest Accrual” for a year is an amount equal to: (a) the
Interest Accrual credited to the Director’s Deferred Fee Trust Account for that
year; less (b) the product of (i) the amount of such Interest Accrual,
multiplied by (ii) the aggregate of the federal, state and local individual
income tax rates (determined in accordance with paragraph 9.10). The Guaranteed
Rate Payment shall equal the difference between the Director’s Net Interest
Accrual and the net income credited to the deferred account maintained under the
Director’s Grantor Trust for the year, and shall be paid within 90 days of the
end of that year.

9.8           The Company shall also make a payment to a Director’s Grantor
Trust (a “Guaranteed Principal Payment”), to be credited to the stock account
maintained thereunder, to the extent that the balance in the stock account as of
the end of any calendar year is less than 75 percent of the balance of the
Director’s Stock Trust Account (net of federal, state and local income taxes) as
of that same date. For the calendar year in which the last installment
distribution is made from the Director’s Grantor Trust, the payment made under
this paragraph 9.8 shall equal the amount, if any, needed to increase the fair
market value of the stock account maintained under the Director’s Grantor Trust;
such that if a distribution of the stock account were then made to the Director,
the Director would receive the same amount he or she would have received (net of
federal, state and local income taxes) if his or her Stock Trust Account were to
be distributed on that same date with the deferred fees that had been allocated
to that Account taxed at the federal, state and local income tax rates in effect
on the date the fees were credited to the Account and the balance of the Account
taxed at the federal, state and local income tax rates in effect on the date of
the distribution. Payments required under this paragraph 9.8 shall be made
within 90 days of the end of the calendar year, except the last payment which
shall be made not later than the due date of the last installment distribution
from the Director’s Grantor Trust.

9.9           In addition to the fees provided under Section 3, each Director
(or, if the Director is deceased, the beneficiary designated under the
Director’s Grantor Trust) shall be entitled to a Tax Gross Up payment for each
year there is a balance in his or her Deferred Fee Trust Account or Stock Trust
Account. The “Tax Gross Up” shall

 

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approximate: (a) the amount necessary to compensate the Director (or
beneficiary) for the net increase in his or her federal, state and local income
taxes as a result of the inclusion in the Director’s (or beneficiary’s) taxable
income of the income of his or her Grantor Trust and any Guaranteed Rate and
Guaranteed Principal Payments for that year; less (b) any distribution to the
Director (or beneficiary) of his or her Grantor Trust’s net earnings for that
year; plus (c) an amount necessary to compensate the Director (or beneficiary)
for the net increase in the taxes described in (a) above as a result of the
inclusion in his or her taxable income of any payment made pursuant to this
paragraph 9.9.

9.10         For purposes of this Section, a Director’s federal income tax rate
shall be deemed to be the highest marginal rate of federal individual income tax
in effect in the calendar year in which a calculation under this Section is to
be made and state and local tax rates shall be deemed to be the highest marginal
rates of individual income tax in effect in the state and locality of the
Director’s residence on the date such a calculation is made, net of any federal
tax benefits. Notwithstanding the preceding sentence, if a Director is not a
citizen or resident of the United States, his or her income tax rates shall be
deemed to be the highest marginal income tax rates actually imposed on the
Director’s benefits under this Plan or earnings under his or her Grantor Trust.

9.11         If a Director’s deferred fees have been paid to a Grantor Trust(s)
pursuant to paragraph 9.2, then at any time (and from time to time) prior to the
Director’s retirement the Director may elect to have those deferred fees paid to
him or her from the Grantor Trust(s) either:

(i)        in the order in which they were earned (i.e., the fees for the
earliest year of service as a Director will be the first fees distributed from
the Grantor Trust(s), the fees for the next earliest year of service as a
Director will be paid on the anniversary of the payment of the first
installment, etc.), or

(ii)     in reverse chronological order from the order in which they were earned
(i.e., the fees for the Director’s last year of service as a Director will be
the first fees distributed from the Grantor Trust(s), the fees for the
penultimate year of service as a Director will be paid on the anniversary of the
payment of the first installment, etc.).

