SEC Filing | Abbott Laboratories

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FORM 10-Q

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549

(Mark One)
ý	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2003
OR
o	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to

Commission File No. 1-2189

ABBOTT LABORATORIES

An Illinois Corporation		I.R.S. Employer Identification No. 36-0698440
100 Abbott Park Road Abbott Park, Illinois 60064-6400
Telephone: (847) 937-6100

Indicate by check mark whether the registrant (l) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of l934 during the preceding l2 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ý No o

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes ý No o

As of June 30, 2003, Abbott Laboratories had 1,562,559,488 common shares without par value outstanding.

PART I. FINANCIAL INFORMATION

Abbott Laboratories and Subsidiaries

Condensed Consolidated Financial Statements

(Unaudited)

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Earnings

(Unaudited)

(dollars and shares in thousands except per share data)

			Three Months Ended June 30						Six Months Ended June 30
			2003			2002			2003			2002
Net Sales			$	4,723,635		$	4,314,889		$	9,304,098		$	8,504,178

Cost of products sold				2,270,855			2,166,590			4,468,596			4,062,667
Research and development				402,753			379,492			808,780			736,173
Acquired in-process research and development				39,000			107,700			39,000			107,700
Selling, general and administrative				1,685,886			978,008			2,682,091			1,869,694

		Total Operating Cost and Expenses		4,398,494			3,631,790			7,998,467			6,776,234

Operating Earnings				325,141			683,099			1,305,631			1,727,944
Net interest expense				38,384			52,221			75,674			105,107
(Income) from TAP Pharmaceutical Products Inc. joint venture				(132,542	)		(177,251	)		(264,630	)		(335,713	)
Net foreign exchange loss				9,064			18,369			44,260			43,092
Other (income) expense, net				(6,998	)		5,303			(20,829	)		(496	)

	Earnings Before Taxes			417,233			784,457			1,471,156			1,915,954
Taxes on earnings				170,590			192,192			423,532			469,409

Net Earnings			$	246,643		$	592,265		$	1,047,624		$	1,446,545

Basic Earnings Per Common Share			$	0.16		$	0.38		$	0.67		$	0.93

Diluted Earnings Per Common Share			$	0.16		$	0.38		$	0.67		$	0.92

Cash Dividends Declared Per Common Share			$	0.245		$	0.235		$	0.49		$	0.47

Average Number of Common Shares Outstanding Used for Basic Earnings Per Common Share				1,561,681			1,561,580			1,562,247			1,559,514
Dilutive Common Stock Options				10,629			12,380			8,117			17,027

Average Number of Common Shares Outstanding Plus Dilutive Common Stock Options				1,572,310			1,573,960			1,570,364			1,576,541

Outstanding Common Stock Options Having No Dilutive Effect				59,207			46,460			59,207			22,558

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

Abbott Laboratories and Subsidiaries

Condensed Consolidated Statement of Cash Flows

(Unaudited)

(dollars in thousands)

			Six Months Ended June 30
			2003			2002
Cash Flow From (Used in) Operating Activities:
	Net earnings		$	1,047,624		$	1,446,545
	Adjustments to reconcile net earnings to net cash from operating activities—
	Depreciation			456,341			433,650
	Amortization of intangibles			172,940			166,398
	Acquired in-process research and development			39,000			107,700
	Trade receivables			313,018			(41,127	)
	Inventories			(38,357	)		(161,508	)
	Other, net			20,112			130,824

		Net Cash From Operating Activities		2,010,678			2,082,482

Cash Flow From (Used in) Investing Activities:
	Acquisitions of businesses and technology			(242,063	)		(585,999	)
	Acquisitions of property and equipment			(594,756	)		(600,488	)
	Investment securities transactions			215,277			(2,940	)
	Other			7,768			9,232

		Net Cash (Used in) Investing Activities		(613,774	)		(1,180,195	)

Cash Flow From (Used in) Financing Activities:
	Proceeds from (repayments of) commercial paper, net			(966,000	)		(844,000	)
	Other borrowing transactions, net			611,028			257,936
	Common share transactions, net			(62,909	)		121,794
	Dividends paid			(749,816	)		(693,521	)

		Net Cash (Used in) Financing Activities		(1,167,697	)		(1,157,791	)

Effect of exchange rate changes on cash and cash equivalents				145,250			80,263

Net Increase (Decrease) in Cash and Cash Equivalents				374,457			(175,241	)
Cash and Cash Equivalents, Beginning of Year				704,450			657,378

Cash and Cash Equivalents, End of Period			$	1,078,907		$	482,137

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

Abbott Laboratories and Subsidiaries

Condensed Consolidated Balance Sheet

(Unaudited)

(dollars in thousands)

				June 30 2003			December 31 2002
Assets
Current Assets:
	Cash and cash equivalents			$	1,078,907		$	704,450
	Investment securities				94,881			261,677
	Trade receivables, less allowances of $219,301in 2003 and $198,116 in 2002				2,834,176			2,927,370
	Inventories:
		Finished products			1,363,995			1,274,760
		Work in process			644,574			563,659
		Materials			716,214			602,883

			Total inventories		2,724,783			2,441,302
Prepaid expenses, deferred income taxes, and other receivables					2,982,049			2,786,973

			Total Current Assets		9,714,796			9,121,772

Investment Securities Maturing after One Year					274,001			250,779

Property and Equipment, at Cost					12,881,878			12,147,673
	Less: accumulated depreciation and amortization				6,756,912			6,319,551

	Net Property and Equipment				6,124,966			5,828,122
Intangible Assets, net of amortization					3,875,523			3,919,248
Goodwill					4,420,037			3,732,533
Deferred Income Taxes, Investment in Joint Ventures and Other Assets					1,481,531			1,406,648

				$	25,890,854		$	24,259,102

Liabilities and Shareholders' Investment
Current Liabilities:
	Short-term borrowings			$	1,616,563		$	1,927,543
	Trade accounts payable				1,487,956			1,661,650
	Salaries, dividends payable, and other accruals				3,947,385			3,149,511
	Income taxes payable				69,696			42,387
	Current portion of long-term debt				211,557			221,111

			Total Current Liabilities		7,333,157			7,002,202

Long-Term Debt					4,316,405			4,273,973

Post-employment Obligations and Other Long-term Liabilities					2,348,456			2,318,374

Commitments and Contingencies
Shareholders' Investment:
	Preferred shares, one dollar par value Authorized—1,000,000 shares, none issued				—			—
	Common shares, without par value Authorized — 2,400,000,000 shares Issued at stated capital amount—Shares: 2003: 1,578,379,617; 2002: 1,578,944,551				2,967,351			2,891,266
	Common shares held in treasury, at cost—Shares: 2003: 15,820,129; 2002: 15,876,449				(231,022	)		(231,845	)
	Unearned compensation — restricted stock awards				(67,315	)		(76,472	)
	Earnings employed in the business				8,766,141			8,601,386
	Accumulated other comprehensive income (loss)				457,681			(519,782	)

			Total Shareholders' Investment		11,892,836			10,664,553

				$	25,890,854		$	24,259,102

The accompanying notes to condensed consolidated financial statements are an integral part of this statement.

Abbott Laboratories and Subsidiaries

Notes to Condensed Consolidated Financial Statements

June 30, 2003

(Unaudited)

Note 1—Basis of Presentation

The accompanying unaudited, condensed consolidated financial statements have been prepared pursuant to rules and regulations of the Securities and Exchange Commission and, therefore, do not include all information and footnote disclosures normally included in audited financial statements. However, in the opinion of management, all adjustments necessary to present fairly the results of operations, financial position and cash flows have been made. It is suggested that these statements be read in conjunction with the financial statements included in Abbott's Annual Report on Form 10-K for the year ended December 31, 2002.

Note 2—Supplemental Financial Information
(dollars in thousands)

		Three Months Ended June 30						Six Months Ended June 30
		2003			2002			2003			2002
Net Interest Expense:
	Interest expense	$	48,005		$	60,192		$	96,186		$	123,133
	Interest income		(9,621	)		(7,971	)		(20,512	)		(18,026	)

Total		$	38,384		$	52,221		$	75,674		$	105,107

Note 3—Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates, and for 2003, include the effect of the charge for the anticipated settlement of the Ross enteral nutrition investigation and for the charge for acquired in-process research and development. The effective tax rates, excluding the effect of these 2003 charges, are less than the statutory U.S. federal income tax rate principally due to the domestic dividend exclusion and the benefit of tax exemptions in several taxing jurisdictions.

Note 4—Litigation and Environmental Matters

Abbott is involved in various claims and legal proceedings including a number of antitrust suits and investigations in connection with the pricing of prescription pharmaceuticals. These suits and investigations allege that various pharmaceutical manufacturers have conspired to fix prices for prescription pharmaceuticals and/or to discriminate in pricing to retail pharmacies by providing discounts to mail-order pharmacies, institutional pharmacies and HMOs in violation of state and federal antitrust laws. The suits have been brought on behalf of individuals and retail pharmacies and name both Abbott and certain other pharmaceutical manufacturers and pharmaceutical wholesalers as defendants. The cases seek treble damages, civil penalties, and injunctive and other relief. Abbott has filed a response to each of the complaints denying all substantive allegations.

is classified as Selling, general and administration expense and $8 million is classified as Cost of products sold. This reserve is included in the Condensed Consolidated Balance Sheet under Salaries, dividends payable, and other accruals. Abbott expects to remit the settlement amount by the end of 2003.

There are several lawsuits pending in connection with the sales of Hytrin. These suits allege that Abbott violated state or federal antitrust laws and, in some cases, unfair competition laws by signing patent settlement agreements with Geneva Pharmaceuticals, Inc. and Zenith Laboratories, Inc. Those agreements related to pending patent infringement lawsuits between Abbott and the two companies. Some of the suits also allege that Abbott violated various state or federal laws by filing frivolous patent infringement lawsuits to protect Hytrin from generic competition. The cases seek treble damages, civil penalties and other relief. Abbott has filed or intends to file a response to each of the complaints denying all substantive allegations.

Abbott has been identified as a potentially responsible party for investigation and cleanup costs at a number of locations in the United States and Puerto Rico under federal and state remediation laws and is investigating potential contamination at a number of company-owned locations. Abbott has recorded an estimated cleanup cost for each site for which management believes Abbott has a probable loss exposure. No individual site cleanup exposure is expected to exceed $3 million, and the aggregate cleanup exposure is not expected to exceed $20 million.

For its legal proceedings and environmental exposures discussed in this note and in Note 5, Abbott estimates the range of possible loss to be from approximately $125 million to $200 million, excluding the enteral nutritional investigation. Abbott has recorded reserves of approximately $150 million for these proceedings and exposures. These reserves represent management's best estimate of probable loss, as defined by Statement of Financial Accounting Standards No. 5, "Accounting for Contingencies."

While it is not feasible to predict the outcome of all such proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations, except with respect to the enteral nutritional investigation. Payment of the enteral nutritional settlement will be material to cash flows in the quarter paid.

Note 5—TAP Pharmaceutical Products Inc.

TAP and Abbott have been named as defendants in several lawsuits alleging violations of various state or federal laws in connection with TAP's marketing and pricing of Lupron. Abbott has filed or intends to file a response to each of the lawsuits denying all substantive allegations.

Within the next year, legal proceedings may occur that may result in a change in the estimated reserves recorded by TAP and Abbott. While it is not feasible to predict the outcome of such pending claims, proceedings, and investigations with certainty, management is of the opinion that their ultimate disposition should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations.

Note 6—U.S. Food and Drug Administration Consent Decree

In November 1999, Abbott reached agreement with the U.S. government to have a consent decree entered to settle issues involving Abbott's diagnostics manufacturing operations in Lake County, Ill. The decree, which was amended in December 2000, requires Abbott to ensure its diagnostics manufacturing processes in Lake County conform with the U.S. Food and Drug Administration's (FDA) Quality System Regulation (QSR). The decree allows for the continued manufacture and distribution of medically necessary diagnostic products made in Lake County. However, Abbott is prohibited from manufacturing or distributing certain diagnostic products until Abbott ensures the processes in its Lake County diagnostics manufacturing operations conform with the QSR. The decree allows Abbott to export diagnostic products and components for sale and distribution outside the United States if they meet the export requirements of the Federal Food, Drug and Cosmetic Act. Under the terms of the amended consent decree, Abbott was to ensure its diagnostics manufacturing operations are in conformance with the QSR by January 15, 2001. The FDA performed an inspection of Abbott's Lake County, Ill. diagnostics manufacturing operations during the fourth quarter of 2001 and first quarter of 2002 to determine whether those operations are in conformity with the QSR. In May 2002, these operations were found not to be in conformity. Accordingly, Abbott was required to make additional payments to the government and continue its efforts to achieve full compliance. A pretax charge of $129 million to Cost of sales related to this matter was recorded in the second quarter of 2002. The FDA will determine Abbott's conformance with the QSR after a re-inspection of Abbott's facilities. If the FDA concludes that the operations are not in conformance with the QSR, Abbott may continue to be subject to additional costs and loss of revenue.

Note 7—Comprehensive Income, net of tax (dollars in thousands)

	Three Months Ended June 30					Six Months Ended June 30
	2003		2002			2003			2002
Foreign currency translation adjustments	$	581,527	$	250,504		$	982,644		$	45,553
Unrealized gains (losses) on marketable equity securities		34,789		(73,738	)		34,668			(67,247	)
Net gains (losses) on derivative instruments designated as cash flow hedges		175		(11,289	)		(28,881	)		(14,970	)
Reclassification adjustment for realized gains		37		(2,011	)		(10,968	)		(12,929	)

Other comprehensive income (loss), net of tax		616,528		163,466			977,463			(49,593	)
Net Earnings		246,643		592,265			1,047,624			1,446,545

Comprehensive Income	$	863,171	$	755,731		$	2,025,087		$	1,396,952

Supplemental Comprehensive Income Information, net of tax:
Cumulative foreign currency translation (income) loss adjustments						$	(674,402	)	$	590,369
Minimum pension liability adjustments							203,182			—
Cumulative unrealized losses (gains) on marketable equity securities							(32,708	)		50,372
Cumulative losses on derivative instruments designated as cash flow hedges							46,247			3,562

Note 8—Segment Information (dollars in millions)

Revenue Segments—Abbott's principal business is the discovery, development, manufacture and sale of a broad line of health care products. Abbott's products are generally sold directly to retailers, wholesalers, hospitals, health care facilities, laboratories, physicians' offices and government agencies throughout the world. Abbott's reportable segments are as follows:

Pharmaceutical Products—U.S. sales of a broad line of pharmaceuticals.

Diagnostic Products—Worldwide sales of diagnostic systems and tests for blood banks, hospitals, consumers, commercial laboratories and alternate-care testing sites.

Hospital Products—U.S. sales of intravenous and irrigation fluids and related administration equipment, drugs and drug-delivery systems, anesthetics, critical care products, and other medical specialty products for hospitals and alternate-care sites.

Ross Products—U.S. sales of a broad line of adult and pediatric nutritional products, pediatric pharmaceuticals and consumer products.

International—Non-U.S. sales of Abbott's pharmaceutical, hospital and nutritional products. Products sold by International are manufactured by domestic segments and by international manufacturing locations.

Abbott's underlying accounting records are maintained on a legal entity basis for government and public reporting requirements. Segment disclosures are on a performance basis consistent with internal management reporting. Intersegment transfers of inventory are recorded at standard cost and are not a measure of segment operating earnings. The cost of some corporate functions and the cost of certain employee benefits are sold to reportable segments at predetermined rates that approximate cost. Remaining costs, if any, are not allocated to reportable segments. Intangible assets and related amortization from business acquisitions are not allocated to segments. The following segment information has been prepared in accordance with the internal accounting policies of Abbott, as described above, and are not presented in accordance with generally accepted accounting principles applied to the consolidated financial statements.

	Net Sales to External Customers								Operating Earnings
	Three Months Ended June 30				Six Months Ended June 30				Three Months Ended June 30						Six Months Ended June 30
	2003		2002		2003		2002		2003			2002			2003			2002
Pharmaceutical	$	1,264	$	997	$	2,339	$	1,947	$	407		$	293		$	701		$	584
Diagnostics (worldwide)		756		735		1,479		1,414		76			68			110			130
Hospital		748		762		1,465		1,436		174			208			340			391
Ross		478		515		1,079		1,094		151			159			414			400
International		1,400		1,243		2,739		2,466		328			316			653			663

Total Reportable Segments		4,646		4,252		9,101		8,357		1,136			1,044			2,218			2,168
Other		78		63		203		147

Net Sales	$	4,724	$	4,315	$	9,304	$	8,504

Corporate functions										59			42			108			89
Benefit plans costs										8			2			18			33
Non-reportable segments										5			(1	)		4			6
Net interest expense										38			52			76			105
Acquired in-process research and development										39			108			39			108
(Income) from TAP Pharmaceutical Products Inc. joint venture										(133	)		(177	)		(265	)		(335	)
Net foreign exchange loss										9			18			44			43
Other, net (a)										694			215			723			203

Consolidated Earnings Before Taxes									$	417		$	785		$	1,471		$	1,916

(a): Other, net for 2003 includes $622 for the anticipated settlement of the Ross enteral nutrition investigation. Of the $622 charge, $614 is classified as Selling, general and administrative expense

and $8 is classified as Cost of products sold. Other, net for 2002 includes $116 of the $129 pre-tax charge to Cost of sales relating to the U.S. FDA consent decree charge as discussed in Note 6; the remaining amount of the charge is included in the results of the diagnostic products segment.

