Exhibit 10.1


 


Amended effective


December 9, 2005


 


ABBOTT
LABORATORIES 401(K) SUPPLEMENTAL PLAN


 


SECTION 1

INTRODUCTION


 


1-1.          PURPOSE.  This
Abbott Laboratories 401(k) Supplemental Plan (the “Plan”) is being established
by Abbott Laboratories (“Abbott”) to provide eligible management employees of
Abbott an opportunity to accumulate capital for their retirement or other
termination of employment in excess of the contributions allowed under the
Abbott Laboratories Stock Retirement Plan (“Stock Plan”).


 


1-2.          EFFECTIVE DATE. 
The Plan shall be effective as of October 1, 1993.


 


1-3.          ADMINISTRATION. 
The Plan shall be administered by the Compensation Committee (the “Committee”)
appointed by the Board of Directors of Abbott (the “Board of Directors”).


 


SECTION 2

ELIGIBILITY AND PARTICIPATION


 


2-1.          PERSONS ELIGIBLE TO PARTICIPATE.  Participation in the Plan shall be limited to
employees who are serving as corporate officers of Abbott as of October 1,
1993 or who become corporate officers thereafter. The term “corporate officer”
for purposes of the Plan shall mean an individual elected an officer of Abbott
by its Board of Directors (or designated as such for purposes of the Plan by
the Committee), but shall not include assistant officers. In the event an
employee should cease to be a corporate officer of Abbott due to demotion,
termination of employment or otherwise, such employee shall cease to be
eligible to participate in the Plan and any contributions then being made on
behalf of such employee shall immediately cease.


 


2-2.          PARTICIPANT.  An
eligible employee may elect to participate in the Plan by electing to have
contributions made on the employee’s behalf as provided in Section 5.


 


SECTION 3

EMPLOYEE CONTRIBUTIONS


 


3-1.          ALLOWABLE CONTRIBUTIONS.  An eligible employee may elect to have his
employer make “pre-tax contributions” on his behalf in an amount not greater
than 18% in total of his compensation in any calendar year for services
rendered to his employer. A pre-tax contribution made by an employer on behalf
of a participant shall reduce the participant’s compensation at the time of
payment of such compensation. Each election hereunder shall be in writing, and
shall be in multiples of 1% of compensation.


 


3-2.          COMPENSATION.  A
participant’s “compensation” shall have the same meaning as that term is used
in subsection 7-2 of the Stock Plan.


 





















 


3-3.          MAXIMUM EMPLOYEE CONTRIBUTIONS.  Notwithstanding subsection 3.1, in no
event shall the sum of:


 


(a)           the participant’s total contributions, pre-tax
contributions, supplemental deposits and supplemental pre-tax contributions
made under the Stock Plan; plus


 


(b)           the participant’s total pre-tax contributions made
under the Plan;


 


for any
calendar year, exceed 18% of the employee’s compensation for such year.  In the event the limitation described in this
subsection 3.3 would be exceeded for any participant, the participant’s
pre-tax contributions made under this Plan shall be reduced until the limit is
not exceeded.


 


SECTION 4

EMPLOYER CONTRIBUTIONS


 


For the
calendar year ending December 31, 1993, and for each subsequent calendar
year, Abbott shall make a contribution on behalf of each participant in the
Plan who makes pre-tax contributions (“basic contributions”) under the Plan
during such year at the rate of two percent (2%) of compensation in excess of,
for calendar year 1993, Two Hundred Thousand Dollars ($200,000), and for
calendar years subsequent to 1993, the limit in effect for such year under Section 40l(a)(17),
Internal Revenue Code of 1986, as amended. Such employer contribution shall be
in an amount equal to the contribution the participant would have received
under subsection 8-3 of the Stock Plan with respect to such basic
contributions had such basic contributions been made under subsection 7-1
of the Stock Plan.  A participant who
suspends his basic contributions to the Plan during any calendar year shall
receive an employer contribution under this Section 4 based on the basic
contributions made by the participant during such year.


