Exhibit
10.5


 


ABBOTT LABORATORIES


1996 INCENTIVE STOCK
PROGRAM


NON-QUALIFIED REPLACEMENT
STOCK OPTION


 


	
  ABBOTT LABORATORIES (THE “COMPANY”) HEREBY GRANTS TO

  
	
  «First_Name» «MI» «Last_Name»

  	
  (THE “EMPLOYEE”).

  
	
  «SSN»

  



 


A NON-QUALIFIED REPLACEMENT STOCK OPTION TO PURCHASE
FROM TIME TO TIME ALL OR ANY PART OF A TOTAL OF «NQSOs» COMMON SHARES OF THE COMPANY, AT A PRICE OF $«Option_Price» PER SHARE.  THIS OPTION IS GRANTED UPON THE TERMS AND
CONDITIONS SET FORTH BELOW AND HAS BEEN GRANTED WITH RESPECT TO AN OPTION (THE
“ORIGINAL OPTION”), THE ORIGINAL TERM OF WHICH WAS SET TO EXPIRE ON «Expiration_Date» (THE “EXPIRATION DATE”).


 


THIS OPTION IS GRANTED THIS «Grant_Day» DAY OF «Grant_Month»,
«YEAR», UNDER THE ABBOTT LABORATORIES 1996 INCENTIVE STOCK PROGRAM
(THE “PROGRAM”) FOR THE PURPOSE OF FURNISHING TO THE EMPLOYEE AN APPROPRIATE
INCENTIVE TO IMPROVE OPERATIONS AND INCREASE PROFITS AND ENCOURAGING THE
EMPLOYEE TO CONTINUE EMPLOYMENT WITH THE COMPANY AND ITS SUBSIDIARIES.  TERMS USED HEREIN SHALL HAVE THE SAME
MEANING AS IN THE PROGRAM, AND IN THE EVENT OF ANY INCONSISTENCY BETWEEN THE
PROVISIONS HEREOF AND THE PROVISIONS OF THE PROGRAM, THE PROGRAM SHALL CONTROL.


 


THE TERMS AND CONDITIONS OF THIS OPTION ARE AS
FOLLOWS:


 


1.               THIS OPTION MAY, BUT NEED NOT, BE EXERCISED IN
INSTALLMENTS, BUT ONLY WITHIN THE TIME PERIODS AND SUBJECT TO THE CONDITIONS
DESCRIBED BELOW.  THIS OPTION MAY BE
EXERCISED ONLY AFTER SIX MONTHS HAVE ELAPSED FROM THE DATE OF ITS GRANT.  IN NO EVENT SHALL THIS OPTION BE EXERCISABLE
ON OR AFTER THE DATE ON WHICH THE ORIGINAL OPTION WOULD HAVE TERMINATED OR AT
ANY OTHER TIME WHEN THE ORIGINAL OPTION WOULD NOT HAVE BEEN EXERCISABLE.


 


2.               SUBJECT TO PARAGRAPHS 4 AND 5, IF THE EMPLOYEE’S
EMPLOYMENT WITH THE COMPANY OR ITS SUBSIDIARIES TERMINATES BEFORE SIX MONTHS
HAVE ELAPSED FROM THE DATE OF THIS OPTION’S GRANT, THEN THE DETERMINATION OF
WHETHER AND UPON WHAT CONDITIONS THIS OPTION MAY BE EXERCISED SHALL BE MADE
PURSUANT TO THE PROVISIONS THAT WOULD HAVE GOVERNED THE EXERCISE OF THE
ORIGINAL OPTION IN THE EVENT THE EMPLOYEE’S EMPLOYMENT HAD TERMINATED BEFORE
THE ORIGINAL OPTION BECAME EXERCISABLE.