Note 9—Restructuring Charges (dollars in millions)

In October 2002, Abbott announced restructuring plans to align Abbott's global manufacturing operations with its scientific focus and to achieve greater operating efficiencies in its Diagnostics and International segments. The following summarizes the restructuring activity:

	Employee-Related And Other			Asset Impairments			Total
2002 Restructuring charges	$	141		$	33		$	174
2002 Payments and impairments		(37	)		(33	)		(70	)

Accrued balance at December 31, 2002		104			—			104
Change in estimate and foreign currency translation		(8	)		—			(8	)
2003 Payments		(57	)		—			(57	)

Accrued balance at June 30, 2003	$	39		$	—		$	39

In 2001 and 2002, Abbott implemented restructuring plans related primarily to the operations of the acquired pharmaceutical business of BASF. The following summarizes the restructuring activity:

	Employee-Related And Other			Asset Impairments			Total
2001 Restructuring charges	$	195		$	12		$	207
2001 Payments and impairments		(106	)		(12	)		(118	)

Accrued balance at December 31, 2001		89			—			89
2002 Restructuring charges		59			—			59
2002 Payments		(80	)		—			(80	)

Accrued balance at December 31, 2002		68			—			68
2003 Payments		(36	)		—			(36	)

Accrued balance at June 30, 2003	$	32		$	—		$	32

Note 10—Sale of Product Rights

In the first quarter 2003, Abbott completed the sale of its U.S. eye and ear care product lines and in the first quarter 2002, Abbott sold its U.S. Selsun Blue product rights and recorded these transactions in net sales in accordance with Abbott's revenue recognition accounting policies as discussed in Note 1 to the financial statements included in Abbott's Annual Report on Form 10-K.

Note 11—Business Combinations and Technology Acquisition

In the second quarter 2003, Abbott acquired Spinal Concepts, a marketer of spinal fixation products used in the treatment of spinal disorders, diseases and injuries for approximately $166 million, in cash, plus additional milestone payments of up to $40 million if agreed upon targets are met. Abbott also acquired the assets of JOMED's coronary and peripheral interventional business line for approximately $68 million in cash. These acquisitions resulted in a charge of $39 million for estimated acquired in-process research and development, intangible assets of approximately $118 million and non-tax deductible goodwill of approximately $57 million. Acquired intangible assets, primarily product technology, will be amortized over 10 to 16 years (average of approximately 13 years). Allocation of the purchase price is subject to completion of independent appraisals, which are expected to be completed in the third quarter of 2003.

In the second quarter 2002, Abbott acquired the cardiovascular stent business of Biocompatibles International plc and certain cardiovascular stent technology rights from Medtronic, Inc. In addition in 2002, Abbott acquired an additional 28.8 percent of the issued common shares of Hokuriku Seiyaku and in 2003 Abbott acquired the remaining shares, resulting in Abbott owning 100 percent of the common shares of Hokuriku Seiyaku. The aggregate cash purchase price ($586 million) of these strategic business and technology acquisitions resulted in a charge of $108 million for acquired in-process research and development, intangible assets of approximately $145 million and non-tax deductible goodwill of approximately $257 million. Acquired intangible assets, primarily product technology, will be amortized over 4 to 13 years (average of approximately 8 years).

Had these acquisitions taken place on January 1 of the previous year, consolidated sales and income would not have been significantly different from reported amounts.

Note 12—Incentive Stock Programs

Abbott measures compensation cost using the intrinsic value-based method of accounting for stock options and replacement stock options granted to employees. Had compensation cost been determined using the fair market value-based accounting method, pro forma net income (in millions) and earnings per share (EPS) amounts would have been as follows:

	Three Months Ended June 30						Six Months Ended June 30
	2003			2002			2003			2002
Net income, as reported	$	247		$	592		$	1,047		$	1,447
Compensation cost under fair value-based accounting method, net of taxes		(55	)		(54	)		(111	)		(105	)

Net income, pro forma	$	192		$	538		$	936		$	1,342

Basic EPS, as reported	$	0.16		$	0.38		$	0.67		$	0.93
Basic EPS, pro forma		0.12			0.34			0.60			0.86
Diluted EPS, as reported		0.16			0.38			0.67			0.92
Diluted EPS, pro forma		0.12			0.34			0.60			0.86
Reported diluted EPS higher than pro forma diluted EPS		0.04			0.04			0.07			0.06

Note 13—Equity Method Investments
(dollars in millions)

Abbott's 50 percent-owned joint venture, TAP Pharmaceutical Products Inc. (TAP), is accounted for under the equity method of accounting. Abbott's income from the TAP joint venture is recognized net of consolidating adjustments. Summarized financial information for TAP is as follows:

	Three Months Ended June 30				Six Months Ended June 30
	2003		2002		2003		2002
Net Sales	$	996.2	$	1,033.9	$	2,006.7	$	1,946.3
Cost of Sales		269.9		225.4		529.9		422.7
Income Before Taxes		414.2		540.6		827.0		1,025.8
Net Income		265.1		343.3		529.3		651.4
					June 30 2003		December 31 2002
Current Assets					$	1,207.5	$	1,176.8
Total Assets						1,618.7		1,580.3
Current Liabilities						999.4		791.6
Total Liabilities						1,041.0		839.8

Note 14—Debt and Lines of Credit

In 2003, Abbott established a yen denominated line of credit of approximately $1 billion. Borrowings outstanding at June 30, 2003 were approximately $900 million. Proceeds from this line of credit were used to pay off an existing yen denominated credit facility of approximately $280 million and to pay down domestic commercial paper borrowings. The new line of credit expires in August 2003, and Abbott subsequently replaced this facility with a similar yen denominated facility, which expires in November 2003. In the second quarter 2003, Abbott established a U.S. dollar denominated credit facility of $750 million, which expires on December 31, 2004. There were no borrowings under this facility at June 30, 2003.

FINANCIAL REVIEW

Results of Operations

The following table details sales by reportable segment for the second quarter and first six months:
(dollars in millions)

	Three Months Ended June 30						Six Months Ended June 30
	Net Sales to External Customers				Percentage Change (a)		Net Sales to External Customers				Percentage Change (a)
	2003		2002				2003		2002
Pharmaceutical	$	1,264	$	997	26.8		$	2,339	$	1,947	20.1
Diagnostics		756		735	2.9			1,479		1,414	4.6
Hospital		748		762	(1.8	)		1,465		1,436	2.0
Ross		478		515	(7.1	)		1,079		1,094	(1.3	)
International		1,400		1,243	12.7			2,739		2,466	11.0

Total Reportable Segments		4,646		4,252	9.3			9,101		8,357	8.9
Other		78		63	20.8			203		147	38.4

Net Sales	$	4,724	$	4,315	9.5		$	9,304	$	8,504	9.4

Total U.S.	$	2,791	$	2,603	7.2		$	5,555	$	5,175	7.3

Total International	$	1,933	$	1,712	12.9		$	3,749	$	3,329	12.6

A comparison of the product group sales by segment for first six months ended June 30 is as follows:
(dollars in millions)

	Six Months Ended June 30
	2003		Percentage Change (a)		2002		Percentage Change (a)
Pharmaceutical—
Neuroscience	$	364	1.8		$	357	(2.6	)
Anti-Infectives		313	13.5			276	(3.4	)
Diabetes/Metabolism		282	(4.1	)		294	49.9
Cardiology		299	43.9			208	58.3
Anti-Viral		205	19.9			171	30.8
Immunology		78	N/A			—	—
Diagnostic—
Immunochemistry		1,065	4.9			1,015	(4.2	)
Glucose		256	6.7			240	8.9
Hematology		111	6.6			104	(2.7	)
Hospital—
Anesthesia		219	11.6			196	4.2
Renal Care		168	(10.3	)		187	30.9
Acute Care Injectibles		231	2.0			226	5.2
Infusion Therapy		214	1.4			211	7.6
Vascular Pharma and Devices		114	33.8			85	16.7
Ross—
Pediatric Nutritionals		519	1.4			512	(7.9	)
Adult Nutritionals		380	(10.2	)		423	2.3
International—
Other Pharmaceuticals		1,230	11.7			1,102	53.8
Anti-Infectives		411	8.9			377	(1.9	)
Hospital Products		418	10.9			377	1.7
Pediatric Nutritionals		252	1.0			249	7.3
Adult Nutritionals		276	11.7			247	0.2

a): Percentage changes are based on unrounded numbers.

Worldwide net sales for the second quarter 2003 and first six months 2003 reflect unit growth and the positive effect of the relatively weaker U.S. dollar. The relatively weaker U.S. dollar increased consolidated net sales 3.7 percent for the second quarter 2003 and 3.3 percent for the first six months 2003 and increased international sales 9.2 percent for the second quarter 2003 and 8.5 percent for the first six months 2003 over comparable 2002 periods. In addition, the effect of the relatively weaker U.S. dollar increased Immunochemistry and Glucose product sales by 7.0 percent and 6.9 percent, respectively, for the six months ended 2003 over 2002; and increased international Anti-Infectives and international Adult Nutritionals product sales by 11.3 percent and 6.9 percent, respectively, for the first six months 2003 over 2002.

Increased sales volume of TriCor favorably impacted the Cardiology product sales of the Pharmaceutical Products segment for both 2003 and 2002. Increased sales volume of Ultane favorably impacted the Anesthesia product sales of the Hospital Products segment in 2003. The decrease in Ross' Adult Nutritionals product sales in 2003 was due, in part, to lower retail sales in anticipation of a transition to new packaging for Ensure. The acquisition of the pharmaceutical business of BASF in

2001 favorably impacted the Diabetes/Metabolism product sales of the Pharmaceutical Products segment and the Other Pharmaceuticals product sales of the International segment for 2002.

On December 31, 2002, the FDA approved Humira for the treatment of rheumatoid arthritis. U.S. sales of Humira, reported in Immunology product sales, were $78 million for the first six months 2003. International sales of Humira from sales through patient named basis programs were $5 million for the first six months 2003. Worldwide sales of Humira in 2003 are forecasted to be more than $250 million based on the U.S. launch and an expected European launch later in 2003.

Gross profit margin (sales less cost of products sold, including freight and distribution expenses) was 51.9 percent for the second quarter 2003, compared to 49.8 percent for the second quarter 2002. First six months 2003 gross profit margin was 52.0 percent, compared to 52.2 percent for the first six months 2002. The increase in the gross profit margin in the second quarter 2003 was due primarily to the effect of the $129 million FDA consent decree charge in 2002, which decreased the gross profit margin 3.0 percent in 2002. In addition, higher manufacturing costs, primarily ongoing costs associated with Good Manufacturing Practices compliance enhancements related to the diagnostics division, was partially offset by favorable product mix. The decrease in the gross profit margin for the six months 2003 was due to higher other manufacturing costs, primarily ongoing costs associated with Good Manufacturing Practices compliance enhancements related to the diagnostics division; partially offset by the effect of the $129 million FDA consent decree charge in 2002, which decreased the gross profit margin 1.5 percent in 2002.

Research and development expenses, excluding acquired in-process research and development, increased 6.1 percent in the second quarter 2003 and 9.9 percent for the first six months 2003, respectively, over comparable 2002 periods. These increases were primarily due to increased spending to support pipeline programs, such as additional new indications for Humira. The majority of research and development expenditures is concentrated on pharmaceutical products.

Selling, general and administrative expenses for the second quarter 2003 and first six months 2003 increased 72.4 percent and 43.5 percent, respectively, over the comparable 2002 periods. In the second quarter 2003, Abbott recorded in Selling, general and administrative expenses, a pretax charge of $614 million related to the settlement of the Ross enteral nutritional investigation as discussed below and in Note 4. This charge increased selling, general and administrative expenses by 62.8 percent and 32.9 percent over the second quarter and first six months of 2002, respectively. The increases in selling, general and administrative expenses, excluding the charge for the investigation, were due primarily to increased selling and marketing support for new and existing products, including accelerated spending for the launch of Humira, due to its earlier-than-expected FDA approval, as well as spending on other marketed pharmaceutical products.

May 2002, these operations were found not to be in conformity. Accordingly, Abbott was required to make additional payments to the government and continue its efforts to achieve full compliance. A pretax charge of $129 million related to this matter was recorded in the second quarter of 2002. The FDA will determine Abbott's conformance with the QSR after a re-inspection of Abbott's facilities. If the FDA concludes that the operations are not in conformance with the QSR, Abbott may continue to be subject to additional costs and loss of revenue. The consent decree affects the sales and margin of the Immunochemistry products of the Diagnostic Products segment.

The U.S. Attorney's office in the Southern District of Illinois is conducting an industry-wide investigation of the enteral nutritional business. The investigation is both civil and criminal in nature. During the second quarter of 2003, Abbott reached a settlement with the U.S. Attorney resolving all outstanding allegations by the government, and accrued a charge of $622 million; of which $614 million is classified as Selling, general and administration expense and $8 million is classified as Cost of products sold. Abbott expects to remit the settlement amount by the end of 2003.

Business Combinations and Technology Acquisition

In the second quarter 2003, Abbott acquired Spinal Concepts, a marketer of spinal fixation products used in the treatment of spinal disorders, diseases and injuries for approximately $166 million, in cash, plus additional milestone payments of up to $40 million if agreed upon targets are met. Abbott also acquired the assets of JOMED's coronary and peripheral interventional business line for approximately $68 million in cash. These acquisitions resulted in a charge of $39 million for estimated acquired in-process research and development, intangible assets of approximately $118 million and non-tax deductible goodwill of approximately $57 million. Acquired intangible assets, primarily product technology, will be amortized over 10 to 16 years (average of approximately 13 years). Allocation of the purchase price is subject to completion of independent appraisals that are expected to be completed in the third quarter of 2003.

In July 2003, Abbott announced that it has entered into an agreement to acquire ZonePerfect, a marketer of healthy and nutritious products for active people, for approximately $160 million in cash. The transaction is subject to customary closing conditions, including government approvals, and is expected to close during the third quarter of 2003.

Had these acquisitions taken place on January 1 of the previous year, consolidated sales and income would not have been significantly different from reported amounts.

Restructuring Charges
(dollars in millions)

	Employee-Related And Other			Asset Impairments			Total
2002 Restructuring charges	$	141		$	33		$	174
2002 Payments and impairments		(37	)		(33	)		(70	)

Accrued balance at December 31, 2002		104			—			104
Change in estimate and foreign currency translation		(8	)		—			(8	)
2003 Payments		(57	)		—			(57	)

Accrued balance at June 30, 2003	$	39		$	—		$	39

In 2001 and 2002, Abbott implemented restructuring plans related primarily to the operations of the acquired pharmaceutical business of BASF. The following summarizes the restructuring activity:

	Employee-Related And Other			Asset Impairments			Total
2001 Restructuring charges	$	195		$	12		$	207
2001 Payments and impairments		(106	)		(12	)		(118	)

Accrued balance at December 31, 2001		89			—			89
2002 Restructuring charges		59			—			59
2002 Payments		(80	)		—			(80	)

Accrued balance at December 31, 2002		68			—			68
2003 Payments		(36	)		—			(36	)

Accrued balance at June 30, 2003	$	32		$	—		$	32

Interest Expense

Net interest expense decreased in both the second quarter and first six months of 2003 due primarily to lower interest rates and a lower level of debt.

Sale of Product Rights

Taxes on Earnings

Taxes on earnings reflect the estimated annual effective rates, and for 2003, include the effect of the charge for the anticipated settlement of the Ross enteral nutrition investigation and for the charge for acquired in-process research and development. The effect of these charges for the second quarter 2003 was to increase the effective tax rate from 24.0 percent to 40.9 percent. Abbott anticipates that the effective tax rate for the last six months of 2003 will be approximately 24.0 percent. The effective tax rates, excluding the effect of these 2003 charges, are less than the statutory U.S. federal income tax

rate principally due to the domestic dividend exclusion and the benefit of tax exemptions in several taxing jurisdictions.

Liquidity and Capital Resources at June 30, 2003 Compared with December 31, 2002

Net cash from operating activities for the first six months 2003 totaled $2.0 billion. Abbott expects annual cash flow from operating activities to continue to exceed Abbott's capital expenditures and cash dividends.

At June 30, 2003, Abbott had working capital of approximately $2.4 billion compared to working capital of approximately $2.1 billion at December 31, 2002. The increase in working capital in 2003 was primarily due to operating cash flows used to increase cash and cash equivalents.

At June 30, 2003, Abbott's long-term debt ratings were AA by Standard & Poor's Corporation and Aa3 by Moody's Investors Service. In June 2003, Standard & Poor's Corporation reaffirmed Abbott's debt ratings. As a result of Abbott's announcement related to the anticipated settlement of the Ross enteral nutritional investigation as discussed in Note 4, Moody's Investors Service placed Abbott's long-term debt ratings under review for possible downgrade. The review by Moody's Investors Service is currently in process. Abbott has readily available financial resources, including unused lines of credit of $3.0 billion, which support commercial paper borrowing arrangements.