 


A contribution
made by a participant under subsection 5.4 shall be considered a basic
contribution for purposes of this Section 4 to the extent it includes
contributions at the rate of two percent (2%) of compensation for 1993 in
excess of Two Hundred Thousand Dollars ($200,000).


 


SECTION 5

ELECTIONS


 


5-1.          ANNUAL ELECTIONS REQUIRED.  Except as provided in subsections 5.2 and
5.3, a participant shall elect to make pre-tax contributions with respect to
compensation earned in any calendar year, prior to the first day of such
calendar year.  Each such election shall
be in writing, shall be filed with the Committee, shall be effective only for
the calendar year for which made and, except as provided in subsection 5.2,
shall be irrevocable.  Notwithstanding
subsection 5.2, an employee who fails to make an election under this subsection 5.1
for a calendar year may not contribute to the Plan during such year.


 


5-2.          LIMITED CHANGES. 
A participant who has elected under subsection 5.1 to make pre-tax
contributions for any calendar year, may increase or decrease such pre-tax
contributions during such calendar year by filing a written election with the
Committee.  A participant may make no
more than two such elections under this subsection 5.2 during such
calendar year.  Any election filed under
this subsection 5.2 shall become effective for 


 


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compensation earned no earlier then the first
payroll period commencing after receipt of the election by the Committee.  Any election filed under this subsection 5.2
shall remain in effect for compensation earned during the remainder of such
calendar year unless changed by a subsequent election under this subsection 5.2.


 


5-3.          NEWLY ELIGIBLE EMPLOYEES.  A newly eligible employee (including
employees who become eligible due to the adoption of the Plan) shall make the
election described in subsection 5.1 within thirty (30) days of the date
he is notified of his eligibility to participate in the Plan.  Any such election shall become effective for
compensation earned no earlier then the first payroll period commencing after
receipt of the election by the Committee and shall remain in effect for the
remainder of the then current calendar year unless changed as provided in subsection 5.2.


 


5-4.          SPECIAL CONTRIBUTION FOR 1993.  Employees who are serving as corporate
officers of Abbott and who have established “Grantor Trusts” under the 1986
Abbott Laboratories Management Incentive Plan (“MIP”) as of October 1,
1993, may elect to make a lump-sum contribution based on compensation earned
during the period of January 1, 1993 through September 30, 1993 (the “Make-Up
Period”) by filing an election with the Administrator and tendering payment in
cash to such Grantor Trust of the amount of the contribution, not later than October 31,
1993.  Any such contribution shall not
exceed the maximum contribution allowed under subsection 3.3 based on the
employee’s Stock Plan contributions made, and compensation earned, during the
Make-Up Period.


 


5-5.          GRANTOR TRUST ELECTION.  As part of the annual elections described in
subsection 5.1, each participant may also elect to have his pre-tax and
employer contributions for such year deposited in a “Grantor Trust” established
by the participant under the circumstances and on the terms described in subsection 6.1.  Any such election shall be irrevocable and
shall apply to all pre-tax contributions made during, and employer
contributions made for, such calendar year on behalf of such participant.  If the participant fails to make an election
under this subsection 5.5, the participant’s pre-tax contributions made
during, and employer contribution made for, such calendar year shall be
retained by Abbott and shall not be deposited in a Grantor Trust in the future.


 


SECTION 6

FUNDING EMPLOYER AND EMPLOYEE CONTRIBUTIONS


 


6-1.          CONTRIBUTIONS TO BE DEPOSITED IN GRANTOR TRUSTS.  Each participant’s pre-tax contributions and
employer contributions which the participant has filed an election under subsection 5.5
shall be retained by Abbott and credited to a Grantor Trust Account established
under subsection 7.1.  As soon as
practicable after the date the value of the participant’s Grantor Trust Account
exceeds Fifty Thousand Dollars ($50,000), the entire value of such account,
less the approximate aggregate federal, state and local individual income taxes
(determined under subsection 8.5) attributable to the Grantor Trust
Account, shall be deposited in a “Grantor Trust” established by the
participant, provided such trust is in a form which the Committee determines is
substantially similar to the trust attached to this Plan as Exhibit A.  The appropriate aggregate federal, state and
local individual income taxes attributable to the Grantor Trust Account shall
be paid directly to the participant.


