Exhibit 10.4


 


ABBOTT LABORATORIES
SUPPLEMENTAL PENSION PLAN


 


(As amended and
restated effective January 1, 2008)


 





















 


ABBOTT LABORATORIES
SUPPLEMENTAL PENSION PLAN


 


Section 1

INTRODUCTION


 


1-1.                             On September 9, 1977, December 14,
1979 and February 10, 1984 the Board of Directors of Abbott Laboratories (“Abbott”)
adopted certain resolutions providing for payment of (i) pension benefits
calculated under the Abbott Laboratories Annuity Retirement Plan (“Annuity Plan”)
in excess of those which may be paid under that plan under the limits imposed
by Section 415 of the U.S. Internal Revenue Code, as amended, and the
Employee Retirement Income Security Act (“ERISA”) and (ii) the additional
pension benefits that would be payable under the Annuity Plan if deferred awards
under the Abbott Laboratories Management Incentive Plan were included in “final
earnings” as defined in the Annuity Plan. 
The ABBOTT LABORATORIES SUPPLEMENTAL PENSION PLAN (this “Supplemental
Plan”) clarified, restated and superseded the prior resolutions and is hereby
amended and restated in accordance with the requirements of Section 409A
of the Internal Revenue Code of 1986, as amended (“Code Section 409A”).


 


1-2.                             The Supplemental Plan shall apply to
employees of Abbott and its subsidiaries and affiliates existing as of the date
of adoption of the Supplemental Plan or thereafter created or acquired.  (Abbott and each of such subsidiaries and
affiliates are hereinafter referred to as an “employer” and collectively as the
“employers”).


 


1-3.                             All benefits provided under the
Supplemental Plan shall be provided from the general assets of the employers
and not from any trust fund or other designated asset.  All participants in the Supplemental Plan
shall be general creditors of the employers with no priority over other
creditors.


 


1-4.                             The Supplemental Plan shall be
administered by the Abbott Laboratories Employee Benefit Board of Review
appointed and acting under the Annuity Plan (“Board of Review”).  Except as stated below, the Board of Review
shall perform all powers and duties with respect to the Supplemental Plan,
including the power to direct payment of benefits, allocate costs among
employers, adopt amendments and determine questions of interpretation.  The Board of Directors of Abbott (the “Board
of Directors”) shall have the sole authority to terminate the Supplemental
Plan.


 


1-5.                             Notwithstanding anything in the
Supplemental Plan to the contrary, any amounts under the Supplemental Plan that
were earned and vested before January 1, 2005 (as determined in accordance
with Code Section 409A) with respect to participants who retired before January 1,
2005 (“Grandfathered Amounts”) shall be subject to the terms and conditions of
the Supplemental Plan as administered and as in effect on December 31,
2004.  Amendments made to the
Supplemental Plan pursuant to this amendment and restatement or otherwise shall
not affect the Grandfathered Amounts unless expressly provided for in the
amendment.  The terms and conditions
applicable to the Grandfathered Amounts are set forth in Appendix A attached
hereto.


 





















 


Section 2

ERISA ANNUITY PLAN SUPPLEMENTAL BENEFIT


 


2-1.                             The benefits described in this Section 2
shall apply to all participants in the Annuity Plan who retire, or terminate
with a vested pension under that plan, on or after September 9, 1977.


 


2-2.                             Each Annuity Plan participant whose
retirement or vested pension under that plan would otherwise be limited by Section 415,
Internal Revenue Code, shall receive a supplemental pension under this
Supplemental Plan in an amount, which, when added to his or her Annuity Plan
pension (calculated as if such pension had been payable based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4), will equal the amount
the participant would be entitled to under the Annuity Plan as in effect from
time to time, calculated as if such pension had been payable based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4, without regard to the
limitations imposed by Section 415, Internal Revenue Code.


 


Section 3

1986 TAX REFORM ACT SUPPLEMENTAL BENEFIT


 


3-1.                             The benefits described in this Section 3
shall apply to all participants in the Annuity Plan who retire, or terminate
with a vested pension under that plan, after December 31, 1988.


 


3-2.                             Each Annuity Plan participant shall
receive a supplemental pension under this Supplemental Plan in an amount
determined as follows:


 


(a)                                       The supplemental pension shall be
the difference, if any, between:


 


i.                           the hypothetical monthly benefit
that would have been payable under the Annuity Plan based on the distribution rules established
hereunder and the pension form selected by the participant as permitted by
subsections 8-3 and 8-4 plus any supplement provided by Section 2; and


 


ii.                        the hypothetical monthly benefit
that would have been payable under the Annuity Plan, calculated based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4, (without regard to the
limits imposed by Section 415, Internal Revenue Code) if the participant’s
“final earnings”, as defined in the Annuity Plan, had included compensation in
excess of the limits imposed by Section 401(a)(17), Internal Revenue Code,
and any “pre-tax contributions” made by the participant under the Abbott
Laboratories Supplemental 401(k) Plan.


 


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Section 4


DEFERRED
COMPENSATION PLAN ANNUITY PLAN SUPPLEMENTAL BENEFIT


 


4-1.                             The benefits described in this Section 4
shall apply to all participants in the Annuity Plan who retire, or terminate
with a vested pension, under that plan, on or after January 1, 2002 and who
made a Deferral Election under the Abbott Laboratories Deferred Compensation
Plan (the “Deferred Compensation Plan”) with respect to any calendar month
during the one hundred twenty consecutive calendar months immediately preceding
retirement or termination of employment.


