Exhibit
10.3


 


INCENTIVE SPLIT AGREEMENT


 


ABBOTT LABORATORIES


1996 INCENTIVE STOCK
PROGRAM


INCENTIVE AND
NON-QUALIFIED STOCK OPTIONS


 


	
  ABBOTT LABORATORIES (THE “COMPANY”) HEREBY GRANTS TO

  
	
  «FIRST_NAME» «MI» «LAST_NAME»

  	
  (THE “EMPLOYEE”).

  
	
  «SSN»

  



 


AN INCENTIVE STOCK OPTION TO PURCHASE FROM TIME TO
TIME ALL OR ANY PART OF A TOTAL OF «ISOs»
COMMON SHARES OF THE COMPANY IDENTIFIED ABOVE AS BEING SUBJECT TO THE INCENTIVE
STOCK OPTION, AT THE PRICE OF «PRICE» PER
SHARE, AND HAS CONTEMPORANEOUSLY GRANTED TO THE EMPLOYEE A NON-QUALIFIED STOCK
OPTION TO PURCHASE FROM TIME TO TIME ALL OR ANY PART OF THE TOTAL NUMBER OF
COMMON SHARES OF THE COMPANY IDENTIFIED IN THE ACCOMPANYING AGREEMENT CAPTIONED
“NON-QUALIFIED SPLIT AGREEMENT” (“ACCOMPANYING SPLIT AGREEMENT”)  AS BEING SUBJECT TO THE NON-QUALIFIED STOCK
OPTION, AT THE PRICE PER SHARE IDENTIFIED IN THE ACCOMPANYING SPLIT AGREEMENT
(SUCH PRICES BEING NOT LESS THAN 100% OF THE FAIR MARKET VALUE OF THE SHARES ON
THE DATE HEREOF).  THESE OPTIONS ARE
GRANTED UPON THE TERMS AND CONDITIONS SET FORTH BELOW.  IN ADDITION, THE INCENTIVE STOCK OPTION IS
GRANTED PURSUANT TO SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986 (THE
“CODE”).


 


THESE OPTIONS ARE GRANTED THIS «Grant_Day» DAY OF «Grant_Month», «YEAR» UNDER THE COMPANY’S
1996 INCENTIVE STOCK PROGRAM (HEREIN CALLED 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.  THESE
OPTIONS INCORPORATE AND ARE SUBJECT TO, THE PROVISIONS OF THE PROGRAM.  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 THE OPTIONS ARE AS
FOLLOWS:


 


1.               THESE OPTIONS MAY, BUT NEED NOT, BE EXERCISED IN
INSTALLMENTS, BUT MAY BE EXERCISED ONLY TO THE EXTENT, AND WITHIN THE TIME
PERIODS, DESCRIBED BELOW.  DURING THE
LIFETIME OF THE EMPLOYEE THESE OPTIONS MAY BE EXERCISED ONLY BY THE EMPLOYEE
AND (EXCEPT AS PROVIDED BELOW) ONLY WHILE IN THE EMPLOY OF THE COMPANY OR ANY
OF ITS SUBSIDIARIES.


 


2.               THESE OPTIONS MAY BE EXERCISED ONLY ON OR AFTER THE
FIRST ANNIVERSARY OF THE GRANT DATE.  TERMINATION
OF EMPLOYMENT BEFORE THE FIRST ANNIVERSARY OF THE GRANT DATE WILL TERMINATE ALL
RIGHTS UNDER THE OPTIONS (UNLESS THE TERMINATION IS FOR REASON OF RETIREMENT,
DISABILITY OR DEATH, OR FOR REASON OTHER THAN RETIREMENT, DISABILITY OR DEATH
AND THE FIRST ANNIVERSARY OF THE GRANT DATE OCCURS WITHIN THE THREE (3) MONTH
PERIOD DESCRIBED IN PARAGRAPH 4).


 


(NOTE: ALTHOUGH THESE
OPTIONS IN CERTAIN CIRCUMSTANCES MAY BE EXERCISED MORE THAN THREE MONTHS AFTER
TERMINATION OF EMPLOYMENT, UNDER SECTION 422 OF THE CODE THE INCENTIVE STOCK
OPTION MUST BE EXERCISED WITHIN THREE MONTHS AFTER TERMINATION FOR ANY REASON
OTHER THAN DISABILITY OR DEATH TO QUALIFY FOR INCENTIVE STOCK OPTION TAX
TREATMENT.)


