Exhibit 10.4


 


1986

ABBOTT LABORATORIES

MANAGEMENT INCENTIVE PLAN

(as amended and restated effective January 1, 2008)


 


SECTION 1


 


INTRODUCTION


 


1.1         BACKGROUND AND PURPOSES. This 1986 ABBOTT LABORATORIES
MANAGEMENT INCENTIVE PLAN (the “Plan”) is a successor Plan to the 1961, 1971
and 1981 Management Incentive Plans (the “Predecessor Plans”). This Plan is
being established by ABBOTT LABORATORIES (“Abbott”) for the following purposes:


 


(a)                                  To provide greater incentive for
participants in the Plan to attain and maintain the highest standards of
managerial performance by rewarding them for services rendered with
compensation, in addition to their base salaries, in proportion to the success
of Abbott and to the participants’ respective contribution to such success; and


 


(b)                                 To attract and retain in the employ
of Abbott and its subsidiaries persons of outstanding competence.


 


1.2         EFFECTIVE DATE AND FISCAL YEAR. The Plan became
effective as of January 1, 1986 and is hereby amended and restated as of January 1,
2008, in accordance with the requirements of Section 409A of the Internal
Revenue Code of 1986, as amended (“Code Section 409A”).  The term “fiscal year,” as used in this Plan,
means the fiscal period from time to time employed by Abbott for the purpose of
reporting earnings to shareholders.


 


1.3         ADMINISTRATION. The Plan will be administered by the
Compensation Committee (the “Committee”) appointed by the Board of Directors of
Abbott (the “Board of Directors”).


 


1.4         GRANDFATHERED AMOUNTS. 
Notwithstanding anything in the Plan to the contrary, any amounts under
the 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 Plan as administered and as in effect on December 31,
2004.  Amendments made to the 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 Exhibit A attached hereto.


 


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SECTION 2


 


ELIGIBILITY AND PARTICIPATION


 


2.1         PERSONS ELIGIBLE FOR PARTICIPATION. Participation in
the Plan will be limited to those Officers and managerial employees of Abbott
and its subsidiaries who, from time to time, shall be selected as participants
by the Committee.


 


2.2         PARTICIPANTS. The term “participant,” as used in the
Plan, shall include both active participants and inactive participants.


 


2.3         ACTIVE PARTICIPANTS. For each fiscal year, there shall
be a group of active participants which, except as provided below, shall not
exceed forty-five persons and shall consist of those persons eligible for
participation who shall have been designated as active participants and
notified of that fact by the Committee. 
If, as a result of the growth of Abbott and its subsidiaries or changes
in Abbott’s organization, the Board of Directors deems it appropriate, the
Board of Directors may, in its discretion, from time to time, increase the
number of persons who may be designated as active participants for any fiscal
year beyond the limit of forty-five persons provided for above. Selection as an
active participant for any fiscal year shall not confer upon any person a right
to be an active participant in any subsequent fiscal year, nor shall it confer
upon him the right to receive any allocation under the Plan, other than amounts
allocated to him by the Committee pursuant to the Plan, and all such
allocations shall be subject to all of the terms and conditions of the Plan.


 


2.4         INACTIVE PARTICIPANTS. Inactive participants shall
consist of those persons, including beneficiaries of deceased participants, if
any, for whom an allocation shall have been made for a prior fiscal year under
this Plan or a Predecessor Plan, the payment of which was deferred and remains
unpaid. Status as an inactive participant shall not preclude a person from also
being an active participant during any fiscal year.


 


SECTION 3


 


MANAGEMENT INCENTIVE PLAN FUND


 


3.1         BASE FOR MANAGEMENT INCENTIVE PLAN FUND. The “base
earnings” for determining whether any portion of consolidated net income for
any fiscal year may be allocated to the Management Incentive Plan Fund for such
year shall be that amount of consolidated net income (as defined in subsection
3.2) which is equal to 15 percent of the Abbott Common Shareholder’s Equity for
such fiscal year. For this purpose, “Abbott Common Shareholders’ Equity” for
any fiscal year shall mean the Shareholders’ Investment, as reflected in the
consolidated balance sheet of Abbott as of the close of the next preceding
fiscal year, plus or minus such adjustments thereof as may be determined by the
Committee in order to reflect:


 


(a)          The existence, issuance, sale, exchange, conversion or



 


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retirement of any securities, other than
common shares, of Abbott (whether involving preferred stock, debt, convertible
preferred stock or convertible debt securities); and


 


(b)         The issuance or retirement of any common shares or any
changes in accounting methods or period adopted by Abbott since the close of
such next preceding fiscal year.


 


Any adjustments to be made in accordance with (a) and (b) above
in determining Abbott Common Shareholders’ Equity for any fiscal year shall be
determined by the Committee after consultation with Abbott’s independent
auditors, and any determination made by the Committee after such consultation
shall be conclusive upon all persons.


