Document:

Exhibit 4.1

 

ABBOTT LABORATORIES

 

DEFERRED COMPENSATION PLAN

 

ARTICLE I

 

Introduction

 

Section 1.1             Purpose. 
The Plan is designed to assist the Employers in attracting and retaining
key employees by providing those employees with the opportunity to defer the
receipt of a portion of their compensation and to have that deferred
compensation treated as if it were invested pending its distribution by the
Plan.

 

Section 1.2             ERISA. 
The Plan is intended to be exempt from Parts 2, 3, and 4 of Title I of
ERISA and, therefore, participation in the Plan is limited to a select group of
management and highly compensated employees, within the meaning of Sections
201(2), 301(a)3 and 401(a)(1) of ERISA.

 

Section 1.3             Employers.

 

(a)           After the Effective Date, any Subsidiary of the
Company that is not then an Employer may adopt the Plan with the Company’s
consent as described in Section 13.12.

 

(b)           Each Employer shall be liable to the Company for an
amount equal to the Plan benefits earned by its Eligible Employees.  Where an Eligible Employee has been employed
by more than one Employer, the Plan Administrator shall allocate the liability
to the Company associated with that Eligible Employee’s Plan benefits among his
or her Employers.  The Plan Administrator
shall establish procedures for determining the time at which and manner in
which the Employers shall pay this liability to the Company.

 

Section 1.4             Grandfathered Amounts. 
Notwithstanding anything in this Plan to the contrary, any amounts under
this Plan that were earned and vested before January 1, 2005 (as
determined in accordance with Code Section 409A) (“Grandfathered Amounts”)
shall be subject to the terms and conditions of the Plan as administered and as
in effect on October 3, 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
Appendix A attached hereto.

 

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Section 1.5             Effective Date. 
The Plan has been amended and restated, effective as of January 1,
2008 (the “Effective Date”).

 

ARTICLE II

 

Definitions

 

When used in this Plan, unless
the context clearly requires a different meaning, the following words and terms
shall have the meanings set forth below. 
Whenever appropriate, words used in the singular shall be deemed to
include the plural, and vice versa,
and the masculine gender shall be deemed to include the feminine gender.

 

Section 2.1             Account. 
“Account(s)” means the account(s) established for record keeping
purposes for each Participant pursuant to Article VI.

 

Section 2.2             Base Compensation. 
“Base Compensation” means the Participant’s total compensation earned in
a Plan Year for personal service actually rendered to an Employer, including
sales bonuses, sales incentives and sales commissions (excluding Eligible
Bonuses, all other bonuses, commissions, relocation expenses, reimbursements,
expense allowances, fringe benefits (cash or noncash), welfare benefits
(whether or not those amounts are includible in gross income) and other
non-regular forms of compensation) before deductions for (i) Deferral
Elections made pursuant to Section 4.1
or (ii) contributions made on the Participant’s behalf to any Employer 401(k) Plan
or to any cafeteria plan under Section 125 of the Internal Revenue Code of
1986, as amended (the “Code”) maintained by an Employer.

 

Section 2.3             Beneficiary. 
“Beneficiary” means the person, persons or entity designated by the
Participant to receive any benefits payable under the Plan pursuant to Article IX.

 

Section 2.4             Board of Review. 
“Board of Review” means the Abbott Laboratories Employee Benefit Board
of Review appointed and acting under the Abbott Laboratories Annuity Retirement
Plan and having the powers and duties described in this Plan.

 

Section 2.5             Company. 
“Company” means Abbott Laboratories, its successors, any organization
into which or with which Abbott Laboratories may merge or consolidate or to
which all or substantially all of its assets may be transferred.

 

Section 2.6             Deferral Election. 
“Deferral Election” means an election under the Plan by a Participant to
defer the receipt of a portion of his or her Eligible Compensation made on a
Deferral Election Form.

 

Section 2.7             Deferral Election Form. 
“Deferral Election Form” means the form provided to the Participant by
the Plan pursuant to Section 4.1
on which the Participant makes his or her Deferral Election.

 

Section 2.8             Deferral Account. 
“Deferral Account(s)” means the account(s) established for record
keeping purposes for each Participant’s Deferral Election pursuant to Section 6.1.

 

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Section 2.9             Disability. 
The date of “Disability” of a Participant means that, the date on which
the Participant is, by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be expected to last
for a continuous period of not less than twelve months, eligible to receive
income replacement benefits under the terms of the Abbott Laboratories Extended
Disability Plan (“EDP”) or, for a Participant whose Employer does not
participate in the EDP, such similar accident and health plan, providing income
replacement benefits, in which his or her Employer participates, for a period
of six months.

 

Section 2.10           Distribution Election. 
“Distribution Election” is defined in Section 4.3(a).

 

Section 2.11           Distribution Election Form. 
“Distribution Election Form” means the form provided to the Participant
by the Plan pursuant to Section 4.3
on which the Participant specifies the time at which the amounts credited to
one of the Participant’s Account(s) are to be distributed and their method
of payment.

 

Section 2.12           Effective Date. 
“Effective Date” is defined in Section 1.5.

 

Section 2.13           Eligibility Date. 
“Eligibility Date” is defined in Section 3.1(b).

 

Section 2.13           Eligible Bonus. 
“Eligible Bonus” means an annual cash incentive bonus for a Plan Year
that the Plan Administrator, or its delegate, has designated as being eligible
for deferral under the Plan.  As of the
Effective Date, cash bonuses paid under the Abbott Laboratories Cash Profit
Sharing Plan or any Employer’s annual incentive bonus plan with a performance
period commencing on January 1 and ending on December 31 of the
applicable Plan Year are eligible for deferral under the Plan.

 

Section 2.14           Eligible Compensation. 
“Eligible Compensation” means the Participant’s Base Compensation and
Eligible Bonuses.

 

Section 2.15           Eligible Employee. 
“Eligible Employee” means any person employed by an Employer who is both

 

(i)            a United States employee or an
expatriate who is based and paid in the United States, and

 

(ii)           shown as having a grade level of 20
(or equivalent level of compensation if on a different pay grade system) or
higher on his or her Employer’s Human Resource System

 

and who is not (a) both an
officer of the Company and eligible to participate in the Abbott Laboratories
401(k) Supplemental Plan, except as contemplated by Section 3.1
hereof for the Plan Year in which the person is first named an officer, (b) an
individual who provides services to an Employer under a contract, arrangement
or understanding with either the individual directly or with an agency or
leasing organization that treats the individual as either an independent
contractor or an employee of such agency or leasing organization, even if such
individual is subsequently determined (by an Employer, the Internal Revenue
Service, any other governmental agency, judicial action, or otherwise) to have
been a common law employee of an 

 

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Employer rather than an
independent contractor or employee of such agency or leasing organization, or (c) any
Employee who is employed by an Employer located in Puerto Rico, other than any
person designated as a “U.S. Expatriate” on the records of an Employer.

 

For all Plan purposes, an
individual shall be an “Eligible Employee” for any Plan Year only if during
that Plan Year an Employer treats that individual as its employee for purposes
of employment taxes and wage withholding for Federal income taxes, even if such
individual is subsequently determined (by an Employer, the Internal Revenue
Service, any other governmental agency, judicial action, or otherwise) to have
been a common law employee of an Employer in that Plan Year.

 

Section 2.16           Employer. 
“Employer” shall mean the Company, the participating Employers on the
Effective Date, and any Subsidiary of the Company that subsequently adopts the
Plan in the manner provided in Section 13.12.

 

Section 2.17           Employer Contribution. 
“Employer Contribution” means the contribution deemed to have been made
by an Employer pursuant to Section 5.1.

 

Section 2.18           Employer Contribution Account. 
“Employer Contribution Account(s)” means the account(s) established
for record keeping purposes for each Participant’s Employer Contributions
pursuant to Section 6.1.

 

Section 2.19           Employer 401(k) Plan. 
“Employer 401(k) Plan” means any defined contribution retirement
plan that is maintained by an Employer, qualified under Code Section 401(a),
and includes a cash or deferred arrangement under Code Section 401(k).  The term shall specifically include, but not
be limited to, the Abbott Laboratories 401(k) Plan and the Abbott
Laboratories Stock Retirement Plan.

 

Section 2.20           ERISA. 
“ERISA” means the Employee Retirement Income Security Act of 1974, as
amended.

 

Section 2.21           Hardship Distribution. 
“Hardship Distribution” is defined in Section 8.5(a).

 

Section 2.22           In-Service Distribution. 
“In-Service Distribution” is defined in Section 4.3.

 

Section 2.23           Initial Election. 
“Initial Election” is defined in Section 4.3(a).

 

Section 2.24           Investment Election. 
“Investment Election” is defined in Section 4.2(a).

 

Section 2.25           Investment Election Form. 
“Investment Election Form” means the form provided to the Participant by
the Plan pursuant to Section 4.2
on which the Participant specifies the Investment Funds in which the
Participant’s Account(s) are to be deemed to be invested.

 

Section 2.26           Investment Fund(s). 
“Investment Fund(s)” means one or more of the funds selected by the Plan
Administrator pursuant to Section 4.2.

 

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Section 2.27           Investment Fund Subaccounts. 
“Investment Fund Subaccounts” is defined in Section 6.1(b).

 

Section 2.28           Matching DCP Deferral. 
“Matching DCP Deferral” for a Participant for a Plan Year is an amount
equal to the total dollar amount of the Participant’s deferrals for the Plan
Year pursuant to Employee Deferral Elections under Section 4.1(b), but in
no event shall a Participant’s Matching DCP Deferral for a Plan Year exceed the
amount by which (a) the Participant’s Base Compensation for the Plan Year
up to the limit on compensation as defined in Code Section 401(a)(17)
exceeds (b) the Participant’s Base Compensation for the Plan Year less the
total dollar amount deferred pursuant to Employee Deferral Elections under Section 4.1(b) for
the Plan Year.

 

Section 2.29           Participant. 
“Participant” means any Eligible Employee who elects to participate in
this Plan by filing a Deferral Election, Investment Fund Election, and
Distribution Election as provided in Article IV.

 

Section 2.30           Plan. 
“Plan” means the Abbott Laboratories Deferred Compensation Plan.

 

Section 2.31           Plan Administrator. 
“Plan Administrator” means the Board of Review.

 

Section 2.32           Plan Year. 
“Plan Year” means a twelve-month period beginning January 1 and
ending the following December 31.

 

Section 2.33           Rate of Return. 
“Rate of Return” means, for each Investment Fund, an amount equal to the
net gain or net loss (expressed as a percentage) on the assets of that
Investment Fund.

 

Section 2.34           Retirement. 
“Retirement” means a Termination of Employment after having satisfied
the age and service requirements of Subsection (a) or (b) below, as
applicable:

 

(a)           With respect to Participants covered by the Abbott
Laboratories Annuity Retirement Plan:

 

(i)            for the Participant hired before
2004, the date on which the Participant attains age 50 and completes 10 years
of “vesting service” (as such term is described in the Abbott Laboratories
Annuity Retirement Plan); or

 

(ii)           for the Participant hired after
2003, the date on which the Participant attains age 55 and completes 10 years
of vesting service.