 


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6-2.          CONTRIBUTIONS TO BE RETAINED BY ABBOTT.  Each participant’s pre-tax contributions and
employer contributions for which the participant has not filed an election
under subsection 5.5 shall be retained by Abbott and credited to a
Deferred Account established under subsection 7.1.


 


6-3.          AFTER ESTABLISHMENT OF GRANTOR TRUST.  After a Grantor Trust has been established by
a participant under subsection 6.1, all pre-tax contributions and employer
contributions made thereafter for which the participant has filed an election
under subsection 5.5, shall be deposited in such Grantor Trust (less the
approximate aggregate federal, state and local individual income taxes
(determined under subsection 8.5) attributable to such contributions).
Such deposits shall be made as soon as practicable after the last complete
payroll period of the calendar quarter in which the contributions are made.


 


6-4.          FUNDING SPECIAL CONTRIBUTION FOR 1993.  The full amount of any contribution made by a
participant under subsection 5.4 shall be deposited in the participant’s
Grantor Trust established under subsection 5.1 of the MIP.  Such participant’s Trust Account established
under subsection 5.2 of the MIP shall be credited with the sum of (a) the
amount of such contribution, plus (b) the amount of the approximate
aggregate federal, state and local individual income taxes (determined under
subsection 6.7 of the MIP) attributable to the sum of paragraph (a) and
(b) of this subsection 6.4. 
Thereafter, such contribution shall be treated for all purposes of the
MIP as if it were an allocation paid under subsection 5.1 (b) of the
MIP.


 


6-5.          ELIMINATION OF GRANTOR TRUST FUNDING THRESHOLD.  Notwithstanding anything contained in the
Plan to the contrary, effective as of January 1, 2005, (a) with
respect to each participant who makes or has made a Grantor Trust election
pursuant to subsection 5-5 of the Plan, the Grantor Trust funding
threshold referenced in subsection 6-1 of the Plan shall no longer be
applied or have any force or effect and  (b) the
Grantor Trust established by the participant shall be funded in accordance with
the requirements of Section 409A of the Internal Revenue Code of 1986, as
amended.


 


6-6.          UTILIZATION OF TRANSITION RELIEF UNDER SECTION 409A
OF THE CODE.  Notwithstanding anything
contained in the Plan to the contrary, pursuant to Q&A-20 of Internal
Revenue Service Notice 2005-1 (the “Notice”), Abbott shall cause the amount of
all pre-tax and employer contributions and all associated earnings, including
guaranteed rate payments, for the periods ended on or prior to December 31,
2005 for each participant who has made a Grantor Trust election under subsection 5-5,
to the extent not previously contributed to a Grantor Trust established by the
participant, to be deposited in such Grantor Trust on or prior to December 31,
2005.  Such contribution is intended to
result in a partial termination of participation in the Plan as permitted by
the Notice.  Each participant who has
established a Grantor Trust and who receives such contribution shall include
the full amount of such Grantor Trust contribution in the participant’s income
in 2005.


 


SECTION 7

ACCOUNTING


 


7-1.          SEPARATE ACCOUNTS. 
The Committee shall maintain two separate Accounts, a “Deferred Account”
and a “Trust Account” in the name of each participant.  The Deferred Account shall be comprised of
any pre-tax contributions made on behalf of the 


 


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participant under subsection 3.1 and any
employer contributions made on behalf of the participant under Section 4,
for which the participant has not made an election under subsection 5.5,
and any adjustments made pursuant to subsection 7.2.  The “Trust Account” shall be comprised of any
pre-tax contributions made on behalf of the participant under subsection 3.1
and any employer contributions made on behalf of the participant under Section 4,
for which the participant has made an election under subsection 5.5, and
any adjustments made pursuant to subsection 7.3.