 


3.2         CONSOLIDATED NET INCOME. For the purposes of this
Plan, for any fiscal year or period, the “consolidated net income” shall be the
consolidated net income of Abbott and its subsidiaries, prepared in accordance
with generally accepted accounting principles, consistently applied, after
provision for any interest accrued with respect to such period on account of
deferred payments under this Plan or a Predecessor Plan, but before allowances
for any amount to be allocated to the Management Incentive Plan Fund, both net
of applicable income taxes, and after such adjustments for the following, as
may be determined by the Committee after consultation with Abbott’s independent
auditors (all net of applicable income taxes):


 


(a)          The exclusion of any charges for amortization or
goodwill arising out of acquisitions made for securities which, as a result of
adjustments made in determining Abbott Common Shareholders’ Equity pursuant to
subsection 3.1, are treated as common share equivalents; and


 


(b)         The exclusion of any interest on debt securities which
are convertible into common shares of Abbott and which shall have been
considered as common share equivalents in determining Abbott Common Shareholders’
Equity pursuant to subsection 3.1 hereof; and


 


(c)          The deduction of any dividend requirement for
preferred shares which has not been considered as common share equivalents in
determining Common Shareholders’ Equity pursuant to subsection 3.1 hereof.


 


In the sole
discretion of the Committee there shall also be excluded in the calculation of “consolidated
net income” unusual gains and losses and the tax effects thereof, changes in
generally accepted accounting principles and the tax effects thereof and extraordinary
gains and losses.


 


3.3         DETERMINATION OF MANAGEMENT INCENTIVE PLAN AMOUNT FOR
ANY YEAR. For each fiscal year that consolidated net income exceeds base
earnings, and as soon as practicable after ascertainment of that fact, the
Committee shall determine a tentative amount as the Management Incentive Plan
Amount for that year, which tentative amount shall not exceed the lesser of:


 


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(a)          an amount which, when treated as an expense currently
deductible for income tax purposes in such year, would cause a 5 percent
reduction in such year’s excess of consolidated net income over the base
earnings for such year; and


 


(b)         an amount which, when treated as an expense currently
deductible for income tax purposes in such year, would cause a 1-1/2 percent
reduction in such year’s consolidated net income; and


 


(c)          an amount which equals 200 percent of the aggregate
base salaries of all active participants for such year.


 


For purposes of the Plan “base salary” means the
amount of salary paid to each active participant by Abbott and its subsidiaries
for such year plus the includible portion (as described below) of any “Eligible
Restricted Stock Award,” as defined in Section 5-2 of the Abbott
Laboratories Supplemental Pension Plan and does not include bonuses, other
awards or any other compensation of any kind. The includible portion of a
participant’s Eligible Restricted Stock Award shall be the portion of the
participant’s Eligible Restricted Stock Award that is included in the
participant’s final earnings under the Abbott Laboratories Supplemental Pension
Plan for such year. Following determination of such tentative Management
Incentive Plan Amount, the Committee shall report in writing the amount of such
tentative amount to the Board of Directors. At the meeting of the Board of
Directors coincident with or next following receipt by it of the Committee’s
determination, the Board of Directors shall have the power to approve or
reduce, but not to increase, the tentative amount reported to it by the
Committee. The amount approved by the Board of Directors shall be the
Management Incentive Plan Amount for such year.


 


3.4         THE MANAGEMENT INCENTIVE PLAN FUND. The Management
Incentive Plan Fund at any time shall consist of an amount equal to the
aggregate of the Management Incentive Plan Amounts established pursuant to
subsection 3.3 of this Plan for all fiscal years during which this Plan shall
have been operative, plus the amounts established as Management Incentive Plan
Amounts for any prior fiscal year pursuant to a Predecessor Plan, reduced by an
amount equal to the aggregate of the amounts of awards which shall have been
allocated to participants in accordance with this Plan or a Predecessor Plan,
and awards, or any other compensation of any kind.


 


SECTION 4


 


ALLOCATION OF MANAGEMENT INCENTIVE FUND


 


4.1         ANNUAL ALLOCATION OF MANAGEMENT INCENTIVE FUND. As
soon as practicable after the close of each fiscal year, part or all of the
amount then in the Management Incentive Plan Fund (including the Management
Incentive Plan Amount for such fiscal year) will be allocated by the Committee
among active participants in the Plan for such fiscal year, having due regard
for the purposes for which the Plan was established, in the following manner
and order:


 


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(a)          First, if the Chairman of the Board of Abbott shall be
an active participant for such year, the members of the Committee, other than
the Chairman of the Board, shall determine the amount, if any, to be allocated
to the Chairman of the Board from such Fund for such year; and


 


(b)         Next, all or a part of the balance of such Fund may be
allocated among the active participants (other than the Chairman of the Board)
for such year, in such amounts and proportions as the Committee shall determine
provided, however, that the amount allocated to any active participant for any
year shall not exceed 200 percent of such participant’s base salary for that
year.


 


4.2         COMMITTEE’S DISCRETION IN ALLOCATIONS. In making any
allocations in accordance with subsection 4.1 for any year, the discretion of
the Committee shall be absolute, and no active participants for any year, by
reason of their designation as such, shall be entitled to any particular
amounts or any amount whatsoever.