In 2003, Abbott entered into interest rate hedge contracts totaling $800 million to manage its exposure to changes in the fair value of $800 million of fixed-rate debt due in July 2006. These contracts are designated as fair value hedges of the variability of the fair value of fixed-rate debt due to changes in the long-term benchmark interest rates. The effect of the hedge is to change a fixed-rate interest obligation to a variable rate for that portion of the debt.

Under a registration statement filed with the Securities and Exchange Commission in February 2001, Abbott may issue up to $250 million of securities in the future in the form of debt securities or common shares without par value.

In June 2000, the Board of Directors authorized the purchase of 25 million shares of Abbott's common stock and Abbott purchased 10.6 million shares from this authorization in 2001 and 2000. Common stock purchases were temporarily suspended in January 2001, following Abbott's announced acquisition of the pharmaceutical business of BASF. In 2003, Abbott announced that it plans to purchase the remaining 14.4 million shares from time to time on the open market. During the first six months 2003, Abbott purchased 2.7 million of its common shares at a cost of $98 million. As of June 30, 2003, an additional 11.7 million shares may be purchased in future periods under the June 2000 authorization by the Board of Directors.

In the first quarter 2003, $200 million was funded to Abbott's main domestic pension plan.

Legislative Issues

Abbott's primary markets are highly competitive and subject to substantial government regulation. Abbott expects debate to continue at both the federal and the state levels over the availability, method

of delivery, and payment for health care products and services. Abbott believes that if legislation is enacted, it could have the effect of reducing prices, or reducing the rate of price increases for medical products and services. International operations are also subject to a significant degree of government regulation. It is not possible to predict the extent to which Abbott or the health care industry in general might be adversely affected by these factors in the future. A more complete discussion of these factors is contained in Item 1, Business, in the Annual Report on Form 10-K, which is available upon request.

Private Securities Litigation Reform Act of 1995—A Caution Concerning Forward-Looking Statements

Under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Abbott cautions investors that any forward-looking statements or projections made by Abbott, including those made in this document, are subject to risks and uncertainties that may cause actual results to differ materially from those projected. Economic, competitive, governmental, technological and other factors that may affect Abbott's operations are discussed in Exhibit 99.1 to this Quarterly Report on Form 10-Q.

Item 4. Controls and Procedures

(a): Evaluation of disclosure controls and procedures. The Chief Executive Officer, Miles D. White, and Chief Financial Officer, Thomas C. Freyman, evaluated the effectiveness of Abbott Laboratories' disclosure controls and procedures as of the end of the period covered by this report, and concluded that Abbott Laboratories' disclosure controls and procedures were effective to ensure that information Abbott is required to disclose in its filings with the Securities and Exchange Commission under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission's rules and forms, and to ensure that information required to be disclosed by Abbott in the reports that it files under the Exchange Act is accumulated and communicated to Abbott's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

Abbott is involved in various claims, legal proceedings and investigations, including (as of June 30, 2003, except as otherwise indicated) those described below.

In its Form 10-Q for the first quarter of 2003, Abbott reported that three cases were pending in which Abbott sought to protect its patents for divalproex sodium (a drug that Abbott sells under the trademark Depakote®). In May 2003, after a Section 505(b)(2) NDA was filed for a product described as sodium valproate tablets, Abbott filed a new lawsuit against Andrx Corporation, Andrx Pharmaceuticals, Inc., and Andrx Pharmaceutials, LLC in the United States District Court for the Southern District of Florida. This new action has been consolidated with the previously filed case against the same parties.

In its 2002 Form 10-K, Abbott reported that a number of antitrust cases were pending in federal court (including a case filed by the Attorneys General of the States of Colorado, Florida and Kansas) and various state courts in connection with the settlement of patent litigation by Abbott involving terazosin hydrochloride, a drug sold by Abbott under the trademark Hytrin®. These cases (which were brought against Abbott, Geneva Pharmaceuticals, Inc. and Zenith Goldline Pharmaceuticals, Inc.) seek actual damages, treble damages, and other relief and allege Abbott violated state or federal antitrust laws and, in some cases, unfair competition laws. The Appellate Court of the State of New York, County of New York stayed two of these cases, Asher and Lisanti, pending the resolution of In re: Terazosin Hydrochloride, MDL No. 1317.

In its 2002 Form 10-K, Abbott reported that a number of cases, brought as purported class actions or representative actions on behalf of individuals or entities, are pending that allege generally that Abbott and numerous other pharmaceutical companies reported false pricing information in connection with certain drugs that are reimbursable under Medicare and Medicaid. Four cases have been brought by state Attorneys General (California, Montana, Nevada and West Virginia). These cases generally seek damages, treble damages, disgorgement of profits, restitution and attorneys' fees. The federal court cases have been consolidated in the United States District Court in Massachusetts under the Multidistrict Litigation Rules as In re: Pharmaceutical Industry Average Wholesale Price Litigation, MDL 1456. In June 2003, plaintiffs in MDL 1456 filed an amended complaint which added (i) the allegation that the defendant pharmaceutical manufacturers conspired with publishers of pricing data and pharmaceutical benefit managers (PBMs) to raise drug reimbursement prices and (ii) antitrust and conspiracy claims relating to TogetherRx, a company through which Abbott and certain other pharmaceutical companies offer a prescription drug discount to certain low-income seniors. One additional case was filed on June 30, 2003, International Union of Operating Engineers Local No. 68 Welfare Fund v. AstraZeneca PLC, et al. in state court in Monmouth County, New Jersey. Abbott has filed or intends to file a response in each case denying all substantive allegations.

In its 2002 Form 10-K, Abbott reported that a number of cases have been brought against TAP Pharmaceutical Products Inc., Abbott and Takeda Chemical Industries, Ltd. in various courts that generally allege that TAP reported false pricing information in connection with Lupron®, a product reimbursable under Medicare. In one previously reported case, Benoit, a plaintiff has severed her claim, and has created a new case, Grass v. Takeda, et al., pending in Jefferson County, Texas. In another previously reported case, Stetser, the Court granted plaintiffs' motion to certify a nationwide class of plaintiffs. The class certification ruling has been appealed.

In its Form 10-Q for the first quarter of 2003, Abbott reported that a number of cases were pending in which Abbott seeks to protect its patents for fenofibrate (a drug Abbott sells under the trademark TriCor®) and that it was seeking a rehearing of the court's decision in a case relating to the

capsule product, Novopharm Limited, in which the United States Court of Appeals for the Federal Circuit had affirmed the lower court's grant of summary judgment in favor of Novopharm. The request for a rehearing has been denied. Abbott has filed two additional cases alleging infringement of patents with respect to Abbott's tablet product: Abbott Laboratories v. Cipher Pharmaceuticals, filed on April 21, 2003 in the United States District Court for the District of Puerto Rico and Abbott Laboratories v. Ranbaxy Pharmaceuticals, Inc., filed on May 12, 2003 in the United States District Court for the District of New Jersey.

In its 2002 Form 10-K, Abbott reported that it is a defendant in numerous lawsuits involving the drug oxycodone (a drug sold under the trademark OxyContin®), which is manufactured by Purdue Pharma. Abbott promotes OxyContin to certain specialty physicians, including surgeons and anesthesiologists, under a co-promotion agreement with Purdue Pharma. Purdue Pharma is a defendant in each lawsuit and, pursuant to the co-promotion agreement, Purdue is required to indemnify Abbott in each lawsuit. Most of the lawsuits allege generally that plaintiffs suffered personal injuries as a result of taking OxyContin. Some of the lawsuits allege consumer protection violations and unfair trade practices. One suit by a third party payor alleges antitrust pricing violations and overpricing of the drug. As of June 30, 2003, there were a total of 262 lawsuits pending in which Abbott is a party. 96 cases were pending in federal court. 166 cases were pending in state court. 237 cases were brought by individual plaintiffs, and 25 cases were brought as actual or purported class action lawsuits. One case has been brought by the Attorney General for the State of West Virginia. As previously disclosed in the 2002 Form 10-K, a class of Ohio plaintiffs was certified in the case of Howland v. Purdue Pharma, L.P. et al.. That certification decision was affirmed by the Court of Appeals for Butler County, Ohio.

In its 2002 Form 10-K, Abbott reported that the U.S. Attorney's Office in the Southern District of Illinois has been conducting an industry-wide investigation of the enteral nutritional business. The investigation was focused on the sales and marketing practices in that business. Abbott has agreed to a settlement with the Department of Justice and with each of the 50 states and the District of Columbia concerning their respective Medicaid programs. On July 23, 2003, CG Nutritionals, Inc., a subsidiary of Abbott, pled guilty to a one count charge alleging interference with a federal healthcare investigation and agreed to pay a criminal fine of $200 million. Abbott has also agreed to pay approximately $414 million to the U.S. and to the 50 states and District of Columbia to resolve certain civil allegations. As part of the settlement, Abbott has entered into a Corporate Integrity Agreement with the Office of Inspector General for the U.S. Department of Health and Human Services. The settlement is not expected to affect Abbott's ability to continue to do business with any private party or state or federal government. The U.S. District Court for the Southern District of Illinois accepted CG Nutritionals' plea and scheduled a further hearing on October 27, 2003 to impose the agreed upon disposition.

On June 27, 2003, Robert Corwin filed a shareholder derivative action against Abbott's current directors. The suit was filed in connection with the announcement that Abbott would take a $622 million charge in anticipation of settling the investigation by the U.S. Attorney's Office for the Southern District of Illinois. The suit alleges that the directors breached their fiduciary duties in failing to stop the alleged improper business practices in the enteral nutritional business. Abbott and the directors deny all substantive allegations and intend to move to dismiss the case.

Abbott is a defendant in a number of lawsuits involving the drug sibutramine (sold under the trademark Meridia®) that have been brought either as purported class actions or on behalf of individual plaintiffs. The lawsuits generally allege design defects and failure to warn. Certain lawsuits also allege consumer protection violations and/or unfair trade practices. As of June 30, 2003, 99 lawsuits were pending in which Abbott is a party. 93 cases are being or have been transferred to the United States District Court for the Southern District of Ohio and are captioned In Re Meridia MDL No. 1481. Six cases are pending in state court: Barley v. Knoll, et al., filed on October 15, 2002, in the Circuit Court of Montgomery County, Alabama; Bracero, et al. v. Abbott, et al., filed on June 3, 2002, in

the Superior Court of New Jersey, Hudson County; Killinger v. Abbott, et al., filed on November 18, 2002, in the Circuit Court of the 19^th Judicial Circuit, Lake County, Illinois; Olinger v. Abbott, filed on January 8, 2003, in the Circuit Court of the 3^rd Judicial Circuit, Madison County, Illinois; Titus v. Knoll, et al., filed on October 1, 2002, in the District Court of Nueces County, Texas; and Watson v. Abbott, et al., filed on July 25, 2002, in the 19^th Judicial District Court, Parish of East Baton Rouge, Louisiana. One case is pending in Canada: Mandel, et al. v. Abbott, filed on June 24, 2002 in the Ontario Superior Court of Justice, Toronto, Canada; and one case is pending in Italy: Casartelli v. Abbott, et al., in the Civil Court of Monza, Italy.

While it is not feasible to predict the outcome of such pending claims, proceedings and investigations with certainty, management is of the opinion that their ultimate dispositions should not have a material adverse effect on Abbott's financial position, cash flows, or results of operations, except with respect to the enteral nutritional investigation. Payment of the enteral nutritional settlement will be material to cash flows in the quarter paid.

Item 6. Exhibits and Reports on Form 8-K

(a): Exhibits

Incorporated by reference to the Exhibit Index included herewith.

(b): Reports on Form 8-K

On July 10, 2003, Abbott Laboratories furnished a Current Report on Securities and Exchange Commission Form 8-K reporting the press release issued by Abbott Laboratories that announced Abbott's results of operations for the second quarter of 2003.

On July 10, 2003, Abbott Laboratories filed a Current Report on Securities and Exchange Commission Form 8-K reporting that on June 20, 2003, the Abbott Board of Directors amended and restated the company's By-Laws. The amended and restated By-Laws were filed as an exhibit to the Report.

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		ABBOTT LABORATORIES
		By:	/s/ THOMAS C. FREYMAN Thomas C. Freyman, Senior Vice President, Finance and Chief Financial Officer

Date: August 12, 2003

EXHIBIT INDEX

Exhibit No.		Exhibit
10.1		The Abbott Laboratories 1991 Incentive Stock Program, as amended.
10.2		The Abbott Laboratories 1996 Incentive Stock Program, as amended.
10.3		Abbott Laboratories 401(k) Supplemental Plan, as amended.
10.4		Abbott Laboratories Supplemental Pension Plan, as amended.
10.5		The 1986 Abbott Laboratories Management Incentive Plan, as amended.
10.6		Amended form of agreement regarding change in control between Abbott and each of the Named Officers identified in Abbott's Proxy Statement for the 2003 Annual Meeting of Shareholders.
10.7		Abbott Laboratories Equity-Based Award/Recognition Plan.
12		Statement re: computation of ratio of earnings to fixed charges.
31.1		Certification of Chief Executive Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
31.2		Certification of Chief Financial Officer Required by Rule 13a-14(a) (17 CFR 240.13a-14(a)).
Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be "filed" under the Securities Exchange Act of 1934.
32.1		Certification of Chief Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2		Certification of Chief Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
99.1		Cautionary Statement Regarding Forward-Looking Statements.

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PART I. FINANCIAL INFORMATION Abbott Laboratories and Subsidiaries Condensed Consolidated Financial Statements (Unaudited)
Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Earnings (Unaudited) (dollars and shares in thousands except per share data)
Abbott Laboratories and Subsidiaries Condensed Consolidated Statement of Cash Flows (Unaudited) (dollars in thousands)
Abbott Laboratories and Subsidiaries Condensed Consolidated Balance Sheet (Unaudited) (dollars in thousands)
Abbott Laboratories and Subsidiaries Notes to Condensed Consolidated Financial Statements June 30, 2003 (Unaudited)

Item 4. Controls and Procedures

PART II. OTHER INFORMATION

SIGNATURE
EXHIBIT INDEX



                                                                   EXHIBIT 10.1

                             ABBOTT LABORATORIES
                         1991 INCENTIVE STOCK PROGRAM
                   (as amended and restated on June 20, 2003)

     1.   PURPOSE. The purpose of the Abbott Laboratories 1991 Incentive Stock
Program (the "Program") is to attract and retain outstanding individuals as
directors, officers and other employees of Abbott Laboratories (the "Company")
and its subsidiaries, and to furnish incentives to such persons by providing
such persons opportunities to acquire common shares of the Company, or monetary
payments based on the value of such shares or financial performance of the
Company, or both, on advantageous terms as herein provided.

     2.   ADMINISTRATION. The Program will be administered by a committee (the
"Committee") of at least two persons which shall be either the Compensation
Committee of the Board of Directors of the Company (the "Board of Directors") or
such other committee comprised entirely of "disinterested persons" as defined in
Rule 16b-3 of the Securities and Exchange Commission as the Board of Directors
may from time to time designate. The Committee shall interpret the Program,
prescribe, amend and rescind rules and regulations relating thereto and make all
other determinations necessary or advisable for the administration of the
Program. A majority of the members of the Committee shall constitute a quorum
and all determinations of the Committee shall be made by a majority of its
members. Any determination of the Committee under the Program may be made
without notice of meeting of the Committee by a writing signed by a majority of
the Committee members.

     3.   PARTICIPANTS. Participants in the Program will consist of such
officers and other employees of the Company and its subsidiaries as the
Committee in its sole discretions may designate from time to time to receive
Benefits hereunder. The Committee's designation of a participant in any year
shall not require the Committee to designate such person to receive a Benefit in
any other year. The Committee shall consider such factors as it deems pertinent
in selecting participants and in determining the type and amount of their
respective Benefits, including without limitation (i) the financial condition of
the Company; (ii) anticipated profits for the current or future years; (iii)
contributions of participants to the profitability and development of the
Company; and (iv) other compensation provided to participants. Non-Employee
Directors shall also be participants in the Program solely for purposes of
receiving Restricted Stock Awards under paragraph 13. The term "Non-Employee
Director" shall mean a member of the Board of Directors who is not a full-time
employee of the Company or any of its subsidiaries.

     4.   TYPES OF BENEFITS. Benefits under the Program may be granted in any
one or a combination of (a) Incentive Stock Options; (b) Non-qualified Stock
Options; (c) Stock Appreciation Rights; (d) Limited Stock Appreciation Rights;

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(e) Restricted Stock Awards; (f) Performance Units; and (g) Foreign Qualified
Benefits, all as described below and pursuant to the Plans set forth in
paragraphs 6-12 hereof.