 

(b)           With respect to Participants covered by the Abbott
Laboratories Pension Plan for Former BASF Employees, the date on which the
Participant attains age 55 and completes 5 years of vesting service (as such
term is described in the Abbott Laboratories Pension Plan for Former BASF
Employees).

 

Section 2.35           Subsequent Election. 
“Subsequent Election” is defined in Section 4.2(a).

 

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Section 2.36           Subsidiary. 
“Subsidiary” shall mean any corporation, limited liability company,
partnership, joint venture, or business trust organized in the United States 50
percent or more of the voting stock of which is owned, directly or indirectly,
by the Company.

 

Section 2.37           Termination of Employment. 
“Termination of Employment” means the cessation of a Participant’s
services as an employee, whether voluntary or involuntary, for any reason other
than death; provided, that the Participant shall not be considered to have
terminated employment for purposes of the Plan until he or she would be
considered to have incurred a “separation from service” from the Employer
within the meaning of Code Section 409A.

 

Section 2.37           Unforeseeable Emergency. 
“Unforeseeable Emergency” means a severe financial hardship to the
Participant resulting from an illness or accident of the Participant, the
Participant’s spouse or a dependent of the Participant, loss of the Participant’s
property due to casualty (including the need to rebuild a home following damage
to a home not otherwise covered by insurance, for example, not as a result of a
natural disaster), or other similar extraordinary and unforeseeable
circumstances arising as a result of events beyond the control of the
Participant as determined by the Plan Administrator.

 

ARTICLE III

 

Participation

 

Section 3.1             Participation.

 

(a)           Except as provided in Sections 3.1(b) and (c), an Eligible Employee may become
a Participant by making a Deferral Election, Investment Fund Election, and
Distribution Election pursuant to Article IV
on or before the deadline set by the Plan Administrator pursuant to Section 4.4.

 

(b)           A newly hired individual who is an Eligible Employee
shall become eligible to participate in the Plan on the first day of the month
next following the month after the individual’s date of hire (the “Eligibility
Date”); provided, that in no event shall such individual begin to participate
in the plan later than 90 days following his or her date of hire.  Notwithstanding the election requirements of Section 3.1(a),
a newly Eligible Employee 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 a Deferral Election, Investment Fund Election and Distribution Election
pursuant to Article IV within the thirty
(30) day period immediately following the Eligibility Date.  Any such election shall become effective for
Eligible Compensation earned no earlier than the first payroll period
commencing after receipt of the election by the Plan Administrator and shall be
irrevocable for the remainder of the Plan Year.

 

(c)           An individual who becomes an Eligible Employee as a
result of a job promotion or transfer may only make a Deferral Election,
Investment Fund Election and Distribution Election pursuant to Article IV with respect to Eligible Compensation to be
earned in the Plan Year next following the year of such promotion or
transfer.  Any such election shall be
made in accordance with Article IV
and shall become effective for Eligible Compensation earned in the Plan Year
following the year in which the election is made.

 

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Section 3.2             Termination of Participation. 
A Participant who ceases to be an Eligible Employee due to a Termination
of Employment will remain a Participant but (i) may no longer make
Deferral Elections with respect to any Plan Year following the year of such
termination and (ii) all deferrals under the Plan shall cease as of the
date of the Participant’s Termination of Employment.  A Participant who ceases to be an Eligible
Employee due to a job promotion (or demotion) may no longer make Deferral
Elections with respect to any Plan Year following the year of such promotion or
demotion but the Participant’s Deferral Elections for the Plan Year in which
such promotion or demotion occurs shall remain irrevocable.  A Participant shall remain a Participant
until (i) his or her death or (ii) his or her Accounts have been
distributed.

 

ARTICLE IV

 

Election Forms

 

Section 4.1             Deferral Elections.

 

(a)           Participants shall make their Deferral Elections
annually on a form provided by the Plan Administrator (a “Deferral Election
Form”). Each Deferral Election shall apply to only a single Plan Year.

 

(b)           On his or her Deferral Election Form, the Participant
shall specify the amount (expressed as a percentage) of his or her Base
Compensation and the amount (also expressed as a percentage) of his or her
Eligible Bonuses that the Participant elects to defer for that Plan Year
together with such other information as the Plan Administrator may, in its sole
and absolute discretion, require.

 

(c)           For any Plan Year, a Participant may elect to defer:

 

(i)            between five percent (5%) and
seventy-five percent (75%) of his or her Base Compensation (in whole percentage
increments), and

 

(ii)           between five percent (5%) and one
hundred percent (100%) of his or her Eligible Bonus (in whole percentage
increments);

 

provided, however, that in no
event may a Participant elect to defer his or her Eligible Compensation to the
extent that his or her remaining compensation would be insufficient to satisfy
all applicable withholding taxes and contributions required under Employer
sponsored benefit plans in which the Participant participates.

 

(d)           A Participant may not revoke his or her Deferral
Election at any time after the deadline for making such Deferral Election set
by the Plan Administrator pursuant to Section 4.4.

 

Section 4.2             Investment Elections. 
The Plan Administrator shall, from time to time, make available investment
options (the “Investment Funds”) that serve as benchmark funds for the amounts
a Participant defers under the Plan.  A
Participant’s Plan deferrals shall not actually be invested in the Investment
Funds and the Participant shall not be considered a shareholder of any of the
Investment Funds he or she selects by virtue of participation in the Plan.  Instead, the Participant’s Plan deferrals
shall be considered invested in, and his or her Plan Account shall 

 

7

 

reflect such Investment Fund’s Rate of
Return. A Participant’s election of investments shall be subject to the
following rules:

 

(a)           Participants shall make their investment elections on
an Investment Election Form provided by the Plan Administrator (an “Investment
Election”).

 

(b)           The Investment Election Form completed by the
Participant shall apply only to the Eligible Compensation being deferred in a
single Plan Year and shall specify the Investment Funds in which the deferrals
for each such Plan Year are to be deemed to be invested, and the portion
(expressed in whole percentage increments) of the deferrals for such Plan Year
that are to be deemed to be invested in each such Investment Fund, and shall
continue in effect until revoked or changed as permitted by the Plan
Administrator.

 

Section 4.3             Distribution Elections.

 

(a)           Participants shall make their distribution elections
in accordance with the Distribution Election Form provided by the Plan
Administrator (a “Distribution Election”) as permitted or required by such
form.  Each Distribution Election (the “Initial
Election”) shall apply only to the Eligible Compensation being deferred in a
single Plan Year and must be made by the deadline set by the Plan Administrator
pursuant to Section 4.4, at which time
the Initial Election shall be irrevocable, subject to Section 4.3(c).

 

(b)           On the Distribution Election Form:

 

(i)            Mandatory Retirement Election. 
In all cases, the Participant shall select the method of payment from
among the methods of payment described in Section 8.3(a) to
apply in the event payment is made upon Retirement pursuant to this
Distribution Election in accordance with Sections 8.3 or 8.4
or upon Disability in accordance with Section 8.7.

 

(ii)           Optional In-Service Distribution Election. 
The Participant shall also have the option to elect that the Eligible
Compensation being deferred for that Plan Year shall be paid to the Participant
while he or she is still employed by an Employer (an “In-Service Distribution”).  If the Participant elects to receive an
In-Service Distribution of the Eligible Compensation being deferred, then the
Participant shall also select the year in which the payments are to be
made.  A Participant may not elect to receive
an In-Service Distribution in a Plan Year that is less than two (2) years
after the end of the Plan Year in which the Eligible Compensation is earned.

 

(c)           Notwithstanding anything to the contrary in Section 4.3, a Participant may change the form of
distribution or his or her Distribution Election (a “Subsequent Election”) to
the extent permitted by the Plan Administrator and Code Section 409A(a)(4)(C),
including the requirements that such Subsequent Election:

 

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(i)            shall not take effect until at least
12 months after the date on which the Subsequent Election is filed with the
Plan Administrator;

 

(ii)           shall result in the first
distribution subject to such Subsequent Election being made at least five years
after the date such distribution would otherwise have been paid pursuant to the
previous election; and

 

(iii)          shall be filed with the Plan
Administrator at least 12 months before the date the first scheduled
distribution is to be paid pursuant to the previous election.

 

Section 4.4             Deadline for Submitting Election
Forms.  The Plan Administrator may set a deadline or
deadlines for the receipt of the election forms required under the Plan;
provided, however, that, except as provided in Section 3.1(b),
such forms must be filed on or before the end of the year immediately preceding
the Plan Year for which it is to be effective.

 

ARTICLE V

 

Employer
Contributions

 

Section 5.1             Employer Contributions. 
Each Participant who makes a Deferral Election will be credited with an
Employer Contribution equal to 5% of the Participant’s Matching DCP
Deferral.  The Plan Administrator may,
however, in his or her discretion, otherwise set the amount of the Employer
Contribution, subject to and not in excess of applicable limits imposed by the
Internal Revenue Service.

 

Section 5.2             Allocation of Employer Contributions. 
A Participant’s Employer Contribution for a Plan Year shall be allocated
among the same Investment Funds and in the same proportion as the Participant
has elected for his or her deferrals for that Plan Year.

 

Section 5.3             Distribution of Employer
Contributions.  An Employer Contribution for a Plan Year
shall be distributed to the Participant according to the election made by the
Participant governing his or her deferrals for that same Plan Year.

 

ARTICLE VI

 

Maintenance
and Crediting of Accounts

 

Section 6.1             Maintenance of Accounts.

 

(a)           The Plan shall maintain a separate Account for each
Deferral Election (a “Deferral Account”) made by and each Employer Contribution
(an “Employer Contribution Account”) made for a Participant.  A Participant’s Accounts shall reflect the
Participant’s Investment Fund Elections and Distribution Elections made
pursuant to Article IV, any
Employer Contributions made on behalf of the Participant pursuant to Article V, adjustments to the Account
made pursuant to this Article VI,
and distributions made with respect to the Account pursuant to Article VIII.  The Accounts shall be used solely as a device
for the 

 

9

 

measurement and determination of the amounts
to be paid to the Participants pursuant to this Plan and shall not constitute
or be treated as a trust fund of any kind.

 

(b)           Each Account shall be divided into separate
subaccounts (“Investment Fund Subaccounts”), each of which corresponds to the
Investment Fund selected by the Participant pursuant to Section 4.2(b).

 

Section 6.2             Crediting of Accounts.

 

(a)           No later than five (5) business days following
the end of each pay period, the Plan shall credit each Participant’s Investment
Fund Subaccounts to reflect amounts deferred from the Participant’s Eligible
Compensation during that pay period and the Investment Fund Election made by
the Participant with respect to that Eligible Compensation.

 

(b)           At the end of each Plan Year, the Plan shall credit
each Participant’s Investment Fund Subaccounts to reflect any Employer
Contribution deemed to have been made on behalf of the Participant for that
Plan Year and the allocation of that contribution among the Investment Funds
pursuant to Section 4.2.

 

(c)           The Plan Administrator shall adjust each Investment
Fund Subaccount to reflect any transfers under the Plan to or from that
Investment Fund Subaccount, as of the end of each business day to reflect any
distributions under the Plan made with respect to that Investment Fund
Subaccount, and the Rate of Return on the related Investment Fund.

 

Section 6.3             Statement of Accounts. 
Each Participant shall be issued quarterly statements of his or her
Account(s) in such form as the Plan Administrator deems desirable, setting
forth the balance to the credit of such Participant in his or her Account(s) as
of the end of the most recently completed quarter.