 


3.               SUBJECT TO PARAGRAPHS 4 AND 5, IF THE EMPLOYEE’S
EMPLOYMENT WITH THE COMPANY OR ITS SUBSIDIARIES TERMINATES AFTER SIX MONTHS
HAVE ELAPSED FROM THE DATE OF THIS OPTION’S GRANT, THEN THE DETERMINATION OF
WHETHER AND UPON WHAT CONDITIONS THIS OPTION MAY BE EXERCISED SHALL BE MADE
PURSUANT TO THE PROVISIONS THAT WOULD HAVE GOVERNED THE EXERCISE OF THE
ORIGINAL OPTION IN THE EVENT THE EMPLOYEE’S EMPLOYMENT HAD TERMINATED AFTER THE
ORIGINAL OPTION BECAME EXERCISABLE.


 


4.             NOTWITHSTANDING PARAGRAPHS 2 AND 3, THIS OPTION SHALL
IMMEDIATELY TERMINATE IN THE EVENT THE EMPLOYEE ENGAGES, DIRECTLY OR INDIRECTLY
FOR THE BENEFIT OF THE EMPLOYEE OR OTHERS, IN ANY ACTIVITY, EMPLOYMENT OR
BUSINESS DURING EMPLOYMENT OR WITHIN TWELVE (12) MONTHS AFTER THE DATE OF
TERMINATION OR RETIREMENT WHICH, IN THE SOLE OPINION AND DISCRETION OF THE
COMPENSATION


 

















 


COMMITTEE OR ITS
DELEGATE, IS COMPETITIVE WITH THE COMPANY OR ANY OF ITS SUBSIDIARIES.


 


5.               NOTWITHSTANDING PARAGRAPHS 2 AND 3, THESE OPTIONS
SHALL IMMEDIATELY TERMINATE, IF IN THE SOLE OPINION AND DISCRETION OF THE
COMPENSATION COMMITTEE OR ITS DELEGATE, THE EMPLOYEE (A) ENGAGES IN A MATERIAL
BREACH OF THE COMPANY’S CODE OF BUSINESS CONDUCT; (B) COMMITS AN ACT OF FRAUD,
EMBEZZLEMENT OR THEFT IN CONNECTION WITH THE EMPLOYEE’S DUTIES OR IN THE COURSE
OF EMPLOYMENT; OR (C) WRONGFULLY DISCLOSES SECRET PROCESSES OR CONFIDENTIAL
INFORMATION OF THE COMPANY OR ITS SUBSIDIARIES.


 


6.               NOTHING HEREIN CONFERS UPON THE EMPLOYEE ANY RIGHT TO
CONTINUE IN THE EMPLOY OF THE COMPANY OR OF ANY SUBSIDIARY.


 


7.               THIS OPTION IS NOT TRANSFERABLE OTHERWISE THAN BY WILL
OR THE LAWS OF DESCENT AND DISTRIBUTION AND IS EXERCISABLE DURING THE
EMPLOYEE’S                         LIFETIME ONLY BY THE EMPLOYEE.  IT MAY NOT BE ASSIGNED, TRANSFERRED (EXCEPT
AS AFORESAID), PLEDGED OR HYPOTHECATED IN ANY WAY, WHETHER BY OPERATION OF LAW
OR OTHERWISE, AND SHALL NOT BE SUBJECT TO EXECUTION, ATTACHMENT, OR SIMILAR PROCESS.  ANY ATTEMPT AT ASSIGNMENT, TRANSFER, PLEDGE,
HYPOTHECATION, OR OTHER DISPOSITION OF THIS OPTION CONTRARY TO THE PROVISIONS
HEREOF, AND THE LEVY OF ANY ATTACHMENT OR SIMILAR PROCESS UPON THIS OPTION,
SHALL BE NULL AND VOID AND WITHOUT EFFECT.