 


4-2.                             Each Annuity Plan participant shall
receive a supplemental pension under this Supplemental Plan in an amount
determined as follows:


 


(a)                                       The supplemental pension shall be
the difference, if any, between:


 


i.                           the hypothetical monthly benefit
that would have been payable under the Annuity Plan based on the distribution rules established
hereunder and the pension form selected by the participant as permitted by
subsections 8-3 and 8-4 plus any supplement provided by Section 2 and Section 3;
and


 


ii.                        the hypothetical monthly benefit
that would have been payable under the Annuity Plan, calculated based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4, (without regard to the
limits imposed by Section 415, Internal Revenue Code) if the participant’s
“base earnings”, as defined in the Annuity Plan, included deferrals made under
the Deferred Compensation Plan and any compensation in excess of the limits imposed
by Section 401(a)(17), Internal Revenue Code.


 


Section 5

DEFERRED MIP ANNUITY PLAN SUPPLEMENTAL BENEFIT


 


5-1.                             The benefits described in this Section 5
shall apply to all participants in the Annuity Plan who retire, or terminate
with a vested pension, under that plan, on or after December 14, 1979 and
who were awarded Management Incentive Plan awards for any calendar year during
the ten consecutive calendar years ending with the year of retirement or
termination of employment.


 


5-2.                             Each Annuity Plan participant shall
receive a supplemental pension under this Supplemental Plan in an amount
determined as follows:


 


(a)                                       The supplemental pension shall be
the difference, if any, between:


 


i.                           the hypothetical monthly benefit
that would have been payable under the Annuity Plan based on the distribution rules established
hereunder and the pension form selected by the


 


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participant as
permitted by subsections 8-3 and 8-4 plus any supplement provided by Section 2,
Section 3, and Section 4; and


 


ii.                        the hypothetical monthly benefit
that would have been payable under the Annuity Plan, calculated based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4, (without regard to the
limits imposed by Section 415, Internal Revenue Code) if the participant’s
“final earnings”, as defined in the Annuity Plan, were one-sixtieth of the sum
of:


 


A.  the
participant’s total “basic earnings” (excluding any payments under the
Management Incentive Plan or any Division Incentive Plan) received in the sixty
consecutive calendar months for which his basic earnings (excluding any
payments under the Management Incentive Plan or any Division Incentive Plan) were
highest within the last one hundred twenty consecutive calendar months
immediately preceding his retirement or termination of employment; and


 


B.  the
amount of the participant’s total awards under the Management Incentive Plan
and any Division Incentive Plan (whether paid immediately or deferred) made for
the five consecutive calendar years during the ten consecutive calendar years
ending with the year of retirement or termination for which such amount is the
greatest and (for participants granted Management Incentive Plan awards for
less than five consecutive calendar years during such ten year period) which
include all Management Incentive Plan awards granted for consecutive calendar
years within such ten year period.


 


(b)                                 That portion of any Management
Incentive Plan award which the Compensation Committee of the Board of Directors
of Abbott (“Committee”) has determined shall be excluded from the participant’s
“basic earnings” shall be excluded from the calculation of “final earnings” for
purposes of this subsection 5-2.  “Final
earnings” for purposes of this subsection 5-2 shall include any compensation in
excess of the limits imposed by Section 401(a)(17), Internal Revenue Code.


 


(c)                                  In the event the period described in
subsection 5-2(a)(ii)(B) is the final five calendar years of employment
and a Management Incentive Plan award is made to the participant subsequent to
retirement for the participant’s final calendar year of employment, the
supplemental pension shall be adjusted by adding such new award and subtracting
a portion of the earliest Management Incentive Plan award included in the
calculation, from the amount determined under subsection 5-2(a)(ii)(B).  The portion subtracted shall be equal to that


 


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portion of the
participant’s final calendar year of employment during which the participant
was employed by Abbott.


 


Section 6

CORPORATE OFFICER ANNUITY PLAN SUPPLEMENTAL BENEFIT


 


6-1.                             The benefits described in this Section 6
shall apply to all participants in the Annuity Plan who are corporate officers
of Abbott as of September 30, 1993 or who become corporate officers
thereafter, and who retire, or terminate with a vested pension under that plan
on or after September 30, 1993.  The
term “corporate officer” for purposes of this Supplemental Plan shall mean an
individual elected an officer of Abbott by its Board of Directors (or
designated as such for purposes of this Section 6 by the Compensation
Committee), but shall not include assistant officers.


 


6-2.                             Subject to the limitations and
adjustments described below, each participant described in subsection 6-1 shall
receive a monthly supplemental pension under this Supplemental Plan commencing
on the date determined in accordance with subsection 8-2 and payable as a life
annuity, equal to 6/10 of 1 percent (.006) of the participant’s final earnings
(as determined under subsection 5-2) for each of the first twenty years of the
participant’s benefit service (as defined in the Annuity Plan) occurring after
the participant’s attainment of age 35.


 


6-3.                             In no event shall the sum of (a) the
participant’s aggregate percentage of final earnings calculated under
subsection 6-2 and (b) of the participant’s aggregate percentage of final
earnings calculated under subsection 5-1 of the Annuity Plan, excluding
5-1(a)(ii)(B), exceed the maximum aggregate percentage of final earnings
allowed under subsection 5-1 (also
excluding 5-1(a)(ii)(B)) of the Annuity Plan (without regard to any
limits imposed by the Internal Revenue Code), as in effect on the date of the
participant’s retirement or termination. 
In the event the limitation described in this subsection 6-3 would
be exceeded for any participant, the participant’s aggregate percentage
calculated under subsection 6-2 shall be reduced until the limit is not
exceeded.