 

ARTICLE VII

 

Vesting and
Forfeitures

 

Section 7.1             Deferral Accounts. 
A Participant’s Deferral Accounts shall be one hundred percent (100%)
vested and non-forfeitable at all times.

 

Section 7.2             Employer Contribution Account.

 

(a)           A Participant’s Employer Contribution Account shall
become one hundred percent (100%) vested and non-forfeitable when the matching
contributions made by the Participant’s Employer on behalf of the Participant
under the Employer 401(k) Plan in which the Participant participates
become one hundred percent (100%) vested and non-forfeitable.

 

(b)           If a Participant’s employment with the Employers
terminates (whether voluntarily or involuntarily) before the matching
contributions made by the Participant’s Employer on behalf of the Participant
under the Employer 401(k) Plan in which the Participant participates
become one hundred percent (100%) vested and non-forfeitable, then the
Participant shall forfeit his or her related Employer Contribution Account.

 

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ARTICLE VIII

 

Distribution
of Benefits

 

Section 8.1             Distribution of Benefits in the
Event of a Termination of Employment.  If a
Participant elects to receive his or her Plan benefits as an In-Service
Distribution, then in the event of that Participant’s Termination of Employment
(other than due to Retirement) prior to receiving that In-Service Distribution,
the Company shall pay that Participant’s Plan benefits in a lump-sum to the
Participant within 90 days following his or her Termination of Employment.  If a Participant elects to receive his or her
Plan benefits upon Retirement, then in the event of that Participant’s
Termination of Employment prior to the date the Participant attains eligibility
for Retirement, the Company shall pay that Participant’s Plan benefits in a
lump-sum to the Participant within 90 days following his or her Termination of
Employment.

 

Section 8.2             In-Service Distributions. 
Subject to the provisions of Section 8.6,
the Company shall pay In-Service Distributions in a lump-sum to the Participant
on the first business day in February of the year designated by the
Participant on his or her Distribution Election Form.

 

Section 8.3             Distribution of Benefits in the
Event of Retirement.

 

(a)           If, pursuant to Section 4.3,
a Participant has elected to receive his or her Plan benefits for a Plan Year
upon his or her Retirement, then the Company shall pay the Participant his or
her Plan benefits commencing on the first business day in February next
following the date of the Participant’s Retirement in any of the following
forms pursuant to the Participant’s Initial Election or Subsequent Election, as
applicable:

 

(i)            in substantially equal quarterly or
annual installments to the Participant over fifteen (15) years; or

 

(ii)           in substantially equal quarterly or
annual installments to the Participant over ten (10) years; or

 

(iii)          in substantially equal quarterly or
annual installments to the Participant over five (5) years; or

 

(iv)          in a lump-sum; or

 

(v)           if no such election is on file with
the Plan Administrator, in substantially equal quarterly installments to the
Participant over ten (10) years.

 

Quarterly installments shall be paid on the
first business day of each calendar quarter and annual installments shall be
paid on the first business day of each calendar year.

 

(b)           Notwithstanding the provisions of Section 8.3(a),
in the event that, as of the date of the Participant’s Retirement, the
Participant’s benefits under the Plan do not exceed, in the aggregate, $15,500,
the Participant’s benefits shall be paid to the Participant in a lump-sum.

 

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Section 8.4             Distribution of Benefits on the
Earlier to Occur of a Participant’s Retirement or a Specified Date.

 

If a Participant has elected to
receive his or her Plan benefits on a specified date pursuant to Section 4.3(b)(ii), if the Participant’s Retirement
occurs prior to such specified date,

 

(a)           For amounts deferred with respect to Plan Years
beginning prior to January 1, 2008, the Company shall pay the Participant
his or her Plan benefits in a lump sum on the first business day in February next
following the Participant’s Retirement; and

 

(b)           For amounts deferred with respect to Plan Years
beginning on or after January 1, 2008, the Company shall pay the
Participant his or her Plan benefits in accordance with Section 8.3(a),
subject to Section 8.3(b).

 

Section 8.5             Distributions Due to Unforeseeable
Emergency.

 

(a)           A Participant may receive the early payment of all or
part of the balance in his or her Account(s) in the event of an
Unforeseeable Emergency (a “Hardship Distribution”) subject to the following
restrictions:

 

(i)            The Participant has requested the
Hardship Distribution from the Plan Administrator on a form provided by or in
the format requested by the Plan Administrator;

 

(ii)           The Plan Administrator has
determined that an Unforeseeable Emergency has occurred;

 

(iii)          The Plan Administrator determines
the amount of the Hardship Distribution, which amount will be limited to the
amount reasonably necessary to satisfy the emergency need (including any
amounts necessary to pay any Federal, state, local or foreign income taxes or
penalties reasonably anticipated to result from the Hardship Distribution); and

 

(iv)          The Hardship Distribution shall be distributed
in a lump-sum within 30 days following determination by the Plan Administrator
of the amount of the Hardship Distribution.

 

(b)           The circumstances that would constitute a
Unforeseeable Emergency will depend on the facts and circumstances of each case,
but, in any case, a Hardship Distribution may not be made to the extent that
such hardship may be relieved through (i) reimbursement or compensation by
insurance or otherwise, (ii) liquidation of the Participant’s assets, to
the extent that liquidation of the Participant’s assets would not itself cause
severe financial hardship, or (iii) by cessation of deferrals under this
Plan in compliance with Code Section 409A.

 

Section 8.6             Distribution of Benefits in the
Event of Death.  In the event of a Participant’s death prior
to the complete distribution of his or her Accounts, the Company shall

 

12

 

distribute his or her total Plan benefits to
his or her Beneficiary in a lump sum within 90 days after the date of the
Participant’s death.

 

Section 8.7             Distribution of Benefits in the
Event of Disability.

 

In the event of a Participant’s
Disability, the Company shall pay the Participant his or her Plan benefits
commencing on the first business day in February next following the date
of the Participant’s Disability in the form set forth below:

 

(a)           For any Participant who has elected to receive his or
her Plan benefits upon Retirement, pursuant to the Participant’s Distribution
Election to receive his or her Plan benefits in one of the Retirement forms
permitted under Section 8.3(a), subject to Section 8.3(b).

 

(b)           For a Participant who has elected to receive his or
her Plan benefits as an In-Service Distribution, if the Participant’s
Disability occurs prior to the date specified in such Distribution Election:

 

(i)            For amounts deferred with respect to
Plan Years beginning on or subsequent to January 1, 2008, pursuant to the
Participant’s Distribution Election to receive his or her Plan benefits in one
of the Retirement forms permitted under Section 8.3(a),
subject to Section 8.3(b).

 

(ii)           For amounts deferred with respect to
all Plan Years beginning prior to January 1, 2008, pursuant to the
Participant’s Distribution Election to receive his or her Plan benefits in a
lump sum under Section 4.3(b)(ii).

 

Section 8.8             Postponing or Amending Distributions. 
A Participant may postpone a scheduled distribution or amend the form of
distribution specified in Section 8.2,
Section 8.3(a) or Section 8.4 only by making a Subsequent Election
pursuant to the terms of Section 4.3(c).

 

ARTICLE IX

 

Beneficiary
Designation

 

Section 9.1             Beneficiary Designation. 
Each Participant shall have the right, at any time, to designate any
person, persons or entity as his or her Beneficiary or Beneficiaries. A
Beneficiary designation shall be made, and may be amended, by the Participant
by filing a designation with the Plan Administrator, on such form and in
accordance with such procedures as the Plan Administrator may establish from
time to time.

 

Section 9.2             Failure to Designate a Beneficiary.  If a Participant or Beneficiary fails to
designate a Beneficiary as provided above, or if all designated Beneficiaries
predecease the Participant or his or her Beneficiary, then the Participant’s
Beneficiary shall be deemed to be, in the following order:

 

(i)            to the spouse of such person, if
any; or

 

13

 

(ii)           to the deceased person’s estate.

 

Section 9.3             Facility of Payment. 
When, in the Plan Administrator’s opinion, a Participant or Beneficiary
is under a legal disability or is incapacitated in any way so as to be unable
to manage his or her financial affairs, the Plan Administrator may make any
benefit payments to the Participant or Beneficiary’s legal representative, or
spouse, or the Plan Administrator may apply the payment for the benefit of the
Participant or Beneficiary in any way the Plan Administrator considers
advisable, in each case, without subjecting the Participant or Beneficiary to
accelerated taxation and/or tax penalties under Code Section 409A.

 

ARTICLE X

 

Administration
of Plan

 

Section 10.1           Plan Administrator. 
The Board of Review, or such person as the Board of Review shall
designate pursuant to Section 10.3,  shall serve as the Plan Administrator of
the Plan. The administration of the Plan shall be under the supervision of the
Plan Administrator. It shall be a principal duty of the Plan Administrator to
see that the Plan is carried out, in accordance with its terms, for the
exclusive benefit of persons entitled to participate in the Plan without
discrimination  among them.
Benefits under the Plan shall be paid only if the Plan Administrator decides,
in his or her discretion, that the applicant is entitled to them. The Plan
Administrator will have full power to administer the Plan in all of its
details, subject to applicable requirements of law. For this purpose, the Plan
Administrator’s powers will include but will not be limited to, the following
authority, in addition to all other powers provided by this Plan:

 

(i)            To make and enforce such rules and
regulations as it deems necessary or proper for the efficient administration of
the Plan, including the establishment of any claims procedures that may be
required by applicable provisions of law;

 

(ii)           To exercise discretion in
interpreting the Plan, any interpretation to be reviewed under the arbitrary
and capricious standard;

 

(iii)          To exercise discretion in deciding
all questions concerning the Plan and the eligibility of any person to
participate in the Plan; such decision to be reviewed under the arbitrary and
capricious standard;

 

(iv)          To appoint such agents, counsel,
accountants, consultants and other persons as may be required to assist in
administering the Plan;

 

(v)           To allocate and delegate its responsibilities
under the Plan and to designate other persons to carry out any of its
responsibilities under the Plan, any such allocations, delegation or
designation to be in writing;

 

14

 

(vi)          To determine the amount and type of
benefits to which any Participant or Beneficiary shall be entitled hereunder,
including the method and date for all valuations under the Plan;

 

(vii)         To receive from the Employers and
from Participants such information as shall be necessary for the proper
administration of the Plan or any of its programs;

 

(viii)        To maintain or cause to be
maintained all the necessary records for the administration of the Plan;

 

(ix)           To receive, review and keep on file
(as it deems convenient and proper) reports of benefit payments made by the
Plan;

 

(x)            To determine and allocate among the
Employers the liability to the Company associated with Plan benefits in
accordance with Section 1.3
and to determine the time at which and manner in which that liability shall be
paid to the Company;

 

(xi)           To make, or cause to be made,
equitable adjustments for any mistakes or errors made in the administration of
the Plan; and

 

(xii)          To do all other acts which the Plan
Administrator deems necessary or proper to accomplish and implement its
responsibilities under the Plan.

 

Section 10.2           Reliance on Tables, etc. 
In administering the Plan, the Plan Administrator will be entitled to
the extent permitted by law to rely conclusively on all tables, valuations,
certificates, opinions and reports which are furnished by, or in accordance
with the instructions of accountants, counsel, or other experts employed or
engaged by the Plan Administrator.

