Document:

Exhibit 10.7

 

As Amended and Restated

Effective as of January 1, 2008

 

1998 PERFORMANCE INCENTIVE PLAN (PIP) RULES

409A DOCUMENT

 

The following rules shall govern the administration of the 1998
Abbott Laboratories Performance Incentive Plan (PIP) and any comparable
successor plan with respect to all amounts that are not Grandfathered Amounts.  Capitalized terms used but not otherwise
defined in these Rules shall have the meaning provided in the PIP.  These rules shall remain in effect until
amended by the Committee:

 

1.                       Fiscal Year. 
The term “fiscal year”, as used in the PIP, means the fiscal period from
time to time employed by Abbott for the purpose of reporting earnings to
shareholders.

 

2.                       Consolidated Net Income. 
“Consolidated Net Income” shall be the consolidated net income for such
fiscal year as stated in Abbott’s Audited Financial Statements.  Excluded from the calculation of consolidated
net income will be the effect of changes in GAAP and the tax effects thereon,
and extraordinary gains and loses and the tax effects thereon if presented in
the audited Consolidated Statement of Earnings.

 

3.                       Naming of Participants. 
For any fiscal year, all participants in the PIP must be named by the Committee
prior to the completion of the immediately preceding fiscal year.  A PIP participant may not be an active
participant in the MIP in the same fiscal year.

 

4.                       Inclusion in Pensionable Earnings. 
The full amount of any PIP award earned under Rule 5 will be
included in the participant’s pensionable earnings.

 

5.                       Time of Payment. 
Beginning with any award allocation paid after December 31, 1998, a
participant must direct payment or deferral of an allocation made to the participant
under the PIP by one or more of the following methods:

 

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

 

(b)                 A portion in cash and deposited to a
grantor trust (the “Grantor Trust”) established by the participant (in a form
which the Committee determines is substantially similar to the trust in Exhibit A)
and the balance paid to the participant approximately equal to the participant’s
aggregate federal, state and local individual income and employment taxes;
provided that all payments or contributions 

 

 

to the Grantor Trust and
participant contemplated by this Rule 5(b) shall be made no later
than the last day of the “applicable 2 1⁄2 month period”, as such term is defined
in Treasury Regulation § 1.409A-1(b)(4)(i)(A); or

 

(c)                 Deferral of payment until the time,
and in the manner determined in Rule 17.

 

Amounts paid under the PIP will
not be considered amounts paid under the MIP for purposes of subsections 3.3
and 3.4 and Section 4 of the MIP.  The
base salaries of PIP participants will not be considered for determination of
the MIP amount in subsection 3.3 of the MIP.

 

6.                       Time of Election.

 

(a)                  A participant must make the election
described in Rule 5 by filing it with the Committee before expiration of
the election period established by the Committee, which period shall end  no
later than December 31 of the fiscal year prior to the year during which
the performance incentive compensation is earned under the PIP.

 

(b)                 Notwithstanding the timing requirements
of Rule 6(a), an individual who newly becomes eligible to participate in
the PIP by being designated as a participant under Section 3.1 of the PIP
(and who was not eligible to participate in any other plan that would be
aggregated with the Plan under Treasury Regulation §1.409A-1(c)) may make the
an initial deferral election described in Rule 5 by filing it with the
Committee or its delegate within the thirty (30) day period immediately
following the date he or she first is designated as participant, provided,
that the compensation deferred pursuant to such election relates solely to
services performed after the date of such election.  For this purpose, an election shall be deemed
to apply to compensation paid for services performed after the election if the election
applies to no more than the amount prescribed by Treasury Regulation
§1.409A-2(a)(7)(i).

 

(c)                  Any election described in Rule 5
shall be irrevocable for the fiscal year to which the election applies.

 

7.                       Accounts. 
The Committee shall establish accounts for participants who have made
elections pursuant to Rule 5(b) or 5(c) as follows.

 

(a)                  The Committee will maintain a “Deferred
Account” in the name of each participant who has elected to defer payment of
all or a portion of his or her PIP award under Rule 5(c).  The Deferred Account shall consist of
allocations deferred according to Rule 5(c) and any adjustments made
in accordance with Rule 8.

 

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(b)                 The Committee will maintain two
separate Accounts, a “Pre-Tax Account” and an “After-Tax Account”, in the name
of each participant who has declined to defer allocations by electing to have a
portion of his or her PIP award deposited in cash to a Grantor Trust according
to Rule 5(b).  The Pre-Tax Account
shall consist of the aggregate of all allocations contemplated by Rule 5(b),
whether deposited to the participant’s Grantor Trust or made in cash to the
participant, and any adjustments made in accordance with Rule 9.  The After-Tax Account shall consist of
allocations deposited to the participant’s Grantor Trust in cash according to Rule 5(b) and
any adjustments made in accordance with Rule 10.

 

8.                       Adjustment of Deferred Accounts. 
At the end of each fiscal year, a participant’s Deferred Account will be
adjusted as follows:

 

(a)                  First, reduced by an amount equal to
any distribution made to the participant during the year according to Rule 17
or Rule 18;

 

(b)                 Next, increased by an amount equal
to any allocation for that year that is deferred according to Rule 5(c);
and

 

(c)                  Last, increased by an amount equal
to the interest earned for that year according to Rule 11.

 

9.                       Adjustment of Pre-Tax Accounts. 
At the end of each fiscal year, a participant’s Pre-Tax Account will be
adjusted as follows:

 

(a)                  First, reduced, in any year in which
the participant is entitled to receive a distribution from his or her Grantor
Trust, by an amount equal to the distribution that would have been made to the
participant if the aggregate amounts allocated according to Rule 5(b) had
instead been deferred under Rule 5(c);

 

(b)                 Next, increased by an amount equal
to any allocation for that year that is paid to the participant (including the
amount paid to the participant’s Grantor Trust) according to Rule 5(b);
and

 

(c)                  Last, increased by an amount equal
to the interest earned for that year according to Rule 11.

 

10.                 Adjustment of After-Tax Accounts. 
At the end of each fiscal year, a participant’s After-Tax Account will
be adjusted as follows:

 

(a)                  First, reduced, in any year in which
the participant is in receipt of a distribution from his or her Grantor Trust,
by an amount calculated as provided in Rule 28 which represents the
distribution for such year;

 

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(b)                 Next, increased by an amount equal
to the allocation for that year that is deposited in the participant’s Grantor
Trust according to Rule 5(b); and

 

(c)                  Last, increased by an amount equal
to the interest earned for that year according to Rule 11.

 

11.                 Interest Accruals on Accounts.

 

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

 

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

 

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

 

(b)                 As of the end of each fiscal year, a
participant’s After-Tax Account shall be credited with the amount of Interest
set forth above, multiplied by (one minus the aggregate of the applicable
federal, state and local individual income tax rates and employment tax rate,
determined in accordance with Rule 26 (the “After-Tax Interest”)).

 

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

 

12.                 Guaranteed Rate Payments. 
In addition to any allocation made to a participant for any fiscal year
in accordance with Rule 5(b), Abbott shall also make a payment to a
participant’s Grantor Trust (a “Guaranteed Rate Payment”) for each year in
which the Grantor Trust is in effect.  The
Guaranteed Rate Payment shall equal the excess, if any, of the participant’s
Net Interest Accrual (as defined below) over the net earnings of the
participant’s Grantor Trust for the year, and shall be paid within the thirty (30)
days beginning April 1 of the following fiscal year.  A participant’s Net Interest Accrual for 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 Rule 11(b).