     5.   SHARES RESERVED UNDER THE PROGRAM. There is hereby reserved for
issuance under the Program an aggregate of Five Million (5,000,000) common
shares, which may be newly issued or treasury shares. The shares hereby reserved
are in addition to the shares previously reserved under the Company's 1977
Incentive Stock Plan, 1981 Incentive Stock Program and 1986 Incentive Stock
Program (the "Prior Stock Option Plans"). Any common shares reserved for
issuance under the Prior Stock Option Plans in excess of the number of shares as
to which options or other Benefits have been awarded on the date of shareholder
approval of this Program, plus any such shares as to which options or other
Benefits granted under the Prior Stock Option Plans may lapse, expire, terminate
or be canceled after such date, shall also be reserved and available for
issuance in connection with Benefits under this Program. All of such shares may,
but need not, be issued pursuant to the exercise of the Incentive Stock Options.

     If there is a lapse, expiration, termination or cancellation of any Benefit
granted hereunder without the issuance of shares or payment of cash thereunder,
or if shares are issued under any Benefit and thereafter are reacquired by the
Company pursuant to rights reserved upon the Issuance thereof, the shares
subject to or reserved for such Benefit may again be used for new options,
rights of awards or any sort authorized under this Program; provided, however,
that in no event may the number of common shares issued under this Program
exceed the total number of shares reserved for issuance hereunder.

     6.   INCENTIVE STOCK OPTION PLAN. Incentive Stock Options will consist of
options to purchase common shares at purchase prices not less than One Hundred
percent (100%) of the Fair Market Value of such common shares on the date of
grant. Incentive Stock Options will be exercisable over not more than ten (10)
years after the date of grant. In the event of termination of employment for any
reason other than retirement, disability or death, the right of the optionee to
exercise an Incentive Stock Option shall terminate upon the earlier of the end
of the original term of the option or three (3) months after the optionee's last
day of work for the Company and its subsidiaries. In the event of termination of
employment due to retirement or disability, or if the optionee should die while
employed, the right of the optionee or his or her successor in interest to
exercise an Incentive Stock Option shall terminate upon the earlier of the end
of the original term of the option or sixty (60) months after the date of such
retirement, disability or death. If the optionee should die within three (3)
months after termination of employment for any reason other than retirement or
disability, the right of his or her successor in interest to exercise an
Incentive Stock Option shall terminate upon the earlier of the end of the
original term of the option or three (3) months after the date of such death. If
the optionee should die within sixty (60) months after termination of employment
due to retirement or disability, the right of his or her successor in interest
to exercise an Incentive Stock Option shall terminate upon the later of sixty
(60) months after the date of such retirement or disability or six (6) months
after the date of such death, but not later than the end of the original term of
the option. The aggregate fair market value (determined as of the time the
Option is granted) of the

                                        2


common shares with respect to which Incentive Stock Options are exercisable for
the first time by any individual during any calendar year (under all option
plans of the Company and its subsidiary corporations) shall not exceed $100,000.
An Incentive Stock Option granted to a participant who is subject to Section 16
of the Securities Exchange Act of 1934, as amended (the "Exchange Act") may be
exercised only after six (6) months from its grant date (unless otherwise
permitted under Rule 16b-3 of the Securities and Exchange Commission).

     7.   NON-QUALIFIED STOCK OPTION PLAN. Non-qualified Stock Options will
consist of options to purchase common shares at purchase prices not less than
One Hundred percent (100%) of the Fair Market Value of such common shares on the
date of grant. Non-qualified Stock Options will be exercisable over not more
than ten (10) years after the date of grant. In the event of termination of
employment for any reason other than retirement, disability or death, the right
of the optionee to exercise a Non-qualified Stock Option shall terminate upon
the earlier of the end of the original term of the option or three (3) months
after the optionee's last day of work for the Company and its subsidiaries. In
the event of termination of employment due to retirement or disability or if the
optionee should die while employed, the right of the optionee or his or her
successor in interest to exercise a Non-qualified Stock Option shall terminate
upon the earlier of the end of the original term of the option or sixty (60)
months after the date of such retirement, disability or death. If the optionee
should die within three (3) months after termination of employment for any
reason other than retirement or disability, the right of his or her successor in
interest to exercise a Non-qualified Stock Option shall terminate upon the
earlier of the end of the original term of the option or three (3) months after
the date of such death. If the optionee should die within sixty (60) months
after termination of employment due to retirement or disability, the right of
his or her successor in interest to exercise a Non-qualified Stock Option shall
terminate upon the later of sixty (60) months after the date of such retirement
or disability or six (6) months after the date of such death, but not later than
the end of the original term of the option. A Non-qualified Stock Option granted
to a participant who is subject to Section 16 of the Exchange Act may be
exercised only after six (6) months from its grant date (unless otherwise
permitted under Rule 16b-3 of the Securities and Exchange Commission).

     8.   STOCK APPRECIATION RIGHTS PLAN. The Committee may, in its discretion,
grant a Stock Appreciation Right to the holder of any stock option granted
hereunder or under the Prior Stock Option Plans. Such Stock Appreciation Rights
shall be subject to such terms and conditions consistent with the Program as the
Committee shall impose from time to time, including the following:

          (a)  A Stock Appreciation Right may be granted with respect to a stock
               option at the time of its grant or at any time thereafter up to
               six (6) months prior to its expiration.

          (b)  Stock Appreciation Rights will permit the holder to surrender any
               related stock option or portion thereof which is then exercisable

                                        3


               and to elect to receive in exchange therefor cash in an amount
               equal to:

               (i)    The excess of the Fair Market Value on the date of such
                      election of one common share over the option price
                      multiplied by

               (ii)   The number of shares covered by such option or portion
                      thereof which is so surrendered.

          (c)  A Stock Appreciation Right granted to a participant who is
               subject to Section 16 of the Exchange Act may be exercised only
               after six (6) months from its grant date (unless otherwise
               permitted under Rule 16b-3 of the Securities and Exchange
               Commission).

          (d)  The Committee shall have the discretion to satisfy a
               participant's right to receive the amount of cash determined
               under subparagraph (b) hereof, in whole or in part, by the
               delivery of common shares valued as of the date of the
               participant's election.

          (e)  A Stock Appreciation Right may be granted to a participant
               regardless of whether such participant has been granted a Limited
               Stock Appreciation Right with respect to the same stock option.
               However, a Stock Appreciation Right may not be exercised during
               any period that a Limited Stock Appreciation Right with respect
               to the same stock option may be exercised.

          (f)  In the event of the exercise of a Stock Appreciation Right, the
               number of shares reserved for issuance shall be reduced by the
               number of shares covered by the stock option or portion thereof
               surrendered.

     9.   LIMITED STOCK APPRECIATION RIGHTS PLAN. The Committee may, in its
discretion, grant a Limited Stock Appreciation Right to the holder of any stock
option granted hereunder or under the Prior Stock Option Plans. Such Limited
Stock Appreciation Rights shall be subject to such terms and conditions
consistent with the Program as the Committee shall impose from time to time,
including the following:

          (a)  A Limited Stock Appreciation Right may be granted with respect to
               a stock option at the time of its grant or at any time thereafter
               up to six (6) months prior to its expiration.

          (b)  A Limited Stock Appreciation Right will permit the holder to
               surrender any related stock option or portion thereof which is
               then exercisable and to receive in exchange therefor cash in an
               amount equal to:

                                        4


               (i)    The excess of the Fair Market Value on the date of such
                      election of one common share over the option price
                      multiplied by

               (ii)   The number of shares covered by such option or portion
                      thereof which is so surrendered.

          (c)  A Limited Stock Appreciation Right granted to a participant who
               is subject to Section 16 of the Exchange Act may be exercised
               only after six (6) months from its grant date (unless otherwise
               permitted under Rule 16b-3 of the Securities and Exchange
               Commission) and only during the sixty (60) day period commencing
               with the day following the date of a Change In Control.

          (d)  A Limited Stock Appreciation Right may be granted to a
               participant regardless of whether such participant has been
               granted a Stock Appreciation Right with respect to the same stock
               option.

          (e)  In the event of the exercise of a Limited Stock Appreciation
               Right, the number of shares reserved for issuance hereunder shall
               be reduced by the number of shares covered by the stock option or
               portion thereof surrendered.

     10.  RESTRICTED STOCK AWARDS PLAN. Restricted Stock Awards will consist of
common shares transferred to participants without other payment therefor as
additional compensation for their services to the Company or one of its
subsidiaries. Restricted Stock Awards shall be subject to such terms and
conditions as the Committee determines appropriate, including, without
limitations, restrictions on the sale or other disposition of such shares and
rights of the Company to reacquire such shares upon termination of the
participant's employment within specified periods. Subject to such other
restrictions as are imposed by the Committee, the common shares covered by a
Restricted Stock Award granted to a participant who is subject to Section 16 of
the Exchange Act may be sold or otherwise disposed of only after six (6) months
from the grant date of the award (unless otherwise permitted under Rule 16b-3 of
the Securities and Exchange Commission).

     11.  PERFORMANCE UNITS PLAN. Performance Units shall consist of monetary
units granted to participants which may be earned in whole or in part if the
Company achieves certain goals established by the Committee over a designated
period of time, but not in any event more than five (5) years. The goals
established by the Committee may include earnings per share, return on
shareholder equity, return on average total capital employed, and/or such other
goals as may be established by the Committee in its discretion. In the event the
minimum corporate goal established by the Committee is not achieved at the
conclusion of a period, no amount shall be paid to or vested in the participant.
In the event the maximum corporate goal is achieved, One Hundred percent (100%)
of the monetary value of the Performance Units shall be paid to or vested in the
participants. Partial achievement of the maximum goal may result in a

                                        5


payment or vesting corresponding to the degree of achievement. Payment of an
award earned may be in cash or in common shares or in a combination of both, and
may be made when earned, or vested and deferred, as the Committee in its sole
discretion determines. Deferred awards shall earn interest on the terms and at a
rate determined by the Committee. The number of shares reserved for issuance
hereunder shall be reduced by the largest whole number obtained by dividing
monetary value of the units at the commencement of the performance period by the
market value of a common share at such time, provided that such number of shares
may again become available for issuance under this Program as is provided in
Paragraph 5 hereof.

     12.  FOREIGN QUALIFIED BENEFITS. Benefits under the Program may be granted
to such employees of the Company and its subsidiaries who are residing in
foreign jurisdictions as the Committee in its sole discretion may determine from
time to time. The Committee may adopt such supplements to the Program as may be
necessary to comply with the applicable laws of such foreign jurisdictions and
to afford participants favorable treatment under such laws; provided, however,
that no Benefit shall be granted under any such supplement with terms or
conditions which are inconsistent with the provisions as set forth under the
Program.

     13.  RESTRICTED STOCK AWARDS FOR NON-EMPLOYEE DIRECTORS.

          (a)  Each person elected a Non-Employee Director at the annual
               shareholders meeting in 1991, 1992, 1993, 1994 and 1995 shall
               receive a restricted Stock Award on that date covering a number
               of common shares with a fair market value on the date of the
               award closest to, but not in excess of, Twenty Thousand Dollars
               ($20,000).

          (b)  ISSUANCE OF CERTIFICATES. As soon as practicable following the
               date of the award the Company shall issue certificates
               ("Certificates") to the Non-Employee Director receiving the
               award, representing the number of common shares covered by the
               award. At the discretion of the Company, the Certificates shall
               bear legends describing the restrictions on such shares imposed
               by this paragraph 13.

          (c)  RIGHTS. Upon issuance of the Certificates, the directors in whose
               names they are registered shall, subject to the restrictions of
               this paragraph 13, have all of the rights of a shareholder with
               respect to the shares represented by the Certificates, including
               the right to vote such shares and receive case dividends and
               other distributions thereon.

          (d)  RESTRICTED PERIOD. The shares covered by awards granted under
               this paragraph 13 may not be sold or otherwise disposed of within
               six (6) months following their grant date (unless otherwise

                                        6


               permitted under Rule 16b-3 of the Securities and Exchange
               Commission) and in addition shall be subject to the restrictions
               of this paragraph 13 for a period (the "Restricted Period")
               commencing with the date of the award and ending on the earliest
               of the following events:

               (i)    The date the director terminates or retires from the
                      Board;

               (ii)   The date the director dies; or

               (iii)  The date of occurrence of a Change in Control (as defined
                      in paragraph 19(c)).

          (e)  RESTRICTIONS. All shares covered by awards granted under this
               paragraph 13 shall be subject to the following restrictions
               during the Restricted Period:

               (i)    The shares may not be sold, assigned, transferred,
                      pledged, hypothecated or otherwise disposed of.

               (ii)   Any additional common shares of the Company or other
                      securities or property issued with respect to shares
                      covered by awards granted under this paragraph 13 as a
                      result of any stock dividend, stock split or
                      reorganization, shall be subject to the restrictions and
                      other provisions of this paragraph 13.

               (iii)  A director shall not be entitled to receive any shares
                      prior to completion of all actions deemed appropriate by
                      the Company to comply with federal or state securities
                      laws and stock exchange requirements.

          (f)  Except in the event of conflict, all provisions of the Program
               shall apply to this paragraph 13. In the event of any conflict
               between the provisions of the Program and this paragraph 13, this
               paragraph 13 shall control. Those provisions of paragraph 16
               which authorize the Committee to declare outstanding restricted
               stock awards to be vested and to amend or modify the terms of
               Benefits shall not apply to awards granted under this paragraph
               13.

     14.  NONTRANSFERABILITY. Each stock option and stock appreciation right
granted under this Program shall not be transferable other than by will or the
laws of descent and distribution, and shall be exercisable, during the
participant's lifetime, only by the participant or the participant's guardian or
legal representative. A participant's interest in a Performance Unit shall not
be transferable until payment or delivery of the award is made.

                                        7


     15.  OTHER PROVISIONS. The award of any Benefit under the Program may also
be subject to other provisions (whether or not applicable to the Benefit awarded
to any other participant) as the Committee determines appropriate, including,
without limitation, provisions for the purchase of common shares under stock
options in installments, provisions for the payment of the purchase price of
shares under stock options by delivery of other common shares of the Company
having a then market value equal to the purchase price of such shares,
restrictions on resale or other disposition, such provisions as may be
appropriate to comply with federal or state securities laws and stock exchange
requirements and understandings or conditions as to the participant's employment
in addition to those specifically provided for under the Program.

     The Committee may, in its discretion, permit payment of the purchase price
of shares under stock options by delivery of a properly executed exercise notice
together with a copy of irrevocable instructions to a broker to deliver promptly
the Company the amount of sale or loan proceeds to pay the purchase price. To
facilitate the foregoing, the Company may enter into agreements for coordinated
procedures with one or more brokerage firms.

     The Committee may, in its discretion and subject to such rules as it may
adopt, permit a participant to pay all or a portion of the federal, state and
local taxes, including FICA withholding tax, arising in connection with the
following transactions: (a) the exercise of a Non-qualified Stock Option; (b)
the lapse of restrictions on common shares received as a Restricted Stock Award;
or (c) the receipt or exercise of any other Benefit; by electing (i) to have the
Company withhold common shares, (ii) to tender back common shares received in
connection with such Benefit or (iii) to deliver other previously acquired
common shares of the Company having a fair market value approximately equal to
the amount to be withheld.

     16.  TERM OF PROGRAM AND AMENDMENT MODIFICATION. CANCELLATION OR
ACCELERATION OF BENEFITS. No Benefit shall be granted more than five (5) years
after the date of the approval of this Program by the shareholders; provided,
however, that the terms and conditions applicable to any Benefits granted prior
to such date may at any time be amended, modified or canceled by mutual
agreement between the Committee and the participant or such other persons as may
then have an interest therein, so long as any amendment or modification does not
increase the number of common shares issuable under this Program; and provided
further, that the Committee may, at any time and in its sole discretion, declare
any or all stock options and stock appreciation rights then outstanding under
this Program or the Prior Stock Option Plans to be exercisable, any or all then
outstanding Restricted Stock Awards to be vested, and any or all then
outstanding Performance Units to have been earned, whether or not such options,
rights, awards or units are then otherwise exercisable, vested or earned.

     17.  AMENDMENT TO PRIOR STOCK OPTION PLANS. No options or other Benefits
shall be granted under the Prior Stock Option Plans on or after the date of
shareholder approval of this Program.

                                        8


     18.  TAXES. The Company shall be entitled to withhold the amount of any tax
attributable to any amount payable or shares deliverable under the Program after
giving the person entitled to receive such amount or shares notice as far in
advance as practicable, and the Company may defer making payment or delivery if
any such tax may be pending unless and until indemnified to its satisfaction.

     19.  DEFINITIONS.

          (a)  FAIR MARKET VALUE. Except as provided below, the Fair Market
               Value of the Company's common shares shall be determined by such
               methods or procedures as shall be established by the Committee;
               provided that, in the case of any Limited Stock Appreciation
               Right (other than a right related to an Incentive Stock Option),
               the Fair Market Value shall be the higher of:

               (i)    The highest daily closing price of the Company's common
                      shares during the sixty (60) day period following the
                      Change in Control; or

               (ii)   The highest gross price paid or to be paid for the
                      Company's common shares in any of the transactions
                      described in paragraphs 19(c)(i) and 19(c)(ii).