 

Section 10.3           Delegation. 
The Board of Review shall have the authority to appoint another
corporation or one or more other persons to serve as the Plan Administrator
hereunder, in which event such corporation or person (or persons) shall
exercise all of the powers, duties, responsibilities, and obligations of the
Plan Administrator hereunder.

 

Section 10.4           Operations. 
The day to day operation of the Plan will be handled by the person or
persons designated by the Plan Administrator.

 

Section 10.5           Uniform Rules. 
The Plan Administrator shall administer the Plan on a reasonable and
nondiscriminatory basis and shall apply uniform rules to all similarly
situated Participants.

 

Section 10.6           Plan Administrator’s Decisions Final. 
Any interpretation of the provisions of the Plan (including but not
limited to the provisions of any of its Programs) and any decision on any
matter within the discretion of the Plan Administrator made by the Plan
Administrator in good faith shall be binding on all persons. A misstatement or
other mistake of fact shall be corrected when it becomes known and the Plan Administrator
shall make such adjustment on 

 

15

 

account thereof as it considers equitable and
practicable. Neither the Plan Administrator nor any Employer shall be liable in
any manner for any determination of fact made in good faith.

 

ARTICLE XI

 

Claims for
Benefits

 

Section 11.1           Claims and Review Procedures. 
The Plan Administrator shall adopt procedures for the filing and review
of claims in accordance with Section 503 of ERISA.

 

ARTICLE XII

 

Amendment and
Termination of Plan

 

Section 12.1           Amendment. 
The Company may amend this Plan, in whole or in part, at any time
provided, however, that no amendment shall be effective to decrease the balance
in any Account as accrued at the time of such amendment. Any amendment which
would allow officers of the Company to participate in the Plan shall require
the approval of the Abbott Laboratories Board of Directors. Any amendment which
increases the total cost of the Plan to the Employers in excess of $250,000 in
each of the three full calendar years next following the date of the amendment
shall be approved by the Board of Review. 
The Senior Vice President, Human Resources of the Company shall approve
all other amendments to the Plan and the extension of the Plan to any division
or Subsidiary of the Company.

 

Section 12.2           Termination. 
The Board of Review may at any time terminate the Plan with respect to
future Deferral Elections.  The Board of
Review may also terminate and liquidate the Plan in its entirety; provided that
such termination and liquidation are consistent with the provisions of Code Section 409A.  Upon any such termination, the Company shall
pay to the Participant the benefits the Participant is entitled to receive
under the Plan, determined as of the termination date, in compliance with Code Section 409A.

 

ARTICLE XIII

 

Miscellaneous

 

Section 13.1           Unfunded Plan. 
This Plan is intended to be an unfunded plan maintained primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees, within the meaning of Sections 201, 301 and
401 of ERISA and therefore meant to be exempt from Parts 2, 3 and 4 of Title I
of ERISA.  All payments pursuant to the
Plan shall be made from the general funds of the Company and no special or
separate fund shall be established or other segregation of assets made to
assure payment. No Participant or other person shall have under any
circumstances any interest in any particular property or assets of the Company
as a result of participating in the Plan.

 

Section 13.2           Nonassignability. 
Except as specifically set forth in the Plan with respect to the
designation of Beneficiaries, neither a Participant nor any other person shall
have any right to commute, sell, assign, transfer, pledge, anticipate, mortgage
or otherwise encumber, transfer, hypothecate or convey in advance of actual
receipt the amounts, if any, payable hereunder, or 

 

16

 

any part thereof, which are, and all rights
to which are, expressly declared to be unassignable and non-transferable.  No part of the amounts payable shall, prior
to actual payment, be subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency.

 

Section 13.3           Validity and Severability. 
The invalidity or unenforceability of any provision of this Plan shall
not affect the validity or enforceability of any other provision of this Plan,
which shall remain in full force and effect, and any prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

 

Section 13.4           Governing Law. 
The validity, interpretation, construction and performance of this Plan
shall in all respects be governed by the laws of the State of Illinois, without
reference to principles of conflict of law, except to the extent preempted by
federal law.

 

Section 13.5           Employment Status. 
This Plan does not constitute a contract of employment or impose on the
Participant or the Company any obligation for the Participant to remain an
employee of the Company or change the status of the Participant’s employment or
the policies of the Company and its affiliates regarding termination of
employment.

 

Section 13.6           Underlying Incentive Plans and
Programs.  Nothing in this Plan shall prevent the
Company from modifying, amending or terminating the compensation or the
incentive plans and programs pursuant to which Eligible Bonuses or Eligible
Compensation are earned and which are deferred under this Plan.

 

Section 13.7           Successors of the Company. 
The rights and obligations of the Company under the Plan shall inure to
the benefit of, and shall be binding upon, the successors and assigns of the
Company.

 

Section 13.8           Waiver of Breach. 
The waiver by the Company of any breach of any provision of the Plan by
the Participant shall not operate or be construed as a waiver of any subsequent
breach by the Participant.

 

Section 13.9           Notice. 
Any notice or filing required or permitted to be given to the Company
under the Plan shall be sufficient if in writing and hand-delivered, or sent by
first class mail to the principal office of the Company, directed to the
attention of the Plan Administrator. Such notice shall be deemed given as of
the date of delivery, or, if delivery is made by mail, as of the date shown on
the postmark.

 

Section 13.10         Waiver of Notice. Any notice required under the Plan
may be waived by the person entitled to such notice.

 

Section 13.11         Evidence. 
Evidence required of anyone under the Plan may be by certificate,
affidavit, document or other information which the person acting on it
considers pertinent and reliable, and signed, made or presented by the proper
party or parties.

 

17

 

Section 13.12         Additional Employers. Subject to the consent of the
Board of Review, any Subsidiary of the Company may adopt the Plan by filing a
written instrument to that effect with the Company.

 

Section 13.13         Separation and Distribution
Agreement of 2004.  The provisions of this Section 13.13
shall apply to an Eligible Employee who is a Participant in the Plan and who
transfers from employment with the Company or an Employer to Hospira, Inc.
or to a subsidiary of Hospira, Inc. (collectively, the “Hospira Companies”)
as a result of the transactions contemplated by that certain Separation and
Distribution Agreement by and between Abbott Laboratories and Hospira, Inc.,
dated as of April 12, 2004
(the “Distribution Agreement”), and such transfer of employment is made in
accordance with and subject to the terms of the Employee Benefits Agreement as
described in the Distribution Agreement (each such transferred Participant
referred to herein as a “Transferred Hospira Participant”).

 

(a)           A Transferred Hospira Participant’s transfer of
employment to the Hospira Companies will not be considered as a termination of
employment as a result of Termination of Employment, Retirement or Disability
for purposes of determining eligibility for distributions under Article VII of the Plan.  Such Transferred Hospira Participant’s
termination of employment resulting from Termination of Employment, Retirement
or Disability shall occur only upon his or her subsequent termination of
employment from the Hospira Companies (and Termination of Employment,
Retirement and Disability with respect to such Transferred Hospira Participants
shall mean such events in relation to the Hospira Companies rather than in
relation to the Company and the Employers);

 

(b)           Following his or her transfer to employment with the
Hospira Companies, a Transferred Hospira Participant will remain a participant
but will not be eligible to make Deferral Elections.  A Transferred Hospira Participant shall
remain a Participant until (i) his or her death or (ii) his or her
Accounts have been distributed in accordance with the Plan and in accordance
with the Transferred Hospira Participant’s elections regarding the manner of
distribution of such Accounts.

 

Section 13.14         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, to the extent
required to avoid accelerated taxation and/or tax penalties under Code Section 409A
and applicable guidance issued thereunder, amounts that would otherwise be
payable pursuant to the Plan  during the
six-month period immediately following the Participant’s Termination of
Employment or Retirement shall instead be paid on the first business day after
the date that is six months following the Participant’s Termination of
Employment or Retirement (or upon the Participant’s death, if earlier), plus,
to the extent subject to a six-month delay, a return equal to the Rate of
Return that would be achieved if such amounts were invested in accordance with
the Participant’s Investment Elections under Section 4.2 from the
respective dates on which such amounts would otherwise have been paid until the
actual date of payment.

 

18

 

Appendix
A

 

ABBOTT LABORATORIES

 

DEFERRED COMPENSATION PLAN

 

ARTICLE 1

 

Introduction

 

Section 1.1                                    Purpose.  The Plan is designed to assist the Employers
in attracting and retaining key employees by providing those employees with the
opportunity to defer the receipt of a portion of their compensation and to have
that deferred compensation treated as if it were invested pending its
distribution by the Plan.

 

Section 1.2                                    ERISA.  The Plan is intended to be exempt from Parts
2, 3, and 4 of Title I of ERISA and, therefore, participation in the Plan is
limited to a select group of management and highly compensated employees,
within the meaning of Sections 201(2), 301(a)3 and 401(a)(l) of ERISA.

 

Section 1.3                                    Employers.

 

(a)                                  In addition to the Company, the
participating Employers on the Effective Date are Abbott Laboratories
International Company, Abbott International Ltd., TAP Pharmaceutical Products
Inc., TAP Pharmaceuticals Inc., Abbott Laboratories Inc., Murex Diagnostics, Inc.,
TAP Finance Inc., Perclose Inc., Abbott BioResearch Center, Inc., and
Knoll Pharmaceutical Corporation.

 

(b)                                 After the Effective Date, any other
Subsidiary of the Company may adopt the Plan with the Company’s consent as
described in Section 13.12.

 

(c)                                  Each Employer shall be liable to the
Company for an amount equal to the Plan benefits earned by its Eligible
Employees. Where an Eligible Employee has been employed by more than one
Employer, the Plan Administrator shall allocate the liability to the Company
associated with that Eligible Employee’s Plan benefits among his or her
Employers. The Plan Administrator shall establish procedures for determining
the time at which and manner in which the Employers shall pay this liability to
the Company.

 

Section 1.4                                    Effective Date.  The Plan’s “Effective Date” is January 1,
2002.

 

 

ARTICLE 2

 

Definitions

 

When used in this Plan, unless the context
clearly requires a different meaning, the following words and terms shall have
the meanings set forth below. Whenever appropriate, words used in the singular
shall be deemed to include the plural, and vice versa, and
the masculine gender shall be deemed to include the feminine gender.

 

Section 2.1                                    Account.  “Account(s)” means the account(s) established
for record keeping purposes for each Participant pursuant to Article 6.

 

Section 2.2                                    Base Salary.  “Base Salary” means the Participant’s annual
base rate of pay from an Employer (excluding Eligible Bonuses, all other
bonuses, commissions, relocation expenses, and other non-regular forms of
compensation) before deductions for (i) Deferral Elections made pursuant
to Section 4.1 or (ii) contributions
made on the Participant’s behalf to any Employer 401(k) Plan or to any
cafeteria plan under Section 125 of the Internal Revenue Code of 1986, as
amended (the “Code”) maintained by an Employer.

 

Section 2.3                                    Beneficiary.  “Beneficiary” means the person, persons or
entity designated by the Participant to receive any benefits payable under the
Plan pursuant to Article 9.