 


SECTION 5


 


PAYMENT OF AMOUNTS ALLOCATED TO PARTICIPANTS


 


5.1         TIME OF PAYMENT. For fiscal years beginning after December 31,
1988, a participant shall direct the payment or deferral of an allocation made
to him pursuant to subsection 4.1 at the time specified in subsection 5.2
(subject to such conditions relating to the right of the participant to receive
payment of such amount as established by the Committee) by one or more of the
following methods:


 


(a)          current payment in cash to the participant, which
payment shall be made no later than the last day of the “applicable 2 1⁄2 month
period”, as such term is defined in Treasury Regulation § 1.409A-1(b)(4)(i)(A);


 


(b)         current payment of a portion in cash and deposited to
a grantor trust (the “Grantor Trust”) established by the participant (in a form
which the Committee determines is substantially similar to the trust in Exhibit B)
and the balance paid to the participant approximately equal to the participant’s
aggregate federal, state and local individual income and employment taxes
(determined in accordance with subsection 6.7); provided that all payments or
contributions to the Grantor Trust and participant contemplated by this
subsection 5.1(b) shall be made no later than the last day of the “applicable
2 1⁄2 month period”, as such term is defined in Treasury Regulation
§ 1.409A-1(b)(4)(i)(A); or


 


(c)          deferral of payment until such time and in such manner
as determined in accordance with subsection 5.14.


 


5.2         TIME OF ELECTION.


 


(a)                                  A participant must make the election
described in subsection 5.1 by filing it with the Committee or its delegate on
or before December 31 


 


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of the year prior to the fiscal year during which the incentive compensation is
earned under the Plan.


 


(b)                                 Notwithstanding the timing
requirements described above, an individual who newly becomes eligible to
participate in the Plan by being designated as a participant under subsection
2.1 (and who was not eligible to participate in any other plan that would be
aggregated with the Plan under Treasury Regulation §1.409A-1(c)) may make the
an initial deferral election described in subsection 5.1 by filing it with the
Committee or its delegate within the thirty (30) day period immediately
following the date he or she first is designated as participant, provided,
that the compensation deferred pursuant to such election relates solely to services
performed after the date of such election. 
For this purpose, an election shall be deemed to apply to compensation
paid for services performed after the election if the election applies to no
more than the amount prescribed by Treasury Regulation §1.409A-2(a)(7)(i).


 


(c)                                  Any election described in subsection
5.1 shall be irrevocable for the fiscal year to which the election applies.


 


5.3         SEPARATE ACCOUNTS. The Committee shall establish
accounts for participants who have made elections pursuant to subsection 5.1(b) or
5.1(c) as follows.


 


(a)          The Committee will maintain a “Deferred Account” in
the name of each participant who has elected to defer payment of all or a
portion of his or her MIP award under subsection 5.1(c).  The Deferred Account shall consist of
allocations deferred according to subsection 5.1(c) and any adjustments
made in accordance with subsection 5.4.


 


(b)         The Committee will maintain two separate Accounts, a “Pre-Tax
Account” and an “After-Tax Account”, in the name of each participant who has
elected to have a portion of his or her MIP award deposited in cash to a
Grantor Trust according to subsection 5.1(b). 
The Pre-Tax Account shall consist of the aggregate of all allocations
contemplated by subsection 5.1(b), whether deposited to the participant’s
Grantor Trust or made in cash to the participant, and any adjustments made in
accordance with subsection 5.5.  The
After-Tax Account shall consist of allocations deposited to the participant’s
Grantor Trust in cash according to subsection 5.1(b) and any adjustments
made in accordance with subsection 5.6.


 


5.4         ADJUSTMENT OF DEFERRED ACCOUNTS. As of the end of each
fiscal year, each participant’s Deferred Account shall be adjusted by the
Committee as follows:


 


(a)                                  FIRST, reduced by an amount equal to
any distributions made to the participant during that year pursuant to
subsections 5.14 or 5.15;


 


(b)                                 NEXT, increased by an amount equal
to the allocation for that year that is deferred pursuant to subsection 5.1(c);
and


 


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(c)                                  FINALLY, increased by an amount
equal to the interest earned for that year according to subsection 5.7.


 


5.5         ADJUSTMENT OF PRE-TAX ACCOUNTS. As of the end of each
fiscal year, each participant’s Pre-Tax Account shall be adjusted by the
Committee as follows:


 


(a)          FIRST, reduced, in any year in which the participant is
entitled to receive a distribution from his or her Grantor Trust, by an amount
equal to the distribution that would have been made to the participant if the
aggregate amounts allocated according to subsection 5.1(b) had instead
been deferred under subsection 5.1(c);


 


(b)         NEXT, increased by an amount equal to any allocation
for that year that is paid to the participant (including the amount deposited
in the participant’s Grantor Trust) according to subsection 5.1(b); and


 


(c)          FINALLY, increased by an amount equal to the interest
earned for that year according to subsection 5.7.


 


5.6         ADJUSTMENT OF AFTER-TAX ACCOUNTS. As of the end of
each fiscal year, each participant’s After-Tax Account shall be adjusted by the
Committee as follows:


 


(a)          FIRST, reduced, in any year in which the participant
is in receipt of a benefit distribution from his or her Grantor Trust, by an
amount calculated as provided in subsection 5.19 which represents the
distribution for such year;


 


(b)         NEXT, increased by an amount equal to the allocation
for that year that is deposited in the participant’s Grantor Trust according to
subsection 5.1(b); and


 


(c)          FINALLY, increased by an amount equal to the interest
earned for that year according to subsection 5.7.


 


5.7         INTEREST ACCRUALS ON ACCOUNTS.


 


(a)          As of the end of each fiscal year, a participant’s Deferred
Account or Pre-Tax Account, as applicable, shall be credited with interest (“Interest”)
at the following rate:


 


(i)                                     the average of the “prime rate” of
interest published by the Wall Street Journal (Mid-West Edition) or comparable
successor quotation service on the first business day of January and the
last business day of each month of the fiscal year;


 


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(ii)         plus two hundred twenty-five (225)
basis points.