 

13.                 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 

 

4

 

specified
shall be consistent with the provisions of Section 3(b) of the form
of Grantor Trust attached hereto as Exhibit A.

 

14.                 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 Rule 14, 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
PIP.  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 PIP).  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 that 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 Rule 14 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 the person’s lifetime or prior to the
termination of a fiduciary’s duties.  If
a deceased participant or a deceased nonfiduciary beneficiary who had the right
to designate a beneficiary as provided above dies without having designated a
further beneficiary, or if no beneficiary designated as provided above is
living or qualified and acting, the Committee, in its discretion, may direct
distribution of the amount remaining from time to time to either: (i)  any
one or more or all of the next of kin (including the surviving spouse) of the
participant or the deceased beneficiary, as the case may be, and in such
proportions as the Committee determines; or (ii)  the legal representative
of the estate of the deceased participant or deceased beneficiary as the case
may be.

 

15.                 Non-assignability and Facility of
Payment.  Amounts payable to participants and their
beneficiaries under the PIP 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 provisions of these Rules shall not be construed as
restricting 

 

5

 

in any way a
designation right granted to a beneficiary under Rule 14.  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.

 

16.                 Payer of Amounts Allocated to
Participants.  Any amount allocated to a participant in the
PIP and any interest credited thereto will be paid by the employer (or such
employer’s successor) by whom the participant was employed during the fiscal
year for which any amount was allocated, and for that purpose, if a participant
shall have been employed by two or more employers during any fiscal year the
amount allocated under the PIP for that year shall be an obligation of each of
the respective employers in proportion to the respective amounts of base salary
paid by each of them in that fiscal year.

 

17.                 Manner of Payment of Deferred
Accounts.  Subject to Rule 18, a participant shall
elect to receive payment of his Deferred Account in substantially equal annual
installments over a minimum period of ten years, or a longer period, at the
time of his deferral election under Rule 5.  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.

 

18.                 Payment Upon Termination Following
Change in Control.  Notwithstanding any other provision of the
PIP or the provisions of any award made under the PIP, if a participant incurs
a termination of employment with Abbott and its subsidiaries for any reason within
two (2) years following the date of a Change in Control, provided that the
event constituting a Change in Control is also a “change in control event”, as
such term is defined in Treasury Regulation § 1.409A-3(i)(5): (a) with
respect to a participant whose allocations under the PIP are deferred in
accordance with Rule 5(c), the aggregate unpaid balance of the participant’s
Deferred Account shall be paid to such participant in a lump sum within thirty
(30) days following the date of such termination of employment, and (b) with
respect to a participant whose allocations under the PIP are made pursuant to Rule 5(b),
(i) the aggregate of the participant’s unpaid allocation under Rule 5(b) (if
any) for the fiscal year in which the termination occurs and (ii) a pro
rata portion of the unpaid Guaranteed Rate Payment under Rule 12
attributable to the portion of the year elapsed prior to the date of
termination, shall be paid to such participant’s Grantor Trust in a lump sum
within thirty (30) days following the date of such termination of employment.

 

19.                 Change in Control. 
A “Change in Control” shall be deemed to have occurred on the earliest
of the following dates:

 

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(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 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 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 immediately prior thereto constitute at least a majority
of the Board of Directors of Abbott, the entity surviving such merger or
consolidation or, if Abbott or the entity surviving such merger or
consolidation is then a subsidiary, the ultimate parent thereof and (B) which
results in the voting securities of Abbott outstanding immediately prior to
such merger or consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity or any parent thereof), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee benefit plan of Abbott
or any subsidiary of Abbott, at least 50% of the combined voting power of the securities
of Abbott or such surviving entity or any parent thereof outstanding immediately
after such merger or consolidation, or (ii) a merger or consolidation
effected to implement a recapitalization of Abbott (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of Abbott (not including in the securities Beneficially Owned by
such Person any securities acquired directly from Abbott or its Affiliates) representing
20% or more of the combined voting power of Abbott’s then outstanding
securities; or

 

(d)                 the date the shareholders of Abbott
approve a plan of complete liquidation or dissolution of Abbott or there is
consummated an agreement for the sale or disposition by Abbott of all or
substantially all of Abbott’s assets, other than a sale

 

7

 

 

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 these Rules: “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.

 

20.                 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

 

8

 

determination
by the Board that there is no reasonable chance that such actions would be
consummated.

 

(c)                  Any Person becomes the Beneficial
Owner, directly or indirectly, of securities of Abbott representing 10% or more
of either the then outstanding shares of common stock of Abbott or the combined
voting power of Abbott’s then outstanding securities (not including any
securities beneficially owned by such Person which are or were acquired
directly from Abbott or its Affiliates).

 

(d)                 The Board 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 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.

 

21.                 Prohibition Against Amendment. 
The provisions of Rules 18, 19, 20 and this Rule 21 may not be
amended or deleted, nor superseded by any other Rule, (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.

 

22.                 Reliance Upon Advice. 
The Board 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 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.

 

23.                 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 PIP 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.

 

24.                 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 PIP.  Nothing contained in the PIP
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 in accordance with Rule 7 are for the
convenience of the administration of the PIP and no trust relationship with
respect to such Accounts is intended or should be implied.  Participant’s rights shall be limited to payment
to them at the time or times and in such amounts as are contemplated by the PIP
and these Rules.  Any decision made by
the Board or the Committee, which is

 

9

 

within the
sole and uncontrolled discretion of either, shall be conclusive and binding
upon the other and upon all other persons whomsoever.

 

25.                 Tax Adjustment Payment. 
In addition to the allocations provided in accordance with Rule 5,
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 Adjustment Payment for each year in which the Grantor
Trust is in effect.  Payment of the Tax
Adjustment Payment 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 Adjustment Payment”
shall equal:

 

(a)                  the amount necessary to compensate
the participant (or beneficiary) for the net increase in the participant’s (or
beneficiary’s) federal, state and local income taxes as a result of the
inclusion in his or her taxable income of the income of the participant’s Grantor
Trust and any Guaranteed Rate Payment for that year; plus

 

(b)                an amount necessary to compensate the participant (or
beneficiary) for the net increase in the taxes described in (a) above as a
result of the inclusion in his or her taxable income of any payment made
pursuant to this Rule 25.

 

26.                 Income Tax Assumptions. 
For purposes of these Rules, a participant’s federal income tax rate
shall be deemed to be the highest marginal rate of federal income individual
tax in effect in the calendar year in which a calculation under the Rules 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. For purposes
of these Rules, a participant’s employment tax rate shall be deemed to be the
highest marginal rate of Federal Insurance Contribution Act tax in effect in the
calendar year in which a calculation under the applicable Rule is to be made.

 

27.                 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.