 

Section 2.4                                    Board of Review.
“Board of Review” means the Abbott Laboratories Employee Benefit Board of
Review appointed and acting under the Abbott Laboratories Annuity Retirement
Plan and having the powers and duties described in this Plan.

 

Section 2.5                                    Company.  “Company” means Abbott Laboratories, its successors,
any organization into which or with which Abbott Laboratories may merge or
consolidate or to which all or substantially all of its assets may be
transferred.

 

Section 2.6                                    Deferral
Election.  “Deferral Election” means
an election under the Plan by a Participant to defer the receipt of a portion
of his or her Eligible Compensation made on a Deferral Election Form.

 

Section 2.7                                    Deferral
Election Form.  “Deferral Election
Form” means the form provided to the Participant by the Plan pursuant to Section 4.1 on which the Participant makes his or her
Deferral Election.

 

Section 2.8                                    Deferral Account.  “Deferral Account(s)” means the account(s) established
for record keeping purposes for each Participant’s Deferral Election pursuant
to Section 6.1.

 

Section 2.9                                    Disability.  “Disability” means eligibility for disability
benefits under the terms of the Abbott Laboratories Extended Disability Plan (“EDP”)
or, for a Participant whose Employer does not participate in the EDP, such
similar plan, providing long term or extended disability benefits, in which his
or her Employer participates.

 

Section 2.10                              Distribution Election
Form.  “Distribution Election Form”
means the form provided to the Participant by the Plan pursuant to Section 4.3 on which the Participant specifies 

 

2

 

the time at
which the amounts credited to one of the Participant’s Account(s) are to
be distributed and their method of payment.

 

Section 2.11                              Early Distribution.
“Early Distribution” is defined in Section 8.5.

 

Section 2.12                              Eligible Bonus.  “Eligible Bonus” means an annual cash
incentive bonus for a Plan Year that the Plan Administrator, or its delegate,
has designated as being eligible for deferral under this Plan. As of the
Effective Date, cash bonuses paid under the following plans have been
designated as being eligible for deferral under the Plan: the Abbott
Laboratories Cash Profit Sharing Plan, the Abbott Laboratories Divisional
Incentive Plan, and the Abbott Laboratories Management Incentive Plan.

 

Section 2.13                              Eligible Compensation.  “Eligible Compensation” means the Participant’s
Base Salary and Eligible Bonuses.

 

Section 2.14                              Eligible Employee.  “Eligible Employee” means any person employed
by an Employer who is both

 

(i)                                     a
United States employee or an expatriate who is based and paid in the United
States, and

 

(ii)                                  shown
as having a grade level of 20 or higher on his or her Employer’s Human Resource
System

 

and who is not (i) an officer of the
Company, (ii) an individual who provides services to an Employer under a
contract, arrangement or understanding with either the individual directly or
with an agency or leasing organization that treats the individual as either an
independent contractor or an employee of such agency or leasing organization,
even if such individual is subsequently determined (by an Employer, the
Internal Revenue Service, any other governmental agency, judicial action, or
otherwise) to have been a common law employee of an Employer rather than an
independent contractor or employee of such agency or leasing organization, or (iii) any
Employee who is employed by an Employer located in Puerto Rico, other than any
person designated as a “U.S. Expatriate” on the records of an Employer.

 

For all Plan purposes, an individual shall be
an “Eligible Employee” for any Plan Year only if during that Plan Year an
Employer treats that individual as its employee for purposes of employment
taxes and wage withholding for Federal income taxes, even if such individual is
subsequently determined (by an Employer, the Internal Revenue Service, any
other governmental agency, judicial action, or otherwise) to have been a common
law employee of an Employer in that Plan Year.

 

Section 2.15                              Employer.  “Employer” shall mean the Company, the
participating Employers on the Effective Date, and any Subsidiary of the
Company that subsequently adopts the Plan in the manner provided in Section 13.12.

 

Section 2.16                              Employer Contribution.  “Employer Contribution” means the
contribution deemed to have been made by an Employer pursuant to Section 5.1.

 

3

 

Section 2.17                              Employer Contribution
Account.  “Employer Contribution
Account(s)” means the account(s) established for record keeping purposes
for each Participant’s Employer Contributions pursuant to Section 6.l.

 

Section 2.18                              Employer 401(k) Plan.  “Employer 401(k) Plan” means any defined
contribution retirement plan that is maintained by an Employer, qualified under
Section 401(a) of the Code, and includes a cash or deferred
arrangement under Code Section 401(k). The term shall specifically
include, but not be limited to, the Abbott Laboratories 401(k) Plan and
the Abbott Laboratories Stock Retirement Plan.

 

Section 2.19                              ERISA.  “ERISA” means the Employee Retirement Income
Security Act of 1974, as amended.

 

Section 2.20                              Hardship Distribution.  “Hardship Distribution” is defined in Section 8.4.

 

Section 2.21                              In-Service
Distribution.  “In-Service
Distribution” is defined in Section 4.3.

 

Section 2.22                              Investment Fund(s).  “Investment Fund(s)” means one or more of the
funds selected by the Plan Administrator pursuant to Section 4.2.

 

Section 2.23                              Investment Election
Form.  “Investment Election Form”
means the form provided to the Participant by the Plan pursuant to Section 4.2 on which the Participant specifies the
Investment Funds in which the Participant’s Account(s) are to be deemed to
be invested.

 

Section 2.24                              Participant.  “Participant” means any Eligible Employee who
elects to participate in this Plan by filing a Deferral Election, Investment
Fund Election, and Distribution Election as provided in Article 4.

 

Section 2.25                              Plan.  “Plan” means the Abbott Laboratories Deferred
Compensation Plan.

 

Section 2.26                              Plan Administrator.
“Plan Administrator” means the Board of Review.

 

Section 2.27                              Plan Year.  “Plan Year” means a twelve-month period
beginning January 1 and ending the following December 31.

 

Section 2.28                              Rate of Return.  “Rate of Return” means, for each Investment
Fund, an amount equal to the net gain or net loss (expressed as a percentage)
on the assets of that Investment Fund.

 

Section 2.29                              Retirement.  “Retirement” means the retirement of a
Participant from an Employer under the Abbott Laboratories Annuity Retirement
Plan or any other pension or defined benefit pension plan of the Company or an
Employer, including for this purpose the Abbott Laboratories Pension for Former
BASF Employees.

 

Section 2.30                              Subsidiary.  “Subsidiary” shall mean any corporation,
limited liability company, partnership, joint venture, or business trust
organized in the United States 50 percent or more of the voting stock of which
is owed, directly or indirectly, by the Company.

 

4

 

Section 2.31                              Termination of
Employment.  “Termination of Employment”
means the cessation of a Participant’s services as an employee of the Company,
whether voluntary or involuntary, for any reason other than Retirement,
Disability or death.

 

Section 2.32                              Unforeseeable
Emergency.  “Unforeseeable Emergency’’
means severe financial hardship to the Participant resulting from a sudden and
unexpected illness or accident of the Participant or a dependent of the
Participant, loss of the Participant’s property due to casualty, or other
similar extraordinary and unforeseeable circumstances arising as a result of
events beyond the control of the Participant as determined by the Plan
Administrator.

 

ARTICLE 3

 

Participation

 

Section 3.1                                    Participation.

 

(a)                                Except as provided in Sections 3.1(a) and (c),
an Eligible Employee may become a Participant by making a Deferral Election,
Investment Fund Election, and Distribution Election pursuant to Article 4 on or before the deadline set by the Plan
Administrator pursuant to Section 4.4.

 

(b)                               A newly Eligible Employee may become
a Participant by making a Deferral Election, Investment Fund Election, and
Distribution Election pursuant to Article 4
within thirty (30) days of his or her date of hire by an Employer and deferrals
shall commence as soon as practical thereafter. Notwithstanding the foregoing,
an individual who becomes a newly Eligible Employee as a result of a job
promotion or transfer may not begin to participate in the Plan until the Plan
Year next following such promotion or transfer.

 

(c)                                If a Participant revokes his or her
Deferral Election for a Plan Year pursuant to Section 4.l(d),
then that Participant may not make a Deferral Election for the following Plan
Year.

 

Section 3.2                                    Termination of
Participation.  Participant who
ceases to be an Eligible Employee will remain a Participant but may no longer
make Deferral Elections. A Participant shall remain a Participant until (i) his
or her death or (ii) his or her Accounts have been distributed.

 

ARTICLE 4

 

Election Forms

 

Section 4.1                                    Deferral
Elections.

 

(a)                                  Participants shall make their
Deferral Elections mutually on a form provided by the Plan Administrator (a “Defend
Election Form”). Each Deferral Election shall apply to only a single Plan Year.

 

5

 

(b)                                 On his or her Deferral Election
Form, the Participant shall specify the amount (expressed as a percentage) of
his or her Base Salary and the amount (also expressed as a percentage) of his
or her Eligible Bonuses that the Participant elects to defer for that Plan Year
together with such other information as the Plan Administrator may, in its sole
and absolute discretion, require.

 

(c)                                  For any Plan Year, a Participant may
elect to defer:

 

(i)                                       between five percent (5%) and
seventy-five percent (75%) of his or her Base Salary (in whole percentage
increments), and

 

(ii)                                between five percent (5%) and one
hundred percent (100%) of his or her Eligible Bonus (in whole percentage
increments);

 

provided, however, that in no event may a
Participant elect to defer his or her Eligible Compensation to the extent that
his or her remaining compensation would be insufficient to satisfy all
applicable withholding taxes and contributions required under Employer
sponsored benefit plans in which the Participant participates.

 

(d)                                 A Participant prospectively may
revoke his or her Deferral Election with respect to his or her Base Salary but
may not otherwise revoke or modify his or her Deferral Election. Any such
revocation shall be made on forms provided by the Plan. If a Participant
revokes his or her Deferral Election, then that Participant may not make a
Deferral Election during the immediately following Plan Year.

 

Section 4.2                                    Investment
Elections.  The Plan Administrator
shall, from time to time, make available investment options (the “Investment
Funds”) that serve as benchmark funds for the amounts a Participant defers
under the Plan. A Participant’s Plan deferrals shall not actually be invested
in the Investment Funds and the Participant shall not be considered a
shareholder of any of the Investment Funds he or she selects by virtue of
participation in the Plan. Instead, the Participant’s Plan deferrals shall be
considered invested in, and his or her Plan Account shall reflect such
Investment Fund’s Rate of Return.  A
Participant’s election of investments shall be subject to the following rules:

 

(a)                                  Participants shall make their
investment elections on an Investment Election Form provided by the Plan
Administrator (an “Investment Election”).

 

(b)                                 On his or her Investment Election
Form, the Participant shall specify the Accounts to which the Investment
Election applies, the Investment Funds in which those Account(s) are to be
deemed to be invested, and the portion (expressed in whole percentage
increments) of each Account that is to be deemed to be invested in each such
Investment Fund.

 

(c)                                  A Participant may change his or her
Investment Election no more often than once every thirty (30) days.

 

Section 4.3                                    Distribution
Elections.

 

6

 

(a)                                  Participants shall make their
distribution elections on a Distribution Election Form provided by the
Plan Administrator (a “Distribution Election”). Each Distribution Election
shall apply to only the Eligible Compensation being deferred in a single Plan
Year.