 


(b)   As of the end of each fiscal year, a participant’s
After-Tax Account shall be credited with the amount of Interest provided above,
multiplied by the aggregate of the federal, state and local individual income
tax rates determined in accordance with subsection 6.7 (the “After-Tax Interest”).


 


(c)   This Interest and After-Tax Interest, as applicable,
shall be credited on the conditions established by the Committee, provided that
any award allocation shall be considered to have been made and credited to a
participant’s Account as of the first day of the fiscal year in which the award
is made.


 


5.8   GUARANTEED RATE PAYMENTS. In addition to any
allocation made to a participant for any fiscal year in accordance with
subsection 5.1(b), Abbott shall also make a payment to a 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, if any, of the participant’s Net Interest Accrual (as
defined below) over the net earnings of the participant’s Grantor Trust for the
year and shall be paid within the thirty (30) days beginning April 1 of
the following fiscal year.  A participant’s
Net Interest Accrual for the year is an amount equal to the After-Tax Interest
credited to the participant’s After-Tax Account for that year in accordance
with subsection 5.7.


 


5.9   GRANTOR TRUST ASSETS. 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 subsection 3(b) of
the form of Grantor Trust attached hereto as Exhibit B.


 


5.10         DESIGNATION OF BENEFICIARIES. Subject to the
conditions and limitations set forth below, each participant, and after a
participant’s death, each primary beneficiary designated by a participant in
accordance with the provisions of this subsection 5.10, shall have the right
from time to time to designate a primary beneficiary or beneficiaries and,
successive or contingent beneficiary or beneficiaries to receive unpaid amounts
from the participant’s Deferred Account under the Plan and the Predecessor
Plans. Beneficiaries may be a natural person or persons or a fiduciary, such as
a trustee of a trust or the legal representative of an estate. Any such
designation shall take effect upon the death of the participant or such
beneficiary, as the case may be, or in the case of any fiduciary beneficiary,
upon the termination of all of its duties (other than the duty to dispose of
the right to receive amounts remaining to be paid under the Plan or a
Predecessor Plan). The conditions and limitations relating to the designation
of beneficiaries are as follows:


 


(a)           A nonfiduciary beneficiary shall have the right to
designate a further beneficiary or beneficiaries only if the original
participant or the next preceding


 


8

















 


primary beneficiary,
as the case may be, shall have expressly so provided in writing; and


 


(b)           A fiduciary beneficiary shall designate as a further
beneficiary or beneficiaries only those persons or other fiduciaries who are
entitled to receive the amounts payable from the participant’s account under
the trust or estate of which it is a fiduciary.


 


Any
beneficiary designation or grant of any power to any beneficiary under this
subsection may be exercised only by an instrument in writing, executed by the
person making the designation or granting such power and filed with the
Secretary of Abbott during such person’s lifetime or prior to the termination
of a fiduciary’s duties. If a deceased participant or a deceased nonfiduciary
beneficiary who had the right to designate a beneficiary as provided above dies
without having designated a further beneficiary, or if no beneficiary
designated as provided above is living or qualified and acting, the Committee,
in its discretion, may direct distribution of the amount remaining from time to
time to either:


 


(iii)          any one or more or all of the next
of kin (including the surviving spouse) of the participant or the deceased
beneficiary, as the case may be, and in such proportions as the Committee
determines; or


 


(iv)          the legal representative of the
estate of the deceased participant or deceased beneficiary as the case may be.


 


5.11         STATUS OF BENEFICIARIES. Following a participant’s
death, the participant’s beneficiary or beneficiaries will be considered and
treated as an inactive participant for all purposes of this Plan.


 


5.12         NON-ASSIGNABILITY AND FACILITY OF PAYMENT. Amounts
payable to participants and their beneficiaries under the Plan are not in any
way subject to their debts and other obligations, and may not be voluntarily or
involuntarily sold, transferred or assigned; provided that the preceding provisions
of this subsection shall not be construed as restricting in any way a
designation right granted to a beneficiary pursuant to the terms of subsection
5.10. When a participant or the beneficiary of a participant is under legal
disability, or in the Committee’s opinion is in any way incapacitated so as to
be unable to manage his or her financial affairs, the Committee may direct that
payments shall be made to the participant’s or beneficiary’s legal
representative, or to a relative or friend of the participant or beneficiary
for the benefit of the participant or beneficiary, or the Committee may direct
the payment or distribution for the benefit of the participant or beneficiary
in any manner that the Committee determines.


 


5.13         PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS. Any amount
allocated to a participant in the Plan and any interest credited thereto will
be


 


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paid by the employer (or such employer’s
successor) by whom the participant was employed during the fiscal year for
which any amount was allocated, and for that purpose, if a participant shall
have been employed by two or more employers during any fiscal year the amount
allocated under this Plan for that year shall be an obligation of each of the
respective employers in proportion to the respective amounts of base salary
paid by each of them in that fiscal year.


 


5.14         MANNER OF PAYMENT OF DEFERRED ACCOUNTS. Subject to
subsection 5.15, a participant shall elect to receive payment of his Deferred Account
in substantially equal annual installments over a minimum period of ten years,
or a longer period, at the time of his deferral election under subsection
5.1(c).  Payment of a participant’s
Deferred Account shall commence on the first business day of January of
the year following the year in which the participant incurs a termination of employment.