          (b)  SUBSIDIARY. The term "subsidiary" for all purposes other than the
               Incentive Stock Option Plan described in paragraph 6, shall mean
               any corporation, partnership, joint venture or business trust,
               fifty percent (50%) or more of the control of which is owned,
               directly or indirectly, by the Company. For Incentive Stock
               Option Plan purposes the term "subsidiary" shall be defined as
               provided in Internal Revenue Code Section 425(f).

          (c)  CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
               occurred on the earliest of the following dates:

               (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

                                        9


                      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 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

                                       10


                      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 Program: "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;
                      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.

          (d)  DISABILITY. The term "disability" for all purposes of the Program
               shall mean the participant's disability as defined in subsection
               4.1(a) of the Abbott Laboratories Extended Disability Plan for
               twelve (12) consecutive months.

     20.  ADJUSTMENT PROVISIONS.

          (a)  If the Company shall at any time change the number of issued
               common shares without new consideration to the Company (such as
               by stock dividends or stock splits), the total number of shares

                                       11


               reserved for issuance under this Program and the number of shares
               covered by each outstanding Benefit and the purchase price of
               such shares shall be adjusted so that the aggregate consideration
               payable to the Company and the value of each such Benefit shall
               not be changed.

          (b)  Subject to paragraph 20(c), without affecting number of shares
               otherwise reserved or available hereunder, the Committee may
               authorize the issuance or assumption of Benefits in connection
               with any merger, consolidation, acquisition of property or stock,
               or reorganization upon such terms and conditions as it may deem
               appropriate.

          (c)  Notwithstanding any other provision of this Program or the Prior
               Stock Option Plans including the terms of any Benefit granted
               hereunder, if the outstanding common shares of the Company shall
               be combined, or be changed into, or exchanged for, another kind
               of stock of the Company, into securities of another corporation,
               or into property (including cash) whether through
               recapitalization, reorganization, sale, merger, consolidation,
               spin-off, business combination or a similar transaction (a
               "Transaction"), the Company shall cause its successor, acquiror
               (or ultimate parent of any successor or acquiror), as applicable,
               to assume each stock option, Stock Appreciation Right and Limited
               Stock Appreciation Right outstanding immediately prior to the
               Transaction (or to cause new options or rights to be substituted
               therefor). Pursuant to such assumed or substituted option or
               rights, participants shall thereafter be entitled to receive,
               upon due exercise of any portion of the option or right, (a) in
               the event of a Transaction in which the outstanding common shares
               of the Company are combined, or changed into, or exchanged for,
               solely another kind of stock of the Company or securities of
               another corporation (disregarding, for this purpose, cash paid in
               lieu of fractional shares), the securities which that person
               would have been entitled to receive for common shares acquired
               through exercise of the same portion of such option or right
               immediately prior to the effective date of such Transaction, and
               (b) in the event of a Transaction in which the outstanding common
               shares of the Company are changed into, or exchanged for,
               property (including cash) other than solely stock of the Company
               or securities of another corporation (disregarding, for this
               purpose, cash paid in lieu of fractional shares), securities the
               fair market value of which immediately following the effective
               date of such Transaction (as determined by the Committee) equals
               the fair market value (as determined by the Committee) of the
               property which that person would have been entitled to receive
               for common shares acquired through exercise of the same portion
               of such option or right immediately prior to the effective date
               of such

                                       12


               Transaction. In each case such assumed or substituted option or
               right shall continue to be subject to the same terms and
               conditions (including, without limitation, with respect to any
               right to receive "replacement options" upon option exercise) to
               which it was subject immediately prior to the Transaction.

               Notwithstanding the immediately preceding paragraph, upon a
               Transaction in which the outstanding common shares of the Company
               are changed into, or exchanged for, property (including cash)
               other than solely stock of the Company or securities of another
               corporation (disregarding, for this purpose, cash paid in lieu of
               fractional shares) and which constitutes a Change in Control,
               each participant may elect to receive, immediately following such
               Transaction in exchange for cancellation of any stock option
               (other than an Incentive Stock Option granted prior to June 19,
               2003), Stock Appreciation Right or Limited Appreciation Right
               held by such participant immediately prior to the Transaction, a
               cash payment, with respect to each common share subject to such
               option or right, equal to the difference between the value of
               consideration (as determined by the Committee) received by the
               shareholders for a common share of the Company in the
               Transaction, less any applicable purchase price.

          (d)  Notwithstanding any other provision of this Program or the Prior
               Stock Option Plans including the terms of any Benefit granted
               hereunder, upon the occurrence of a Change in Control:

               (i)    All stock options then outstanding under this Program or
                      the Prior Stock Option Plans shall become fully
                      exercisable as of the date of the Change in Control,
                      whether or not then otherwise exercisable;

               (ii)   All Stock Appreciation Rights and Limited Stock
                      Appreciation Rights then outstanding shall become fully
                      exercisable as of the date of the Change in Control,
                      whether or not then otherwise exercisable;

               (iii)  All terms and conditions of all Restricted Stock Awards
                      then outstanding shall be deemed satisfied as of the date
                      of the Change in Control; and

               (iv)   All Performance Units then outstanding shall be deemed to
                      have been fully earned and to be immediately payable, in
                      cash, as of the date of the Change in Control.

     21.  AMENDMENT AND TERMINATION OF PROGRAM. The Board of Directors may amend
the Program from time to time or terminate the Program at any

                                       13


time, but no such action shall reduce the then existing amount of any
participant's Benefit or adversely change the terms and conditions thereof
without the participant's consent. Paragraph 13 of the Program may not be
amended more frequently than once every six months other than to comport with
changes in the Internal Revenue Code of 1986, as amended, or the rules
thereunder, and no amendment of the Program shall result in any Committee member
losing his or her status as a "disinterested person" as defined in Rule 16b-3 of
the Securities and Exchange Commission with respect to any employee benefit plan
of the Company or result in the Program losing its status as a protected plan
under said Rule 16b-3.

     22.  EFFECTIVE DATE. The Program was originally adopted by the Board of
Directors on February 8, 1991.

                                       14



                                                                   EXHIBIT 10.2

                             ABBOTT LABORATORIES
                        1996 INCENTIVE STOCK PROGRAM
                   (as amended and restated June 20, 2003)

1.   PURPOSE. The purpose of the Abbott Laboratories 1996 Incentive Stock
Program (the "Program") is to attract and retain outstanding directors, officers
and other employees of Abbott Laboratories (the "Company") and its subsidiaries,
and to furnish incentives to such persons by providing opportunities to acquire
common shares of the Company, or monetary payments based on the value of such
shares or the financial performance of the Company, or both, on advantageous
terms as herein provided and to further align such persons' interests with those
of the Company's other shareholders through compensation that is based on the
value of the Company's common shares.

2.   ADMINISTRATION. The Program will be administered by a committee (the
"Committee") of at least two persons which shall be either the Compensation
Committee of the Board of Directors of the Company (the "Board of Directors") or
such other committee comprised entirely of persons who are both: (i)
"disinterested persons" as defined in Rule 16b-3 of the Securities and Exchange
Commission; and (ii) "outside directors" as defined under Section 162(m) of the
Internal Revenue Code of 1986, as amended, or any successor provision; as the
Board of Directors may from time to time designate. The Committee shall
interpret the Program, prescribe, amend and rescind rules and regulations
relating thereto and make all other determinations necessary or advisable for
the administration of the Program. A majority of the members of the Committee
shall constitute a quorum and all determinations of the Committee shall be made
by a majority of its members. Any determination of the Committee under the
Program may be made without notice of meeting of the Committee by a writing
signed by all of the Committee members. The Committee may, from time to time,
delegate any or all of its duties, powers and authority to any officer or
officers of the Company, except to the extent such delegation would be
inconsistent with Rule 16b-3 of the Securities and Exchange Commission or other
applicable law, rule or regulation. The Chief Executive Officer of the Company
may, on behalf of the Committee, grant stock options and restricted stock awards
under the Program, other than to persons subject to Section 16 of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"). All such grants by the
Chief Executive Officer must be reported to, and ratified by, the Committee
within twelve months of the grant date but, if ratified, shall be effective as
of the grant date.

3.   PARTICIPANTS. Participants in the Program will consist of such officers
and other employees of the Company and its subsidiaries as the Committee in its
sole discretion may designate from time to time to receive Benefits hereunder.
The Committee's designation of a participant in any year shall not require the
Committee to designate such person to receive a Benefit in any other year. The
Committee shall consider such factors as it deems pertinent in selecting
participants and in determining the type and amount of their respective
Benefits, including without limitation (i) the financial condition of the
Company; (ii) anticipated profits for the current or future years; (iii)
contributions of participants to the profitability and development of the
Company; (iv)



prior awards to participants; and (v) other compensation provided to
participants. Non-Employee Directors shall also be participants in the Program
solely for purposes of receiving Restricted Stock Awards under paragraph 13 and
Non-qualified Stock Options under paragraph 14. The term "Non-Employee Director"
shall mean a member of the Board of Directors who is not a full-time employee of
the Company or any of its subsidiaries.

4.   TYPES OF BENEFITS. Benefits under the Program may be granted in any one or
a combination of (a) Incentive Stock Options; (b) Non-qualified Stock Options;
(c) Stock Appreciation Rights; (d) Limited Stock Appreciation Rights; (e)
Restricted Stock Awards; (f) Performance Awards; and (g) Foreign Qualified
Benefits, all as described below.

5.   SHARES RESERVED UNDER THE PROGRAM. There is hereby reserved for issuance
under the Program: (i) an aggregate of Five Million (5,000,000) common shares;
plus (ii) an authorization for each calendar year (the "Annual Authorization")
for the years 1996 through 1999, of seven-tenths of one percent (0.7%) of the
total common shares of the Company issued and outstanding as of the first day of
such calendar year and for the years from and including 2000, one and a half
percent (1.5%) of the total common shares of the Company issued and outstanding
as of the first day of such calendar year; which may be newly issued or treasury
shares. The shares hereby reserved are in addition to the shares previously
reserved under the Company's 1981 Incentive Stock Program, 1986 Incentive Stock
Program and 1991 Incentive Stock Program (the "Prior Programs"). Any common
shares reserved for issuance under the Prior Programs in excess of the number of
shares as to which options or other Benefits have been awarded on the date of
shareholder approval of this Program, plus any such shares as to which options
or other Benefits granted under the Prior Programs may lapse, expire, terminate
or be canceled after such date, shall also be reserved and available for
issuance in connection with Benefits under this Program. Any common shares
reserved under the Program for any calendar year under an Annual Authorization
as to which options or other Benefits have not been awarded as of the end of
such calendar year shall be available for issuance in connection with Benefits
granted in subsequent years.

     If there is a lapse, expiration, termination or cancellation of any Benefit
granted hereunder without the issuance of shares or payment of cash thereunder,
or if shares are issued under any Benefit and thereafter are reacquired by the
Company pursuant to rights reserved upon the issuance thereof, or shares are
reacquired pursuant to the payment of the purchase price of shares under stock
options by delivery of other common shares of the Company, the shares subject to
or reserved for such Benefit, or so reacquired, may again be used for new
options, rights or awards of any sort authorized under this Program; provided,
however, that in no event may the number of common shares issued under this
Program, and not reacquired by the Company pursuant to rights reserved upon the
issuance thereof or pursuant to the payment of the purchase price of shares
under stock options by delivery of other common shares of the Company, exceed
the total number of shares reserved for issuance hereunder.

6.   INCENTIVE STOCK OPTIONS. Incentive Stock Options will consist of options



to purchase common shares at purchase prices not less than One Hundred percent
(100%) of the Fair Market Value of such common shares on the date of grant. An
Incentive Stock Option will not be exercisable after the expiration of ten (10)
years from the date such option is granted. In the event of termination of
employment for any reason other than retirement, disability or death, the right
of the optionee to exercise an Incentive Stock Option shall terminate upon the
earlier of the end of the original term of the option or three (3) months after
the optionee's last day of work for the Company and its subsidiaries. In the
event of termination of employment due to retirement or disability, or if the
optionee should die while employed, the right of the optionee or his or her
successor in interest to exercise an Incentive Stock Option shall terminate upon
the end of the original term of the option. If the optionee should die within
three (3) months after termination of employment for any reason other than
retirement or disability, the right of his or her successor in interest to
exercise an Incentive Stock Option shall terminate upon the earlier of the end
of the original term of the option or three (3) months after the date of such
death. To the extent the aggregate fair market value (determined as of the time
the Option is granted) of the common shares with respect to which any Incentive
Stock Option is exercisable for the first time by any individual during any
calendar year (under all option plans of the Company and its subsidiary
corporations) exceeds $100,000, the excess shall be treated as a Non-qualified
Stock Option. An Incentive Stock Option shall be exercisable as determined by
the Committee, but in no event earlier than six (6) months from its grant date.

7.   NON-QUALIFIED STOCK OPTIONS. Non-qualified Stock Options will consist of
options to purchase common shares at purchase prices not less than One Hundred
percent (100%) of the Fair Market Value of such common shares on the date of
grant. A Non-qualified Stock Option will not be exercisable after the expiration
of ten (10) years from the date such option is granted. In the event of
termination of employment for any reason other than retirement, disability or
death, the right of the optionee to exercise a Non-qualified Stock Option shall
terminate upon the earlier of the end of the original term of the option or
three (3) months after the optionee's last day of work for the Company and its
subsidiaries. In the event of termination of employment due to retirement or
disability, or if the optionee should die while employed, the right of the
optionee or his or her successor in interest to exercise a Non-qualified Stock
Option shall terminate upon the end of the original term of the option. If the
optionee should die within three (3) months after termination of employment for
any reason other than retirement or disability, the right of his or her
successor in interest to exercise a Non-qualified Stock Option shall terminate
upon the earlier of the end of the original term of the option or three (3)
months after the date of such death. A Non-qualified Stock Option shall be
exercisable as determined by the Committee, but in no event earlier than six (6)
months from its grant date.

8.   STOCK APPRECIATION RIGHTS. The Committee may, in its discretion, grant a
Stock Appreciation Right to the holder of any stock option granted hereunder or
under the Prior Programs. Such Stock Appreciation Rights shall be subject to
such terms and conditions consistent with the Program as the Committee shall
impose from time to time, including the following:



     (a)  A Stock Appreciation Right may be granted with respect to a stock
          option at the time of its grant or at any time thereafter up to six
          (6) months prior to its expiration.

     (b)  Stock Appreciation Rights will permit the holder to surrender any
          related stock option or portion thereof which is then exercisable and
          to elect to receive in exchange therefor cash in an amount equal to:

          (i)     The excess of the Fair Market Value on the date of such
                  election of one common share over the option price multiplied
                  by

          (ii)    The number of shares covered by such option or portion thereof
                  which is so surrendered.

     (c)  A Stock Appreciation Right granted to a participant who is subject to
          Section 16 of the Exchange Act may be exercised only after six (6)
          months from its grant date (unless such exercise would not affect the
          exemption under Rule 16b-3 of the Securities and Exchange Commission).

     (d)  A Stock Appreciation Right may be granted to a participant regardless
          of whether such participant has been granted a Limited Stock
          Appreciation Right with respect to the same stock option. However, a
          Stock Appreciation Right may not be exercised during any period that a
          Limited Stock Appreciation Right with respect to the same stock option
          may be exercised.

     (e)  In the event of the exercise of a Stock Appreciation Right, the number
          of shares reserved for issuance hereunder shall be reduced by the
          number of shares covered by the stock option or portion thereof
          surrendered.

9.   LIMITED STOCK APPRECIATION RIGHTS. The Committee may, in its discretion,
grant a Limited Stock Appreciation Right to the holder of any stock option
granted hereunder or under the Prior Programs. Such Limited Stock Appreciation
Rights shall be subject to such terms and conditions consistent with the Program
as the Committee shall impose from time to time, including the following:

     (a)  A Limited Stock Appreciation Right may be granted with respect to a
          stock option at the time of its grant or at any time thereafter up to
          six (6) months prior to its expiration.

     (b)  A Limited Stock Appreciation Right will permit the holder to surrender
          any related stock option or portion thereof which is then exercisable
          and to receive in exchange therefor cash in an amount equal to:

          (i)     The excess of the Fair Market Value on the date of such
                  election of one common share over the option price multiplied
                  by

          (ii)    The number of shares covered by such option or portion thereof



                  which is so surrendered.

     (c)  A Limited Stock Appreciation Right granted to a participant who is
          subject to Section 16 of the Exchange Act may be exercised only after
          six (6) months from its grant date (unless such exercise would not
          affect the exemption under Rule 16b-3 of the Securities and Exchange
          Commission) and only during the sixty (60) day period commencing on
          the later of:

          (i)     the day following the date of a Change in Control; or (ii) the
                  first date on which such exercise would be exempt under Rule
                  16b-3 of the Securities and Exchange Commission.

     (d)  A Limited Stock Appreciation Right may be granted to a participant
          regardless of whether such participant has been granted a Stock
          Appreciation Right with respect to the same stock option.

     (e)  In the event of the exercise of a Limited Stock Appreciation Right,
          the number of shares reserved for issuance hereunder shall be reduced
          by the number of shares covered by the stock option or portion thereof
          surrendered.