If a Director fails to elect a manner of payment for his or her deferred fees,
then those deferred fees will be paid to the Director in the order in which they
were earned. The date on which payments commence and the other terms governing
distributions from the Grantor Trust(s) shall be determined in accordance with
the terms of the Grantor Trust(s). A Director’s deferred fees shall continue to
be paid until all deferred fees to which the Director is entitled to receive
under the Plan shall have been paid in accordance with the terms of the Grantor
Trust(s).

 

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Exhibit A

 

IRREVOCABLE GRANTOR TRUST AGREEMENT

 

 

THIS RESTATED AGREEMENT, made this ______ day of                     , 2002, by
and between                      of                                         ,
                     (the “grantor”), and The Northern Trust Company located at
Chicago, Illinois, as trustee (the “trustee”),

 

WITNESSETH THAT:

 

WHEREAS, the grantor has established a trust known as the
“                    Grantor Trust”, dated                     , to hold certain
benefits received by the grantor under the Abbott Laboratories Non-Employee
Directors’ Fee Plan, as it may be amended from time to time; and

 

WHEREAS, the grantor, with the consent of the administrator of the referenced
trust, desires to amend the agreement creating the referenced trust (“trust
agreement”) in many respects and believes the trust agreement, as so amended,
would be easier to understand if restated.

 

NOW, THEREFORE, the grantor amends the trust agreement by substituting for it
and all prior amendments the following provisions which set forth all of the
terms and conditions relating to the administration, investment and distribution
of the trust property after this date:

 

ARTICLE I

Introduction

 

I-1.  Name.  This agreement and the trust hereby evidenced (the “trust”) may be
referred to as the “                                                            
Grantor Trust.”

 

I-2.  The Trust Fund.  The “trust fund” as at any date means all property then
held by the trustee under this agreement.

 

I-3.  Status of the Trust.  The trust shall be irrevocable.  The trust is
intended to constitute a grantor trust under Sections 671-678 of the Internal
Revenue Code, as amended, and shall be construed accordingly.

 

I-4.  The Administrator.  Abbott Laboratories (“Abbott”) shall act as the
“administrator” of the trust, and as such shall have certain powers, rights and
duties under this agreement as described below.  Abbott will certify to the
trustee from time to time the person or persons authorized to act on behalf of
Abbott as the administrator.  The trustee may rely on the latest certificate
received without further inquiry or verification.

 

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I-5.  Acceptance.  The trustee accepts the duties and obligations of the
“trustee” hereunder, agrees to accept funds delivered to it by the grantor or
the administrator, and agrees to hold such funds (and any proceeds from the
investment of such funds) in trust in accordance with this agreement.

 

ARTICLE II

Distribution of the Trust Fund

 

II-1.  Separate Accounts.  The administrator shall maintain two separate
accounts under the trust, a “deferred account” and a “stock account.” Funds
delivered to the trustee shall be allocated between the accounts by the trustee
as directed by the administrator.  As of the end of each calendar year, the
administrator shall charge each account with all distributions made from such
account during that year; and credit each account with its share of income and
realized gains and charge each account with its share of expenses and realized
losses for the year.  The trustee shall be required to make separate investments
of the trust fund for the accounts, and may not administer and invest all funds
delivered to it under the trust as one trust fund.

 

II-2.  Distributions Prior to the Grantor’s Death.  Principal and accumulated
income shall not be distributed from the trust prior to the grantor’s
termination of service as a Director of Abbott (the grantor’s “settlement
date”); provided that, each year the administrator may direct the trustee to
distribute to the grantor a portion of the income of the trust fund for that
year, with the balance of such income to be accumulated in the trust.  The
administrator shall inform the trustee of the grantor’s settlement date. 
Thereafter, the trustee shall distribute the trust fund to the grantor, if then
living, in a series of annual installments, commencing on the first day of the
month next following the later of the grantor’s settlement date or the date the
grantor attains age 65 years.  The administrator shall inform the trustee of the
number of installment distributions and the amount of each installment
distribution under this paragraph II-2, and the trustee shall be fully protected
in relying on such information received from the administrator.