 


8.               THIS OPTION MAY BE EXERCISED ONLY BY DELIVERING TO THE
SECRETARY OR OTHER DESIGNATED EMPLOYEE OR AGENT OF THE COMPANY A WRITTEN,
ELECTRONIC, OR TELEPHONIC NOTICE OF EXERCISE, SPECIFYING THE NUMBER OF COMMON
SHARES WITH RESPECT TO WHICH THE OPTION IS THEN BEING EXERCISED, AND BY PAYMENT
OF THE FULL PURCHASE PRICE OF THE SHARES BEING PURCHASED IN CASH, OR BY THE
SURRENDER OF OTHER COMMON SHARES OF THE COMPANY HELD BY THE EMPLOYEE HAVING A
THEN FAIR MARKET VALUE EQUAL TO THE PURCHASE PRICE, OR BY THE DELIVERY OF A
PROPERLY EXECUTED EXERCISE NOTICE TOGETHER WITH A COPY OF IRREVOCABLE
INSTRUCTIONS TO A BROKER TO DELIVER PROMPTLY TO THE COMPANY THE AMOUNT OF SALE
OR LOAN PROCEEDS TO PAY THE PURCHASE PRICE, OR A COMBINATION THEREOF, PLUS
PAYMENT IN CASH OR, SUBJECT TO APPROVAL OF THE COMPENSATION COMMITTEE, BY
WITHHOLDING OR DELIVERY OF COMMON SHARES OF THE COMPANY, OF THE FULL AMOUNT OF
ANY TAXES WHICH THE COMPANY BELIEVES ARE REQUIRED TO BE WITHHELD AND PAID WITH
RESPECT TO SUCH EXERCISE, AND IN THE EVENT THE OPTION IS BEING EXERCISED BY A
PERSON OR PERSONS OTHER THAN THE EMPLOYEE, SUCH APPROPRIATE TAX CLEARANCES,
PROOF OF THE RIGHT OF SUCH PERSON OR PERSONS TO EXERCISE THE OPTION, AND OTHER
PERTINENT DATA AS THE COMPANY MAY DEEM NECESSARY.


 


9.               THE COMPANY SHALL NOT BE REQUIRED TO ISSUE OR DELIVER
ANY SHARES PURCHASED UPON ANY EXERCISE PENDING COMPLIANCE WITH ALL APPLICABLE
FEDERAL AND STATE SECURITIES AND OTHER LAWS (INCLUDING ANY REGISTRATION
REQUIREMENTS) AND COMPLIANCE WITH THE RULES AND PRACTICES OF ANY STOCK EXCHANGE
UPON WHICH THE COMPANY’S COMMON SHARES ARE LISTED.


 


10.         IN THE EVENT THE PURCHASE PRICE OF THE SHARES COVERED
BY THIS OPTION OR ANY TAXES DUE ON ITS EXERCISE ARE PAID BY THE SURRENDER OF
OTHER COMMON SHARES OF THE COMPANY OR, FOR PAYMENT OF WITHHOLDING TAXES, BY
WITHHOLDING OF SHARES, THE EMPLOYEE WILL BE GRANTED AN OPTION (THE “REPLACEMENT
OPTION”) TO PURCHASE A NUMBER OF COMMON SHARES EQUAL TO THE NUMBER OF SHARES
SURRENDERED AND/OR WITHHELD, PROVIDED THE THEN FAIR MARKET VALUE OF THE SHARES
COVERED BY THIS OPTION IS A LEAST TWENTY-FIVE PERCENT (25%) HIGHER THAN SUCH
PURCHASE PRICE.  THE PURCHASE PRICE
UNDER THE REPLACEMENT


 

















 


                       OPTION WILL BE THE FAIR MARKET VALUE OF
THE SHARES COVERED BY THE REPLACEMENT OPTION AS OF THE GRANT DATE OF THE
REPLACEMENT OPTION.  THE REPLACEMENT
OPTION WILL BE A NON-QUALIFIED STOCK OPTION, FIRST EXERCISABLE SIX (6) MONTHS
FROM THE REPLACEMENT OPTION GRANT DATE, WITH A TERM EQUAL TO THE REMAINDER OF
THE TERM OF THE ORIGINAL OPTION.  AN
ADDITIONAL REPLACEMENT OPTION WILL NOT BE GRANTED UPON THE EXERCISE OF A PREVIOUSLY
ISSUED REPLACEMENT OPTION IF THAT PREVIOUSLY GRANTED REPLACEMENT OPTION IS
EXERCISED IN THE SAME CALENDAR YEAR THAT IT WAS GRANTED.