 


6-4.                             Benefit service occurring between
the date a participant ceases to be a corporate officer of Abbott and the date
the participant again becomes a corporate officer of Abbott shall be
disregarded in calculating the participant’s aggregate percentage under
subsection 6-2.


 


6-5.                             Any supplemental pension otherwise
due a participant under this Section 6 shall be reduced by the amount (if
any) by which:


 


(a)                                  the hypothetical benefits that would
be payable to such participant under the Annuity Plan, based on the
distribution rules established hereunder and the pension form selected by
the participant as permitted by subsections 8-3 and 8-4, and this Supplemental
Plan exceeds


 


(b)                                 the hypothetical maximum benefit
that would be payable to the participant under the Annuity Plan, calculated
based on the distribution rules established hereunder and the pension form
selected by the participant as permitted by subsections 8-3 and 8-4, (without
regard to the limits imposed by Section 415, Internal Revenue Code) based
on the participant’s final earnings (as


 


5





















 


determined
under subsection 5-2), if the participant had accrued the maximum benefit
service recognized by the Annuity Plan.


 


6-6.                             Any supplemental pension due a
participant under this Section 6 shall be actuarially adjusted as provided
in the Annuity Plan to reflect the pension form selected by the participant as
permitted by subsections 8-3 and 8-4 and the participant’s age at commencement
of the pension as provided in Section 7.


 


Section 7

CORPORATE OFFICER ANNUITY PLAN

SUPPLEMENTAL EARLY RETIREMENT BENEFIT


 


7-1.                             The benefits described in this Section 7
shall apply to all persons described in subsection 6-1.


 


7-2.                             The supplemental pension due under
Sections 2, 3, 4, 5 and 6 to each participant described in subsection 7-1 shall
be reduced in accordance with the rules provided in subsections 5-3 and
5-6 of the Annuity Plan for each month by which its commencement date precedes
the last day of the month in which the participant will attain age 60.  No reduction will be made for the period
between the last day of the months the participant will attain age 60 and age
62.


 


7-3.                             Each participant described in
subsection 7-1 shall receive a monthly supplemental pension under this
Supplemental Plan equal to any hypothetical reduction made in such participant’s
Annuity Plan pension in accordance with the rules provided in subsections
5-3 or 5-6 of the Annuity Plan for the period between the last day of the
months the participant will attain age 60 and age 62, calculated as if the
participant had commenced receipt of the participant’s Annuity Plan pension on
the same date on which the participant commences receipt of the participant’s
supplemental pension based on the distribution rules established hereunder
and the pension form selected by the participant as permitted by subsections
8-3 and 8-4.


 


Section 8

MISCELLANEOUS


 


8-1.                             For purposes of this Supplemental
Plan, the term “Management Incentive Plan” shall mean the Abbott Laboratories
1971 Management Incentive Plan, the Abbott Laboratories 1981 Management
Incentive Plan and all successor plans to those plans.


 


8-2.                             The monthly vested supplemental
pension described in Sections 2, 3, 4, 5, 6 and 7 shall commence to be paid to
the participant or his or her beneficiary on the last day of the month
following the month in which:


 


(a)                                  For the participant hired before
2004, the later of the date on which such participant attains age 50 and the
date such participant’s employment is terminated; or


 


(b)                                 For the participant hired after
2003, the later of the date on which such participant attains age 55 and the
date such participant’s employment is terminated.


 


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Notwithstanding the foregoing provisions of subsection 8-2, any
participant eligible to make an election under Section 9 may make such
election with respect to any accruals for services performed in the year
following the year such election is made.


 


Notwithstanding the foregoing provisions of subsection 8-2, in the
event that the present value of participant’s supplemental pension under
Sections 2, 3, 4, 5, 6 and 7 does not exceed in the aggregate $25,000 as of the
commencement date of the pension payable to such participant or his or her
beneficiary, and payment of such supplemental pension has not been previously
made under Section 9, the present value of such supplemental pension shall
be paid to such participant in a lump-sum on such commencement date.


 


8-3.                             Except as otherwise specifically
provided, payment of the monthly vested supplemental pension described in
Sections 2, 3, 4, 5, 6, and 7 shall be made to a participant as follows:


 


(a)                                  Life Annuity. 
A participant who is not legally married on the date as of which such
payments commence shall receive a monthly retirement income or monthly deferred
vested benefit in accordance with the plan payable on a life annuity basis,
with the last payment to be made for the month in which his or her death
occurs.


 


(b)                                 50% Joint and Survivor Annuity. 
A participant who is legally married on the date as of which such
payments commence shall receive a 50% joint and survivor annuity which is
actuarially equivalent to the amount of monthly retirement income or monthly
deferred vested benefit otherwise payable to him or her in accordance with the
plan on a life annuity basis. Such joint and survivor annuity shall consist of
a reduced monthly retirement income or monthly deferred vested benefit
continuing during the participant’s lifetime, and if the participant’s spouse
is living at the date of the participant’s death, payment of one-half of such
reduced monthly retirement income or monthly deferred vested benefit to such
spouse until the spouse’s death occurs, with the last payment to be made for
the month of the death of the last to die of the participant and his or her
spouse. The joint and survivor annuity payable hereunder to or with respect to
a participant who retires on a late retirement date shall be computed as if
such participant had retired on his or her normal retirement date using for the
age of his or her spouse as of his or her late retirement date, that spouse’s
age as of his or her normal retirement date.