 

II-3.  Distributions After the Grantor’s Death.  The grantor, from time to time
may name any person or persons (who may be named contingently or successively
and who may be natural persons or fiduciaries) to whom the principal of the
trust fund and all accrued or undistributed income thereof shall be distributed
in a lump sum or, if the beneficiary is the grantor’s spouse (or a trust for
which the grantor’s spouse is the sole income beneficiary), in installments, as
directed by the grantor, upon the grantor’s death.  If the grantor directs an
installment method of distribution to the spouse as beneficiary, any amounts
remaining at the death of the spouse beneficiary shall be distributed in a lump
sum to the executor or administrator of the spouse beneficiary’s estate.  If the
grantor directs an installment method of distribution to a trust for which the
grantor’s spouse is the sole income beneficiary, any amounts remaining at the
death of the spouse shall be distributed in a lump sum to such trust.  Despite
the foregoing, if (i) the beneficiary is a trust for which the grantor’s spouse
is the sole income beneficiary, (ii) payments are being made pursuant to this
paragraph II-3 other than in a lump sum and (iii) income earned by the trust
fund for the year exceeds the amount of the annual installment payment, then
such trust may elect to withdraw such excess income by

 

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written notice to the trustee.  Each designation shall revoke all prior
designations, shall be in writing and shall be effective only when filed by the
grantor with the administrator during the grantor’s lifetime.  If the grantor
fails to direct a method of distribution, the distribution shall be made in a
lump sum.  If the grantor fails to designate a beneficiary as provided above,
then on the grantor’s death, the trustee shall distribute the balance of the
trust fund in a lump sum to the executor or administrator of the grantor’s
estate.

 

II-4.  Facility of Payment.  When a person entitled to a distribution hereunder
is under legal disability, or, in the trustee’s opinion, is in any way
incapacitated so as to be unable to manage his or her financial affairs, the
trustee may make such distribution to such person’s legal representative, or to
a relative or friend of such person for such person’s benefit.  Any distribution
made in accordance with the preceding sentence shall be a full and complete
discharge of any liability for such distribution hereunder.

 

II-5.  Perpetuities.  Notwithstanding any other provisions of this agreement, on
the day next preceding the end of 21 years after the death of the last to die of
the grantor and the grantor’s descendants living on the date of this instrument,
the trustee shall immediately distribute any remaining balance in the trust to
the beneficiaries then entitled to distributions hereunder.

 

ARTICLE III

Management of the Trust Fund

 

III-1.  General Powers.  The trustee shall, with respect to the trust fund, have
the following powers, rights and duties in addition to those provided elsewhere
in this agreement or by law:

 

                                          (a)          Subject to the
limitations of subparagraph (b) next below, to sell, contract to sell, purchase,
grant or exercise options to purchase, and otherwise deal with all assets of the
trust fund, in such way, for such considerations, and on such terms and
conditions as the trustee decides.

 

                                          (b)          To retain in cash such
amounts as the trustee considers advisable; and to invest and reinvest the
balance of the trust fund, without distinction between principal and income, in
common stock of Abbott Laboratories, or in obligations of the United States
Government and its agencies or which are backed by the full faith and credit of
the United States Government or in any mutual fund, common trust fund or
collective investment fund which invests solely in such obligations; and any
such investment made or retained by the trustee in good faith shall be proper
despite any resulting risk or lack of diversification or marketability.

 

                                          (c)          To deposit cash in any
depositary (including the banking department of the bank acting as trustee)
without liability for interest, and to invest cash in savings accounts or time
certificates of deposit bearing a reasonable rate of interest in any such
depositary.

 

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                                          (d)          To invest, subject to the
limitations of subparagraph (b) above, in any common or commingled trust fund or
funds maintained or administered by the trustee solely for the investment of
trust funds.

 

                                          (e)          To borrow from anyone,
with the administrator’s approval, such sum or sums from time to time as the
trustee considers desirable to carry out this trust, and to mortgage or pledge
all or part of the trust fund as security.

