Exhibit 10.4

 

ABBOTT LABORATORIES
NON-QUALIFIED REPLACEMENT STOCK OPTION AGREEMENT

 

Abbott Laboratories (the “Company”) hereby grants to «First Name» «MI» «Last
Name»,  «Employee ID» (the “Employee”), a Non-Qualified Replacement Stock Option
(the “Option”) to purchase from time to time all or any part of a total of
«NQSOs» Shares subject to this Option, at the price of $«Option_Price» per
Share, such price being not less than 100% of the Fair Market Value of the
Shares on the date hereof (the “Exercise Price”), under the terms and conditions
set forth in this Non-Qualified Stock Option Agreement (the “Agreement”) and is
granted with respect to an Option (the “Original Option”), the original term of
which was set to expire on «Expiration_Date» (the “Expiration Date”).

 

This Option is granted this «Grant_Day» day of «Grant_Month», 20    , under the
Company’s 1996 Incentive Stock Program (the “Program”) for the purpose of
furnishing to the Employee an appropriate incentive to improve operations and
increase profits and encouraging the Employee to continue employment with the
Company and its Subsidiaries.  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 Option are as follows:

 

1.                    This Option may, but need not, be exercised in
installments, but only within the time periods and subject to the conditions
described below.  This Option may be exercised only after six months have
elapsed from the date of its grant.  In no event shall this Option be
exercisable on or after the date on which the Original Option would have
terminated or at any other time when the Original Option would not have been
exercisable.

 

2.                    Subject to Paragraphs 4 and 5, if the employee’s
employment with the Company and its Subsidiaries terminates before six months
have elapsed from the date of this Option’s grant, then the determination of
whether and upon what conditions this Option may be exercised shall be made
pursuant to the provisions that would have governed the exercise of the Original
Option in the event the Employee’s employment had terminated before the Original
Option became exercisable.

 

3.                    Subject to Paragraphs 4 and 5, if the Employee’s
employment with the Company and its Subsidiaries terminates after six months
have elapsed from the date of this Option’s grant, then the determination of
whether and upon what conditions this Option may be exercised shall be made
pursuant to the provisions that would have governed the exercise of the Original
Option in the event the Employee’s employment had terminated after the Original
Option became exercisable.

 

4.                    Notwithstanding Paragraphs 2 and 3, this Option shall
immediately terminate in the event the Employee engages, directly or indirectly
for the benefit of the Employee or others, in any activity, employment or
business during employment or within twelve (12) months after the date of
termination or

 

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retirement which, in the sole opinion and discretion of the Committee or its
delegate, is competitive with the Company or any of its Subsidiaries.

 

5.                    Notwithstanding Paragraphs 2 and 3, these Options shall
immediately terminate, if in the sole opinion and discretion of the Committee or
its delegate, the Employee (a) engages in a material breach of the Company’s
code of business conduct; (b) commits an act of fraud, embezzlement or theft in
connection with the Employee’s duties or in the course of employment; or
(c) wrongfully discloses secret processes or confidential information of the
Company or its Subsidiaries.

 

6.                    Neither the Program nor this Agreement shall confer upon
the Employee the right to continue in the 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.

 

7.                    Except as otherwise provided by the Committee or its
delegate, the Option is not transferable otherwise than by will or the laws of
descent and distribution and is exercisable during the Employee’s lifetime only
by the Employee or the Employee’s guardian or legal representative.  It may not
be assigned, transferred (except by will or the laws of descent and
distribution), pledged or hypothecated in any way, whether by operation of law
or otherwise, and shall not be subject to execution, attachment, or similar
process.  Any attempt at assignment, transfer, pledge, hypothecation, or other
disposition of the Option contrary to the provisions hereof, and the levy of any
attachment or similar process upon such Option, shall be null and void and
without effect.

 

8.                    The Option may be exercised only by (i) delivering to the
Secretary or other designated employee or agent of the Company, a written,
electronic, or telephonic notice of exercise, specifying the number of Shares
with respect to which the Option is then being exercised, and by payment of the
full Exercise Price of the Shares being purchased in cash, or with other Shares
held by the Employee having a then fair market value equal to the Exercise
Price, (ii) by the delivery of a properly executed exercise notice together with
a copy of  irrevocable instructions to a broker to deliver promptly to the
Company the amount of sale or loan proceeds to pay the Exercise Price, or
(iii) a combination thereof, plus, in each case, payment of the full amount of
any taxes which the Company believes are required to be withheld and paid with
respect to such exercise.  In the event the Option is being exercised by a
person or persons other than the Employee, such person shall furnish the
appropriate tax clearances, proof of the right of such person or persons to
exercise the Option, and other pertinent data as the Company may deem necessary.

 

9.                    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 purchased upon any exercise pending compliance with all applicable
federal and state securities and other laws (including any registration
requirements)

 

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and compliance with the rules and practices of any stock exchange upon which the
Shares are listed.