 


5.15         PAYMENTS UPON TERMINATION FOLLOWING CHANGE IN
CONTROL.  Notwithstanding any other
provision of the Plan or the provisions of any award made under the Plan, if a
participant incurs a termination of employment with Abbott and its subsidiaries
for any reason within two (2) years following the date of a Change in
Control, 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): (a) with respect to a participant whose allocations under
the Plan are deferred in accordance with subsection 5.1(c), the aggregate
unpaid balance of the participant’s Deferred Account shall be paid to such
participant in a lump sum within thirty (30) days following the date of such
termination of employment, and (b) with respect to a participant whose
allocations under the Plan are made pursuant to subsection 5.1(b), (i) the
aggregate of the participant’s unpaid allocation under subsection 5.1(b) (if
any) for the fiscal year in which the termination occurs and (ii) a pro
rata portion of the unpaid Guaranteed Rate Payment under subsection 5.8
attributable to the portion of the year elapsed prior to the date of
termination, shall be paid to such participant’s Grantor Trust in a lump sum
within thirty (30) days following the date of such termination of employment.


 


5.16         CHANGE IN CONTROL. 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


 


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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 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.


 


For purposes of this Plan: “Affiliate” shall have the meaning set forth
in Rule 12b-2 promulgated under Section 12 of the Exchange Act; “Beneficial
Owner” shall have the


 


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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.


 


5.17         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.


 


5.18         PROHIBITION AGAINST AMENDMENT. The provisions of
subsections 5.15, 5.16, 5.17 and this subsection 5.18 may not be amended or
deleted, nor superseded by any other provision of this Plan, (i) during
the pendency of a Potential Change in Control and (ii) during the period
beginning on the date of a Change in Control and ending on the date five (5) years
following such Change in Control.


 


12

















 


5.19         ADMINISTRATOR’S CALCULATION OF GRANTOR TRUST
DISTRIBUTIONS. The Administrator shall calculate the amount to be distributed
from a participant’s Grantor Trust in any year in which the participant is
entitled to a benefit distribution by multiplying (i) the amount of the
reduction determined in accordance with subsection 5.5(a), by (ii) a
fraction, the numerator of which is the balance in the participant’s After-Tax
Account as of the end of the prior fiscal year and the denominator of which is
the balance of the participant’s Pre-Tax Account as of that same date.


 


SECTION 6


 


MISCELLANEOUS


 


6.1   RULES. The Committee may establish such rules and
regulations as it may consider necessary or desirable for the effective and
efficient administration of the Plan.


 


6.2   MANNER OF ACTION BY COMMITTEE. A majority of the
members of the Committee qualified to act on any particular question may act by
meeting or by writing signed without meeting, and may execute any instrument or
document required or delegate to one of its members authority to sign. The
Committee from time to time may delegate the performance of certain ministerial
functions in connection with the Plan, such as the keeping of records, to such
person or persons as the Committee may select. Except as otherwise expressly
provided in the Plan, the costs of administration of the Plan will be paid by
Abbott. Any notice required to be given to, or any document required to be
filed with the Committee, will be properly given or filed if mailed or
delivered in writing to the Secretary of Abbott.


 


6.3   RELIANCE UPON ADVICE. The Board of Directors and the
Committee may rely upon any information or advice furnished to it by any
Officer of Abbott or by Abbott’s independent auditors, or other consultants,
and shall be fully protected in relying upon such information or advice. No
member of the Board of Directors or the Committee shall be liable for any act
or failure to act on their part, excepting only any acts done or omitted to be
done in bad faith, nor shall they be liable for any act or failure to act of
any other member.


 


6.4   TAXES. Any employer shall be entitled, if necessary or
desirable, to pay, or withhold the amount of any federal, state or local tax,
attributable to any amounts payable by it under the Plan after giving the
person entitled to receive such amount notice as far in advance as practicable,
and may require payment or indemnification from the participant in an amount
necessary to satisfy such taxes prior to remitting such taxes.


 


6.5   RIGHTS OF PARTICIPANTS. Employment rights of
participants with Abbott and its subsidiaries shall not be enlarged or affected
by reason of establishment of or inclusion as a participant in the Plan.
Nothing contained in the Plan shall require Abbott or any subsidiary to
segregate or earmark any assets, funds or property for the purpose of payment
of any amounts which may have been deferred. The Deferred Account, Pre-Tax Account
and After-Tax Account with respect to any


 


13

















 


participant established
pursuant to subsection 5.2 are for the convenience of the administration of the
Plan and no trust relationship with respect to such Accounts is intended or
should be implied. Participant’s rights shall be limited to payment to them at
the time or times and in such amounts as are contemplated by the Plan. Any
decision made by the Board of Directors or the Committee, which is within the sole
and uncontrolled discretion of either, shall be conclusive and binding upon the
other and upon all other persons whomsoever.