 


8-4.                             In lieu of the form and amount of supplemental
pension benefit specified in subsection 8-3, a participant may elect, prior to
commencement, a supplemental pension benefit, which is actuarially equivalent
to the form of payment specified in subsection 8-3(a), in the annuity forms
permitted by the Board of Review, provided that the scheduled date for the
first annuity payment is not changed as a result of such election.  For purposes of this provision, the term “actuarially
equivalent” shall have the meaning provided by Treasury Regulation §1.409A-2(b)(2)(ii)(A),
applying reasonable actuarial methods and assumptions, which must be the same
for each annuity payment option and otherwise comply with the rules provided
by Treasury Regulation §1.409A-2(b)(2)(ii)(D).


 


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An election under this subsection 8-4 must be
in writing, signed by the participant, and filed with the Board of Review at
such time and in such manner as the Board of Review shall determine; and will
be effective only if the participant’s spouse, if any, consents to the election
in writing, and such consent acknowledges the effect of the election and is
witnessed by a plan representative or a notary public. In any case where a
participant elects an optional form of benefit, the option shall be designed so
that more than 50 percent of the actuarial reserve required to provide the
participant’s monthly vested supplemental pension benefit in the normal form
will be applied to provide the participant’s benefits under the option during
the period of the participant’s life expectancy. Payment of an optional form of
benefit will commence no later than the date on which the participant’s monthly
supplemental pension benefit would otherwise commence. An election under this
subs 8-4 may not be changed after payment of the participant’s supplemental
pension benefit has commenced.


 


8-5.          Notwithstanding
any other provision of this Supplemental Plan, if a participant terminates
employment within two (2) years following the occurrence of a Change in
Control, the present value of his or her supplemental pension under Sections 2,
3, 4 and 5, but excluding any amounts with respect to which an election under Section 9
has been made, whether or not then payable or vested) shall be paid to such
participant in a lump sum, calculated using reasonable actuarial assumptions
and methods, within thirty (30) days following the date of such termination of
employment; provided that the event constituting a Change in Control is also a “change
in control event”, as such term is defined in Treasury Regulation §
1.409A-3(i)(5).  The supplemental pension
under Section 2 shall be computed using as the applicable limit under Section 415
of the Internal Revenue Code, such limit as is in  effect on the termination date and based on
the assumption that the participant will receive his or her supplemental
pension in the form of a straight life annuity with no ancillary benefits.  The present values of the supplemental
pensions under Sections 2, 3, 4 and 5 shall be computed as of the date of
payment using an interest rate equal to the Pension Benefit Guaranty
Corporation interest rate applicable to an immediate annuity, as in effect on
the date of payment.


 


8-6.          For
purposes of subsection 8-5, a “Change in Control” shall be deemed to have
occurred on the earliest of the following dates:


 


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


 


(b)                                   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
Abbott) whose appointment or election by the Board of Directors or nomination for
election by Abbott’s shareholders


 


8

















 


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


 


(c)                                  the date on which there is
consummated a merger or consolidation of Abbott or any direct or indirect
subsidiary of Abbott with any other corporation or other entity, other than (i) a
merger or consolidation (A) 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 Abbott, the entity surviving such
merger or consolidation or, if Abbott or the entity surviving such merger or
consolidation is then a subsidiary, the ultimate parent thereof and (B) which
results in the voting securities of Abbott 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 Abbott
or any subsidiary of Abbott, at least 50% of the combined voting power of the
securities of Abbott or such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger or
consolidation effected to implement a recapitalization of Abbott (or similar
transaction) in which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of Abbott (not including in the securities
Beneficially Owned by such Person any securities acquired directly from Abbott
or its Affiliates) representing 20% or more of the combined voting power of
Abbott’s then outstanding securities; or


 


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


 


9

















 


For purposes of this Supplemental 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) Abbott or any of its subsidiaries, (ii) a trustee or
other fiduciary holding securities under an employee benefit plan of Abbott 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 Abbott in substantially the same
proportions as their ownership of stock of Abbott.


 


8-7.          POTENTIAL
CHANGE IN CONTROL.  A “Potential Change
in Control” shall exist during any period in which the circumstances described
in paragraphs (a), (b), (c) or (d), below, exist (provided, however, that
a Potential Change in Control shall cease to exist not later than the
occurrence of a Change in Control):


 


(a)                                  Abbott 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.


 


(b)                                 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.


 


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


 


(d)                                 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 (d) 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.


 


8-8.          The
provisions of subsections 8-5, 8-6, 8-7 and this subsection 8-8 may not be
amended or deleted, nor superseded by any other provision of this Supplemental
Plan, (i) during


 


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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.


 


8-9.          All
benefits due under this Supplemental Plan shall be paid by Abbott and Abbott
shall be reimbursed for such payments by the employee’s employer.  In the event the employee is employed by more
than one employer, each employer shall reimburse Abbott in proportion to the
period of time the employee was employed by such employer, as determined by the
Board of Review in its sole discretion.


 


8-10.        The
benefits under the Supplemental Plan are not in any way subject to the debts or
other obligations of the persons entitled to benefits and may not be
voluntarily or involuntarily sold, transferred or assigned.


 


8-11.        Nothing
contained in this Supplemental Plan shall confer on any employee the right to
be retained in the employ of Abbott or any of its subsidiaries or affiliates.