 

28.                 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 Rule 9(a), by (ii) a
fraction, the numerator of which is the balance in the participant’s After-Tax
Account as of the end of the prior fiscal year and the denominator of which is
the balance of the participant’s Pre-Tax Account as of that same date

 

29.                 Section 409A. 
To the extent applicable, it is intended that these Rules comply
with the provisions of Code Section 409A. 
The Rules will be administered and interpreted

 

10

 

in a manner
consistent with this intent, and any provision that would cause the Rules 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 these Rules, 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 Rules that would otherwise be payable during the six-month period
after the date of termination shall instead be paid on the first business day
after the expiration of such six-month period, plus interest thereon, at a rate
equal to the rate specified in Rule 11 (to the extent that such interest
is not already provided to the participant under Rule 12), from the
respective dates on which such amounts would otherwise have been paid until the
actual date of payment.  In addition, for
purposes of these Rules, each amount to be paid and each installment payment
shall be construed as a separate identified payment for purposes of Code Section 409A.

 

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Exhibit B

 

IRREVOCABLE
GRANTOR TRUST AGREEMENT

 

THIS
AGREEMENT, made this          day of                  ,
20    , by and between                                     
of                    ,
Illinois (the “grantor”), and The Northern Trust Company located at Chicago,
Illinois, as trustee (the “trustee”),

 

WITNESSETH THAT:

 

WHEREAS, the grantor desires to establish and
maintain a trust to hold certain benefits received by the grantor under the
1986 Abbott Laboratories Management Incentive Plan, as it may be amended from
time to time;

 

NOW, THEREFORE, IT IS AGREED as follows:

 

 

ARTICLE I

 

INTRODUCTION

 

I-1                                  NAME.
This agreement and the trust hereby evidenced (the “trust”) may be referred to
as the “                    
20    Grantor Trust”.

 

I-2                                  THE
TRUST FUND. The “trust fund” as at any date means all property then held by the
trustee under this agreement.

 

I-3                                  STATUS
OF THE TRUST. The trust shall be irrevocable. The trust is intended to
constitute a grantor trust under Sections 671-678 of the Internal Revenue Code,
as amended, and shall be construed accordingly.

 

I-4                                  THE
ADMINISTRATOR. Abbott Laboratories (“Abbott”) shall act as the “administrator”
of the trust, and as such shall have certain powers, rights and duties under
this agreement as described below. Abbott will certify to the trustee from time
to time the person or persons authorized to act on behalf of Abbott as the
administrator. The trustee may rely on the latest certificate received without
further inquiry or verification.

 

I-5                                  ACCEPTANCE.
The trustee accepts the duties and obligations of the “trustee” hereunder,
agrees to accept funds delivered to it by the grantor or the administrator, and
agrees to hold such funds (and any proceeds from the investment of such funds)
in trust in accordance with this agreement.

 

ARTICLE II

 

DISTRIBUTION
OF THE TRUST FUND

 

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

 

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

 

 

II-3                              DISTRIBUTIONS
FROM THE DEFERRED ACCOUNT PRIOR TO THE GRANTOR’S DEATH. Principal and
accumulated income credited to the deferred account shall not be distributed
from the trust prior to the grantor’s retirement or other termination of
employment with Abbott or a subsidiary of Abbott (the grantor’s “settlement
date”); provided that, each year the administrator may direct the trustee to
distribute to the grantor a portion of the income of the deferred account for
that year, with the balance of such income to be accumulated in that account.
The administrator shall inform the trustee of the grantor’s settlement date.
Thereafter, the trustee shall distribute the amounts from time to time credited
to the deferred account to the grantor, if then living, in a series of annual
installments, with the amount of each installment computed by one of the
following methods:

 

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

 

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

 

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

 

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

 

 

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

 

II-4.                           DISTRIBUTIONS
FROM THE TRUST FUND AFTER THE GRANTOR’S DEATH. The grantor, from time to time
may name any person or persons (who may be named contingently or successively
and who may be natural persons or fiduciaries) to whom the principal of the
trust fund and all accrued or undistributed income therefrom shall be
distributed in a lump sum or, if the beneficiary is the grantor’s spouse (or a
trust for which the grantor’s spouse is the sole income beneficiary), in
installments, as directed by the grantor, upon the grantor’s death. If the
grantor directs an installment method of distribution to the spouse as
beneficiary, any amounts remaining at the death of the spouse beneficiary shall
be distributed in a lump sum to the executor or administrator of the spouse
beneficiary’s estate. If the grantor directs an installment method of
distribution to a trust for which the grantor’s spouse is the sole income
beneficiary, any amounts remaining at the death of the spouse shall be
distributed in a lump sum to such trust. Despite the foregoing, if (i) the
beneficiary is a trust for which the grantor’s spouse is the sole income
beneficiary, (ii) payments are being made pursuant to this paragraph II-4
other than in a lump sum and (iii) income earned by the trust fund for the
year exceeds the amount of the annual installment payment, then such trust may
elect to withdraw such excess income by written notice to the trustee. Each
designation shall revoke all prior designations, shall be in writing and shall
be effective only when filed by the grantor with the administrator during the
grantor’s lifetime. If the grantor fails to direct a method of distribution,
the distribution shall be made in a lump sum. If the grantor fails to designate
a beneficiary as provided above, then on the grantor’s death, the trustee shall
distribute the balance of the trust fund in a lump sum to the executor or
administrator of the grantor’s estate.

 

II-5                              FACILITY
OF PAYMENT. When a person entitled to a distribution hereunder is under legal
disability, or, in the trustee’s opinion, is in any way incapacitated so as to
be unable to manage his or her financial affairs, the trustee may 

 

 

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

 

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

 

ARTICLE III

MANAGEMENT OF
THE TRUST FUND

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

 

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

 

ARTICLE IV

GENERAL
PROVISIONS

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE V

CHANGES IN
TRUSTEE

 

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

 

 

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

 

V-2.                           APPOINTMENT
OF SUCCESSOR TRUSTEE. The administrator shall fill any vacancy in the office of
trustee as soon as practicable by written notice to the successor trustee; and
shall give prompt written notice thereof to the grantor, if then living,
otherwise to each beneficiary then entitled to payments or distributions under
this agreement. A successor trustee shall be a bank (as defined in Section 581
of the Internal Revenue Code, as amended).

 

V-3.                           DUTIES
OF RESIGNING OR REMOVED TRUSTEE AND OF SUCCESSOR TRUSTEE. A trustee that
resigns or is removed shall furnish promptly to the administrator and the
successor trustee an account of its administration of the trust from the date
of its last account. Each successor trustee shall succeed to the title to the
trust fund vested in its predecessor without the signing or filing of any
instrument, but each predecessor trustee shall execute all documents and do all
acts necessary to vest such title of record in the successor trustee. Each
successor trustee shall have all the powers conferred by this agreement as if
originally named trustee. No successor trustee shall be personally liable for
any act or failure to act of a predecessor trustee. With the approval of the
administrator, a successor trustee may accept the account furnished and the
property delivered by a predecessor trustee without incurring any liability for
so doing, and such acceptance will be complete discharge to the predecessor
trustee.

 

ARTICLE VI

AMENDMENT AND
TERMINATION

 

VI-1.                       AMENDMENT.
With the consent of the administrator, this trust may be amended from time to
time by the grantor, if then living, otherwise by a majority of the
beneficiaries then entitled to payments or distributions hereunder, except as
follows:

 

(a)                                  The
duties and liabilities of the trustee cannot be changed substantially without
its consent.