 

                                          (f)           To retain any funds or
property subject to any dispute without liability for interest and to decline to
make payment or delivery thereof until final adjudication by a court of
competent jurisdiction or until an appropriate release is obtained.

 

                                          (g)          To begin, maintain or
defend any litigation necessary in connection with the administration of this
trust, except that the trustee shall not be obliged or required to do so unless
indemnified to the trustee’s satisfaction.

 

              (h)          To compromise, contest, settle or abandon claims or
demands.

 

                                          (i)           To give proxies to vote
stocks and other voting securities, to join in or oppose (alone or jointly with
others) voting trusts, mergers, consolidations, foreclosures, reorganizations,
liquidations, or other changes in the financial structure of any corporation,
and to exercise or sell stock subscription or conversion rights.

 

                                          (j)           To hold securities or
other property in the name of a nominee, in a depositary, or in any other way,
with or without disclosing the trust relationship.

 

                                          (k)          To divide or distribute
the trust fund in undivided interests or wholly or partly in kind.

 

                                          (l)           To pay any tax imposed
on or with respect to the trust; to defer making payment of any such tax if it
is indemnified to its satisfaction in the premises; and to require before making
any payment such release or other document from any lawful taxing authority and
such indemnity from the intended payee as the trustee considers necessary for
its Protection.

 

                                          (m)         To deal without
restriction with the legal representative of the grantor’s estate or the trustee
or other legal representative of any trust created by the grantor or a trust or
estate in which a beneficiary has an interest, even though the trustee,
individually, shall be acting in such other capacity, without liability for any
loss that may result.

 

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                                          (n)          To appoint or remove by
written instrument any bank or corporation qualified to act as successor
trustee, wherever located, as special trustee as to part or all of the trust
fund, including property as to which the trustee does not act, and such special
trustee, except as specifically limited or provided by this or the appointing
instrument, shall have all of the rights, titles, powers, duties, discretions
and immunities of the trustee, without liability for any action taken or omitted
to be taken under this or the appointing instrument.

 

                                          (o)          To appoint or remove by
written instrument any bank, wherever located, as custodian of part or all of
the trust fund, and each such custodian shall have such rights, powers, duties
and discretions as are delegated to it by the trustee.

 

                                          (p)          To employ agents,
attorneys, accountants or other persons, and to delegate to them such powers as
the trustee considers desirable, and the trustee shall be protected in acting or
refraining from acting on the advice of persons so employed without court
action.

 

                                          (q)          To perform any and all
other acts which in the trustee’s judgment are appropriate for the proper
management, investment and distribution of the trust fund.

 

III-2.  Principal and Income.  Any income earned on the trust fund, which is not
distributed as provided in Article II shall be accumulated and from time to time
added to the principal of the trust.  The grantor’s interest in the trust shall
include all assets or other property held by the trustee hereunder, including
principal and accumulated income.

 

III-3.  Statements.  The trustee shall prepare and deliver monthly to the
administrator and annually to the grantor, if then living, otherwise to each
beneficiary then entitled to distributions under this agreement, a statement (or
series of statements) setting forth (or which taken together set forth) all
investments, receipts, disbursements and other transactions effected by the
trustee during the reporting period; and showing the trust fund and the value
thereof at the end of such period.

 

III-4.  Compensation and Expenses.  All reasonable costs, charges and expenses
incurred in the administration of this trust, including compensation to the
trustee, any compensation to agents, attorneys, accountants and other persons
employed by the trustee, and expenses incurred in connection with the sale,
investment and reinvestment of the trust fund shall be paid from the trust fund.

 

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ARTICLE IV

General Provisions

 

IV-1.  Interests Not Transferable.  The interests of the grantor or other
persons entitled to distributions hereunder are not subject to their debts or
other obligations and may not be voluntarily or involuntarily sold, transferred,
alienated, assigned or encumbered.

 

IV-2.  Disagreement as to Acts.  If there is a disagreement between the trustee
and anyone as to any act or transaction reported in any accounting, the trustee
shall have the right to a settlement of its account by any proper court.