 


3.               ON THE FIRST ANNIVERSARY OF THE GRANT DATE ONE-THIRD
OF THE TOTAL NUMBER OF SHARES (ROUNDED UP) COVERED BY THESE OPTIONS MAY BE
PURCHASED; ON THE SECOND ANNIVERSARY OF THE GRANT DATE TWO-THIRDS OF THE TOTAL
NUMBER OF SHARES (ROUNDED UP) COVERED BY THESE OPTIONS MAY BE PURCHASED; AND ON
THE


 

















 


THIRD ANNIVERSARY OF THE
GRANT DATE THESE OPTIONS SHALL BE EXERCISABLE IN FULL.  THE SHARES COVERED BY THE INCENTIVE STOCK
OPTION SHALL BE APPLIED FIRST TO EACH SUCH INSTALLMENT TO THE MAXIMUM EXTENT
ALLOWABLE UNDER SECTION 422(D) OF THE CODE AND PARAGRAPH 6 OF THE PROGRAM UNTIL
EXHAUSTED AND THE SHARES COVERED BY THE NON-QUALIFIED STOCK OPTION SHALL BE
APPLIED SECOND, TO THE BALANCE OF SUCH INSTALLMENTS UNTIL EXHAUSTED.  IN THE EVENT OF TERMINATION OF EMPLOYMENT,
THE NUMBER OF SHARES WHICH MAY BE PURCHASED PURSUANT TO THIS PARAGRAPH SHALL BE
DETERMINED AS IF THE EMPLOYEE CONTINUED TO BE EMPLOYED BY THE COMPANY DURING
THE PERIODS REFERRED TO IN PARAGRAPHS 4, 5, 6, 7, 8 AND 9 OF THE OPTIONS.  THE RIGHT TO PURCHASE SHALL CUMULATE SO THAT
SHARES MAY BE PURCHASED AT ANY TIME AFTER BECOMING ELIGIBLE FOR PURCHASE UNTIL
TERMINATION OF THE OPTIONS.


 


4.               SUBJECT TO PARAGRAPHS 10 AND 11, IF EMPLOYMENT OF THE
EMPLOYEE WITH THE COMPANY AND ITS SUBSIDIARIES TERMINATES, FOR ANY REASON OTHER
THAN RETIREMENT, DISABILITY OR DEATH, THIS OPTION MAY BE EXERCISED BY THE
EMPLOYEE TO THE EXTENT PERMITTED UNDER PARAGRAPH 3 WITHIN THREE (3) MONTHS
AFTER THE EMPLOYEE’S LAST DAY OF WORK, BUT NOT BEYOND THE TERMS OF THE OPTIONS.


 


5.               SUBJECT TO PARAGRAPHS 10 AND 11, IF THE EMPLOYEE
SHOULD RETIRE UNDER THE ABBOTT LABORATORIES ANNUITY RETIREMENT PLAN OR ANY
OTHER PENSION OR RETIREMENT PLAN OF THE COMPANY OR A SUBSIDIARY, THESE OPTIONS
MAY BE EXERCISED BY THE EMPLOYEE TO THE EXTENT PERMITTED UNDER PARAGRAPH 3
WITHIN THE TERM OF THE OPTIONS.


 


6.               SUBJECT TO PARAGRAPHS 10 AND 11, IF THE EMPLOYMENT OF
THE EMPLOYEE WITH THE COMPANY AND ITS SUBSIDIARIES TERMINATES DUE TO
DISABILITY, THESE OPTIONS MAY BE EXERCISED BY THE EMPLOYEE TO THE EXTENT
PERMITTED UNDER PARAGRAPH 3 WITHIN THE TERM OF THE OPTIONS.


 


7.               IN THE EVENT OF DEATH OF THE EMPLOYEE DURING
EMPLOYMENT, THE OPTIONS MAY BE EXERCISED TO THE EXTENT PERMITTED UNDER
PARAGRAPH 3 WITHIN THE TERM OF THE OPTIONS AND ONLY BY THE EXECUTOR OR
ADMINISTRATOR OF THE ESTATE OF THE EMPLOYEE OR THE PERSON OR PERSONS TO WHOM
RIGHTS UNDER THE OPTIONS HAVE PASSED BY WILL OR THE LAWS OF DESCENT AND
DISTRIBUTION.


 


8.               IN THE EVENT OF DEATH OF THE EMPLOYEE DURING THE THREE
(3) MONTH PERIOD REFERRED TO IN PARAGRAPH 4 OF THESE OPTIONS, THESE OPTIONS MAY
BE EXERCISED TO THE EXTENT PERMITTED UNDER PARAGRAPH 3 WITHIN THREE (3) MONTHS
AFTER SUCH DEATH, BUT NOT BEYOND THE TERM OF THE OPTIONS AND ONLY BY THE
EXECUTOR OR ADMINISTRATOR OF THE ESTATE OF THE EMPLOYEE OR THE PERSON OR
PERSONS TO WHOM RIGHTS UNDER THE OPTIONS HAVE PASSED BY WILL OR THE LAWS OF
DESCENT AND DISTRIBUTION.