10.  RESTRICTED STOCK AWARDS. Restricted Stock Awards will consist of common
shares transferred to participants without other payment therefor as additional
compensation for their services to the Company or any of its subsidiaries.
Restricted Stock Awards granted under this paragraph 10 shall be satisfied from
the Company's available treasury shares. Restricted Stock Awards shall be
subject to such terms and conditions as the Committee determines appropriate,
including, without limitation, restrictions on the sale or other disposition of
such shares and rights of the Company to reacquire such shares upon termination
of the participant's employment within specified periods. Subject to such other
restrictions as are imposed by the Committee, the common shares covered by a
Restricted Stock Award granted to a participant who is subject to Section 16 of
the Exchange Act may be sold or otherwise disposed of only after six (6) months
from the grant date of the award (unless such sale would not affect the
exemption under Rule 16b-3 of the Securities and Exchange Commission). No more
than ten percent (10%) of the total number of shares available for grant in any
calendar year may be issued as Restricted Stock Awards under paragraphs 10 and
13 in that year.

11.  PERFORMANCE AWARDS. Performance Awards in the form of Performance Units or
Performance Shares may be granted to any participant in the Program. Performance
Units shall consist of monetary awards which may be earned in whole or in part
if the Company achieves certain goals established by the Committee over a
designated period of time. Performance Shares shall consist of common shares or
awards denominated in common shares which may be earned in whole or in part if
the Company achieves certain goals established by the Committee over a
designated period of time. The goals established by the Committee shall be based
on any one, or combination of, earnings per share, return on equity, return on
assets, total shareholder return, net operating income, cash flow, increase in
revenue, economic value added, increase in



share price or cash flow return on investment. Partial achievement of the
goal(s) may result in a payment or vesting corresponding to the degree of
achievement. Payment of an award earned may be in cash or in common shares or in
a combination of both, and may be made when earned, or may be vested and
deferred, as the Committee in its sole discretion determines. The maximum amount
which may be granted under all Performance Awards for any one year for any one
participant shall be Five Million Dollars ($5,000,000). This limit shall be
applied to Performance Shares by multiplying the number of Performance Shares
granted by the fair market value of one common share on the date of the award.
During the term of the Program, no more than 5 million shares of Abbott common
stock may be granted in the form of Performance Units and no more than 5 million
shares of Abbott common stock may be granted in the form of Performance Shares.
This paragraph 11 is intended to comply with the performance-based compensation
requirements of Section 162(m) of the Internal Revenue Code of 1986, as amended,
and shall be interpreted in accordance with the rules and regulations
thereunder.

12.  FOREIGN QUALIFIED BENEFITS. Benefits under the Program may be granted to
such employees of the Company and its subsidiaries who are residing in foreign
jurisdictions as the Committee in its sole discretion may determine from time to
time. The Committee may adopt such supplements to the Program as may be
necessary to comply with the applicable laws of such foreign jurisdictions and
to afford participants favorable treatment under such laws; provided, however,
that no Benefit shall be granted under any such supplement with terms or
conditions which are inconsistent with the provisions as set forth under the
Program.

13.  RESTRICTED STOCK AWARDS FOR NON-EMPLOYEE DIRECTORS.

     (a)  Each year, on the date of the annual shareholders meeting, each person
          who is elected a Non-Employee Director at the annual shareholders
          meeting shall be awarded both: (i) a Restricted Stock Award covering a
          number of common shares with a fair market value on the date of the
          award closest to, but not in excess of, an amount equal to six times
          the monthly fee in effect under Section 3.1 of the Abbott Laboratories
          Non-Employee Director's Fee Plan on the date of the award and (ii) in
          the years 1996 through 2005, a Restricted Stock Award covering a
          number of common shares with a fair market value on the date of the
          award closest to, but not in excess of, Twenty-Two Thousand Dollars
          ($22,000) for awards made in years 1996 through 2000 and Twenty-Five
          Thousand Dollars ($25,000) for awards made in years 2001 through 2005.

     (b)  ISSUANCE OF CERTIFICATES. As soon as practicable following the date of
          the award the Company shall issue certificates ("Certificates") to the
          Non-Employee Director receiving the award, representing the number of
          common shares covered by the award. Each Certificate shall bear a
          legend describing the restrictions on such shares imposed by this
          paragraph 13.



     (c)  RIGHTS. Upon issuance of the Certificates, the directors in whose
          names they are registered shall, subject to the restrictions of this
          paragraph 13, have all of the rights of a shareholder with respect to
          the shares represented by the certificates, including the right to
          vote such shares and receive cash dividends and other distributions
          thereon.

     (d)  RESTRICTED PERIOD. The shares covered by awards granted under this
          paragraph 13 may not be sold or otherwise disposed of within six (6)
          months following their grant date (unless such sale would not affect
          the exemption under Rule 16b-3 of the Securities and Exchange
          Commission) and in addition shall be subject to the restrictions of
          this paragraph 13 for a period (the "Restricted Period") commencing
          with the date of the award and ending on the earliest of the following
          events:

          (i)     The date the director terminates or retires from the Board;

          (ii)    The date the director dies; or

          (iii)   The date of occurrence of a Change in Control (as defined in
                  paragraph 20(c)).

     (e)  RESTRICTIONS. All shares covered by awards granted under this
          paragraph 13 shall be subject to the following restrictions during the
          Restricted Period:

          (i)     The shares may not be sold, assigned, transferred, pledged,
                  hypothecated or otherwise disposed of.

          (ii)    Any additional common shares of the Company or other
                  securities or property issued with respect to shares covered
                  by awards granted under this paragraph 13 as a result of any
                  stock dividend, stock split or reorganization, shall be
                  subject to the restrictions and other provisions of this
                  paragraph 13.

          (iii)   A director shall not be entitled to receive any shares prior
                  to completion of all actions deemed appropriate by the Company
                  to comply with federal or state securities laws and stock
                  exchange requirements.

     (f)  Except in the event of conflict, all provisions of the Program shall
          apply to this paragraph 13. In the event of any conflict between the
          provisions of the Program and this paragraph 13, this paragraph 13
          shall control. Those provisions of paragraph 17 which authorize the
          Committee to declare outstanding restricted stock awards to be vested
          and to amend or modify the terms of Benefits shall not apply to awards
          granted under this paragraph 13. Restricted Stock Awards granted under
          this paragraph 13 shall be satisfied from the Company's available
          treasury shares.



14.  NON-QUALIFIED STOCK OPTIONS FOR NON-EMPLOYEE DIRECTORS.

     (a)  Each Non-Employee Director may elect to receive any or all of his or
          her fees earned during the second half of 1996 and each subsequent
          calendar year under Section 3 of the Abbott Laboratories Non-Employee
          Directors' Fee Plan (the "Directors' Fee Plan") in the form of
          Non-qualified Stock Options under this Section 14. Each such election
          shall be irrevocable, and must be made in writing and filed with the
          Secretary of the Company by December 31, 1995 (for fees earned in the
          second half of 1996) and (for fees earned in subsequent calendar
          years) by June 30 of the calendar year preceding the calendar year in
          which such fees are earned (or such later date as may be permissible
          under Rule 16b-3 of the Securities and Exchange Commission, but in no
          event later than December 31 of such preceding calendar year).

     (b)  A Non-Employee Director may file a new election each calendar year
          applicable to fees earned in the immediately succeeding calendar year.
          If no new election or revocation of a prior election is received by
          June 30 of any calendar year (or such later date as may be permissible
          under paragraph (a)), the election, if any, in effect for such
          calendar year shall continue in effect for the immediately succeeding
          calendar year. Any election made under this Section 14 shall take
          precedence over any election made by the director for the same period,
          under the Directors' Fee Plan, to the extent necessary to resolve any
          conflict between such elections. If a director does not elect to
          receive his or her fees in the form of Non-qualified Stock Options,
          the fees due such director shall be paid or deferred as provided in
          the Directors' Fee Plan and any applicable election thereunder by the
          director.

     (c)  The number of common shares covered by each Non-qualified Stock Option
          granted in any year under this Section 14 shall be determined based on
          an independent appraisal for such year of the intrinsic value of
          options granted hereunder and the amount of fees covered by the
          director's election for such year. The number of common shares covered
          by options granted in 1996 (as determined under this procedure) shall
          be the number of whole shares equal to (i) the product of three (3)
          times the amount of fees which the director has elected under
          paragraph (a) to receive in the form of Non-qualified Stock Options,
          divided by (ii) One Hundred percent (100%) of the Fair Market Value of
          one common share on the grant date. Any fraction of a share shall be
          disregarded, and the remaining amount of the fees corresponding to
          such option shall be paid as provided in the Directors' Fee Plan and
          any applicable election thereunder by the director.

     (d)  Effective on October 10, 1997, each Non-qualified Stock Option due a
          director under this Section 14 prior to the 1998 annual shareholders
          meeting shall be granted on October 10, 1997 at a purchase price equal
          to One Hundred percent (100%) of the Fair Market Value of the common



          shares covered by such option on the grant date. Effective with the
          1998 Annual Shareholders Meeting, each Non-qualified Stock Option due
          a director under this Section 14 shall be granted annually, on the
          date of the annual shareholders meeting, at a purchase price equal to
          One Hundred percent (100%) of the Fair Market Value of the common
          shares covered by such option on the grant date. Each such option
          shall be immediately exercisable and nonforfeitable, and shall not be
          exercisable after the expiration of ten (10) years from the date it is
          granted. Each such option shall contain provisions allowing payment of
          the purchase price and, to the extent permitted, any taxes due on
          exercise, by delivery of other common shares of the Company (or, in
          the case of the payment of taxes, by withholding of shares).

     (e)  All Non-qualified Stock Options granted under this Section 14 prior to
          October 10, 1997, shall be immediately exercisable and nonforfeitable,
          and shall not be exercisable after the expiration of ten (10) years
          from the date granted.

15.  NONTRANSFERABILITY. Except as provided by the Committee, each stock option
and stock appreciation right granted under this Program shall not be
transferable other than by will or the laws of descent and distribution, and
shall be exercisable, during the participant's lifetime, only by the participant
or the participant's guardian or legal representative.

16.  OTHER PROVISIONS. The award of any Benefit under the Program may also be
subject to other provisions (whether or not applicable to the Benefit awarded to
any other participant) as the Committee determines appropriate, including,
without limitation, provisions for the purchase of common shares under stock
options in installments, provisions for the payment of the purchase price of
shares under stock options by delivery of other common shares of the Company
having a then market value equal to the purchase price of such shares,
restrictions on resale or other disposition, such provisions as may be
appropriate to comply with federal or state securities laws and stock exchange
requirements and understandings or conditions as to the participant's employment
in addition to those specifically provided for under the Program.

     In the case of a participant who is subject to Section 16(a) and 16(b) of
the Exchange Act, the Committee may, at any time, add such conditions and
limitations to any Benefit granted to such participant, or any feature of any
such Benefit, as the Committee, in its sole discretion, deems necessary or
desirable to comply with Section 16(a) or 16(b) and the rules and regulations
thereunder or to obtain any exemption therefrom. A participant may pay the
purchase price of shares under stock options by delivery of a properly executed
exercise notice together with a copy of irrevocable instructions to a broker to
deliver promptly to the Company the amount of sale or loan proceeds to pay the
purchase price. To facilitate the foregoing, the Company may enter into
agreements for coordinated procedures with one or more brokerage firms.

     The Committee may, in its discretion and subject to such rules as it may
adopt,



permit or require a participant to pay all or a portion of the federal, state
and local taxes, including FICA and medicare withholding tax, arising in
connection with the following transactions: (a) the exercise of a Non-qualified
Stock Option; (b) the lapse of restrictions on common shares received as a
Restricted Stock Award; or (c) the receipt or exercise of any other Benefit; by
(i) having the Company withhold common shares, (ii) tendering back common shares
received in connection with such Benefit or (iii) delivering other previously
acquired common shares of the Company having a fair market value approximately
equal to the amount to be withheld.

     The Committee may grant stock options under the Program (and, for stock
options granted prior to shareholder approval of this Program, under the
Company's 1991 Incentive Stock Program) that provide for the grant of
replacement stock options if all or any portion of the purchase price or taxes
incurred in connection with the exercise, are paid by delivery (or, in the case
of payment of taxes, by withholding of shares) of other common shares of the
Company. The replacement stock option shall cover the number of common shares
surrendered to pay the purchase price, plus the number of shares surrendered or
withheld to satisfy the participant's tax liability, shall have an exercise
price equal to One Hundred percent (100%) of the Fair Market Value of such
common shares on the date such replacement stock option is granted, shall first
be exercisable six months from the date of grant of the replacement stock option
and shall have an expiration date equal to the expiration date of the original
stock option.

17.  TERM OF PROGRAM AND AMENDMENT, MODIFICATION, CANCELLATION OR ACCELERATION
OF BENEFITS. The Program shall continue in effect until terminated by the Board
of Directors, except that no Incentive Stock Option shall be granted more than
ten (10) years after the date of adoption of this Program. The terms and
conditions applicable to any Benefits may at any time be amended, modified or
canceled by mutual agreement between the Committee and the participant or such
other persons as may then have an interest therein, so long as any amendment or
modification does not increase the number of common shares issuable under this
Program; and provided further, that the Committee may, at any time and in its
sole discretion, declare any or all stock options and stock appreciation rights
then outstanding under this Program or the Prior Programs to be exercisable and
any or all then outstanding Restricted Stock Awards to be vested, whether or not
such options, rights or awards are then otherwise exercisable or vested.
Notwithstanding the foregoing, except as provided in paragraph 22, the Committee
shall neither lower the purchase price of any option granted under the Program
nor grant any option under the Program in replacement of a cancelled option
which had previously been granted at a higher purchase price, without
shareholder approval.

18.  AMENDMENT TO PRIOR PROGRAMS. No options or other Benefits shall be granted
under the Prior Programs on or after the date of shareholder approval of this
Program.

19.  INDIVIDUAL LIMIT ON OPTIONS AND STOCK APPRECIATION RIGHTS; AGGREGATE LIMIT
ON INCENTIVE STOCK OPTIONS. The maximum number of shares with respect to which
Incentive Stock Options, Non-qualified Stock Options,



Stock Appreciation Rights and Limited Stock Appreciation Rights may be granted
to any one participant, in aggregate in any one calendar year, shall be One
Million (1,000,000) shares. Incentive Stock Options with respect to no more than
the lesser of (i) Seventy-Five Million (75,000,000) shares (plus any shares
acquired by the Company pursuant to payment of the purchase price of shares
under incentive stock options by delivery of other common shares of the
Company), or (ii) the total number of shares reserved under paragraph 5 may be
issued under the Plan.

20.  TAXES. The Company shall be entitled to withhold the amount of any tax
attributable to any amount payable or shares deliverable under the Program after
giving the person entitled to receive such amount or shares notice as far in
advance as practicable, and the Company may defer making payment or delivery if
any such tax may be pending unless and until indemnified to its satisfaction.

21.  DEFINITIONS.

     (a)  FAIR MARKET VALUE. Except as provided below, the Fair Market Value of
          the Company's common shares shall be determined by such methods or
          procedures as shall be established by the Committee; provided that, in
          the case of any Limited Stock Appreciation Right (other than a right
          related to an Incentive Stock Option), the Fair Market Value shall be
          the higher of:

          (i)     The highest daily closing price of the Company's common shares
                  during the sixty (60) day period following the Change in
                  Control; or

          (ii)    The highest gross price paid or to be paid for the Company's
                  common shares in any of the transactions described in
                  paragraphs 21(c)(i) and 21(c)(ii).

     (b)  SUBSIDIARY. The term "subsidiary" for all purposes other than the
          Incentive Stock Option provisions in paragraph 6, shall mean any
          corporation, partnership, joint venture or business trust, fifty
          percent (50%) or more of the control of which is owned, directly or
          indirectly, by the Company. For Incentive Stock Option purposes the
          term "subsidiary" shall be defined as provided in Internal Revenue
          Code Section 424(f).

     (c)  CHANGE IN CONTROL. A "Change in Control" shall be deemed to have
          occurred on the earliest of the following dates:

          (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 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 Program: "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; 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.

     (d)  DISABILITY. The term "disability" for all purposes of the Program
          shall mean the participant's disability as defined in subsection
          4.1(a) of the Abbott Laboratories Extended Disability Plan for twelve
          (12) consecutive months.

22.  ADJUSTMENT PROVISIONS.

     (a)  If the Company shall at any time change the number of issued common
          shares without new consideration to the Company (such as by stock
          dividends or stock splits), the total number of shares reserved for
          issuance under this Program, the individual and aggregate limits
          described in paragraphs 11 and 19 on the number of shares that may be
          granted or



          issued (as the case may be), the number of shares covered by each
          outstanding Benefit and the purchase price of such shares shall be
          adjusted so that the aggregate consideration payable to the Company
          and the value of each such Benefit shall not be changed.

     (b)  Subject to paragraph 22(c), without affecting the number of shares
          otherwise reserved or available hereunder, the Committee may authorize
          the issuance or assumption of Benefits in connection with any merger,
          consolidation, acquisition of property or stock, or reorganization
          upon such terms and conditions as it may deem appropriate.