 

(b)                                 This
trust may not be amended so as to make the trust revocable.

 

 VI-2.                    TERMINATION. This trust shall not
terminate, and all rights, titles, powers, duties, discretions and immunities
imposed on or reserved to the trustee, the administrator, the grantor and the
beneficiaries shall continue in effect, until all assets of the trust have been
distributed by the trustee as provided in Article II.

 

 

*      *      *

 

IN WITNESS WHEREOF, the grantor and the
trustee have executed this agreement as of the day and year first above
written.

 

 

	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Grantor

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  The Northern Trust Company as Trustee

  
	
   

  	
   

  	
  By

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  ItsExhibit 10.10

 

Amended and
Restated effective January 1, 2008

 

ABBOTT LABORATORIES
NON-EMPLOYEE DIRECTORS’ FEE PLAN

 

SECTION 1.

PURPOSE

 

ABBOTT LABORATORIES NON-EMPLOYEE DIRECTORS’
FEE PLAN - referred to below as the “Plan” - has been established by ABBOTT
LABORATORIES - referred to below as the “Company” - to attract and retain as
members of its Board of Directors persons who are not full-time employees of
the Company or any of its subsidiaries but whose business experience and
judgment are a valuable asset to the Company and its subsidiaries.

 

SECTION 2.

DIRECTORS COVERED

 

As used in the Plan, the term “Director”
means any person who is elected to the Board of Directors of the Company in
April, 1962 or at any time thereafter, and is not a full-time employee of the
Company or any of its subsidiaries.

 

SECTION 3.
  FEES PAYABLE TO DIRECTORS

 

3.1           Each Director shall be entitled to a deferred monthly
fee of Eight Thousand Dollars ($8,000.00) for each calendar month or portion
thereof (excluding the month in which he is first elected a Director) that he
holds such office with the Company.

 

3.2           A Director who serves as Chairman of the Executive
Committee of the Board of Directors shall be entitled to a deferred monthly fee
of One Thousand Six Hundred Dollars ($1,600.00) for each calendar month or
portion thereof (excluding the month in which he is first elected to such
position) that he holds such position.

 

3.3           Audit Committee Fees

 

(a)                                  A Director who serves as Chairman of
the Audit Committee of the Board of Directors shall be entitled to a deferred
monthly fee of One Thousand Five Hundred Dollars ($1,500.00) for each calendar
month or portion thereof (excluding the month in which he is first elected to
such position) that he holds such position.

 

(b)                                 Each Director who serves on the
Audit Committee of the Board of Directors (other than the Chairman of the Audit
Committee) shall be entitled to a deferred monthly fee of Five Hundred Dollars
($500.00) for each calendar month or portion thereof (excluding the month in which
he is first elected to such position) that he holds such position.

 

 

3.4           A Director who serves as Chairman of the Compensation
Committee of the Board of Directors shall be entitled to a deferred monthly fee
of One Thousand Dollars ($1,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

 

3.5           A Director who serves as Chairman of the Nominations
Committee of the Board of Directors shall be entitled to a deferred monthly fee
of One Thousand Dollars ($1,000.00) for each calendar month or portion thereof
(excluding the month in which he is first elected to such position) that he
holds such position.

 

3.6           A Director who serves as Chairman of any other
Committee created by this Board of Directors shall be entitled to a deferred
monthly fee of One Thousand Dollars ($1,000.00) for each calendar month or
portion thereof (excluding the month in which he is first elected to such
position) that he holds such position.

 

3.7           A Director’s Deferred Fee Account shall be credited
with interest annually. During the calendar years 1968 and prior, the rate of
interest credited to deferred fees shall be four (4) percent per annum.
During the calendar years 1969 through 1992, the rate of interest credited to
deferred fees shall be the average of the prime rates being charged by the two
largest commercial banks in the City of Chicago as of the end of the month
coincident with or last preceding the date upon which said interest is so credited.
During the calendar years 1993 through 2007, the rate of interest credited to
deferred fees shall be equal to: (a) the average of the prime rates being
charged by the two largest commercial banks in the City of Chicago as of the
end of the month coincident with or last preceding the date upon which said
interest is so credited; plus (b) two hundred twenty-five (225) basis
points.  For the calendar year 2008 and
subsequent years, the rate of interest credited to deferred fees shall be equal
to: (a) the average of the “prime rate” of interest published by The Wall
Street Journal (Mid-West Edition) or comparable successor quotation service on
the first business day of January and the last business day of each month
of the fiscal year; plus (b) two hundred twenty-five (225) basis
points.  For purposes of this provision,
the term “deferred fees” shall include “deferred monthly fees,” and “deferred
meeting fees,” and shall also include any such interest credited thereon.

 

3.8           For purposes of Sections 3.1, 3.2, 3.3, 3.4, 3.5 and
3.6, the automatic deferral of the fees specified therein shall be subject to a
Director’s election to receive such fees currently pursuant to Section 4.1
or Section 9.1 of the Plan.

 

SECTION 4.

PAYMENT OF DIRECTORS’ FEES

 

4.1           Any Director may, by written notice filed with the
Secretary of the Company no later than December 31 in a calendar year,
elect to receive current payment of all or any portion of the monthly and
meeting fees earned by him in calendar years subsequent to the calendar year in
which he files such notice, in which case such fees shall not be deferred but
shall be paid quarterly as earned and no interest shall be credited
thereon.  Such election shall be
irrevocable as of December 31 of the year prior to the year in which the
fees will be earned.  Notwithstanding the
timing requirements described above, an individual who is newly elected as a
Director may make the election described above by filing it with the Secretary
of the Company 

 

2

 

within
the thirty (30) day period immediately following the date he or she first
becomes a Director eligible to participate in the Plan (and all plans that
would be aggregated with the Plan pursuant to Treasury Regulation §1.409A-1(c)(2)(i)),
provided, that the compensation subject to such election relates solely
to services performed after the date of such election and provided  further, that such election shall become
irrevocable on the thirtieth day following the date he or she first becomes a
Director eligible to participate in the Plan. 
In no event shall the fees subject to an election under this Section 4.1
be paid 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).  Any Director who has previously provided
notice pursuant to this Section 4.1 may, by written notice filed with the
Secretary of the Company no later than December 31 in a calendar year,
elect to defer payment of all or a portion of the monthly and meeting fees
earned by him in calendar years subsequent to the year in which he files such
notice, in which case such fees shall be paid to him in accordance with Section 4.2
below.

 

4.2           A Director’s deferred fees earned pursuant to the Plan
shall commence to be paid on the first day of the calendar month next following
the earlier of his death or his attainment of age sixty-five (65) if he is not
then serving as a Director, or the termination of his service as a Director if
he serves as a Director after the attainment of age sixty-five (65).

 

4.3           A Director’s deferred fees that have commenced to be
payable pursuant to Section 4.2 shall be payable in annual installments in
the order in which they shall have been deferred (i.e. the deferred fees and earnings
thereon for the earliest year of service as a Director will be paid on the date
provided for in Section 4.2, the deferred fees for the next earliest year
of service as a Director will be paid on the anniversary of the payment of the
first installment, etc.).

