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 


 


11

















 


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 


 


2

















 


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.


 


3

















 


                                          (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.


 


4

















 


                                          (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.


 


5

















 


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.


 


6

















 


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.


 


*                              *                              *


 


7

















 


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

  	
   

  
	
   

  	
   

  	
   

  



 


8