 

(b)                                 On the Distribution Election Form:

 

(i)                                   the Participant shall state whether
the Eligible Compensation being deferred for that Plan Year are to be paid to
the Participant while he or she is still employed by an Employer (an “In-Service
Distribution”) or upon the Participant’s Retirement or Disability.

 

(ii)                                If the Participant elects to receive
the Eligible Compensation being deferred upon his or her Retirement or
Disability, then the Participant shall also select the method of payment from
among the methods of payment described in Section 8.3(a).
An election to receive a distribution of the Eligible Compensation being
deferred upon Retirement or Disability will be irrevocable after the beginning
of the Plan Year to which the Deferral Election relates.

 

(iii)                             If the Participant elects to receive
an In-Service Distribution of the Eligible Compensation being deferred, then
the Participant shall also select the year in which the payments are to be
made. A Participant may not elect to receive an In-Service Distribution in a
Plan Year that is less than two (2) years after the end of the Plan Year
in which the Eligible Compensation is earned.

 

Section 4.4                                    Deadline for
Submitting Election Forms.  The Plan
Administrator may set a deadline or deadlines for the receipt of the election forms
required under the Plan; provided, however, that such forms must be filed on or
before the November 30 immediately preceding the Plan Year for which it is
to be effective; and provided further that the deadline for the first Plan Year
may be on or before December 31.

 

ARTICLE 5

 

Employer Contributions

 

Section 5.1                                    Employer
Contributions.  Each Participant who
makes a Deferral Election will be credited with an Employer Contribution using
the same formula for employer matching contributions used under the Employer
401(k) Plan in which that Participant participates. To receive an Employer
Contribution, the Participant must be contributing the maximum allowable amount
of pre-tax contributions to the Employer 401(k) Plan in which he or she
participates and it will be assumed that he or she is receiving an employer
matching contribution on his or her contribution. This assumed matching
contribution from the Employer 401(k) Plan will reduce and offset the
Employer Contribution calculated under provisions of this Plan. The Plan
Administrator may set the amount of the Employer Contribution and may, in its
sole and absolute discretion, base that amount on a formula that takes into
account a Participant’s overall compensation.

 

7

 

Section 5.2                                    Allocation of
Employer Contributions.  A
Participant’s Employer Contribution for a Plan Year shall be allocated among
the same Investment Funds and in the same proportion as the Participant has
elected for his or her Base Salary deferral for that Plan Year.

 

Section 5.3                                    Distribution of
Employee Contributions.  An Employer
Contribution for a Plan Year shall be distributed to the Participant according
to the election made by the Participant governing his or her Base Salary
deferrals for that same Plan Year.

 

ARTICLE 6

 

Maintenance and Crediting of Accounts

 

Section 6.1                                    Maintenance of
Accounts.

 

(a)                                  The Plan shall maintain a separate
Account for each Deferral Election (a “Deferral Account”) made by and each
Employer Contribution (an “Employer Contribution Account”) made for a
Participant. A Participant’s Accounts shall reflect the Participant’s
Investment Fund Elections and Distribution Elections made pursuant to Article 4, any Employer Contributions made on behalf of
the Participant pursuant to Article 5,
adjustments to the Account made pursuant to this Article 6,
and distributions made with respect to the Account pursuant to Article 8. The Accounts shall be used solely as a
device for the measurement and determination of the amounts to be paid to the
Participants pursuant to this Plan and shall not constitute or be treated as a
trust fund of any kind.

 

(b)                                 Each Account shall be divided into
separate subaccounts (“Investment Fund Subaccounts”), each of which corresponds
to the Investment Fund selected by the Participant pursuant to Section 4.2(b).

 

Section 6.2                                    Crediting of
Accounts.

 

(a)                                  No later than five (5) business
days following the end of each pay period, the Plan shall credit each
Participant’s Investment Fund Subaccounts to reflect amounts deferred from the
Participant’s Eligible Compensation during that pay period and the Investment
Fund Election made by the Participant with respect to that Eligible
Compensation.

 

(b)                                 No later than ten (10) business
days following the end of each fiscal quarter, the Plan shall credit each
Participant’s Investment Fund Subaccounts to reflect any Employer Contribution
deemed to have been made on behalf of the Participant for that fiscal quarter
and the allocation of that contribution among the Investment Funds pursuant to Section 8.3.

 

(c)                                  Each month, the Plan shall adjust
each Investment Fund Subaccount to reflect any transfers under the Plan to or
from that Investment Fund Subaccount, any distributions under the Plan made
with respect to that Investment Fund Subaccount, and the Rate of Return on the
related Investment Fund. The Plan shall, however, calculate the Rate of Return
for each Investment Fund Subaccount on each business day.

 

8

 

Section 6.3                                    Statement of
Accounts.  Each Participant shall be
issued quarterly statements of his or her Account(s) in such form as the
Plan Administrator deem desirable, setting forth the balance to the credit of
such Participant in his or her Account(s) as of the end of the most
recently completed quarter.

 

ARTICLE 7

 

Vesting and Forfeitures

 

Section 7.1                                    Deferral
Accounts.  A Participant’s Deferral
Accounts shall be one hundred percent (100%) vested and non-forfeitable at all
times.

 

Section 7.2                                    Employer
Contribution Account.

 

(a)                                  A Participant’s Employer
Contribution Account shall become one hundred percent (100%) vested and
non-forfeitable when the matching contributions made by the Participant’s
Employer on behalf of the Participant under the Employer 401(k) Plan in
which the Participant participates become one hundred percent (100%) vested and
non-forfeitable.

 

(b)                                 If a Participant’s employment with
the Employers terminates (whether voluntarily or involuntarily) before the
matching contributions made by the Participant’s Employer on behalf of the
Participant under the Employer 401(k) Plan in which the Participant
participates become one hundred percent (100%) vested and non-forfeitable, then
the Participant shall forfeit his or her related Employer Contribution Account.

 

ARTICLE 8

 

Distribution of Benefits

 

Section 8.1                                    Distribution of
Benefits in the Event of Termination of Employment.  If a Participant elects to receive his or her
Plan Benefits as an In-Service Distribution, then in the event of that
Participant’s Retirement or the termination of that Participant’s employment
with the Employers for any reason (whether or not voluntary) other than
Retirement or Disability prior to receiving that In-Service Distribution, the
Company shall pay that Participant’s Plan benefits in a lump-sum to the
Participant as soon as practical following his or her termination of
employment.

 

Section 8.2                                    In-Service
Distributions.  Subject to the
provisions of Section 8.6, the Company
shall pay In-Service Distributions in a lump-sum to the Participant on or about
February 1st of the year designated by the Participant on
his or her Distribution Election Form or as soon as practical thereafter.

 

Section 8.3                                    Distribution of
Benefits in the Event of Disability or Retirement.

 

(a)                                  If, pursuant to Section 4.3
a Participant has elected to receive his or her Plan benefits upon his or her
Disability or Retirement and if at the time of that Disability or Retirement
the Participant has more than a total of $25,000 to be distributed from his or
her Account using the same distribution method, then the Company shall pay the
Participant his or

 

9

 

her Plan benefits commencing as soon as practical after the Participant’s
Disability or Retirement in any of the following forms:

 

(i)                                     in substantially equal quarterly
installments to the Participant over fifteen (15) years; or

 

(ii)                                  in substantially equal quarterly
installments to the Participant over ten (10) years; or

 

(iii)                               in substantially equal quarterly
installments to the Participant over five (5) years; or

 

(iv)                              in a lump-sum; or

 

(v)                                 if no such election is on file with
the Plan Administrator, in the form specified in Section 8.3(a)(ii) hereof.

 

(b)           If
a Participant elects to receive his or her Plan benefits upon his or her
Disability or Retirement and if at the time of that Disability or Retirement
the Participant has $25,000 or less credited to his or her Account, then the
Participant (or in the event of the Participant’s death, the Participant’s
Beneficiary) shall receive, and the Company shall pay, the Participant’s Plan
benefits in a lump-sum as soon as practical after the Participant’s Disability
or Retirement.

 

(c)           In
the event of a Participant’s death, the Company shall pay his or her total
Account balance, including any unpaid installments, to his or her Beneficiary
in a lump sum as soon as practical after the Participant’s death.

 

Section 8.4             Hardship
Distributions.

 

(a)           A
Participant may receive the early payment of all or part of the balance in his
or her Account(s) in the event of an Unforeseeable Emergency (a “Hardship
Distribution”) subject to the following restrictions:

 

(i)                                     The Participant has requested the
Hardship Distribution from the Plan Administrator on a form provided by or in
the format requested by the Plan Administrator;

 

(ii)                                  The Plan Administrator has
determined that an Unforeseeable Emergency has occurred;

 

(iii)                               The Plan Administrator determines
the amount of the Hardship Distribution; and

 

(iv)                              The Hardship Distribution shall be
distributed in a lump-sum as soon as practical following the determination by
the Plan Administrator of the amount of the Hardship Distribution.

 

10

 

(b)           The
circumstances that would constitute a Unforeseeable Emergency will depend on
the facts and circumstances of each case, but, in any case, a Hardship
Distribution may not be made to the extent that such hardship may be relieved
through (i) reimbursement or compensation by insurance or otherwise, (ii) liquidation
of the Participant’s assets, to the extent that liquidation of the Participant’s
assets would not itself cause severe financial hardship, or (iii) by
cessation of deferrals under this Plan.

 

Section 8.5             Early
Distributions.  A Participant may
receive an early payment of all or a part of the balance in his or her Account(s) subject
to the following restrictions (“Early Distribution”):

 

(a)           The
Participant requests an Early Distribution of at least fifty percent (50%) of
the balance in his or her Account(s) on a form provided by or in the
format requested by the Plan Administrator;

 

(b)           The
Early Distribution shall be distributed in a lump-sum as soon as practical
following the Plan Administrator’s receipt of the Participant’s request in
accordance with the provisions of this Section 8.5;

 

(c)           If
the Participant receives an Early Distribution, then the Participant shall be
deemed to have revoked his or her Deferral Election for the Plan Year and may
not make a Deferral Election for the remainder of that Plan Year nor the
following Plan Year; and

 

(d)           A
Participant shall receive ninety percent (90%) of the amount of the Early
Distribution he or she requests and the remaining ten percent (10%) of such
amount shall be forfeited by the Participant.

 

Section 8.6             Postponing
or Amending Distributions.  A
Participant may postpone, no more than twice each Plan Year, a scheduled
In-Service Distribution to a date that is at least two (2) years after the
previously scheduled distribution date by filing a form provided by or in the
format requested by the Plan Administrator at least one year prior to the date
previously elected by the Participant for that In-Service Distribution. A
Participant may amend the method of distribution specified in Section 8.3(a) by filing a form provided by or in
the format requested by the Plan Administrator; provided, however, that in the
event of a Participant’s Retirement or Disability within one (1) year of
any such amendment, the amendment shall be voided and the most recent election
on file with the Administrator shall govern.

 

ARTICLE 9

 

Beneficiary Designation

 

Section 9.1             Beneficiary
Designation.  Each Participant shall
have the right, at any time, to designate any person, persons or entity as his
or her Beneficiary or Beneficiaries. A Beneficiary designation shall be made,
and may be amended, by the Participant by filing a written designation with the
Plan Administrator, on such form and in accordance with such procedures as the
Plan Administrator may establish from time to time.