     (c)  Notwithstanding any other provision of this Program or the Prior
          Programs including the terms of any Benefit granted hereunder, if the
          outstanding common shares of the Company shall be combined, or be
          changed into, or exchanged for, another kind of stock of the Company,
          into securities of another corporation, or into property (including
          cash) whether through recapitalization, reorganization, sale, merger,
          consolidation, spin-off, business combination or a similar transaction
          (a "Transaction"), the Company shall cause its successor, acquiror (or
          ultimate parent of any successor or acquiror), as applicable, to
          assume each stock option, Stock Appreciation Right and Limited Stock
          Appreciation Right outstanding immediately prior to the Transaction
          (or to cause new options or rights to be substituted therefor).
          Pursuant to such assumed or substituted option or rights, participants
          shall thereafter be entitled to receive, upon due exercise of any
          portion of the option or right, (a) in the event of a Transaction in
          which the outstanding common shares of the Company are combined, or
          changed into, or exchanged for, solely another kind of stock of the
          Company or securities of another corporation (disregarding, for this
          purpose, cash paid in lieu of fractional shares), the securities which
          that person would have been entitled to receive for common shares
          acquired through exercise of the same portion of such option or right
          immediately prior to the effective date of such Transaction, and (b)
          in the event of a Transaction in which the outstanding common shares
          of the Company are changed into, or exchanged for, property (including
          cash) other than solely stock of the Company or securities of another
          corporation (disregarding, for this purpose, cash paid in lieu of
          fractional shares), securities the fair market value of which
          immediately following the effective date of such Transaction (as
          determined by the Committee) equals the fair market value (as
          determined by the Committee) of the property which that person would
          have been entitled to receive for common shares acquired through
          exercise of the same portion of such option or right immediately prior
          to the effective date of such Transaction. In each case such assumed
          or substituted option or right shall continue to be subject to the
          same terms and conditions (including, without limitation, with respect
          to any right to receive "replacement options" upon option exercise) to
          which it was subject immediately prior to the Transaction.



          Notwithstanding the immediately preceding paragraph, upon a
          Transaction in which the outstanding common shares of the Company are
          changed into, or exchanged for, property (including cash) other than
          solely stock of the Company or securities of another corporation
          (disregarding, for this purpose, cash paid in lieu of fractional
          shares) and which constitutes a Change in Control, each participant
          may elect to receive, immediately following such Transaction in
          exchange for cancellation of any stock option (other than an Incentive
          Stock Option granted prior to June 20, 2003, Stock Appreciation Right
          or Limited Appreciation Right held by such participant immediately
          prior to the Transaction, a cash payment, with respect to each common
          share subject to such option or right, equal to the difference between
          the value of consideration (as determined by the Committee) received
          by the shareholders for a common share of the Company in the
          Transaction, less any applicable purchase price.

     (d)  Notwithstanding any other provision of this Program or the Prior
          Programs including the terms of any Benefit granted hereunder, upon
          the occurrence of a Change in Control:

          (i)     All stock options then outstanding under this Program or the
                  Prior Programs shall become fully exercisable as of the date
                  of the Change in Control, whether or not then otherwise
                  exercisable;

          (ii)    All Stock Appreciation Rights and Limited Stock Appreciation
                  Rights then outstanding shall become fully exercisable as of
                  the date of the Change in Control, whether or not then
                  otherwise exercisable;

          (iii)   All terms and conditions of all Restricted Stock Awards then
                  outstanding shall be deemed satisfied as of the date of the
                  Change in Control; and

          (iv)    All Performance Awards then outstanding shall be deemed to
                  have been fully earned and to be immediately payable, in cash,
                  as of the date of the Change in Control.

23.  AMENDMENT AND TERMINATION OF PROGRAM. The Board of Directors may amend the
Program from time to time or terminate the Program at any time, but no such
action shall reduce the then existing amount of any participant's Benefit or
adversely change the terms and conditions thereof without the participant's
consent. Notwithstanding the foregoing, except as provided in paragraph 22, the
Company shall neither lower the purchase price of any option granted under the
Program nor grant any option under the Program in replacement of a cancelled
option which had previously been granted at a higher purchase price, without
shareholder approval. To the extent required for compliance with Rule 16b-3 of
the Securities and Exchange Commission, paragraph 13 of the Program may not be
amended more frequently than once every six months other than to comport with
changes in the Internal Revenue Code of 1986, as



amended, or the rules thereunder, and no amendment of the Program shall result
in any Committee member losing his or her status as a "disinterested person" as
defined in Rule 16b-3 of the Securities and Exchange Commission with respect to
any employee benefit plan of the Company or result in the Program or awards
thereunder losing their exempt status under said Rule 16b-3.

24.  EFFECTIVE DATE. The Program was originally adopted by the Board of
Directors on October 13, 1995.



                                                                   EXHIBIT 10.3

                                                               Amended effective
                                                                   June 20, 2003

                  ABBOTT LABORATORIES 401(K) SUPPLEMENTAL PLAN

                                    SECTION 1
                                  INTRODUCTION

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

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

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

                                    SECTION 2
                          ELIGIBILITY AND PARTICIPATION

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

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

                                    SECTION 3
                             EMPLOYEE CONTRIBUTIONS

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

          3-2.    COMPENSATION. A participant's "compensation" shall have the
same meaning as that term is used in Subsection 7-2 of the Stock Plan.

                                        1


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

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

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

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

                                    SECTION 4
                             EMPLOYER CONTRIBUTIONS

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

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

                                    SECTION 5
                                    ELECTIONS

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

                                        2


          5-2.    LIMITED CHANGES. A participant who has elected under
subsection 5.1 to make pre-tax contributions for any calendar year, may increase
or decrease such pre-tax contributions during such calendar year by filing a
written election with the Committee. A participant may make no more than two
such elections under this subsection 5.2 during such calendar year. Any election
filed under this subsection 5.2 shall become effective for compensation earned
no earlier then the first payroll period commencing after receipt of the
election by the Committee. Any election filed under this subsection 5.2 shall
remain in effect for compensation earned during the remainder of such calendar
year unless changed by a subsequent election under this subsection 5.2.

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

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

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

                                    SECTION 6
                   FUNDING EMPLOYER AND EMPLOYEE CONTRIBUTIONS

          6-1.    CONTRIBUTIONS TO BE DEPOSITED IN GRANTOR TRUSTS. Each
participant's pre-tax contributions and employer contributions which the
participant has filed an election under subsection 5.5 shall be retained by
Abbott and credited to a Grantor Trust Account established under subsection 7.1.
As soon as practicable after the

                                        3


date the value of the participant's Grantor Trust Account exceeds Fifty Thousand
Dollars ($50,000), the entire value of such account, less the approximate
aggregate federal, state and local individual income taxes (determined under
subsection 8.5) attributable to the Grantor Trust Account, shall be deposited in
a "Grantor Trust" established by the participant, provided such trust is in a
form which the Committee determines is substantially similar to the trust
attached to this Plan as Exhibit A. The appropriate aggregate federal, state and
local individual income taxes attributable to the Grantor Trust Account shall be
paid directly to the participant.

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

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

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

                                    SECTION 7
                                   ACCOUNTING

          7-1.    SEPARATE ACCOUNTS. The Committee shall maintain two separate
Accounts, a "Deferred Account" and a "Trust Account" in the name of each
participant. The Deferred Account shall be comprised of any pre-tax
contributions made on behalf of the participant under subsection 3.1 and any
employer contributions made on behalf of the participant under Section 4, for
which the participant has not made an election under subsection 5.5, and any
adjustments made pursuant to subsection 7.2. The "Trust Account" shall be
comprised of any pre-tax contributions made on behalf of the participant under
subsection 3.1 and any employer contributions made on behalf of the participant
under Section 4, for which the participant has made an election under subsection
5.5, and any adjustments made pursuant to subsection 7.3.

                                        4


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

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

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

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

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

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

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

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

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

          7-5.    GUARANTEED RATE PAYMENTS. In addition to any employer
contribution made on behalf of a participant for any calendar year pursuant to
section 4, Abbott shall also make a payment to a participant's Grantor Trust (a
"Guaranteed Rate Payment") for any year in which the net earnings of such trust
do not equal or exceed the participant's Net Interest Accrual for that year. A
participant's "Net Interest Accrual" for a year is an amount equal to: (a) the
Interest Accrual credited to the participant's Trust Account for that year; less
(b) the product of (i) the amount of such Interest Accrual,

                                        5


multiplied by (ii) the aggregate of the federal, state and local individual
income tax rates (determined in accordance with subsection 8.5). The Guaranteed
Rate Payment shall equal the difference between the participant's Net Interest
Accrual and the net earnings of the participant's Grantor Trust for the year,
and shall be paid within 90 days of the end of the calendar year.

          7-6.    DESIGNATION OF BENEFICIARIES. Subject to the conditions and
limitations set forth below, each participant, and after a participant's death,
each primary beneficiary designated by a participant in accordance with the
provisions of this subsection 7.6, shall have the right from time to time to
designate a primary beneficiary or beneficiaries and, successive or contingent
beneficiary or beneficiaries to receive unpaid amounts from the participant's
Deferred Account under the Plan. Beneficiaries may be a natural person or
persons or a fiduciary, such as a trustee of a trust or the legal representative
of an estate. Any such designation shall take effect upon the death of the
participant or such beneficiary, as the case may be, or in the case of any
fiduciary beneficiary, upon the termination of all of its duties (other than the
duty to dispose of the right to receive amounts remaining to be paid under the
Plan). The conditions and limitations relating to the designation of
beneficiaries are as follows:

          (a)     A nonfiduciary beneficiary shall have the right to designate a
                  further beneficiary or beneficiaries only if the original
                  participant or the next preceding primary beneficiary, as the
                  case may be, shall have expressly so provided in writing; and

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

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

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

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

                                        6


          7-7.    NON-ASSIGNABILITY AND FACILITY OF PAYMENT. Amounts payable to
participants and their beneficiaries under the Plan are not in any way subject
to their debts and other obligations, and may not be voluntarily or
involuntarily sold, transferred or assigned; provided that the preceding
provisions of this section shall not be construed as restricting in any way a
designation right granted to a beneficiary pursuant to the terms of subsection
7.6. When a participant or the beneficiary of a participant is under legal
disability, or in the Committee's opinion is in any way incapacitated so as to
be unable to manage his or her financial affairs, the Committee may direct that
payments shall be made to the participant's or beneficiary's legal
representative, or to a relative or friend of the participant or beneficiary for
the benefit of the participant or beneficiary, or the Committee may direct the
payment or distribution for the benefit of the participant or beneficiary in any
manner that the Committee determines.

          7-8.    PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS. Any employer
contribution made on behalf of a participant in the Plan and any interest
credited thereto (and to other contributions) will be paid by the employer (or
such employer's successor) by whom the participant was employed during the
calendar year for which any amount was allocated, and for that purpose, if a
participant shall have been employed by two or more employers during any
calendar year the amount allocated under this Plan for that year shall be an
obligation of each of the respective employers in proportion to the respective
amounts of compensation paid by each of them in that calendar year.

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

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

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

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

          7-11.   CHANGE IN CONTROL. A "Change in Control" shall be deemed to
have occurred on the earliest of the following dates:

                                        7


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

          (b)     the date the following individuals cease for any reason to
                  constitute a majority of the number of directors then serving:
                  individuals who, on the date hereof, constitute the Board of
                  Directors and any new director (other than a director whose
                  initial assumption of office is in connection with an actual
                  or threatened election contest, including but not limited to a
                  consent solicitation, relating to the election of directors of
                  Abbott) whose appointment or election by the Board of
                  Directors or nomination for election by Abbott's shareholders
                  was approved or recommended by a vote of at least two-thirds
                  (2/3) of the directors then still in office who either were
                  directors on the date hereof or whose appointment, election or
                  nomination for election was previously so approved or
                  recommended; or

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

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

                                        8


                  than a sale or disposition by Abbott of all or substantially
                  all of Abbott's assets to an entity, at least 50% of the
                  combined voting power of the voting securities of which are
                  owned by shareholders of Abbott, in combination with the
                  ownership of any trustee or other fiduciary holding securities
                  under an employee benefit plan of Abbott or any subsidiary of
                  Abbott, in substantially the same proportions as their
                  ownership of Abbott immediately prior to such sale.

                  Notwithstanding the foregoing, a "Change in Control" shall not
                  be deemed to have occurred by virtue of the consummation of
                  any transaction or series of integrated transactions
                  immediately following which the record holders of the common
                  stock of Abbott immediately prior to such transaction or
                  series of transactions continue to have substantially the same
                  proportionate ownership in an entity which owns all or
                  substantially all of the assets of Abbott immediately
                  following such transaction or series of transactions.

                  For purposes of this Plan: "Affiliate" shall have the meaning
                  set forth in Rule 12b-2 promulgated under Section 12 of the
                  Exchange Act; "Beneficial Owner" shall have the meaning set
                  forth in Rule 13d-3 under the Exchange Act; "Exchange Act"
                  shall mean the Securities Exchange Act of 1934, as amended
                  from time to time; and "Person" shall have the meaning given
                  in Section 3(a)(9) of the Exchange Act, as modified and used
                  in Sections 13(d) and 14(d) thereof, except that such term
                  shall not include (i) Abbott or any of its subsidiaries, (ii)
                  a trustee or other fiduciary holding securities under an
                  employee benefit plan of Abbott or any of its Affiliates,
                  (iii) an underwriter temporarily holding securities pursuant
                  to an offering of such securities, or (iv) a corporation
                  owned, directly or indirectly, by the shareholders of Abbott
                  in substantially the same proportions as their ownership of
                  stock of Abbott.

          7-12.   POTENTIAL CHANGE IN CONTROL. A "Potential Change in Control"
shall exist during any period in which the circumstances described in paragraphs
(a), (b), (c) or (d), below, exist (provided, however, that a Potential Change
in Control shall cease to exist not later than the occurrence of a Change in
Control):

          (a)     Abbott enters into an agreement, the consummation of which
                  would result in the occurrence of a Change in Control,
                  provided that a Potential Change in Control described in this
                  paragraph (a) shall cease to exist upon the expiration or
                  other termination of all such agreements.

          (b)     Any Person (without regard to the exclusions set forth in
                  subsections (i) through (iv) of such definition) publicly
                  announces an intention to take or to consider taking actions
                  the consummation of which would constitute a Change in
                  Control; provided that a Potential Change in Control described
                  in this paragraph (b) shall cease to exist upon the withdrawal
                  of such

                                        9


                  intention, or upon a determination by the Board of Directors
                  that there is no reasonable chance that such actions would be
                  consummated.

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

          (d)     The Board of Directors adopts a resolution to the effect that,
                  for purposes of this Agreement, a Potential Change in Control
                  exists; provided that a Potential Change in Control described
                  in this paragraph (d) shall cease to exist upon a
                  determination by the Board of Directors that the reasons that
                  gave rise to the resolution providing for the existence of a
                  Potential Change in Control have expired or no longer exist.

          7-13.   PROHIBITION AGAINST AMENDMENT. The provisions of subsections
7.10, 7.11, 7.12 and this subsection 7.13 may not be amended or deleted, nor
superseded by any other provision of this Plan, (i) during the pendency of a
Potential Change in Control and (ii) during the period beginning on the date of
a Change in Control and ending on the date five (5) years following such Change
in Control.

                                    SECTION 8
                                  MISCELLANEOUS

          8-1.    RULES. The Committee may establish such rules and regulations
as it may consider necessary or desirable for the effective and efficient
administration of the Plan.

          8-2.    TAXES. Any employer shall be entitled, if necessary or
desirable, to pay, or withhold the amount of any federal, state or local tax,
attributable to any amounts payable by it under the Plan after giving the person
entitled to receive such amount notice as far in advance as practicable, and may
defer making payment of any amount with respect to which any such tax question
may be pending unless and until indemnified to its satisfaction.

          8-3.    RIGHTS OF PARTICIPANTS. Employment rights of participants with
Abbott and its subsidiaries shall not be enlarged or affected by reason of
establishment of or inclusion as a participant in the Plan. Nothing contained in
the Plan shall require Abbott or any subsidiary to segregate or earmark any
assets, funds or property for the purpose of payment of any amounts which may
have been deferred. The Deferred and Trust Accounts established pursuant to
subsection 7.1 are for the convenience of the administration of the Plan and no
trust relationship with respect to such Accounts is intended or should be
implied. Participant's rights shall be limited to payment to them at the time or
times and in such amounts as are contemplated by the Plan. Any decision

                                       10


made by the Committee which is within his sole and uncontrolled discretion,
shall be conclusive and binding upon all persons whomsoever.

          8-4.    TAX GROSS UP. In addition to the employer contribution
provided under Section 4, each participant (or, if the participant is deceased,
the beneficiary designated under the participant's Grantor Trust) shall be
entitled to a Tax Gross Up payment for each year there is a balance in his Trust
Account. The "Tax Gross Up" shall approximate: (a) the amount necessary to
compensate the participant (or beneficiary) for the net increase in the
participant's (or beneficiary's) federal, state and local income taxes as a
result of the inclusion in his taxable income of the income of the participant's
Grantor Trust and any Guaranteed Rate Payment for that year; less (b) any
distribution to the participant (or beneficiary) of his Grantor Trust's net
earnings for that year; plus (c) an amount necessary to compensate the
participant (or beneficiary) for the net increase in the taxes described in (a)
above as a result of the inclusion in his taxable income of any payment made
pursuant to this subsection 8.4. Payment of the Tax Gross Up shall be made by
the employers (in such proportions as Abbott shall designate) directly from
their general corporate assets.