 

10.              In the event the Exercise Price of the Shares covered by this
Option or any taxes due on its exercise are paid by the surrender of other
Shares or, for payment of withholding taxes, by withholding of Shares, the
Employee will be granted an Option (the “Replacement Option”) to purchase a
number of Shares equal to the number of Shares surrendered and/or withheld,
provided the then fair market value of the Shares covered by this Option is at
least twenty-five percent (25%) higher than such Exercise Price.  The Exercise
Price under the Replacement Option will be the fair market value of the Shares
covered by the Replacement Option as of the grant date of the Replacement
Option.  The Replacement Option will be a nonqualified stock Option, first
exercisable six (6) months from the Replacement Option grant date, with a term
equal to the remainder of the term of the Original Option.  An additional
Replacement Option will not be granted upon the exercise of a previously issued
Replacement Option if that previously granted Replacement Option is exercised in
the same calendar year that it was granted.

 

11.              The Employee may satisfy any federal, state, local or foreign
taxes arising from any transaction related to the exercise of the Option by
(i) tendering a cash payment, (ii) having the Company withhold Shares from the
Option exercised to satisfy the minimum applicable withholding tax,
(iii) tendering Shares received in connection with the Option 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
transferable to the Employee upon any exercise of the Option 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
subject to the Option, notwithstanding that a number of the Shares are held back
solely for the purpose of satisfying any such taxes, requirements and
withholding obligations.

 

12.              In the event there is a change in the number of issued Shares
without new consideration to the Company (such as by stock dividends or stock
splits), then (i) the number of Shares at the time unexercised under this Option
shall be changed in proportion to such change in issued Shares; and (ii) the
Exercise Price for the unexercised portion of the Option shall be adjusted so
that the aggregate consideration payable to the Company upon the purchase of all
Shares not theretofore purchased shall not be changed.

 

If the outstanding Shares shall be combined, or be changed into another kind of
stock of the Company or into securities of another corporation, whether through
recapitalization, sale, merger, consolidation, spin-off, etc., the Company shall
cause adequate provision to be made whereby the person or persons entitled to
exercise this Option shall thereafter be entitled to receive, upon due exercise
of any portion of the Option, the securities

 

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which that person would have been entitled to receive for Shares acquired
through exercise of the same portion of such Option immediately prior to the
effective date of such recapitalization, reorganization, sale, merger,
consolidation, spin-off, etc.  If appropriate, due adjustment shall be made in
the per share or per unit price of the securities purchased on exercise of this
Option following said recapitalization, reorganization, sale, merger,
consolidation, spin-off, etc.

 

13.              Neither this Option, Shares issued upon its exercise, any
excess of market value over Exercise Price, nor any other rights, benefits,
values or interest resulting from the granting of this Option shall be
considered as compensation for purposes of any pension or retirement plan,
insurance plan, investment or stock purchase plan, or any other employee benefit
plan of the Company or any of its Subsidiaries.

 

14.              Except as provided in Section 12 above, the grant of an Option
under the Program does not create any contractual or other right to receive
additional Option grants or other Program benefits in the future.  Nothing
contained in this Agreement is intended to create or enlarge any other
contractual obligations between the Company and the Employee.  Future Option
grants, if any, and their terms and conditions, will be at the sole discretion
of the Committee or its delegate.  Unless expressly provided by the Company in
writing, any value associated with an Option granted under the Program is an
item of compensation outside the scope of the Employee’s employment contract, if
any, and shall not be deemed part of the Employee’s normal or expected
compensation for purposes of calculating any severance, resignation, redundancy,
dismissal, end-of-service payments, bonuses, long-service awards, pension or
retirement benefits, or similar payments.

 

15.              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.

 

16.              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.

 

17.              For purposes of this Agreement, “Personal Data” shall mean
certain personal information about the Employee held by the Company and its
Subsidiaries, 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 Subsidiaries, details of all stock
options or any other entitlement to Shares

 

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awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s
favor for the purpose of managing and administering the Program or this Option. 
The Option granted hereunder 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 Agreement 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 this Agreement shall
nevertheless remain in full force and effect.

 

                             By accepting the Option, the Employee voluntarily
and unambiguously acknowledges and consents to the collection, use, processing
and transfer of Personal Data as described in this Section, in electronic or
other form.  The Employee is not obligated 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 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 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 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 may 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 such data.  The Employee may, at any time, withdraw the
consents herein in writing, in any case without cost, by contacting the Company;
however, withdrawing such consent may affect such Employee’s ability to
participate in the Program.

 

18.              The Option is intended to be exempt from the requirements of
Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).  The
Program and this Agreement shall be administered and interpreted in a

 

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manner consistent with this intent.  If the Company determines that this
Agreement is subject to Code Section 409A and fails to comply with that
section’s requirements, the Company may, at the Company’s sole discretion, and
without the Employee’s consent, amend the Agreement to cause it to comply with
Code Section 409A or be exempt from Code Section 409A.

 

19.              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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