Exhibit 10.4


 


ABBOTT LABORATORIES


1996 INCENTIVE STOCK
PROGRAM


INCENTIVE STOCK OPTION


 


	
  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 THIS
INCENTIVE STOCK OPTION AT THE PRICE OF «PRICE»
PER SHARE (SUCH PRICE BEING NOT LESS THAN 100% OF THE FAIR MARKET
VALUE OF THE SHARES ON THE DATE HEREOF) UPON THE TERMS AND CONDITIONS SET FORTH
BELOW AND PURSUANT TO SECTION 422 OF THE INTERNAL REVENUE CODE OF 1986 (THE
“CODE”).


 


THIS INCENTIVE STOCK OPTION IS 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.  THIS
OPTION INCORPORATES AND IS 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 OPTION ARE AS FOLLOWS:


 


1.               THIS OPTION 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 THIS OPTION 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.               THIS OPTION 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 OPTION (UNLESS THE TERMINATION IS FOR
REASON OF RETIREMENT, DISABILITY OR DEATH, OR FOR A 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 THIS OPTION IN CERTAIN
CIRCUMSTANCES MAY BE EXERCISED MORE THAN THREE MONTHS AFTER TERMINATION OF
EMPLOYMENT, UNDER SECTION 422 OF THE CODE THE 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 THIS OPTION MAY BE
PURCHASED; ON THE SECOND ANNIVERSARY OF THE GRANT DATE TWO-THIRDS OF THE TOTAL
NUMBER OF SHARES (ROUNDED UP) COVERED BY THIS OPTION MAY BE PURCHASED AND ON
THE THIRD ANNIVERSARY OF THE GRANT DATE THIS OPTION SHALL BE EXERCISABLE IN FULL.  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 THIS OPTION.  THE
RIGHT TO PURCHASE SHALL CUMULATE SO THAT SHARES MAY BE PURCHASED AT ANY TIME
AFTER BECOMING ELIGIBLE FOR PURCHASE UNTIL TERMINATION OF THE OPTION.


 


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 TERM OF THE OPTION.


 


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, THIS OPTION
MAY BE EXERCISED BY THE EMPLOYEE TO THE EXTENT PERMITTED UNDER PARAGRAPH 3
WITHIN THE TERM OF THE OPTION.


 


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


 


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


 


10.         NOTWITHSTANDING PARAGRAPHS 4, 5 AND 6, 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.


 


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.         THIS OPTION 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.         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.


 


15.         THE OPTION MAY BE EXERCISED ONLY BY DELIVERING TO THE
SECRETARY OR OTHER DESIGNATED EMPLOYEE OR AGENT OF THE COMPANY A WRITTEN,
ELETRONIC, 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 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, 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.


 


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 THIS OPTION BY (1) HAVING THE
COMPANY WITHHOLD COMMON SHARES FROM THE OPTION 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 THIS OPTION, SHARES ISSUED UPON ITS EXERCISE,
ANY EXCESS OF MARKET VALUE OVER OPTION PRICE, NOR ANY OTHER RIGHTS, BENEFITS,
VALUES OR INTEREST RESULTING FROM THE GRANTING OF THIS OPTION SHALL BE
CONSIDERED AS COMPENSATION FOR PURPOSES OF ANY PENSION OR RETIREMENT PLAN,
INSURANCE PLAN, INVESTMENT OR STOCK PURCHASE PLAN, OR ANY OTHER EMPLOYEE
BENEFIT PLAN OF THE COMPANY OR ANY OF ITS SUBSIDIARIES.


 


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 THIS
INCENTIVE 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