 

11

 

Section 9.2             Failure
to Designate a Beneficiary.  If a
Participant or Beneficiary fails to designate a Beneficiary as provided above,
or if all designated Beneficiaries predecease the Participant or his or her
Beneficiary, then the Participant’s Beneficiary shall be deemed to be, in the
following order:

 

(i)                                     to the spouse of such person, if
any; or

 

(ii)                                  to the deceased person’s estate.

 

Section 9.3             Facility
of Payment.  When, in the Plan
Administrator’s opinion, a Participant or Beneficiary is under a legal
disability or is incapacitated in any way so as to be unable to manage his or
her financial affairs, the Plan Administrator may make any benefit payments to
the Participant or Beneficiary’s legal representative, or spouse, or the Plan
Administrator may apply the payment for the benefit of the Participant or
Beneficiary in any way the Plan Administrator considers advisable.

 

ARTICLE 10

 

Administration of Plan

 

Section 10.1           Plan
Administrator.  The Board of Review,
or such person as the Board of Review shall designate pursuant to Section 10.3, shall serve as the Plan Administrator of
the Plan. The administration of the Plan shall be under the supervision of the
Plan Administrator. It shall be a principal duty of the Plan Administrator to
see that the Plan is carried out, in accordance with its terms, for the
exclusive benefit of persons entitled to participate in the Plan without
discrimination among them. Benefits under the Plan shall be paid only if the
Plan Administrator decides, in his or her discretion, that the applicant is
entitled to them. The Plan Administrator will have full power to administer the
Plan in all of its details, subject to applicable requirements of law. For this
purpose, the Plan Administrator’s powers will include but will not be limited
to, the following authority, in addition to all other powers provided by this
Plan:

 

(i)                                     To make and enforce such rules and
regulations as it deems necessary or proper for the efficient administration of
the Plan, including the establishment of any claims procedures that may be
required by applicable provisions of law;

 

(ii)                                  To exercise discretion in
interpreting the Plan, any interpretation to be reviewed under the arbitrary
and capricious standard;

 

(iii)                               To exercise discretion in deciding
all questions concerning the Plan and the eligibility of any person to
participate in the Plan; such decision to be reviewed under the arbitrary and
capricious standard;

 

(iv)                              To appoint such agents, counsel,
accountants, consultants and other persons as may be required to assist in
administering the Plan;

 

12

 

(v)                                To allocate and delegate its
responsibilities under the Plan and to designate other persons to carry out any
of its responsibilities under the Plan, any such allocations, delegation or
designation to be in writing;

 

(vi)                             To determine the amount and type of
benefits to which any Participant or Beneficiary shall be entitled hereunder;

 

(vii)                          To receive from the Employers and
from Participants such information as shall be necessary for the proper
administration of the Plan or any of its programs;

 

(viii)                       To maintain or cause to be
maintained all the necessary records for the administration of the Plan;

 

(ix)                               To receive, review and keep on file
(as it deems convenient and proper) reports of benefit payments made by the
Plan;

 

(x)                                  To determine and allocate among the
Employers the liability to the Company associated with Plan benefits in
accordance with Section 1.3 and to determine
the time at which and manner in which that liability shall be paid to the
Company;

 

(xi)                               To make, or cause to be made,
equitable adjustments for any mistakes or errors made in the administration of
the Plan; and

 

(xii)                            To do all other acts which the Plan
Administrator deems necessary or proper to accomplish and implement its
responsibilities under the Plan.

 

Section 10.2           Reliance
on Tables, etc.  In administering the
Plan, the Plan Administrator will be entitled to the extent permitted by law to
rely exclusively on all tables, valuations, certificates, opinions and reports
which are furnished by, or in accordance with the instructions of accountants,
counsel, or other experts employed or engaged by the Plan Administrator.

 

Section 10.3           Delegation.  The Board of Review shall have the authority
to appoint another corporation or one or more other persons to serve as the
Plan Administrator hereunder, in which event such corporation or person (or
persons) shall exercise all of the powers, duties, responsibilities, and
obligations of the Plan Administrator hereunder.

 

Section 10.4           Operations.  The day to day operation of the Plan will be
handled by the Corporate Benefits Department of the Company or the person or
persons designated by the Plan Administrator.

 

Section 10.5           Uniform
Rules.  The Plan Administrator shall
administer the Plan on a reasonable and nondiscriminatory basis and shall apply
uniform rules to all similarly situated Participants.

 

13

 

Section 10.6           Plan
Administrator’s Decisions Final.  Any
interpretation of the provisions of the Plan (including but not limited to the
provisions of any of its Programs) and any decision on any matter within the
discretion of the Plan Administrator made by the Plan Administrator in good
faith shall be binding on all persons. A misstatement or other mistake of fact
shall be corrected when it becomes known and the Plan Administrator shall make
such adjustment on account thereof as it considers equitable and practicable.
Neither the Plan Administrator nor any Employer shall be liable in any manner
for any determination of fact made in good faith.

 

ARTICLE 11

 

Claims for Benefits

 

Section 11.1           Claims
and Review Procedure.  The Plan
Administrator shall adopt procedures for the filing and review of claims in
accordance with Section 503 of ERISA.

 

ARTICLE 12

 

Amendment and Termination of Plan

 

Section 12.1           Amendment.  The Company may amend this Plan, in whole or
in part, at any time provided, however, that no amendment shall be effective to
decrease the balance in any Account as accrued at the time of such amendment.
Any amendment which would allow officers of the Company to participate in the
Plan shall require the approval of the Abbott Laboratories Board of Directors.
Any amendment which increases the total cost of the Plan to the Employers in
excess of $250,000 in each of the three full calendar years next following the
date of the amendment shall be approved by the Board of Review. The Senior Vice
President, Human Resources of the Company shall approve all other amendments to
the Plan and the extension of the Plan to any division or Subsidiary of the
Company.

 

Section 12.2           Company’s
Right to Terminate.  The Board of
Review may at any time terminate the Plan with respect to future Deferral
Elections. The Board of Review may also terminate the Plan in its entirety at
any time for any reason, including without limitation if, in its judgment, the
continuance of the Plan, the tax, accounting, or other effects thereof, or
potential payments thereunder would not be in the best interests of the
Company, and upon any such termination, the Company shall pay to the Participant
the benefits the Participant is entitled to receive under the Plan as monthly
installments over a three (3) year period commencing within ninety (90)
days (determined as of the most recent Valuation Date preceding the termination
date).

 

ARTICLE 13

 

Miscellaneous

 

Section 13.1           Unfunded
Plan.  This Plan is intended to be an
unfunded plan maintained primarily for the purpose of providing deferred
compensation for a select group of management or highly compensated employees,
within the meaning of Sections 201, 301 and 401 of ERISA and therefore meant to
be exempt from Parts 2, 3 and 4 of Title I of ERISA. All payments

 

14

 

pursuant to
the Plan shall be made from the general funds of the Company and no special or
separate fund shall be established or other segregation of assets made to
assure payment. No Participant or other person shall have under any
circumstances any interest in any particular property or assets of the Company
as a result of participating in the Plan.

 

Section 13.2           Nonassignability.  Except as specifically set forth in the Plan
with respect to the designation of Beneficiaries, neither a Participant nor any
other person shall have any right to commute, sell, assign, transfer, pledge,
anticipate, mortgage or otherwise encumber, transfer, hypothecate or convey in
advance of actual receipt the amounts, if any, payable hereunder, or any part
thereof, which are, and all rights to which are, expressly declared to be
unassignable and nontransferable. No part of the amounts payable shall, prior
to actual payment, be subject to seizure or sequestration for the payment of
any debts, judgments, alimony or separate maintenance owed by a Participant or
any other person, nor be transferable by operation of law in the event of a
Participant’s or any other person’s bankruptcy or insolvency.

 

Section 13.3           Validity
and Severability.  The invalidity or
unenforceability of any provision of this Plan shall not affect the validity or
enforceability of any other provision of this Plan, which shall remain in full
force and effect, and any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.

 

Section 13.4           Governing
Law.  The validity, interpretation,
construction and performance of this Plan shall in all respects be governed by
the laws of the State of Illinois, without reference to principles of conflict
of law, except to the extent preempted by federal law.

 

Section 13.5           Employment
Status.  This Plan does not
constitute a contract of employment or impose on the Participant or the Company
any obligation for the Participant to remain an employee of the Company or
change the status of the Participant’s employment or the policies of the Company
and its affiliates regarding termination of employment.

 

Section 13.6           Underlying
Incentive Plans and Promotion. 
Nothing in this Plan shall prevent the Company from modifying, amending
or terminating the compensation or the incentive plans and programs pursuant to
which Eligible Bonuses or Eligible Compensation are earned and which are
deferred under this Plan.

 

Section 13.7           Successors
of the Company.  The rights and
obligations of the Company under the Plan shall inure to the benefit of, and
shall be binding upon, the successors and assigns of the Company.

 

Section 13.8           Waiver
of Breach.  The waiver by the Company
of any breach of any provision of the Plan by the Participant shall not operate
or be construed as a waiver of any subsequent breach by the Participant.

 

Section 13.9           Notice.  Any notice or filing required or permitted to
be given to the Company under the Plan shall be sufficient if in writing and
hand-delivered, or sent by first class mail to the principal office of the
Company, directed to the attention of the Plan Administrator. Such notice shall
be deemed given as of the date of delivery, or, if delivery is made by mail, as
of the date shown on the postmark.

 

15

 

Section 13.10         Waiver
of Notice.  Any notice required under
the Plan may be waived by the person entitled to such notice.

 

Section 13.11         Evidence.  Evidence required of anyone under the Plan
may be by certificate, affidavit, document or other information which the
person acting on it considers pertinent and reliable, and signed, made or
presented by the proper party or parties.

 

Section 13.12         Additional
Employers.  Subject to the consent of
the Board of Review, any Subsidiary of the Company may adopt the Plan by filing
a written instrument to that effect with the Company.

 

Section 13.13         Separation
and Distribution Agreement of 2004. 
Notwithstanding any other provision of the Plan to the contrary but
subject to the provisions of this Section 13.13,
if an Eligible Employee who is a Participant in the Plan transfers from
employment with the Company or an Employer to Hospira, Inc. or to a
subsidiary of Hospira, Inc. (collectively, the “Hospira Companies”) as a
result of the transactions contemplated by that certain Separation and
Distribution Agreement by and between Abbott Laboratories and Hospira, Inc.,
dated as of April 12, 2004
(the “Distribution Agreement”), and such transfer of employment is made in
accordance with and subject to the terms of the Employee Benefits Agreement as
described in the Distribution Agreement (each such transferred Participant
referred to herein as a “Transferred Hospira Participant”), then the following
provisions shall apply to each such Transferred Hospira Participant:

 

(a)                                  A
Transferred Hospira Participant’s transfer of employment to the Hospira
Companies will not be considered as a termination of employment as a result of
Termination of Employment, Retirement or Disability for purposes of determining
eligibility for distributions under Article 8
of the Plan.  Such Transferred Hospira
Participant’s termination of employment resulting from Termination of
Employment, Retirement or Disability shall occur only upon his or her
subsequent termination of employment from the Hospira Companies (and
Termination of Employment, Retirement and Disability with respect to such
Transferred Hospira Participants shall mean such events in relation to the
Hospira Companies rather than in relation to the Company and the Employers);

 

(b)                                 Following
his or her transfer to employment with the Hospira Companies, a Transferred
Hospira Participant will remain a Participant but may no longer make Deferral
Elections.  A Transferred Hospira
Participant shall remain a Participant until (i) his or her death or (ii) his
or her Accounts have been distributed in accordance with the Plan and in
accordance with the Transferred Hospira Participant’s elections regarding the
manner of distribution of such Accounts.