 

4.4           A Director’s deferred fees shall continue to be paid
until all deferred fees which he is entitled to receive under the Plan shall
have been paid to him (or, in case of his death, to his beneficiary).

 

4.5           If a Director incurs a termination of service as a
Director within two (2) years following the occurrence of a Change in
Control (as defined below), the aggregate unpaid balance of such Director’s
deferred fees plus all unpaid interest credited thereon, shall be paid to such
Director in a lump sum within thirty (30) days following the date of such
termination of service; provided, however, that if such Change in
Control does not constitute a “change in control event” (as defined in Treasury
Regulation § 1.409A-3(i)(5)), then the aggregate unpaid balance of such
Director’s deferred fees shall be paid in accordance with Sections 4.2 and 4.3.

 

Notwithstanding any other provision of the
Plan, if a Director has made the alternative election set forth in Section 9.1,
and if such Director incurs a termination of service as a Director within five (5) years
following the occurrence of a Change in Control, the aggregate unpaid balance
of such Director’s fees deposited to the Director’s Grantor Trust (as defined
below) plus all unpaid interest credited thereon, shall be paid to such
Director from the Director’s Grantor Trust in a lump sum within thirty (30)
days following the date of such termination of service.

 

4.6           A “Change in Control” shall be deemed to have occurred
on the earliest of the following dates:

 

3

 

(i)                                     the date any Person is or becomes
the Beneficial Owner, directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates) representing 20% or more
of the combined voting power of the Company’s then outstanding securities,
excluding any Person who becomes such a Beneficial Owner in connection with a
transaction described in clause (a) of paragraph (iii) below; or

 

(ii)                                  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
the Company) whose appointment or election by the Board of Directors or
nomination for election by the Company’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

 

(iii)                               the date on which there is
consummated a merger or consolidation of the Company or any direct or indirect
subsidiary of the Company with any other corporation or other entity, other
than (a) a merger or consolidation (I) 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 the Company, the
entity surviving such merger or consolidation or, if the Company or the entity
surviving such merger or consolidation is then a subsidiary, the ultimate
parent thereof and (II) which results in the voting securities of the
Company 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 the Company or any subsidiary of the Company,
at least 50% of the combined voting power of the securities of the Company or
such surviving entity or any parent thereof outstanding immediately after such
merger or consolidation, or (b) a merger or consolidation effected to
implement a recapitalization of the Company (or similar transaction) in which
no Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities Beneficially Owned
by such Person any securities acquired directly from the 

 

4

 

Company or its
Affiliates) representing 20% or more of the combined voting power of the
Company’s then outstanding securities; or

 

(iv)                              the date the shareholders of the
Company approve a plan of complete liquidation or dissolution of the Company or
there is consummated an agreement for the sale or disposition by the Company of
all or substantially all of the Company’s assets, other than a sale or
disposition by the Company of all or substantially all of the Company’s assets
to an entity, at least 50% of the combined voting power of the voting
securities of which are owned by shareholders of the Company, in combination
with the ownership of any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or any subsidiary of the Company, in
substantially the same proportions as their ownership of the Company
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 the Company 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 the
Company 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) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under
an employee benefit plan of the Company 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 the Company in substantially the same proportions as their ownership of
stock of the Company.

 

4.7           A “Potential Change in Control” shall exist during any
period in which the circumstances described in paragraphs (i), (ii), (iii) or
(iv), below, exist (provided, however, that a Potential Change in Control shall
cease to exist not later than the occurrence of a Change in Control):

 

5

 

(i)                                     The Company 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 (i) shall cease to exist upon the expiration or other
termination of all such agreements.

 

(ii)                                  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 (ii) 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.

 

(iii)                               Any Person becomes the Beneficial
Owner, directly or indirectly, of securities of the Company representing 10% or
more of either the then outstanding shares of common stock of the Company or
the combined voting power of the Company’s then outstanding securities (not
including any securities beneficially owned by such Person which are or were
acquired directly from the Company or its Affiliates).

 

(iv)                              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 (iv) 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.

 

4.8           The provisions of Sections 4.5, 4.6, 4.7 and this Section 4.8
may not be amended or deleted, nor superseded by any other provision of this
Plan, (i) during the pendency of a Potential Change in Control and (ii) during
the period beginning on the date of a Change in Control and ending on the date
five (5) years following such Change in Control.

 

SECTION 5.

DIRECTORS’ RETIREMENT BENEFIT

 

5.1           Effective April 30, 1998, each of the persons
serving as a Director on December 12, 1997 shall be credited with a
retirement benefit of $4,167 a month for 120 months of continuous service and
no additional retirement benefits shall accrue under the Plan. Each of the persons
serving as a Director on December 12, 1997 may elect: (a) to have his
or her retirement benefit under the Plan treated as provided in Section 5.2
of the Plan; or (b) to have the present value of that retirement benefit
credited to an unfunded phantom stock account and converted into phantom stock
units based on the closing price of the Company’s common stock on April 30,
1998, with those phantom stock units then being credited with the same cash and
stock dividends, 

 

6

 

stock
splits and other distributions and adjustments as are paid on the Company’s
common stock. The phantom stock units shall be payable to the Director in
annual payments commencing on the first day of the calendar month next
following the earlier of the Director’s death or termination of service as a
Director, in an amount determined by the closing price of the Company’s common
stock on the first business day preceding the payment date. Unless the
retirement benefit is terminated, the annual benefit shall continue to be paid
on the anniversary of the day on which the first such retirement benefit
payment was made, until the benefit has been paid for ten years, or until the
death of the Director or surviving spouse, if earlier. If a Director should die
with such benefit still in effect, prior to receipt of all payments due
hereunder, the annual benefit shall continue to be paid to the surviving spouse
of such Director until all payments due hereunder have been made or until the
death of the surviving spouse, if earlier.

 

5.2           Any person serving as a Director on December 12,
1997 who elects to have his or her retirement benefit paid pursuant to this Section 5.2
shall receive a monthly benefit equal to $4,167. Payment of the monthly benefit
shall commence on the first day of the calendar month next following the
earlier of the Director’s death or termination of service as a Director. Unless
the retirement benefit is terminated, the monthly benefit shall continue to be
paid on the first day of each calendar month thereafter, until the benefit has
been paid for one hundred and twenty (120) months, or until the death of the
Director or surviving spouse, if earlier. If a Director should die with such
benefit still in effect, prior to receipt of all payments due hereunder, the
monthly benefit shall continue to the surviving spouse of such Director until
all payments due hereunder have been made or until the death of the surviving
spouse, if earlier.

 

5.3           Directors who retired on or before December 12, 1997
will receive the form and amount of retirement benefit payable under the terms
of the Plan in effect at the time of their retirement.

 

5.4           Each Director who is granted a retirement benefit
hereunder shall make him or herself available for such consultation with the
Board of Directors or any committee or member thereof, as may be reasonably
requested from time to time by the Chairman of the Board of Directors,
following such Director’s termination of service as a Director. The Company
shall reimburse each such Director for all reasonable travel, lodging and
subsistence expenses incurred by the Director at the request of the Company in
rendering such consultation. The Company may terminate the retirement benefit
if the Director should fail to render such consultation, unless prevented by
disability or other reason beyond the Director’s control.