 


8-12.        Upon
adoption of this Supplemental Plan, the prior resolutions shall be deemed
rescinded.


 


8-13.        A
participant shall not become vested in the participant’s supplemental pension
under Sections 2, 3, 4, 5, 6 and 7 until the participant has attained sixty
(60) months of vesting service.  For
purposes of the Supplemental Plan, beginning January 1, 1987, a
participant shall be entitled to 1/12th of a year of vesting service for each calendar
month (or portion thereof) during which the participant is employed by an
employer; provided, however, that a participant employed by an employer on December 31,
1986 shall receive the greater of vesting service calculated in accordance with
the terms of the Annuity Plan in effect on December 31, 1986 or vesting
service calculated in accordance with the rule immediately above, for
service with an employer after 1986.  The
payments required by Section 8 or Section 9 of the Supplemental Plan
shall, in each case, relate only to the vested portion of a participant’s
supplemental pension.


 


8-14.        To
the extent applicable, it is intended that the Supplemental Plan comply with
the provisions of Code Section 409A. 
The Supplemental Plan will be administered and interpreted in a manner
consistent with this intent, and any provision that would cause the
Supplemental Plan to fail to satisfy Code Section 409A will have no force
and effect until amended to comply therewith (which amendment may be
retroactive to the extent permitted by Code Section 409A).  Notwithstanding anything contained herein to
the contrary, a participant shall not be considered to have terminated
employment with Abbott or any employer hereunder for purposes of the
Supplemental Plan and no payments shall be due under Supplemental Plan which
are payable upon the participant’s termination of employment unless the
participant would be considered to have incurred a “separation from service”
from Abbott within the meaning of Section 409A.  To the extent required to avoid accelerated
taxation and/or tax penalties under Code Section 409A and applicable
guidance issued thereunder, amounts that would otherwise be payable pursuant to
the Supplemental Plan during the six-month period immediately following the
participant’s termination of employment shall instead be paid on the first
business day after the date that is six months following the participant’s
termination of employment (or upon the participant’s death, if earlier), plus
interest thereon, at a rate equal to the applicable “Federal short-term rate”
(as defined in Section 1274(d) of the Code) for the month in which
such termination of employment


 


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occurs
(to the extent that such interest is not already provided to the participant
under subsection 9.10), from the respective dates on which such amounts would
otherwise have been paid until the actual date of payment.  With respect to expenses eligible for
reimbursement under the terms of the Supplemental Plan, (i) the amount of
such expenses eligible for reimbursement in any taxable year shall not affect
the expenses eligible for reimbursement in another taxable year and (ii) any
reimbursements of such expenses shall be made no later than the end of the
calendar year following the calendar year in which the related expenses were
incurred, except, in each case, to the extent that the right to reimbursement
does not provide for a “deferral of compensation” within the meaning of Code Section 409A.


 


Section 9

ALTERNATE PAYMENT OF SUPPLEMENTAL PENSIONS


 


9-1.          A
participant who is actively employed by Abbott as a corporate officer as of
December 31 of his or her first year as a corporate officer shall be entitled
to receive payment of the present value of the vested supplemental pension
described in Sections 2, 3, 4, 5, 6 and 7 which accrues with respect to the
year and shall elect to receive such payment by either of the following
methods: (a) current payment in cash directly to the participant, or (b)
current payment of a portion of such present value in cash for the participant
directly to a Grantor Trust established by the participant, determined to be
substantially similar to the form of Grantor Trust attached hereto as Appendix
B, and current payment of the balance of such present value in cash directly to
the participant, provided that such payment made directly to the participant
shall be equal to the aggregate federal, state and local individual income and
employment taxes attributable to the amount paid pursuant to this subsection
9-1(b) (as determined in accordance with subsection 9-12). The payment of any
amount provided under this subsection 9-1 shall be made to the Grantor Trust
established by the participant within the thirty (30) days beginning April 1 of
the year following the year in which such present value is accrued.


 


9-2.          If
the present value of a participant’s vested and accrued supplemental pension
has been paid to the participant (including amounts paid to the participant’s
Grantor Trust) pursuant to subsection 9-1 (either as in effect prior to January 1,
2005 that applied to corporate officers with a present value in excess of
$100,000, or as currently in effect for all corporate officers who are
participants as of the applicable December 31) then, with respect to each
subsequent year of active participation, as of that December 31, a
participant shall be entitled to a payment in an amount equal to (i) the
present value (as of that December 31) of the participant’s vested
supplemental pension described in Sections 2, 3, 4, 5, 6 and 7, less (ii) the
current value (as of that December 31) of the payments previously made to
the participant under subsections 9-1 and 9-2 (if any).  Each year a participant who is a corporate
officer may elect to receive payment of the amounts described in subparagraphs (i) and
(ii) above for the year by either of the following methods: (a) current
payment in cash directly to the participant, or (b) current payment of a
portion of such amount in cash for the participant directly to a Grantor Trust
established by the participant and current payment of the balance of such
amount in cash directly to the participant, provided that the payment made
directly to the participant shall equal the aggregate federal, state and local
individual income and employment taxes attributable to the amount paid pursuant
to this subsection 9-2(b) (as determined in accordance with subsection
9-12).  The payment of any amount
provided under this subsection


 


12

















 


9-2
shall be made to the Grantor Trust established by the participant within the
thirty (30) days beginning April 1 of the year following the year in which
such present value is accrued.  No
payments shall be made under this subsection 9-2 as of any December 31
after the calendar year in which the participant retires or otherwise
terminates employment with Abbott.