 


11.         IN THE EVENT THERE IS A CHANGE IN THE NUMBER OF ISSUED
COMMON SHARES OF THE COMPANY WITHOUT NEW CONSIDERATION TO THE COMPANY (SUCH AS
BY STOCK DIVIDENDS OR STOCK SPLITS), THEN (i) THE NUMBER OF SHARES AT THE TIME
UNEXERCISED UNDER THIS OPTION SHALL BE CHANGED IN PROPORTION TO SUCH CHANGE IN
ISSUED SHARES; AND (ii) THE OPTION PRICE FOR THE UNEXERCISED PORTION OF THE
OPTION SHALL BE ADJUSTED SO THAT THE AGGREGATE CONSIDERATION PAYABLE TO THE
COMPANY UPON THE PURCHASE OF ALL SHARES NOT THERETOFORE PURCHASED SHALL NOT BE
CHANGED.


 


IF THE OUTSTANDING COMMON
SHARES OF THE COMPANY SHALL BE COMBINED, OR BE CHANGED INTO ANOTHER KIND OF
STOCK OF THE COMPANY OR INTO SECURITIES OF ANOTHER CORPORATION, WHETHER THROUGH
RECAPITALIZATION, SALE, MERGER, CONSOLIDATION, SPIN-OFF, ETC., THE COMPANY
SHALL CAUSE ADEQUATE PROVISION TO BE MADE WHEREBY THE PERSON OR PERSONS
ENTITLED TO EXERCISE THIS OPTION SHALL THEREAFTER BE ENTITLED TO RECEIVE, UPON
DUE EXERCISE OF ANY PORTION OF THE OPTION, THE SECURITIES WHICH THAT PERSON
WOULD HAVE BEEN ENTITLED TO RECEIVE FOR COMMON SHARES ACQUIRED THROUGH EXERCISE
OF THE SAME PORTION OF SUCH OPTION IMMEDIATELY PRIOR TO THE EFFECTIVE DATE OF
SUCH RECAPITALIZATION, REORGANIZATION, SALE, MERGER, CONSOLIDATION, SPIN-OFF,
ETC.  IF APPROPRIATE, DUE ADJUSTMENT
SHALL BE MADE IN THE PER SHARE OR PER UNIT PRICE OF THE SECURITIES PURCHASED ON
EXERCISE OF THIS OPTION FOLLOWING SAID RECAPITALIZATION, REORGANIZATION, SALE,
MERGER, CONSOLIDATION, SPIN-OFF, ETC.


 


12.         NEITHER THIS OPTION, SHARES ISSUED UPON ITS EXERCISE,
ANY EXCESS OF MARKET VALUE OVER OPTION PRICE, NOR ANY RIGHTS, BENEFITS, VALUES
OR INTEREST RESULTING FROM THE GRANTING OF THIS OPTION SHALL BE CONSIDERED AS
COMPENSATION FOR PURPOSES OF ANY PENSION OR RETIREMENT PLAN, INSURANCE PLAN,
INVESTMENT OR STOCK PURCHASE PLAN, OR ANY OTHER EMPLOYEE BENEFIT PLAN OF THE
COMPANY OR ANY OF ITS SUBSIDIARIES.


 


IN WITNESS WHEREOF, THE COMPANY HAS CAUSED THIS STOCK
OPTION TO BE EXECUTED BY ITS DULY AUTHORIZED OFFICER AS OF THE GRANT DATE ABOVE
SET FORTH.


 


 


ABBOTT LABORATORIES


 


 


 


CHAIRMAN AND CHIEF EXECUTIVE OFFICER