 

5.5           It is recognized that during a Director’s period of
service as a Director and as a consultant hereunder, a Director will acquire
knowledge of the affairs of the Company and its subsidiaries, the disclosure of
which would be contrary to the best interests of the Company. Accordingly, the
Company may terminate the retirement benefit if, without the express consent of
the Company, the Director accepts election to the Board of Directors of,
acquires a partnership or proprietary interest in, or renders services as an
employee or consultant to, any business entity which is engaged in substantial
competition with the Company or any of its subsidiaries.

 

5.6           An individual will be considered a Director’s “surviving
spouse” for purposes of Section 5 only if the Director and such individual
were married in a religious or civil ceremony 

 

7

 

recognized
under the laws of the state where the marriage was contracted and the marriage
remained legally effective at the date of the Director’s death.

 

SECTION 6.

CONVERSION TO COMMON STOCK UNITS

 

6.1           Any Director who is then serving as a director may, by
written notice filed with the Secretary of the Company, irrevocably elect to
have all or any portion of deferred fees previously earned but not yet paid,
transferred from the Director’s Deferred Fee Account to a Stock Account
established under this Section 6. Any election as to a portion of such
fees shall be expressed as a percentage and the same percentage shall be
applied to all such fees regardless of the calendar year in which earned or to
all deferred fees earned in designated calendar years, as specified by the
Director. A Director may make no more than one notional investment election
under this Section 6.l in any calendar year. All such elections may apply
only to deferred fees for which an election has not previously been made and
shall be irrevocable.

 

6.2           Any Director may, by written notice filed with the
Secretary of the Company, elect to have all or any portion of deferred fees
earned subsequent to the date such notice is filed credited to a Stock Account
established under this Section 6. Fees covered by such election shall be credited
to such account at the end of each calendar quarter in, or for which, such fees
are earned. Such election may be revoked or modified by such Director, by
written notice filed with the Secretary of the Company, as to deferred fees to
be earned in calendar years subsequent to the calendar year such notice is
filed, but shall be irrevocable as to deferred fees earned prior to such year.

 

6.3           Deferred fees credited to a Stock Account under Section 6.1
shall be converted to Common Stock Units by dividing the deferred fees so
credited by the closing price of common shares of the Company on the date the
notice of election under Section 6 is received by the Company (or the next
business day, if there are no sales on such date) as reported on the New York
Stock Exchange Composite Reporting System. Deferred fees credited to a Stock
Account under Section 6.2 shall be converted to Common Stock Units by
dividing the deferred fees so credited by the closing price of common shares of
the Company as of the last business day of the calendar quarter for which the
credit is made, as reported on the New York Stock Exchange Composite Reporting
System.

 

6.4           Each Common Stock Unit shall be credited with (or
adjusted for) the same cash and stock dividends, stock splits and other
distributions and adjustments as are received by or applicable to one common
share of the Company. All cash dividends and other cash distributions credited
to Common Stock Units shall be converted to additional Common Stock Units by
dividing each such dividend or distribution by the closing price of common
shares of the Company on the payment date for such dividend or distribution, as
reported by the New York Stock Exchange Composite Reporting System.

 

6.5           The value of the Common Stock Units credited each
Director shall be paid the Director in cash on the dates specified in Section 4.3
(or, if applicable, Section 4.5). The amount of each payment shall be
determined by multiplying the Common Stock Units payable on each date specified
in Section 4.3 (or, if applicable, Section 4.5) by the closing price
of common 

 

8

 

shares
of the Company on the day prior to the payment date (or the next preceding
business day if there are no sales on such date), as reported by the New York
Stock Exchange Composite Reporting System.

 

SECTION 7.

MISCELLANEOUS

 

7.1           Each Director or former Director entitled to payment
of deferred fees hereunder, from time to time may name any person or persons
(who may be named contingently or successively) to whom any deferred Director’s
fees earned by him and payable to him are to be paid in case of his death
before he receives any or all of such deferred Director’s fees.  Each designation will revoke all prior
designations by the same Director or former Director, shall be in form
prescribed by the Company, and will be effective only when filed by the
Director or former Director in writing with the Secretary of the Company during
his lifetime. If a deceased Director or former Director shall have failed to
name a beneficiary in the manner provided above, or if the beneficiary named by
a deceased Director or former Director dies before him or before payment of all
the Director’s or former Director’s deferred Directors’ fees, the Company, in
its discretion, may direct payment of the remaining installments required by Section 4.3
to either:

 

(a)                                  any one or more or all of the next
of kin (including the surviving spouse) of the Director or former Director, and
in such proportions as the Company determines; or

 

(b)                                 the legal representative or
representatives of the estate of the last to die of the Director or former
Director and his last surviving beneficiary.

 

The person or persons to whom any deceased
Director’s or former Director’s deferred Directors’ fees are payable under this
Section will be referred to as his “beneficiary.”

 

7.2           Establishment of the Plan and coverage thereunder of
any person shall not be construed to confer any right on the part of such
person to be nominated for reelection to the Board of Directors of the Company,
or to be reelected to the Board of Directors.

 

7.3           Payment of deferred Directors’ fees will be made only
to the person entitled thereto in accordance with the terms of the Plan, and
deferred Directors’ fees are not in any way subject to the debts or other
obligations of persons entitled thereto, and may not be voluntarily or
involuntarily sold, transferred or assigned. When a person entitled to a
payment under the Plan is under legal disability or, in the Company’s opinion,
is in any way incapacitated so as to be unable to manage his financial affairs,
the Company may direct that payment be made to such person’s legal
representative, or to a relative or friend of such person for his benefit. Any
payment made in accordance with the preceding sentence shall be in complete
discharge of the Company’s obligation to make such payment under the Plan.

 

7.4           Any action required or permitted to be taken by the
Company under the terms of the Plan shall be by affirmative vote of a majority of
the members of the Board of Directors then in office.

 

9

 

7.5           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
a Director who retired before January 1, 2005 (“Grandfathered Amounts”)
shall be subject to the terms and conditions of the Plan as administered and as
in effect on December 31, 2004. 
Amendments made to the Plan pursuant to this amendment and restatement
or otherwise shall not affect the Grandfathered Amounts unless expressly
provided for in the amendment.  The terms
and conditions applicable to the Grandfathered Amounts are set forth in Exhibit A
attached hereto.

 

7.6           To the extent applicable, it is intended that the Plan
comply with the provisions of Section 409A of the Code.  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 Section 409A of the Code will have no force and
effect until amended to comply therewith (which amendment may be retroactive to
the extent permitted by Section 409A of the Code).  Notwithstanding anything contained herein to
the contrary, for all purposes of this Plan, a Director shall not be deemed to
have had a termination of service as a Director until the Director has incurred
a separation from service as defined in Treasury Regulation §1.409A-1(h) and,
to the extent required to avoid accelerated taxation and/or tax penalties under
Code Section 409A and applicable guidance issued thereunder, payment of
the amounts payable under the Plan that would otherwise be payable during the
six-month period after the date of termination shall instead be paid on the
first business day after the expiration of such six-month period, plus interest
thereon, at a rate equal to the rate specified in Section 9-8 (to the
extent that such interest is not already provided to the participant under subsection
9.10), 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 Section 409A of the Code.