 


9-3.          Present
values for the purposes of subsections 9-1 and 9-2 shall be determined using
reasonable actuarial assumptions specified for this purpose by Abbott and
consistently applied in accordance with the requirements of Treasury Regulation
§1.409A-2(b)(2)(ii)(D).  The “current
value” of the payments previously made to a participant under subsection 9-2
means the aggregate amount of such payments, with interest thereon (at the rate
specified in subsection 9.9).  For
purposes of subsections 9-4 and 9-5, “Taxes” with respect to any payment of
supplemental pension benefits under subsections 9-1 or 9-2, shall mean the
taxes which Abbott calculates will be incurred by the participant on the income
earned (i) on the payment (net of taxes) that is made pursuant to
subsections 9-1 or 9-2, (ii) on the corresponding payment(s) for
Taxes that are made pursuant to subsection 9-4 and, if applicable, 9-5 and (iii) on
the accumulated income earned on any of the payments covered by parts (i) and
(ii) hereof, during the life of such participant’s Grantor Trust.  In calculating such Taxes, Abbott shall use
the aggregate of the current federal, state and local tax rates specified by
subsection 9-12.


 


9-4.          As
a result of any payment made to a participant eligible for payments under this Article 9
for any calendar year pursuant to subsection 9-1 or 9-2, Abbott shall also make
a corresponding payment to such participant in the amount of the Taxes.  The payment for Taxes under this subsection
9-4 shall be made to the participant in the identical manner that the payment
under subsection 9-1 or 9-2 was made. 
For example, (a) if the participant elected to receive the payment
under subsection 9-1 directly in cash, then Abbott shall also pay the Taxes on
such payment in cash directly to the participant, and (b) if the
participant elected to receive the payment under subsection 9-1 into a Grantor
Trust established by the participant, then Abbott shall pay the Taxes on such
payment as follows: current payment of a portion of such Taxes in cash for such
participant directly to a Grantor Trust established by such participant, and current
payment of the balance of such Taxes in cash directly to such participant,
provided that the payment made directly to such participant shall equal the
aggregate federal, state and local individual income taxes attributable to the
amount paid pursuant to this subsection 9-4(b) (as determined in
accordance with subsection 9-12).  Such
amount shall be paid by Abbott directly to the participant in cash no later
than the end of the calendar year in which the participant remits the related
taxes.


 


9-5.


 


(a)                                  In the event that Abbott has made
any payment for Taxes in a particular year under subsection 9-4 in cash
directly to the participant and there is a subsequent increase in the tax rates
for such participant in such year, Abbott shall make a further cash payment to
such participant in the amount of (a) the Taxes on the payments that were
made under subsections 9-1 and 9-2 in cash directly to such participant
calculated using the actual tax rates for the year less (b) the amount of
such Taxes previously paid.  Such amount
shall be paid by Abbott directly to the participant in cash no later than the
end of the calendar year in which the participant remits the related taxes.


 


13

















 


(b)                                 In the event that Abbott has made
any payment for Taxes in a particular year under subsection 9-4 to the
participant’s Grantor Trust, then Abbott shall as of December 31 of the
following year, make a further payment to the participant in the amount of (a) the
Taxes on the payments that were made under subsections 9-1 and 9-2 into the
participant’s Grantor Trust and in cash directly to the participant calculated
using the actual tax rates for the year less (b) the amount of the Taxes
previously paid.  Such payment shall be
paid by Abbott as follows: the current payment of a portion of such amount in
cash directly to the participant’s Grantor Trust and the current payment of the
balance of such amount in cash directly to such participant; provided, that the
payments made directly to such participant shall equal the aggregate federal,
state and local individual income taxes attributable to the amount paid
pursuant to this subsection 9-5 (as determined in accordance with subsection
9-12).  Such amount shall be paid by
Abbott directly to the participant in cash no later than the end of the
calendar year in which the participant remits the related taxes.


 


9-6.          For
each participant whose Grantor Trust has received a payment pursuant to
subsections 9-4 or 9-5, Abbott, as the administrator of such Grantor Trust,
shall direct the trustee to distribute to the participant from the income of
such Grantor Trust, a sum of money sufficient to pay the taxes on trust
earnings for such year.  The taxes shall
be calculated by multiplying the income of the Grantor Trust by the aggregate
of the federal, state, and local tax rates (determined in accordance with
subsection 9-12).


 


9-7.          Except
as provided in subsection 9-11, a participant shall be deemed to have
irrevocably waived and shall be foreclosed from any right to receive any
supplemental pension benefits on that portion of the supplemental pension that
the participant elects to be paid in cash under subsection 9-1 or 9-2.  A participant, who has elected to receive a
payment under subsection 9-1 or 9-2 to a Grantor Trust, must establish such
trust in a form which Abbott determines to be substantially similar to the
trust attached to this Supplemental Plan as Appendix B.  If a participant fails to make an election
under subsection 9-1 or 9-2, or if a participant makes an election under
subsection 9-1 or 9-2 to receive payment in a Grantor Trust but fails to
establish a Grantor Trust, then payment shall be made in cash directly to the
participant.