 


9.               IN THE EVENT OF DEATH OF THE EMPLOYEE DURING THE
PERIODS REFERRED TO IN PARAGRAPHS 5 OR 6 OF THESE OPTIONS, THE OPTIONS MAY BE
EXERCISED TO THE EXTENT PERMITTED UNDER PARAGRAPH 3 WITHIN THE TERM OF THE
OPTIONS AND ONLY BY THE EXECUTOR OR ADMINISTRATOR OF THE ESTATE OF THE EMPLOYEE
OR THE PERSON OR PERSONS TO WHOM RIGHTS UNDER THE OPTIONS HAVE PASSED BY WILL
OR THE LAWS OF DESCENT AND DISTRIBUTION.


 


10.         NOTWITHSTANDING PARAGRAPHS 4, 5 AND 6, THESE OPTIONS
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.


 

















 


11.         NOTWITHSTANDING PARAGRAPHS 4, 5, AND 6, 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.


 


12.         THESE OPTIONS MAY NOT UNDER ANY CIRCUMSTANCES BE
EXERCISED ON OR AFTER THE TENTH (10) ANNIVERSARY OF THE GRANT DATE.


 


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


 


14.         THESE OPTIONS ARE NOT TRANSFERABLE OTHERWISE THAN BY
WILL OR THE LAWS OF DESCENT AND DISTRIBUTION AND ARE EXERCISABLE DURING THE
EMPLOYEE’S LIFETIME ONLY BY THE EMPLOYEE. 
THEY 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 THESE OPTIONS CONTRARY TO THE PROVISIONS
HEREOF, AND THE LEVY OF ANY ATTACHMENT OR SIMILAR PROCESS UPON THESE OPTIONS,
SHALL BE NULL AND VOID AND WITHOUT EFFECT.


 


15.         THESE OPTIONS 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 OPTIONS ARE THEN BEING EXERCISED, AND BY
PAYMENT OF THE FULL PURCHASE PRICE OF THE SHARES BEING PURCHASED IN CASH, OR
WITH OTHER COMMON SHARES OF THE COMPANY HELD BY THE EMPLOYEE HAVING A THEN FAIR
MARKET VALUE EQUAL TO THE PURCHASE PRICE, OR, BY 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 (FOR EXERCISES OF
NON-QUALIFIED OPTIONS) PAYMENT IN CASH OR, SUBJECT TO THE APPROVAL OF THE
COMPENSATION COMMITTEE, BY WITHHOLDING 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 OPTIONS ARE 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
OPTIONS, AND OTHER PERTINENT DATA AS THE COMPANY MAY DEEM NECESSARY.


 


16.         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.


 


17.         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
USED AS PAYMENT AND/OR WITHHELD, PROVIDED THE THEN FAIR MARKET VALUE OF THE SHARES
COVERED BY THIS OPTION IS AT LEAST TWENTY-FIVE PERCENT (25%) HIGHER THAN SUCH
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.


 


18.         THE EMPLOYEE MAY SATISFY ANY FEDERAL, STATE AND LOCAL
TAXES ARISING FROM ANY TRANSACATION RELATED TO THESE OPTIONS BY (1) HAVING THE
COMPANY WITHHOLD COMMON SHARES FROM THE OPTIONS TO SATISFY THE MINIMUM
APPLICABLE WITHHOLDING TAX OR (2) DELIVERING OTHER PREVIOUSLY ACQUIRED COMMON
SHARES OF THE COMPANY HAVING A FAIR MARKET VALUE APPROXIMATELY EQUAL TO THE
AMOUNT TO BE WITHHELD.


 


19.         NEITHER THESE OPTIONS, SHARES ISSUED UPON THEIR
EXERCISE, ANY EXCESS OF MARKET VALUE OVER OPTION PRICE, NOR ANY OTHER RIGHTS,
BENEFITS, VALUES OR INTEREST RESULTING FROM THE GRANTING OF THESE OPTIONS 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.


 


20.         EXCEPT
AS PROVIDED UNDER PARAGRAPH 17, THE GRANT OF A STOCK OPTION UNDER THE PROGRAM
DOES NOT CREATE ANY CONTRACTUAL OR OTHER RIGHT TO RECEIVE ADDITIONAL STOCK
OPTION GRANTS OR OTHER PROGRAM BENEFITS IN THE FUTURE.  NOTHING CONTAINED IN THIS AGREEMENT IS
INTENDED TO CREATE OR ENLARGE ANY OTHER CONTRACTUAL OBLIGATIONS BETWEEN THE
COMPANY AND THE EMPLOYEE.  FUTURE
GRANTS, IF ANY, AND THEIR TERMS AND CONDITIONS, WILL BE AT THE SOLE DISCRETION
OF THE COMPENSATION COMMITTEE.  ANY VALUE
ASSOCIATED WITH A STOCK OPTION GRANTED UNDER THE PROGRAM IS AN ITEM OF
COMPENSATION OUTSIDE THE SCOPE OF THE EMPLOYEE’S EMPLOYMENT CONTRACT, IF ANY.


 


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


 


ABBOTT LABORATORIES


 


 


 


CHAIRMAN AND CHIEF EXECUTIVE OFFICER