 

SECTION 8.

AMENDMENT AND DISCONTINUANCE

 

While the Company expects to continue the
Plan, it must necessarily reserve, and does hereby reserve, the right to amend
or discontinue the Plan at any time; provided, however, that any amendment or
discontinuance of the Plan shall be prospective in operation only, and shall
not affect the payment of any deferred Directors’ fees theretofore earned by
any Director, or the conditions under which any such fees are to be paid or
forfeited under the Plan. Any discontinuance of the Plan by the Company shall
comply with the requirements of Section 409A of the Code.

 

SECTION 9.

ALTERNATE PAYMENT OF FEES

 

9.1           By written notice filed with the Secretary of the
Company prior to each calendar year beginning after December 31, 1988, a
Director may elect to receive all or a portion of his fees earned in the
following calendar year in accordance with the provisions of Section 9.  An election under this Section 9.1 shall
become irrevocable as of December 31 of the calendar year prior to the
year in which such monthly and meeting fees will be earned (or, in the case of
a new Director, on the 30th day following
the Director’s first participation in the Plan and all plans that 

 

10

 

would
be aggregated with the Plan pursuant to Treasury Regulation §1.409A-1(c)(2)(i),
provided, that the compensation subject to such election relates solely
to services performed after the date of such election).

 

9.2           If payment of a Director’s fees is made pursuant to Section 9.1,
such fees shall not be deferred and a portion of such fees shall be paid
currently in cash for the Director directly to a “Grantor Trust” established by
the Director, provided such trust is in a form which the Company determines to
be substantially similar to the trust attached to this plan as Exhibit B;
and the balance of the fees shall be paid currently in cash directly to the
Director, provided that the payment made directly to the Director shall equal
the aggregate federal, state and local individual income taxes attributable to
the fees paid pursuant to this Section 9.2 (determined in accordance with Section 9.14).  In no event shall such fees be paid to the
Grantor Trust or directly to the Director 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).

 

9.3           The Company will establish and maintain four separate
accounts in the name of each Director who has made an election under Section 9.1
as follows: a “Pre-Tax Fee Account”, an “After-Tax Fee Account”, a “Pre-Tax
Stock Account” and an “After-Tax Stock Account” (collectively, the “Accounts”).

 

(a)                                  The Pre-Tax Fee Account shall
reflect any fees paid in cash to a Director (including amounts deposited to a
Director’s Grantor Trust) pursuant to Section 9.2, and interest to be
credited to a Director pursuant to Section 9.8.  The After-Tax Fee Account shall also reflect
such amounts but shall be maintained on an after-tax basis.

 

(b)                                 The Pre-Tax Stock Account shall
reflect the total amount of fees converted to Common Stock Units pursuant to Section 6
and any adjustments made pursuant to that Section and Section 9.9.
The After-Tax Stock Account shall also reflect such amounts but shall be
maintained on an after-tax basis.

 

(c)                                  The Accounts established pursuant to
this Section 9.3 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.

 

9.4   As of the end of each calendar year,
the Company shall adjust each Director’s Pre-Tax Fee Account as follows:

 

(a)   FIRST, charge, in any year in which
the Director is entitled to receive a distribution from his or her Grantor
Trust, an amount equal to the distribution from the fee account maintained
thereunder that would have been made to the Director if the aggregate amounts
paid according to Section 9.2 had instead been deferred under Section 3;

 

(b)   NEXT, credit an amount equal to any fees
for that year, not converted to Common Stock Units, that are paid to the
Director (including the amount deposited in the participant’s Grantor Trust)
according to Section 9.2; and

 

11

 

(c)          FINALLY, credit an amount equal to
the Interest earned for that year according to Section 9.8.

 

9.5                                 As of the end of each calendar year,
the Company shall adjust each Director’s After-Tax Fee Account as follows:

 

(a)          FIRST,
charge, in any year in which the Director is in receipt of a benefit
distribution from his or her Grantor Trust, an amount equal to the product of (i) the
distribution that would have been made to the Director if the aggregate amounts
paid according to Section 9.2 had instead been deferred under Section 3,
multiplied by (ii) a fraction, the numerator of which is the balance in
the Director’s After-Tax Fee Account as of the end of the prior fiscal year and
the denominator of which is the balance of the Director’s Pre-Tax Fee Account as
of that same date;

 

(b)                                 NEXT, credit an amount equal to the
fees not converted to Common Stock Units that are paid that year to the
Director directly to the Director’s Grantor Trust according to Section 9.2;
and

 

(c)                                  FINALLY, credit an amount equal to
the After-Tax Interest earned for that year according to Section 9.8

 

9.6         As of the end of each calendar year,
the Company shall adjust each Director’s Pre-Tax Stock Account as follows:

 

(a)          FIRST, charge, in any year in which
the Director is entitled to receive a distribution from his or her Grantor
Trust, an amount equal to the distribution that would have been made to the
Director if the aggregate amount of fees paid according to Section 9.2 had
instead been deferred under Section 3 and the adjustments had been made
under Section 6;

 

(b)         NEXT, credit an amount equal to any fees for that year
that are converted to Common Stock Units and paid to the Director (including
the amount deposited in the Director’s Grantor Trust to the stock account
maintained thereunder) according to Section 9.2;

 

(c)          NEXT, credit an amount
equal to the net earnings of the Director’s Grantor Trust for the year; and

 

(d)         FINALLY, credit an amount equal to
the Book Value Adjustments to be made for that year according to Section 9.9.

 

9.7                                 As of the end of each calendar year,
the Company shall adjust each Director’s After-Tax Stock Account as follows:

 

(a)                                  FIRST, charge, in any year in which
the Director is entitled to receive a distribution from his or her Grantor
Trust, an amount equal to the product of (i) the distribution that would
have been made to the Director if the aggregate amounts paid according to Section 9.2
had instead been deferred under Section 3 and the adjustments had been
made under Section 6, multiplied by (ii) a fraction, the numerator of
which is the balance in the Director’s After-Tax Stock Account as of the end of
the prior fiscal year

 

12

 

and
the denominator of which is the balance of the Director’s Pre-Tax Stock Account
as of that same date;

 

(b)                                 NEXT, credit an amount equal to the
fees converted to Common Stock Units that are paid that year to the Director
directly to the Director’s Grantor Trust and allocated to the stock account
maintained thereunder according to Section 9.2; and

 

(c)                                  NEXT,
credit an amount equal to the net earnings of the Director’s Grantor Trust for
the year; and

 

(d)                                 FINALLY, credit an amount equal to
the Book Value Adjustments to be made for that year according to Section 9.9.

 

9.8

 

(a)                                  As of the end of each calendar year,
a Director’s Pre-Tax Fee Account shall be credited with interest (“Interest”)
at the following rate:

 

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

 

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

 

(b)                                 As of the end of each calendar year,
a Director’s After-Tax Fee Account shall be credited with the amount of
Interest set forth above, multiplied by (one minus the aggregate of the
applicable federal, state and local individual income tax rates determined in
accordance with subsection 9.14 (the “After-Tax Interest”)).