 

(c)                                  Notwithstanding
the foregoing provisions of this Section 13.13,
a Participant who will transfer to employment with the Hospira Companies on the
Distribution Date may elect, prior to the Distribution Date as defined in the
Distribution Agreement, to have his or her transfer of

 

16

 

employment treated as a
termination of employment with the Company and the Employer, in which case such
Participant will be treated as having a Termination of Employment on the
Distribution Date and his or her Accounts will be distributed in accordance
with Article 8; provided, however, that
such Accounts shall be distributed as soon as practicable following the
one-year anniversary of the Distribution Date. 
Any election made by a Participant in accordance with this Section 13.13(c) shall be made in such form and at
such time as required by the Plan Administrator.

 

17Exhibit 10.2

 

Amended
and Restated effective

January 1,
2008

 

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; GRANDFATHERED AMOUNTS. 
The Plan became effective as of October 1, 1993 and is hereby
amended and restated, effective as of January 1, 2008, in accordance with
the requirements of Section 409A (“Code Section 409A”) of the
Internal Revenue Code of 1986, as amended (the “Code”).  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, provided that the provisions of the Plan,
as amended effective December 9, 2005 in accordance with Code Section 409A,
shall also apply to Grandfathered Amounts. 
Except as expressly provided above or elsewhere herein, amendments made
to the Plan pursuant to this amendment and restatement or otherwise shall not
affect the Grandfathered Amounts.  The
terms and conditions applicable to the Grandfathered Amounts are set forth in Exhibit A
attached hereto.

 

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 or otherwise while
remaining in the employ of Abbott, (a) such employee’s elective deferral
in effect for such year shall remain irrevocable, (b) Abbott’s matching
contributions under Section 4 shall immediately cease and (c) such
employee shall no longer be eligible to participate in the Plan as of the end
of such calendar year.  In the event an
employee should cease to be a corporate officer of Abbott due to termination of
employment, 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.

 

3-4.          CHANGE IN STOCK PLAN. 
Notwithstanding anything to the contrary contained in Sections 3-1 and
3-3 above, no action or inaction by an employee under the Stock Plan may result
in a change in amounts contributed to the Plan in excess of the limit with
respect to elective deferrals under Section 402(g)(1)(A), (B) and (C) of
the Code in effect for the year in which the action or inaction occurs.

 

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 Code Section 40l(a)(17).
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

 

2

 

respect to such basic
contributions had such basic contributions been made under subsection 7-1 of
the Stock Plan.

 

To the extent applicable, 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 Section 5-3, a participant shall elect to
make pre-tax contributions with respect to compensation earned in any calendar
year on or prior to December 31st of the prior 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 shall be irrevocable.  An
employee who fails to make a timely election under this subsection 5-1 for a
calendar year may not contribute to the Plan during the following year.

 

5-2.          [Section intentionally omitted.]

 

5-3.          NEWLY ELIGIBLE AND NEWLY HIRED EMPLOYEES.  A newly hired corporate officer described in Section 2-1
shall become eligible to participate in the Plan on the first day of the month
next following the month after the individual’s date of hire; provided,
that in no event may such individual begin to participate in the Plan later
than 90 days following his or her date of hire. 
An eligible employee described in the preceding sentence (who was not
eligible to participate in any other plan that would be aggregated with the
Plan under Treasury Regulation §1.409A-1(c)) shall make the election described
in Section 5-1 within thirty (30) days of the date on which he first
becomes eligible under the Plan.  Any
such election shall become effective for compensation earned no earlier than
the first payroll period commencing after receipt of the election by the
Committee and shall be irrevocable for the remainder of the calendar year.  Any other newly eligible employee shall make
the election described in Section 5-1 no later than December 31st of the year in which such
employee first becomes eligible under the Plan. 
Any such election shall become effective for compensation earned in the
calendar year following the year in which the election is made.

 

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.  At the
time of the annual elections described in subsection 5-1, each participant may
elect to have his pre-tax and employer contributions for the following year
deposited in a “Grantor Trust” established by the participant under the

 

3

 

circumstances and on the
terms described in subsection 6-1, rather than defer such contributions under
subsection 5-1.  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.  In no event shall such contributions be paid
to the Grantor Trust 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).

 

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 deposited in a “Grantor Trust” established by the
participant, as described in subsection 6-3, provided such trust is in a form
which the Committee determines is substantially similar to the trust attached
to this Plan as Exhibit B.

 

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 aggregate federal,
state and local individual income and employment 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.  The appropriate aggregate federal, state and
local individual income and employment taxes attributable to the contributions
shall be paid directly to the participant. 
In no event shall such contributions be paid to the Grantor Trust or the
participant 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).

 

6-4.          [Section intentionally omitted.]

 

6-5.          ELIMINATION OF GRANTOR TRUST FUNDING THRESHOLD.  Notwithstanding anything contained in the
Plan to the contrary, effective as of January 1, 2005, 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

 

4

 

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 establish accounts for participants who have made elections pursuant to
subsection 5-1 or 5-5 as follows:

 

(a)           The Committee shall 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
pre-tax contributions under subsection 5-1. 
The Deferred Account shall be comprised of any pre-tax contributions
made on behalf of the participant under subsection 3-1 and any other
allocations made on behalf of the participant under Section 4, in each
case, for which the participant has not made an election under subsection 5-5,
and any adjustments made pursuant to subsection 7-2.

 

(b)           The Committee shall maintain two separate Accounts, a “Pre-Tax Account”
and an “After-Tax Account”, in the name of each participant who has declined to
defer allocations by electing to have a portion of his or her pre-tax and
employer contributions deposited in cash to a Grantor Trust according to
subsection 5-5.  The Pre-Tax Account
shall consist of the aggregate of all pre-tax contributions contemplated by
subsection 3-1, whether deposited to the participant’s Grantor Trust or made in
cash to the participant, and any adjustments in accordance with subsection
7-3.  The After-Tax Account shall consist
of employer contributions deposited to the participant’s Grantor Trust in cash
according to subsection 5-5 and any adjustments made in accordance with
subsection 7-4.

 

7-2.          ADJUSTMENT OF DEFERRED ACCOUNTS. 
No later than as of the end of each calendar year, each participant’s
Deferred Account shall be adjusted by the Committee as follows:

 

(a)           FIRST, reduced by an amount equal to any distribution made to the
participant during that year pursuant to subsections 7-11 or 7-12;

 

(b)           NEXT, increased by 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, increased by an amount equal to the Interest earned for that
year pursuant to subsection 7-5.

 

7-3.          ADJUSTMENT OF PRE-TAX ACCOUNTS. 
No later than as of the end of each calendar year, each participant’s
Pre-Tax Account shall be adjusted by the Committee as follows:

 

5

 

(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 5-5 had instead been deferred under
subsection 5-1;

 

(b)           NEXT, increased by an amount equal to any pre-tax contributions and
employer contributions made on behalf of the participant for that year that are
paid to the participant (including any contributions paid to the participant’s
Grantor Trust) according to subsection 5-5;

 

(c)           FINALLY, increased by an amount equal to the Interest earned for that
year pursuant to subsection 7-5.

 

7-4.          ADJUSTMENT OF AFTER-TAX ACCOUNTS. 
No later than as of the end of each calendar 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 by subsection 7-16 which represents the distribution for such year;

 

(b)           NEXT, increased by an amount equal to any pre-tax contributions and
employer contributions made on behalf of the participant for that year that are
deposited in the participant’s Grantor Trust according to subsection 5-5;

 

(c)           FINALLY, increased by an amount equal to the After-Tax Interest earned
for that year pursuant to subsection 7-5.

 

7-5.          INTEREST ACCRUALS ON ACCOUNTS.

 

(a)           No later than as of the end of each calendar 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 calendar year; plus

 

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

 

(b)           No later than as of the end of each calendar year, a participant’s
After-Tax Account shall be credited with the amount of Interest set forth
above, multiplied by the aggregate of the federal, state and local individual
income tax rates determined in accordance with subsection 8-5 (the “After-Tax
Interest”).

 

(c)           The Interest and After-Tax Interest, as applicable, shall be credited
on the conditions established by the Committee.

 

6

 

7-6.          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 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 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 calendar year. A participant’s Net Interest Accrual for a 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 7-5.

 

7-7.          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 Section 3(b) of the form of Grantor Trust attached hereto as
Attachment A.

 

7-8.          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:

 

7

 

(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.

 

7-9.          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.

 

7-10.        PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS.  Any employer contribution made on behalf of a
participant in the Plan and any interest credited with respect thereto 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 contributed, 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.

 

7-11.        MANNER OF PAYMENT OF DEFERRED ACCOUNTS. 
Subject to subsection 7-12, 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 election
for such calendar year under subsection 5-1. 
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.

 

7-12.        PAYMENT UPON TERMINATION FOLLOWING CHANGE IN CONTROL. Notwithstanding
any other provision of 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 contributions under the Plan are deferred in accordance with
subsection 5-1, 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 contributions under the Plan are made pursuant to
subsection 5-5, (i) the aggregate of the participant’s unpaid
contributions under subsection 5-5 (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 7-6 attributable to the portion of the year
elapsed prior to the date of termination, shall be paid to such participant’s
Grantor

 

8

 

Trust in a lump sum within
thirty (30) days following the date of such termination of employment.

 

7-13.        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 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

 

9

 

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 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.

 

7-14.        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.

 

10

 

(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.

 

7-15.        PROHIBITION
AGAINST AMENDMENT.  The provisions of
subsections 7-12, 7-13, 7-14 and this subsection 7-15 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.

 

7-16.        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 7-3(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 calendar year and the denominator of which
is the balance of the participant’s Pre-Tax Account as of that same date.

 

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 require payment from the participant in an amount necessary to satisfy
such taxes prior to remitting such taxes.

 

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, Pre-Tax and After-Tax 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 

 

11

 

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 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.  Payment of the Tax Gross Up (as
defined below) 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.  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 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 taxable income of any payment made pursuant to this subsection 8-4.

 

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 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 without a benefit for any net capital losses.

 

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.

 

12

 

8-9.          CHANGE
OF CONDITIONS RELATING TO PAYMENTS.  No
change to the time of 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.

 

8-10.        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 of Interest provided in subsection 7-5(a) (to the extent that
such interest is not already provided to the participant under subsection 7-6),
from the respective dates on which such amounts would otherwise have been paid
until the actual date of payment.  In
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 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.

 

13

 

EXHIBIT A

 

ABBOTT LABORATORIES 401(k) SUPPLEMENTAL PLAN

 

[Abbott Laboratories 401(k)
Supplemental Plan, as amended, as filed as Exhibit 10.1 to the Abbott
Laboratories Current Report on Form 8-K dated December 9, 2005.]

 

 

EXHIBIT B

 

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.

 

2

 

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.

 

3

 

(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.

 

5

 

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).

 

6

 

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

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