 


6.6   TAX GROSS UP. In addition to the allocations provided
under subsection 4.1, each participant who has established a Grantor Trust (or,
if the participant is deceased, the beneficiary designated under the
participant’s Grantor Trust) shall be entitled to a Tax Gross Up payment for
each year in which the Grantor Trust is in effect.  The “Tax Gross Up” shall equal: (a) the
amount necessary to compensate the participant (or beneficiary) for the net
increase in the participant’s (or beneficiary’s) federal, state and local
income taxes as a result of the inclusion in his or her taxable income of the
income of the participant’s Grantor Trust and any Guaranteed Rate Payment for
that year; plus (b) an amount necessary to compensate the participant (or
beneficiary) for the net increase in the taxes described in (a) above as a
result of the inclusion in his or her taxable income of any payment made
pursuant to this subsection 6.6. Payment of the Tax Gross Up shall be made by
the employers (in such proportions as Abbott shall designate) directly from
their general corporate assets, no later than the end of the calendar year in
which the participant remits the related taxes.


 


6.7   INCOME TAX ASSUMPTIONS. For purposes of Sections 5 and
6, a participant’s federal income tax rate shall be deemed to be the highest
marginal rate of federal income individual tax in effect in the calendar year
in which a calculation under those Sections 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 on the
date such a calculation is made, net of any federal tax benefits without a
benefit for any net capital losses.


 


6.8   SECTION 409A. 
To the extent applicable, it is intended that the Plan comply with the
provisions of Code Section 409A. 
The Plan will be administered and interpreted in a manner consistent
with this intent, and any provision that would cause the 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, for all purposes of the Plan, a
participant shall not be deemed to have had a termination of employment until
the participant has incurred a separation from service as defined in Treasury
Regulation §1.409A-1(h) and, to the extent required to avoid accelerated
taxation and/or tax penalties under Code Section 409A and applicable
guidance issued thereunder, payment of the amounts payable under the Plan that
would otherwise be payable during the six-month period after the date of
termination shall instead be paid on the first business day after the
expiration of such six-month period, plus interest thereon, at a rate equal to
the rate specified in subsection 5.7 (to the extent that such interest is not
already provided to the participant under subsection 5.6), from the respective
dates on which such amounts would otherwise have been paid until the actual
date of payment.  In


 


14

















 


addition, for purposes of the Plan, each
amount to be paid and each installment payment shall be construed as a separate
identified payment for purposes of Code Section 409A.


 


SECTION 7


 


AMENDMENT, TERMINATION AND CHANGE OF

CONDITIONS RELATING TO PAYMENTS


 


7.1   AMENDMENT AND TERMINATION. The Plan will be effective
from its effective date until terminated by the Board of Directors. During the
fifth year after the Plan’s effective date and during every fifth year
thereafter, the Committee may recommend to the Board of Directors whether the
Plan should be amended or terminated. The Board of Directors reserves the right
to amend the Plan from time to time and to terminate the Plan at any time,
except that no such amendment or any termination of the Plan shall reduce any
fixed or contingent obligations which shall have arisen under the Plan prior to
the date of such amendment or termination, or change the terms and conditions
of payment of any allocation theretofore made without the consent of the
participant concerned.


 


7.2   CHANGE OF CONDITIONS RELATING TO PAYMENTS.  No change to the time or payment or the time
of commencement of payment and any period over which payment shall be made
shall be effected except in strict compliance with the subsequent election
requirements of Treasury Regulation § 1.409A-2(b) to the extent subject
thereto.


 


15

















 


Exhibit A


 


1986


ABBOTT LABORATORIES


MANAGEMENT INCENTIVE PLAN


 


[The 1986 Abbott Laboratories
Management Incentive Plan, as amended, as filed as Exhibit 10.5 to the Abbott
Laboratories Quarterly Report for the quarter ended June 30, 2003 on Form
10-Q.]


 

















 


Exhibit B


 


IRREVOCABLE
GRANTOR TRUST AGREEMENT


 


THIS
AGREEMENT, made this          day of                  ,
20    , by and between                                     
of                    ,
Illinois (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
1986 Abbott Laboratories Management Incentive 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 “                    
20    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.


 


ARTICLE II


 


DISTRIBUTION
OF THE TRUST FUND


 


II-1                              SEPARATE
ACCOUNTS. The administrator shall maintain two separate accounts under the
trust, a “rollout account” and a “deferred account.” Funds delivered to the
trustee shall be allocated between the accounts by the trustee as directed by
the administrator. As of the end of each calendar year, the administrator shall
charge each account with all distributions made from such account during that
year; and credit each account with its share of income and realized gains and
charge each account with its share of expenses and realized losses for the
year. The trustee shall not be required to make any separate investment of the
trust fund for the accounts, and may administer and invest all funds delivered
to it under the trust as one trust fund.


 


II-2                              DISTRIBUTIONS
FROM THE ROLLOUT ACCOUNT PRIOR TO THE GRANTOR’S DEATH. The trustee shall
distribute principal and accumulated income credited to the rollout account to
the grantor, if then living, at such times and in such amounts as the
administrator shall direct.


 

















 


II-3                              DISTRIBUTIONS
FROM THE DEFERRED ACCOUNT PRIOR TO THE GRANTOR’S DEATH. Principal and
accumulated income credited to the deferred account 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 deferred account for
that year, with the balance of such income to be accumulated in that account.
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 deferred account to the grantor, if then living, in a series of annual
installments, with the amount of each installment computed by one of the
following methods:


 


(a)                                  The amount of each
installment shall be equal to the sum of: (i) the amount credited to the
deferred account as of the end of the year in which the grantor’s settlement
date occurs, divided by the number of years over which installments are to be
distributed; plus (ii) the net earnings credited to the deferred account
for the preceding year  (excluding the
year in which the grantor’s settlement date occurs).