 

9.9                                 As of the end of each calendar year,
a Director’s Pre-Tax Stock Account and After-Tax Stock Account shall be
adjusted as provided in Section 6.4, to the extent applicable, and shall
also be adjusted to reflect the increase or decrease in the fair market value of
the Company’s common stock determined in accordance with Section 6.5,
except that (i) any reference to the payment date in such Section shall
mean December 31 of the applicable calendar year for purposes of this
Section, and (ii) adjustments to the After-Tax Stock Account shall be made
on an after-tax basis.  Such adjustments
shall be referred to as “Book Value Adjustments.”

 

9.10                           In addition to any fees paid to a
Director’s Grantor Trust under Section 9.2 during the year, the Company
shall also make a payment to a Director’s Grantor Trust (a “Guaranteed Rate
Payment”) for each year in which the Grantor Trust is in effect.  The Guaranteed Rate Payment shall equal the
excess, if any, of the Director’s Net Interest Accrual (as defined below) over
the net earnings of the Director’s deferred account maintained under the
Director’s Grantor Trust for the year, and shall be paid within the thirty (30)
days beginning April 1 of the following calendar year.  A Director’s Net Interest Accrual for a year
is an amount equal to the After-Tax Interest credited to the Director’s
After-Tax Fee Account for that year in accordance with Section 9.8(b).

 

9.11                           In addition to the fees paid under Section 9.2
during the year and the Guaranteed Rate Payment described above, the Company
shall also make a payment to a Director’s Grantor

 

13

 

Trust (a “Guaranteed Principal Payment”) for
each year in which the Grantor Trust is in effect, to be credited to the stock
account maintained thereunder.  The “Guaranteed
Principal Payment” shall equal the excess, if any, of 75 percent of the balance
of the Director’s After-Tax Stock Account on December 31 over the balance
in the stock account maintained under the Director’s Grantor Trust as of that same
date. For the calendar year in which the last installment distribution is made
from the Director’s Grantor Trust (meaning, the year that is X years following
the year of the event triggering the payments, where X is the same number of
years served by the Director), the payment made under this Section 9.11
shall equal the excess, if any, of 100 percent of the balance of the Director’s
After-Tax Stock Account over the balance in the stock account maintained under
the Director’s Grantor Trust as of that same date.  Any Guaranteed Principal Payment required
under this Section 9.11 shall be made within the thirty (30) days
beginning April 1 of the following calendar year.

 

9.12                           Each Director’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 Exhibit B.

 

9.13                           In addition to the fees paid under Section 9.2
and the payments provided by Section 9.10 and 9.11, each Director (or, if
the Director is deceased, the beneficiary designated under the Director’s
Grantor Trust) shall be entitled to a Tax Gross Up payment for each year in
which the Grantor Trust is in effect. The “Tax Gross Up” shall equal: (a) the
amount necessary to compensate the Director (or beneficiary) for the net
increase in his or her federal, state and local income taxes as a result of the
inclusion in the Director’s (or beneficiary’s) taxable income of the income of
his or her Grantor Trust and any Guaranteed Rate and Guaranteed Principal
Payments for that year; plus (b) an amount necessary to compensate the
Director (or beneficiary) for the net increase in the taxes described in (a) above
as a result of the inclusion in his or her taxable income of any payment made
pursuant to this Section 9.13.  Any
Tax Gross-Up payments shall be made no later than the end of the calendar year
in which the Director remits the related taxes.

 

9.14                           For purposes of Section 9, a
Director’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 this Section 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 Director’s residence on the date such a
calculation is made, net of any federal tax benefits without a benefit for any
net capital losses. Notwithstanding the preceding sentence, if a Director is
not a citizen or resident of the United States, his or her income tax rates
shall be deemed to be the highest marginal income tax rates actually imposed on
the Director’s benefits under this Plan or earnings under his or her Grantor
Trust without a benefit for any net capital losses.

 

9.15                           If a portion of a Director’s
fees have been paid to a Grantor Trust pursuant to Section 9.2, then those
fees and earnings thereon shall be paid to him or her from the Grantor Trust in
the order in which they were earned (i.e., the fees for the earliest year of
service as a Director will be the first fees distributed from the Grantor
Trust(s), the fees for the next earliest year of service as a Director will be
paid on the anniversary of the payment of the first

 

14

 

installment, etc.)  The
distribution of a Director’s fees shall continue until all fees to which the
Director is entitled to receive under the Plan shall have been paid in
accordance with the terms of the Grantor Trust(s).

 

15

 

Exhibit A

 

ABBOTT
LABORATORIES NON-EMPLOYEE DIRECTORS’ FEE PLAN

 

[Abbott Laboratories Non-Employee Directors’ Fee Plan, as amended, as
filed as Exhibit 10.1 to the Abbott Laboratories Current Report on Form 8-K
dated February 17, 2006.]

 

 

Exhibit B

 

IRREVOCABLE
GRANTOR TRUST AGREEMENT

 

THIS RESTATED
AGREEMENT, made this
             day of
                            ,
2008, by and between
                          
of                       ,                 (the
“grantor”), and The Northern Trust Company located at Chicago, Illinois, as
trustee (the “trustee”),

 

WITNESSETH THAT:

 

WHEREAS, the
grantor has established a trust known as the “             
Grantor Trust”, dated                              ,
to hold certain benefits received by the grantor under the Abbott Laboratories
Non-Employee Directors’ Fee Plan, as it may be amended from time to time; and

 

WHEREAS, the
grantor, with the consent of the administrator of the referenced trust, desires
to amend the agreement creating the referenced trust (“trust agreement”) in
many respects and believes the trust agreement, as so amended, would be easier
to understand if restated.

 

NOW,
THEREFORE, the grantor amends the trust agreement by substituting for it and
all prior amendments the following provisions which set forth all of the terms
and conditions relating to the administration, investment and distribution of
the trust property after this date:

 

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

 

II-2.  Distributions Prior to the Grantor’s Death.  Principal and accumulated income shall not be
distributed from the trust prior to the grantor’s termination of service as a
Director 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 trust fund for that year, with the balance of such income
to be accumulated in the trust.  The
administrator shall inform the trustee of the grantor’s settlement date.  Thereafter, the trustee shall distribute the
trust fund to the grantor, if then living, in a series of annual installments,
commencing on the first day of the month next following the later of the
grantor’s settlement date or the date the grantor attains age 65 years.  The administrator shall inform the trustee of
the number of installment distributions and 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.

 

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 

 

2

 

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.

 

(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
common stock of Abbott Laboratories, or 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.

 

3

 

(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.

 

(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 

 

4

 

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.

 

6

 

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).

 

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.

 

*                                                                                         *                                                                                         *

 

7

 

IN WITNESS
WHEREOF, the grantor has executed this amending instrument as of the day and
year first above written.

 

 

	
   

  	
   

  
	
   

  	
  Grantor

  

 

The
undersigned, as trustee, acknowledges receipt of the foregoing amending
instrument as of the day and year first above written.

 

 

	
   

  	
  The Northern
  Trust Company as Trustee

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
   

  

 

The
undersigned, as a duly authorized representative of the administrator of the
trust, hereby consents to the foregoing amending instrument as of the day and
year first above written.

 

 

	
   

  	
  Abbott
  Laboratories

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Its

  	
   

  

 

8

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