 

IV-3.  Trustee’s Obligations.  No power, duty or responsibility is imposed on
the trustee except as set forth in this agreement.  The trustee is not obliged
to determine whether funds delivered to or distributions from the trust are
proper under the trust, or whether any tax is due or payable as a result of any
such delivery or distribution.  The trustee shall be protected in making any
distribution from the trust as directed pursuant to Article II without inquiring
as to whether the distributee is entitled thereto; and the trustee shall not be
liable for any distribution made in good faith without written notice or
knowledge that the distribution is not proper under the terms of this agreement.

 

IV-4.  Good Faith Actions.  The trustee’s exercise or non-exercise of its powers
and discretions in good faith shall be conclusive on all persons.  No one shall
be obliged to see to the application of any money paid or property delivered to
the trustee.  The certificate of the trustee that it is acting according to this
agreement will fully protect all persons dealing with the trustee.

 

IV-5.  Waiver of Notice.  Any notice required under this agreement may be waived
by the person entitled to such notice.

 

IV-6.  Controlling Law.  The laws of the State of Illinois shall govern the
interpretation and validity of the provisions of this agreement and all
questions relating to the management, administration, investment and
distribution of the trust hereby created.

 

IV-7.  Successors.  This agreement shall be binding on all persons entitled to
distributions hereunder and their respective heirs and legal representatives,
and on the trustee and its successors.

 

ARTICLE V

Changes in Trustee

 

V-1.  Resignation or Removal of Trustee.  The trustee may resign at any time by
giving thirty days’ advance written notice to the administrator and the
grantor.  The administrator may remove a trustee by written notice to the
trustee and the grantor.

 

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V-2.  Appointment of Successor Trustee.  The administrator shall fill any
vacancy in the office of trustee as soon as practicable by written notice to the
successor trustee; and shall give prompt written notice thereof to the grantor,
if then living, otherwise to each beneficiary then entitled to payments or
distributions under this agreement.  A successor trustee shall be a bank (as
defined in Section 581 of the Internal Revenue Code, as amended).

 

V-3.  Duties of Resigning or Removed Trustee and of Successor Trustee.  A
trustee that resigns or is removed shall furnish promptly to the administrator
and the successor trustee an account of its administration of the trust from the
date of its last account.  Each successor trustee shall succeed to the title to
the trust fund vested in its predecessor without the signing or filing of any
instrument, but each predecessor trustee shall execute all documents and do all
acts necessary to vest such title of record in the successor trustee.  Each
successor trustee shall have all the powers conferred by this agreement as if
originally named trustee.  No successor trustee shall be personally liable for
any act or failure to act of a predecessor trustee.  With the approval of the
administrator, a successor trustee may accept the account furnished and the
property delivered by a predecessor trustee without incurring any liability for
so doing, and such acceptance will be complete discharge to the predecessor
trustee.

 

ARTICLE VI

Amendment and Termination

 

VI-1.  Amendment.  With the consent of the administrator, this trust may be
amended from time to time by the grantor, if then living, otherwise by a
majority of the beneficiaries then entitled to payments or distributions
hereunder, except as follows:

 

(a)                           The duties and liabilities of the trustee cannot
be changed substantially without its consent.

 

(b)                          This trust may not be amended so as to make the
trust revocable.

 

VI-2.  Termination.  This trust shall not terminate, and all rights, titles,
powers, duties, discretions and immunities imposed on or reserved to the
trustee, the administrator, the grantor and the beneficiaries shall continue in
effect, until all assets of the trust have been distributed by the trustee as
provided in Article II.

 

*                              *                              *

 

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IN WITNESS WHEREOF, the grantor has executed this amending instrument as of the
day and year first above written.

 

 

 

 

Grantor

 

The undersigned, as trustee, acknowledges receipt of the foregoing amending
instrument as of the day and year first above written.

 

 

The Northern Trust Company as Trustee

 

 

 

 

By

 

 

 

 

 

Its

 

 

 

 

 

 

The undersigned, as a duly authorized representative of the administrator of the
trust, hereby consents to the foregoing amending instrument as of the day and
year first above written.

 

 

Abbott Laboratories

 

 

 

 

By

 

 

 

 

 

Its

 

 

 

 

 

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