 


9-8.          Abbott
will establish and maintain a separate Supplemental Pension Account in the name
of each participant, a separate After-Tax Supplemental Pension Account in the
name of each participant, and a separate Tax Payment Account in the name of
each participant.  The Supplemental Pension
Account shall reflect any amounts:  (i) paid
to a participant (including amounts paid to a participant’s Grantor Trust)
pursuant to subsections 9-1 and 9-2; (ii) credited to such Account
pursuant to subsection 9-9; and (iii) disbursed to a participant for
supplemental pension benefits (or which would have been disbursed to a
participant if the participant had not elected to receive a cash disbursement
pursuant to subsections 9-1 and 9-2). 
The After-Tax Supplemental Pension Account shall also reflect such
amounts but shall be maintained on an after-tax basis.  The Tax Payment Account shall reflect any
amounts (i) paid to a participant (net of taxes) pursuant to subsections
9-4 and 9-5 and (ii) disbursed to a participant for the payment of taxes
pursuant to subsection 9-6.  The accounts
established pursuant to this subsection 9-8 are


 


14

















 


for
the convenience of the administration of the Plan and no trust relationship
with respect to such accounts is intended or should be implied.


 


9-9.          As
of the end of each calendar year, a participant’s Supplemental Pension Account
shall be credited with interest calculated at the rate of eight percent (8%)
per year.  Any amount so credited shall
be referred to as a participant’s “Interest Accrual”.  The calculation of the Interest Accrual shall
be based on the balance of the payments made pursuant to subsections 9-1 and
9-2 and any Interest Accrual thereon from previous years.  As of the end of each calendar year a participant’s
After-Tax Supplemental Pension Account shall be credited with interest which
shall be referred to as the After-Tax Interest Accrual.  The “After-Tax Interest Accrual” shall be an amount equal to the
product of (a) the Interest Accrual credited to the participant’s Supplemental
Pension Account for such year multiplied by (b) one minus the aggregate of the
federal, state and local individual income tax rates and employment tax rate
(determined in accordance with subsection 9-12).


 


9-10.        In
addition to any payment made to a participant for a calendar year pursuant to
subsections 9-1, 9-2, 9-4 and 9-5, a participant shall also be entitled to a
payment to the participant’s Grantor Trust (a “Guaranteed Rate Payment”) for
each year in which the Grantor Trust is in effect.  The Guaranteed Rate Payment shall equal the
excess of the participant’s After-Tax Interest Accrual over the net income of
the participant’s Grantor Trust for the year and shall be paid by Abbott
directly to the participant’s Grantor Trust within the thirty (30) days
beginning April 1 of the year following the year in which the Guaranteed
Rate Payment is earned.  No payments
shall be made under this subsection 9-10 for any year following the year in
which the participant dies, retires or otherwise terminates employment with
Abbott.


 


9-11.        In
addition and notwithstanding the payments made to a participant’s Grantor Trust
under subsections 9-1 and 9-2 and subject only to the subsequent election
requirements of Treasury Regulation § 1.409A-2(b), Abbott shall make the
monthly vested supplemental pension payments that would have been payable to
the participant had no payments been made to the participant’s Grantor Trust
under subsections 9-1 and 9-2 in the form provided by subsection 8-3.  The monthly vested supplemental pension
payments hereunder shall commence on the first business day of February following
the sixth anniversary of the participant’s termination of employment and ending
with the month of the participant’s (or surviving spouse’s) death.  By way of example, (i) if a participant
terminated employment on June 1, 2008, the commencement date would be the
first business day in February, 2015 and (ii) if a participant terminated
employment on January 15, 2008, the commencement date would be the first
business day in February, 2014.  For
purposes of determining the commencement date under this subsection 9-11, a
participant who retired prior to January 1, 2009 but after December 31,
2004 shall be deemed to have terminated employment on March 1, 2008.  Payments under this subsection 9-11 shall be
made by the employers (in such proportions as Abbott shall designate) directly
from their general corporate assets. 
Payment of the annuity required by this subsection 9.11 may be deferred
by Abbott in compliance with the subsequent election requirements of Treasury
Regulation § 1.409A-2(b).  Any election
to defer payment hereunder shall not take effect until at least 12 months after
the election is made; shall be made not less than 12 months before the annuity
commencement date; and shall require payment to be deferred for a period of no
less than five years from such annuity commencement date.


 


15














 


9-12.        For
purposes of this Supplemental Plan, a participant’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
Supplemental Plan 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 participant’s residence in the calendar year for
which such a calculation is to be made, and a participant’s employment tax rate
shall be deemed to be the highest marginal rate of Federal Insurance
Contributions Act tax in effect in the calendar year for which such a
calculation is to be made, net of any federal tax benefits without a benefit
for any net capital losses.


 


9-13.        Each
participant’s Grantor Trust assets shall be invested solely in the instruments
specified by investment guidelines established by the Committee.  Such investment guidelines, once established,
may be changed by the Committee, provided that any change shall not take effect
until the year following the year in which the change is made and provided
further that the instruments specified shall be consistent with the provisions
of Section 3(b) of the form of Grantor Trust attached hereto as
Appendix B.


 


9-14.        Notwithstanding
anything contained in the Supplemental Plan to the contrary, effective as of January 1,
2005, (a) with respect to each participant who is actively employed by
Abbott as a corporate officer, the Grantor Trust funding threshold of $100,000
formerly referenced in subsections 8-2, 9-1 and 9-2 of the Plan shall no longer
be applied or have any force or effect and (b) the Grantor Trusts
established by the participants under the Supplemental Plan shall be funded in
accordance with the requirements of Code Section 409A.