 


7-2.          ADJUSTMENT OF DEFERRED ACCOUNTS.  As of the end of each calendar year, the
Administrator shall adjust each participant’s Deferred Account as follows:


 


(a)           FIRST, charge an amount equal to any payments made to
the participant during that year pursuant to subsections 7.9 or 7.10;


 


(b)           NEXT, credit an amount equal to any pre-tax
contributions and employer contributions made on behalf of such participant for
that year for which the participant has not made an election under subsection 5.5;
and


 


(c)           FINALLY, credit an amount equal to the Interest
Accrual earned for that year pursuant to subsection 7.4.


 


7-3.          ADJUSTMENT OF TRUST ACCOUNTS.  As of the end of each calendar year, the
Administrator shall adjust each participant’s Trust Account as follows:


 


(a)           FIRST, charge an amount equal to the product of:  (i) any payments made to the participant
during that year from the participant’s Grantor Trust (other than distributions
of trust earnings in excess of the Net Interest Accrual authorized by the
administrator of the trust to provide for the Tax Gross Up under subsection 8.4);
multiplied by (ii) a fraction, the numerator of which is the balance in
the participant’s Trust Account as of the end of the prior calendar year and
the denominator of which is the balance of the participant’s Grantor Trust (as
determined by the administrator of the trust) as of that same date;


 


(b)           NEXT, credit an amount equal to any pre-tax
contributions and employer contributions made on behalf of the participant for
that year for which the participant has made an election under subsection 5.5;


 


(c)           FINALLY, credit an amount equal to the Interest
Accrual earned for that year pursuant to subsection 7.4.


 


7-4.          INTEREST ACCRUALS ON ACCOUNTS.  As of the end of each calendar year, a
participant’s Deferred Account and Trust Account shall be credited with
interest equal to:  (a) the average
of the prime rates of interest charged by the two largest banks located in the
City of Chicago on loans made by them as of January 1 and the end of each
month of the calendar year plus (b) two hundred twenty-five (225) basis
points. Such interest shall be credited on the conditions established by the
Committee.


 


7-5.          GUARANTEED RATE PAYMENTS.  In addition to any employer contribution made
on behalf of a participant for any calendar year pursuant to section 4,
Abbott shall also 


 


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make a payment to a participant’s Grantor
Trust (a “Guaranteed Rate Payment”) for any year in which the net earnings of
such trust do not equal or exceed the participant’s Net Interest Accrual for
that year.  A participant’s “Net Interest
Accrual” for a year is an amount equal to: 
(a) the Interest Accrual credited to the participant’s Trust
Account for that year; less (b) the product of (i) the amount of such
Interest Accrual, multiplied by (ii) the aggregate of the federal, state
and local individual income tax rates (determined in accordance with subsection 8.5).
The Guaranteed Rate Payment shall equal the difference between the participant’s
Net Interest Accrual and the net earnings of the participant’s Grantor Trust
for the year, and shall be paid within 90 days of the end of the calendar year.


 


7-6.          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 7.6, 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.  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).  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 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:


 


(i)    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


 


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


 


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7-7.          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 section shall
not be construed as restricting in any way a designation right granted to a
beneficiary pursuant to the terms of subsection 7.6.  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.


 


7-8.          PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS.  Any employer contribution made on behalf of a
participant in the Plan and any interest credited thereto (and to other
contributions) will be paid by the employer (or such employer’s successor) by
whom the participant was employed during the calendar 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 calendar 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 compensation paid by each
of them in that calendar year.


 


7-9.          MANNER OF PAYMENT. 
Subject to subsection 7.10, a participant shall elect the timing
and manner of payment of each portion of his Deferred Account attributable to
contributions made for any calendar year, at the time of his election for such
calendar year under subsection 5.1. 
Notwithstanding subsection 5.2, any election made under this subsection 7.10
shall be irrevocable as to that portion of the Deferred Account to which the
election relates.  The participant may
select a payment method from any of the following alternatives:


 


(a)           Payment in a lump-sum as soon as practicable following
the participant’s retirement or other termination of employment; or


 


(b)           Payment under any method allowed by the Committee for
deferred accounts under the MIP.


