Exhibit 10.7


 


Amended
effective 1/1/08


 


1998 ABBOTT LABORATORIES PERFORMANCE
INCENTIVE PLAN


 


SECTION 1.          ESTABLISHMENT
AND PURPOSES


 


1.1                                 ESTABLISHMENT OF THE PLAN.  Abbott Laboratories (“Abbott”) established
the “1998 Abbott Laboratories Performance Incentive Plan” (the “Plan”), as set
forth in this document.


 


The Plan became effective as of January 1,
1998 (the “Effective Date”) with the approval of Abbott’s shareholders at the
1998 Annual Meeting of the Shareholders, and shall remain in effect as provided
in Section 6.1 hereof.  The Plan was
amended and restated for documentary compliance with Section 409A of the
Internal Revenue Code of 1986, as amended, (the “Code”) as of January 1,
2008.  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.


 


1.2                                 PURPOSES OF THE PLAN.  The purposes of the Plan are to:


 


(a)                                  Prove flexibility to Abbott in its
ability to attract, motivate, and retain the services of participants in the
Plan (“Participants”) who make significant contributions to Abbott’s success
and to allow Participants to share in the success of Abbott.


 


(b)                                 Optimize the profitability and
growth of Abbott through incentives which are consistent with Abbott’s goals
and which link the performance objectives of Participants to those of Abbott’s
shareholders; and


 


(c)                                  Provide Participants with an
incentive for excellence in individual performance.


 


SECTION 2.          ADMINISTRATION


 


2.1                                 GENERAL.  The Plan shall be administered by the
Compensation Committee (the “Committee”) appointed by the Board of Directors of
Abbott (the “Board”).


 


2.2                                 AUTHORITY OF THE COMMITTEE.  The Committee will have full authority to
administer the Plan, including the authority to interpret and construe any
provision of the Plan, and all rules, regulations and interpretations shall be
conclusive and binding on all persons. 
The Committee has sole responsibility for selecting Participants,
establishing performance objectives, setting award targets, and determining
award amounts.


 


2.3                                 DELEGATION BY THE COMMITTEE.  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.  The cost of administration of the Plan will
be paid by Abbott.


 


SECTION 3.          ELIGIBILITY
AND PARTICIPATION


 


3.1                                 ELIGIBILITY AND PARTICIPATION.  Eligibility for participation in the Plan
shall be limited to senior officers of Abbott and its subsidiaries.
Participants in the Plan will be determined annually by the Committee from
those senior officers eligible to participate in the Plan.


 


SECTION 4.          PERFORMANCE
OBJECTIVES


 


4.1                                 PERFORMANCE OBJECTIVES.  The Plan’s performance objectives (the “Performance
Objectives”) shall be determined with reference to Abbott’s consolidated net
earnings prepared in accordance with generally accepted accounting principles.


 


4.2                                 INDIVIDUAL BASE AWARD ALLOCATION--DEFINED.  The base award allocation for the Chief
Executive Officer, if a Participant for such fiscal year, shall be .0015 of the
consolidated net earnings of Abbott for that fiscal year.  The base award allocation for the Chief
Operating Officer, if a Participant for such fiscal year, shall be .0010 of the
consolidated net earnings of Abbott for that fiscal year.  The base award allocation for any other
Participant shall be .00075 of the consolidated net earnings of Abbott for that
fiscal year.  Each such base award will
be increased by interest, at prevailing market rates, accrued on awards
deferred or paid to grantor trusts.


 


SECTION 5.          FINAL
AWARDS


 


5.1                                 FINAL AWARD ALLOCATION.  As soon as practical after the close of each
fiscal year, a Participant’s final award allocation will be determined solely
on the basis of the Performance Objectives. 
In determining a Participant’s final award allocation, the Committee
will have the discretion to reduce but not increase a Participant’s base award
allocation (as increased by the last sentence of Section 4.2), provided
that a Participant’s individual performance will be considered by the Committee
in exercising that discretion.


 


5.2                                 PAYMENT OF AWARDS.  A Participant’s final award allocation will
be paid or deferred in accordance with rules adopted by the Committee
which, with respect to amounts other than Grandfathered Amounts, comply with
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended.


 


SECTION 6.          DURATION,
AMENDMENT, AND TERMINATION


 


6.1                                 DURATION OF THE PLAN.  The Plan shall commence on the Effective
Date, as described in Section 1.1 hereof, and shall remain in effect until
terminated by the Board.


 


6.2                                 AMENDMENT AND TERMINATION.  The Board, in its sole discretion, may modify
or amend any or all of the provisions of the Plan at any time and, without
notice, may suspend or terminate it entirely. 
However, no such modification may, without the consent of the


 


2

















 


Participant,
reduce the right of a Participant to a payment or distribution to which the
Participant is entitled by reason of an outstanding award allocation.


 


SECTION 7.          SUCCESSORS


 


7.1                                 OBLIGATIONS.  All obligations of Abbott under the Plan with
respect to awards granted hereunder shall be binding on any successor to
Abbott, whether the existence of such successor is the result of a direct or
indirect purchase, merger, consolidation, or otherwise, of all or substantially
all of the business and/or assets of Abbott.


 


3

















 


Exhibit A


 


1998 ABBOTT LABORATORIES PERFORMANCE INCENTIVE PLAN


 


[1998 Abbott Laboratories
Performance Incentive Plan, as filed as Exhibit 10.1 to the Abbott Laboratories
Quarterly Report for the quarter ended March 31, 1998 on Form 10-Q; and, Rules
for the 1998 Abbott Laboratories Performance Incentive Plan, as filed as
Exhibit 10.17 to the 2004 Abbott Laboratories Annual Report on Form 10-K.]