 


9-15.        Notwithstanding
anything contained in the Supplemental Plan to the contrary, pursuant to
Q&A-20 of Internal Revenue Service Notice 2005-1 (the “Notice”), Abbott
shall cause the present value of accrued benefits under the Supplemental Plan
for the periods ended on or prior to December 31, 2005 for each
participant who has made a Grantor Trust election under Section 9-1, to
the extent not previously paid to a Grantor Trust established by the
participant, to be deposited in such Grantor Trust on or prior to December 31,
2005.  Such payment is intended to result
in a partial termination of participation in the Supplemental Plan as permitted
by the Notice.  Each participant who has
established a Grantor Trust and who receives such payment shall include the
full amount of such payment to the Grantor Trust in the participant’s income in
2005.


 


9-16.        Notwithstanding
anything contained in the Supplemental Plan to the contrary, with respect to
each participant who (a) has made a Grantor Trust election under Section 9-1
and (b) first became a corporate officer in 2006, 2007 or 2008, Abbott
shall cause such participant’s 
Pre-Officer Benefit (as defined below) to be deposited in the Grantor
Trust established by the participant in 2009, to the extent not previously
subject to an election under Section 9-1 and paid to such Grantor
Trust.  For purposes of the Supplemental
Plan, “Pre-Officer Benefit” means the present value of such participant’s
accrued supplemental pension benefits which (i) accrued prior to 2007 in
the case of a participant who first became a corporate officer in 2006; (ii) accrued
prior to 2008 in the case of a participant who first became a corporate officer
in 2007; or (iii) accrued prior to 2009 in the case of a participant who
first became a corporate officer in 2008. 
The foregoing amendment is made in accordance with and pursuant to
Q&A-19(c) of the Notice and the guidance extending the same for the
transition period ending on December 31, 2008  For the avoidance of doubt, the amounts
deposited in the participant’s Grantor Trusts hereunder shall 


 


16

















 


no longer be payable pursuant to subsection
8-2, as such amounts will have been distributed to the respective participants
pursuant to the transition relief described in the preceding sentence.


 


17

















 


APPENDIX A


 


ABBOTT LABORATORIES SUPPLEMENTAL PENSION PLAN


 


[Abbott Laboratories Supplemental Pension Plan, as amended, as filed as
Exhibit 10.2 to the Abbott Laboratories Current Report on Form 8-K dated
December 9, 2005.]


 

















 


APPENDIX B


 


SUPPLEMENTAL
BENEFIT


GRANTOR
TRUST


 


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


 


WITNESSETH THAT:


 


WHEREAS, the
grantor desires to establish and maintain a trust to hold certain benefits
received by the grantor under the Abbott Laboratories Supplemental Pension
Plan, as it may be amended from time to time.


 


NOW,
THEREFORE, IT IS AGREED as follows:


 


ARTICLE I

Introduction


 


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


 


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.


 


18

















 


ARTICLE II

Distribution of the Trust Fund


 


II-1.         Supplemental Pension Account.  The administrator shall maintain a “supplemental
pension account” under the trust.  As of
the end of each calendar year, the administrator shall charge the account with
all distributions made from the account during that year; and credit the
account with its share of trust income and realized gains and charge the
account with its share of trust expenses and realized losses for the year.


 


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
retirement or other termination of employment with Abbott or a subsidiary 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
amounts from time to time credited to the supplemental pension account to the
grantor, if then living, in the same manner, at the same time and over the same
period as the pension payable to the grantor under Abbott Laboratories Annuity
Retirement Plan.


 


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 upon the grantor’s death. 
The grantor may direct that such amounts be distributed in a lump sum
or, if the beneficiary is the grantor’s spouse (or a trust [a “Trust”] for
which the grantor’s spouse is the sole income beneficiary), in the same manner,
at the same time and over the same period as the pension payable to the grantor’s
surviving spouse under the Abbott Laboratories Annuity Retirement Plan.  If the grantor directs the same method of
distribution as the pension payable to the surviving spouse under the Abbott
Laboratories Annuity Retirement Plan 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 the same method of
distribution as the pension payable to the surviving spouse under the Abbott
Laboratories Annuity Retirement Plan 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 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


 


19

















 


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 invest and reinvest the trust
fund, without distinction between principal and income, 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 and in any mutual funds, common
trust funds or collective investment funds which invest solely in such
obligations, provided that to the extent practicable no more than Ten Thousand
Dollars ($10,000) shall be invested in such mutual funds, common trust funds or
collective investment funds at any time; 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, in amounts not in excess of those reasonably necessary
to make distributions from the trust.


 


(d)                                 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.


 


(e)                                  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.


 


(f)                                    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.


 


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


 


20

















 


(h)                                 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.


 


(i)                                     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.


 


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


 


(k)                                  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.


 


(l)                                     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.


 


(m)                               Upon the prior written consent of
the administrator, 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.


 


(n)                                 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.


 


(o)                                 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.


 


(p)                                 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 


 


21

















 


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.


 


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.        Disagreements 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 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; 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; and the trustee shall not be liable for any action taken
because of the specific direction of the administrator.


 


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.


 


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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 notice to the administrator and the grantor.  The administrator may remove a trustee by
written notice to the trustee and the grantor.


 


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 and the trustee have executed this agreement as of the day
and year first above written.


 


 


	
   

  	
   

  
	
   

  	
  Grantor

  
	
   

  	
   

  
	
   

  	
  The Northern
  Trust Company, as Trustee

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
   

  



 


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