 


(b)                                 The amount of each
installment shall be determined by dividing the amount credited to the deferred
account as of the end of the preceding year by the difference between (i) the
total number of years over which installments are to be distributed, and (ii) the
number of annual installment distributions previously made from the deferred
account.


 


(c)                                  Each installment
(after the first installment) shall be approximately equal, with the amount
comprised of the sum of: (i) the amount of the first installment, plus
interest thereon at the rate determined under the 1986 Abbott Laboratories
Management Incentive Plan, compounded annually; and (ii) the net earnings
credited to the deferred account for the preceding year.


 


(i)                                     the
foregoing, the final installment distribution made to the grantor under this
paragraph II-3 shall equal the total principal and accumulated income then held
in the trust fund. The grantor, by writing filed with the trustee and the
administrator on or before the end of the calendar year in which the grantor’s
settlement date occurs (or the end of the calendar year in which this trust is
established, if the grantor’s settlement date has already occurred), may select
both the period (which may not be less than 


 

















 


ten years from
the end of the calendar year in which the grantor’s settlement date occurred)
over which the installment distributions are to be made and the method of
computing the amount of each installment. In the absence of such a written
direction by the grantor, installment distributions shall be made over a period
of ten years, and the amount of each installment shall be computed by using the
method described in subparagraph (a) next above. Installment distributions
under this Paragraph II-3 shall be made as of January 1 of each year,
beginning with the calendar year following the year in which the grantor’s
settlement date occurs. The administrator shall inform the trustee of the
amount of each installment distribution under this paragraph II-3, and the
trustee shall be fully protected in relying on such information received from
the administrator.


 


II-4.                           DISTRIBUTIONS
FROM THE TRUST FUND 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 therefrom shall be
distributed in a lump sum or, if the beneficiary is the grantor’s spouse (or a
trust for which the grantor’s spouse is the sole income beneficiary), in
installments, as directed by the grantor, upon the grantor’s death. If the
grantor directs an installment method of distribution to the spouse as
beneficiary, any amounts remaining at the death of the spouse beneficiary shall
be distributed in a lump sum to the executor or administrator of the spouse
beneficiary’s estate. If the grantor directs an installment method of
distribution to a trust for which the grantor’s spouse is the sole income
beneficiary, any amounts remaining at the death of the spouse shall be
distributed in a lump sum to such trust. Despite the foregoing, if (i) the
beneficiary is a trust for which the grantor’s spouse is the sole income
beneficiary, (ii) payments are being made pursuant to this paragraph II-4
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-5                              FACILITY
OF PAYMENT. When a person entitled to a distribution hereunder is under legal
disability, or, in the trustee’s opinion, is in any way incapacitated so as to
be unable to manage his or her financial affairs, the trustee may 


 

















 


make such distribution to such person’s legal representative, or to a
relative or friend of such person for such person’s benefit. Any distribution
made in accordance with the preceding sentence shall be a full and complete
discharge of any liability for such distribution hereunder.


 


II-6                              PERPETUITIES.
Notwithstanding any other provisions of this agreement, on the day next
preceding the end of 21 years after the death of the last to die of the grantor
and the grantor’s descendants living on the date of this instrument, the
trustee shall immediately distribute any remaining balance in the trust to the
beneficiaries then entitled to distributions hereunder.


 


ARTICLE III


MANAGEMENT OF
THE TRUST FUND


 


III-1.                       GENERAL
POWERS. The trustee shall, with respect to the trust fund, have the following
powers, rights and duties in addition to those provided elsewhere in this
agreement or by law:


 


(a)                                  Subject
to the limitations of subparagraph (b) next below, to sell, contract to
sell, purchase, grant or exercise options to purchase, and otherwise deal with all
assets of the trust fund, in such way, for such considerations, and on such
terms and conditions as the trustee decides.


 


(b)                                 To
retain in cash such amounts as the trustee considers advisable; and to invest
and reinvest the balance of the trust fund, without distinction between
principal and income, in obligations of the United States Government and its
agencies or which are backed by the full faith and credit of the United States
Government or in any mutual fund, common trust fund or collective investment
fund which invests solely in such obligations; and any such investment made or
retained by the trustee in good faith shall be proper despite any resulting
risk or lack of diversification or marketability.


 


(c)                                  To
deposit cash in any depositary (including the banking department of the bank
acting as trustee) without liability for interest, and to invest cash in
savings accounts or time certificates of deposit bearing a reasonable rate of
interest in any such depositary.


 


(d)                                 To
invest, subject to the limitations of subparagraph (b) above, in any
common or commingled trust fund or funds maintained or administered by the
trustee solely for the investment of trust funds.


 

















 


(e)                                  To
borrow from anyone, with the administrator’s approval, such sum or sums from time
to time as the trustee considers desirable to carry out this trust, and to
mortgage or pledge all or part of the trust fund as security.


 


(f)                                    To
retain any funds or property subject to any dispute without liability for
interest and to decline to make payment or delivery thereof until final
adjudication by a court of competent jurisdiction or until an appropriate
release is obtained.


 


(g)                                 To
begin, maintain or defend any litigation necessary in connection with the
administration of this trust, except that the trustee shall not be obliged or
required to do so unless indemnified to the trustee’s satisfaction.