 


7-10.        PAYMENT UPON TERMINATION FOLLOWING CHANGE IN CONTROL.
Notwithstanding any other provisions of the Plan, if employment of any participant
with Abbott and its subsidiaries should terminate for any reason within five (5) years
after the date of a Change in Control, the aggregate unpaid balance of the
participant’s Deferred Account and Trust Account, shall be paid to the
participant in a lump sum within thirty (30) days following the date of such
termination.


 


7-11.        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 


 


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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 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 


 


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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 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.


 


7-12.        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 in the securities
beneficially owned by such Person any securities 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 


 


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resolution
providing for the existence of a Potential Change in Control have expired or no
longer exist.


 


7-13.        PROHIBITION AGAINST AMENDMENT.  The provisions of subsections 7.10, 7.11,
7.12 and this subsection 7.13 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.


 


SECTION 8

MISCELLANEOUS


 


8-1.          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.


 


8-2.          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 defer making payment of any
amount with respect to which any such tax question may be pending unless and
until indemnified to its satisfaction.


 


8-3.          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 and Trust
Accounts established pursuant to subsection 7.1 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 Committee which is
within his sole and uncontrolled discretion, shall be conclusive and binding
upon all persons whomsoever.


 


8-4.          TAX GROSS UP. 
In addition to the employer contribution provided under Section 4,
each participant (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 there is a balance in his Trust Account.  The “Tax Gross Up” shall approximate:  (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 taxable income of the income of the participant’s Grantor
Trust and any Guaranteed Rate Payment for that year; less (b) any
distribution to the participant (or beneficiary) of his Grantor Trust’s net earnings
for that year; plus (c) 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 taxable income of any payment made pursuant
to this subsection 8.4.  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.


 


8-5.          INCOME TAX ASSUMPTIONS.  For purposes of Sections 7 and 8, a
participant’s federal income tax rate shall be deemed to be the highest
marginal rate of federal 


 


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individual income 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.


 


8-6.          GENDER.  For
purposes of the Plan, words in the masculine gender shall include the feminine
and neuter genders, the singular shall include the plural and the plural shall
include the singular.


 


8-7.          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.


 


8-8.          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.


 


SECTION 9

AMENDMENT, TERMINATION AND CHANGE OF

CONDITIONS RELATING TO PAYMENTS


 


The Plan will be effective from its effective
date until terminated by the Board of Directors.  The Board of Directors reserves the right to
amend the Plan from time to time and to terminate the Plan at any time. 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.


 


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EXHIBIT A


 


IRREVOCABLE
GRANTOR TRUST AGREEMENT


 


THIS
AGREEMENT, made this           day
of                 ,     ,
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 Abbott Laboratories 40l(k) Supplemental 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 “                     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.         DEFERRED ACCOUNT. 
The administrator shall maintain a “deferred account” under the trust.
As of the end of each calendar year, the administrator shall charge the
deferred account with all distributions made from such account during that
year; and credit such account with income and realized gains and charge such
account with expenses and realized losses for the year.


 





















 


II-2.         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, either in a lump-sum payable as soon as
practicable following the settlement date, or 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 Abbott Laboratories 401(k) Supplemental Plan, compounded annually;
and (ii) the net earnings credited to the deferred account for the
preceding year.


 


Notwithstanding
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, may select either the lump-sum or an installment
payment method and, if an installment method is selected, 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-2 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-2, and the trustee shall be fully protected in relying on such information
received from the administrator.


 


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II-3.         DISTRIBUTIONS 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 thereof 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-3
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-4.         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-5.         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.


 


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(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 considers necessary for its protection.


 


4





















 


(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.


 


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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 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).


 


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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

  	
   

  	
   

  



 


7