 


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


 


(i)                                     To
give proxies to vote stocks and other voting securities, to join in or oppose
(alone or jointly with others) voting trusts, mergers, consolidations,
foreclosures, reorganizations, liquidations, or other changes in the financial
structure of any corporation, and to exercise or sell stock subscription or
conversion rights.


 


(j)                                     To
hold securities or other property in the name of a nominee, in a depositary or
in any other way, with or without disclosing the trust relationship.


 


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


 


(l)                                     To
pay any tax imposed on or with respect to the trust; to defer making payment of
any such tax if it is indemnified to its satisfaction in the premises; and to
require before making any payment such release or other document from any
lawful taxing authority and such indemnity from the intended payee as the
trustee consider necessary for its protection.


 


(m)                               To
deal without restriction with the legal representative of the grantor’s estate
or the trustee or other legal representative of any trust created by the grantor
or a trust or estate in which a beneficiary has an interest, even though 


 

















 


the trustee,
individually, shall be acting in such other capacity without liability for any
loss that may result.


 


(n)                                 To
appoint or remove by written instrument any bank or corporation qualified to
act as successor trustee, wherever located, as special trustee as to part or
all of the trust fund, including property as to which the trustee does not act,
and such special trustee, except as specifically limited or provided by this or
the appointing instrument, shall have all of the rights, titles, powers,
duties, discretions and immunities of the trustee, without liability for any
action taken or omitted to be taken under this or the appointing instrument.


 


(o)                                 To
appoint or remove by written instrument any bank, wherever located, as
custodian of part or all of the trust fund, and each such custodian shall have
such rights, powers, duties and discretions as are delegated to it by the
trustee.


 


(p)                                 To
employ agents, attorneys, accountants or other persons, and to delegate to them
such powers as the trustee considers desirable, and the trustee shall be
protected in acting or refraining from acting on the advice of persons so
employed without court action.


 


(q)                                 To
perform any and all other acts which in the trustee’s judgment are appropriate
for the proper management, investment and distribution of the trust fund.


 


III-2.                       PRINCIPAL
AND INCOME. Any income earned on the trust fund which is not distributed as
provided in Article II shall be accumulated and from time to time added to
the principal of the trust. The grantor’s interest in the trust shall include
all assets or other property held by the trustee hereunder, including principal
and accumulated income.


 


III-3.                       STATEMENTS.
The trustee shall prepare and deliver monthly to the administrator and annually
to the grantor, if then living, otherwise to each beneficiary then entitled to
distributions under this agreement, a statement (or series of statements)
setting forth (or which taken together set forth) all investments, receipts,
disbursements and other transactions effected by the trustee during the
reporting period; and showing the trust fund and the value thereof at the end
of such period.


 


III-4.                       COMPENSATION
AND EXPENSES. All reasonable costs, charges and expenses incurred in the
administration of this trust, including compensation to the trustee, any
compensation to agents, attorneys, accountants and other persons 


 

















 


employed by
the trustee, and expenses incurred in connection with the sale, investment and
reinvestment of the trust fund shall be paid from the trust fund.


 


ARTICLE IV


GENERAL
PROVISIONS


 


IV-1.                       INTERESTS
NOT TRANSFERABLE. The interests of the grantor or other persons entitled to
distributions hereunder are not subject to their debts or other obligations and
may not be voluntarily or involuntarily sold, transferred, alienated, assigned
or encumbered.


 


IV-2.                       DISAGREEMENT
AS TO ACTS. If there is a disagreement between the trustee and anyone as to any
act or transaction reported in any accounting, the trustee shall have the right
to a settlement of its account by any proper court.


 


IV-3.                       TRUSTEE’S
OBLIGATIONS. No power, duty or responsibility is imposed on the trustee except
as set forth in this agreement. The trustee is not obliged to determine whether
funds delivered to or distributions from the trust are proper under the trust,
or whether any tax is due or payable as a result of any such delivery or
distribution. The trustee shall be protected in making any distribution from
the trust as directed pursuant to Article II without inquiring as to
whether the distributee is entitled thereto; and the trustee shall not be
liable for any distribution made in good faith without written notice or
knowledge that the distribution is not proper under the terms of this
agreement.


 


IV-4.                       GOOD FAITH
ACTIONS. The trustee’s exercise or non-exercise of its powers and discretions
in good faith shall be conclusive on all persons. No one shall be obliged to
see to the application of any money paid or property delivered to the trustee.
The certificate of the trustee that it is acting according to this agreement
will fully protect all persons dealing with the trustee.


 


IV-5.                       WAIVER OF
NOTICE. Any notice required under this agreement may be waived by the person
entitled to such notice.


 


IV-6.                       CONTROLLING
LAW. The laws of the State of Illinois shall govern the interpretation and
validity of the provisions of this agreement and all questions relating to the
management, administration, investment and distribution of the trust hereby
created.


 


IV-7.                       SUCCESSORS.
This agreement shall be binding on all persons entitled to distributions
hereunder and their respective heirs and legal representatives, and on the
trustee and its successors.


 


ARTICLE V


CHANGES IN
TRUSTEE


 


V-1.                           RESIGNATION
OR REMOVAL OF TRUSTEE. The trustee may resign at any time by giving thirty (30)
days’ advance written notice to the administrator 


 

















 


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


 


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.


 

















 


*      *      *


 


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