          8-5.    INCOME TAX ASSUMPTIONS. For purposes of Sections 7 and 8, a
participant's federal income tax rate shall be deemed to be the highest marginal
rate of federal individual income tax in effect in the calendar year in which a
calculation under those Sections is to be made, and state and local tax rates
shall be deemed to be the highest marginal rates of individual income tax in
effect in the state and locality of the participant's residence on the date such
a calculation is made, net of any federal tax benefits.

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

          8-7.    MANNER OF ACTION BY COMMITTEE. A majority of the members of
the Committee qualified to act on any particular question may act by meeting or
by writing signed without meeting, and may execute any instrument or document
required or delegate to one of its members authority to sign. The Committee from
time to time may delegate the performance of certain ministerial functions in
connection with the Plan, such as the keeping of records, to such person or
persons as the Committee may select. Except as otherwise expressly provided in
the Plan, the costs of administration of the Plan will be paid by Abbott. Any
notice required to be given to, or any document required to be filed with the
Committee, will be properly given or filed if mailed or delivered in writing to
the Secretary of Abbott.

          8-8.    RELIANCE UPON ADVICE. The Board of Directors and the Committee
may rely upon any information or advice furnished to it by any Officer of Abbott
or by Abbott's independent auditors, or other consultants, and shall be fully
protected in relying upon such information or advice. No member of the Board of
Directors or the Committee shall be liable for any act or failure to act on
their part, excepting only any acts done or

                                       11


omitted to be done in bad faith, nor shall they be liable for any act or failure
to act of any other member.

                                    SECTION 9
                      AMENDMENT, TERMINATION AND CHANGE OF
                         CONDITIONS RELATING TO PAYMENTS

          The Plan will be effective from its effective date until terminated by
the Board of Directors. The Board of Directors reserves the right to amend the
Plan from time to time and to terminate the Plan at any time. No such amendment
or any termination of the Plan shall reduce any fixed or contingent obligations
which shall have arisen under the Plan prior to the date of such amendment or
termination.

                                       12


                                    EXHIBIT A

                       IRREVOCABLE GRANTOR TRUST AGREEMENT

          THIS AGREEMENT, made this _____ day of ____________, __, by and
between ____________ of ____________, Illinois (the "grantor"), and The Northern
Trust Company located at Chicago, Illinois, as trustee (the "trustee"),

                                WITNESSETH THAT:

          WHEREAS, the grantor desires to establish and maintain a trust to hold
certain benefits received by the grantor under the Abbott Laboratories 40l(k)
Supplemental Plan, as it may be amended from time to time;

          NOW, THEREFORE, IT IS AGREED as follows:

                                    ARTICLE I
                                  INTRODUCTION

          I-1.    NAME. This agreement and the trust hereby evidenced (the
"trust") may be referred to as the "__________ 19__ Grantor Trust".

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

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

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

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

                                   ARTICLE II
                         DISTRIBUTION OF THE TRUST FUND

          II-1.   DEFERRED ACCOUNT. The administrator shall maintain a "deferred
account" under the trust. As of the end of each calendar year, the administrator
shall charge the deferred account with all distributions made from such account
during that year; and credit such account with income and realized gains and
charge such account with expenses and realized losses for the year.

                                       13


          II-2.   DISTRIBUTIONS FROM THE DEFERRED ACCOUNT PRIOR TO THE GRANTOR'S
DEATH. Principal and accumulated income credited to the deferred account shall
not be distributed from the trust prior to the grantor's retirement or other
termination of employment with Abbott or a subsidiary of Abbott (the grantor's
"settlement date"); provided that, each year the administrator may direct the
trustee to distribute to the grantor a portion of the income of the deferred
account for that year, with the balance of such income to be accumulated in that
account. The administrator shall inform the trustee of the grantor's settlement
date. Thereafter, the trustee shall distribute the amounts from time to time
credited to the deferred account to the grantor, if then living, either in a
lump-sum payable as soon as practicable following the settlement date, or in a
series of annual installments, with the amount of each installment computed by
one of the following methods:

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

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

          (c)     Each installment (after the first installment) shall be
                  approximately equal, with the amount comprised of the sum of:
                  (i) the amount of the first installment, plus interest thereon
                  at the rate determined under the Abbott Laboratories 401(k)
                  Supplemental Plan, compounded annually; and (ii) the net
                  earnings credited to the deferred account for the preceding
                  year.

Notwithstanding the foregoing, the final installment distribution made to the
grantor under this paragraph II-3 shall equal the total principal and
accumulated income then held in the trust fund. The grantor, by writing filed
with the trustee and the administrator on or before the end of the calendar year
in which the grantor's settlement date occurs, may select either the lump-sum or
an installment payment method and, if an installment method is selected, may
select both the period (which may not be less than ten years from the end of the
calendar year in which the grantor's settlement date occurred) over which the
installment distributions are to be made and the method of computing the amount
of each installment. In the absence of such a written direction by the grantor,
installment distributions shall be made over a period of ten years, and the
amount of each installment shall be computed by using the method described in
subparagraph (a) next above. Installment distributions under this Paragraph II-2
shall be made as of January 1 of each year, beginning with the calendar year
following the year in which the grantor's settlement date occurs. The
administrator shall inform the trustee of the amount of each

                                       14


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
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:

                                       15


          (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.

                                       16


          (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 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

                                       17


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.

                                       18


                                    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.

                                   *    *    *

                                       19


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


                                        ----------------------------------------
                                        Grantor

                                        The Northern Trust Company, as Trustee

                                        By
                                          --------------------------------------

                                        Its
                                           -------------------------------------

                                       20



                                                                   EXHIBIT 10.4

                  ABBOTT LABORATORIES SUPPLEMENTAL PENSION PLAN

                       (AS AMENDED THRU THE 18th AMENDMENT
                            EFFECTIVE JUNE 20, 2003)



                  ABBOTT LABORATORIES SUPPLEMENTAL PENSION PLAN

                                    SECTION 1
                                  INTRODUCTION

     1-1.    On September 9, 1977, December 14, 1979 and February 10, 1984 the
Board of Directors of Abbott Laboratories ("Abbott") adopted certain resolutions
providing for payment of (i) pension benefits calculated under the Abbott
Laboratories Annuity Retirement Plan ("Annuity Plan") in excess of those which
may be paid under that plan under the limits imposed by Section 415 of the U.S.
Internal Revenue Code, as amended, and the Employee Retirement Income Security
Act ("ERISA") and (ii) the additional pension benefits that would be payable
under the Annuity Plan if deferred awards under the Abbott Laboratories
Management Incentive Plan were included in "final earnings" as defined in the
Annuity Plan.

     The purpose of this ABBOTT LABORATORIES SUPPLEMENTAL PENSION PLAN (the
"Supplemental Plan") is to clarify, restate and supersede the prior resolutions.

     1-2.    The Supplemental Plan shall apply to employees of Abbott and its
subsidiaries and affiliates existing as of the date of adoption of the
Supplemental Plan or thereafter created or acquired. (Abbott and each of such
subsidiaries and affiliates are hereinafter referred to as an "employer" and
collectively as the "employers").

     1-3.    All benefits provided under the Supplemental Plan shall be provided
from the general assets of the employers and not from any trust fund or other
designated asset. All participants in the Supplemental Plan shall be general
creditors of the employers with no priority over other creditors.

                                       -2-


     1-4.    The Supplemental Plan shall be administered by the Abbott
Laboratories Employee Benefit Board of Review appointed and acting under the
Annuity Plan ("Board of Review"). Except as stated below, the Board of Review
shall perform all powers and duties with respect to the Supplemental Plan,
including the power to direct payment of benefits, allocate costs among
employers, adopt amendments and determine questions of interpretation. The Board
of Directors of Abbott (the "Board of Directors") shall have the sole authority
to terminate the Supplemental Plan.

                                    SECTION 2
                     ERISA ANNUITY PLAN SUPPLEMENTAL BENEFIT

     2-1.    The benefits described in this Section 2 shall apply to all
participants in the Annuity Plan who retire, or terminate with a vested pension
under that plan, on or after September 9, 1977.

     2-2.    Each Annuity Plan participant whose retirement or vested pension
under that plan would otherwise be limited by Section 415, Internal Revenue
Code, shall receive a supplemental pension under this Supplemental Plan in an
amount, which, when added to his or her Annuity Plan pension, will equal the
amount the participant would be entitled to under the Annuity Plan as in effect
from time to time, based on the particular option selected by the participant,
without regard to the limitations imposed by Section 415, Internal Revenue Code.

                                    SECTION 3
                    1986 TAX REFORM ACT SUPPLEMENTAL BENEFIT

     3-1.    The benefits described in this Section 3 shall apply to all
participants in the Annuity Plan who retire, or terminate with a vested pension
under that plan, after December 31, 1988.

                                       -3-


     3-2.    Each Annuity Plan participant shall receive a supplemental pension
under this Supplemental Plan in an amount determined as follows:

     (a)     The supplemental pension shall be the difference, if any, between:

             (i)   the monthly benefit payable under the Annuity Plan plus any
                   supplement provided by Section 2; and

             (ii)  the monthly benefit which would have been payable under the
                   Annuity Plan (without regard to the limits imposed by Section
                   415, Internal Revenue Code) if the participant's "final
                   earnings", as defined in the Annuity Plan, had included
                   compensation in excess of the limits imposed by Section
                   401(a)(17), Internal Revenue Code, and any "pre-tax
                   contributions" made by the participant under the Abbott
                   Laboratories Supplemental 401(k) Plan.

                                    SECTION 4
          DEFERRED COMPENSATION PLAN ANNUITY PLAN SUPPLEMENTAL BENEFIT

     4-1.    The benefits described in this Section 4 shall apply to all
participants in the Annuity Plan who retire, or terminate with a vested pension,
under that plan, on or after January 1, 2002 and who made a Deferral Election
under the Abbott Laboratories Deferred Compensation Plan (the "Deferred
Compensation Plan") with respect to any calendar month during the one hundred
twenty consecutive calendar months immediately preceding retirement or
termination of employment.

     4-2.    Each Annuity Plan participant shall receive a supplemental pension
under this Supplemental Plan in an amount determined as follows:

     (a)     The supplemental pension shall be the difference, if any, between:

             (i)   the monthly benefit payable under the Annuity Plan plus any
                   supplement provided by Section 2 and Section 3; and

                                       -4-


             (ii)  the monthly benefit which would have been payable under the
                   Annuity Plan (without regard to the limits imposed by Section
                   415, Internal Revenue Code) if the participant's "base
                   earnings", as defined in the Annuity Plan, included deferrals
                   made under the Deferred Compensation Plan and any
                   compensation in excess of the limits imposed by Section
                   401(a)(17), Internal Revenue Code.

                                    SECTION 5
                 DEFERRED MIP ANNUITY PLAN SUPPLEMENTAL BENEFIT

     5-1.    The benefits described in this Section 5 shall apply to all
participants in the Annuity Plan who retire, or terminate with a vested pension,
under that plan, on or after December 14, 1979 and who were awarded Management
Incentive Plan awards for any calendar year during the ten consecutive calendar
years ending with the year of retirement or termination of employment.

     5-2.    Each Annuity Plan participant shall receive a supplemental pension
under this Supplemental Plan in an amount determined as follows:

     (a)     The supplemental pension shall be the difference, if any, between:

             (i)   the monthly benefit payable under the Annuity Plan plus any
                   supplement provided by Section 2, Section 3, and Section 4;
                   and

             (ii)  the monthly benefit which would have been payable under the
                   Annuity Plan (without regard to the limits imposed by Section
                   415, Internal Revenue Code) if the participant's "final
                   earnings", as defined in the Annuity Plan, were one-sixtieth
                   of the sum of:

                   (A)  the participant's total "basic earnings" (excluding any
                        payments under the Management Incentive Plan or any
                        Division Incentive Plan) received in the sixty
                        consecutive calendar months for which his basic earnings
                        (excluding any payments under the Management Incentive
                        Plan or any Division Incentive Plan) were highest within
                        the last one hundred twenty consecutive calendar months
                        immediately preceding his retirement or termination of
                        employment; and

                                       -5-


                   (B)  the amount of the participant's total awards under the
                        Management Incentive Plan and any Division Incentive
                        Plan (whether paid immediately or deferred) made for the
                        five consecutive calendar years during the ten
                        consecutive calendar years ending with the year of
                        retirement or termination for which such amount is the
                        greatest and (for participants granted Management
                        Incentive Plan awards for less than five consecutive
                        calendar years during such ten year period) which
                        include all Management Incentive Plan awards granted for
                        consecutive calendar years within such ten year period.

     (b)     That portion of any Management Incentive Plan award which the
             Compensation Committee has determined shall be excluded from the
             participant's "basic earnings" shall be excluded from the
             calculation of "final earnings" for purposes of this Section 5-2.
             "Final earnings" for purposes of this subsection 5-2 shall include
             any compensation in excess of the limits imposed by Section
             401(a)(17), Internal Revenue Code.

     (c)     In the event the period described in subsection 5-2(a)(ii)(B) is
             the final five calendar years of employment and a Management
             Incentive Plan award is made to the participant subsequent to
             retirement for the participant's final calendar year of employment,
             the supplemental pension shall be adjusted by adding such new award
             and subtracting a portion of the earliest Management Incentive Plan
             award included in the calculation, from the amount determined under
             subsection 5-2(a)(ii)(B). The portion subtracted shall be equal to
             that portion of the participant's final calendar year of employment
             during which the participant was employed by Abbott. If such
             adjustment results in a greater supplemental pension, the greater
             pension shall be paid beginning the first month following the date
             of such new award.

                                    SECTION 6
               CORPORATE OFFICER ANNUITY PLAN SUPPLEMENTAL BENEFIT

     6-1.    The benefits described in this Section 6 shall apply to all
participants in the Annuity Plan who are corporate officers of Abbott as of
September 30, 1993 or who become corporate officers thereafter, and who retire,
or terminate with a vested pension under that plan on or after September 30,
1993. The term "corporate officer" for purposes of this Supplemental Plan shall
mean an individual elected an officer of Abbott by its Board of Directors (or

                                       -6-


designated as such for purposes of this Section 6 by the Compensation Committee
of the Board of Directors of Abbott), but shall not include assistant officers.

     6-2.    Subject to the limitations and adjustments described below, each
participant described in subsection 6-1 shall receive a monthly supplemental
pension under this Supplemental Plan commencing on the participant's normal
retirement date under the Annuity Plan and payable as a life annuity, equal to
6/10 of 1 percent (.006) of the participant's final earnings (as determined
under subsection 5-2) for each of the first twenty years of the participant's
benefit service (as defined in the Annuity Plan) occurring after the
participant's attainment of age 35.

     6-3.    In no event shall the sum of (a) the participant's aggregate
percentage of final earnings calculated under subsection 6-2 and (b) of the
participant's aggregate percentage of final earnings calculated under subsection
5-1(b)(i) of the Annuity Plan, exceed the maximum aggregate percentage of final
earnings allowed under subsection 5-1(b)(i) of the Annuity Plan (without regard
to any limits imposed by the Internal Revenue Code), as in effect on the date of
the participant's retirement or termination. In the event the limitation
described in this subsection 6-3 would be exceeded for any participant, the
participant's aggregate percentage calculated under subsection 6-2 shall be
reduced until the limit is not exceeded.

     6-4.    Benefit service occurring between the date a participant ceases to
be a corporate officer of Abbott and the date the participant again becomes a
corporate officer of Abbott shall be disregarded in calculating the
participant's aggregate percentage under subsection 6-2.

                                       -7-


     6-5.    Any supplemental pension otherwise due a participant under this
Section 6 shall be reduced by the amount (if any) by which:

     (a)     the sum of (i) the benefits due such participant under the
             Annuity Plan and this Supplemental Plan, plus (ii) the actuarially
             equivalent value of the employer-paid portion of all benefits due
             such participant under the primary retirement plans of all
             non-Abbott employers of such participant; exceeds

     (b)     the maximum benefit that would be due under the Annuity Plan
             (without regard to the limits imposed by Section 415, Internal
             Revenue Code) based on the participant's final earnings (as
             determined under subsection 5-2), if the participant had accrued
             the maximum benefit service recognized by the Annuity Plan.

The term "primary retirement plan" shall mean any pension benefit plan as
defined in ERISA, whether or not qualified under the Internal Revenue Code,
which is determined by the Board of Review to be the primary pension plan of its
sponsoring employer. The term "non-Abbott employer" shall mean any employer
other than Abbott or a subsidiary or affiliate of Abbott. A retirement plan
maintained by an employer prior to such employer's acquisition by Abbott shall
be deemed a retirement plan maintained by a non-Abbott employer for purposes of
this subsection 6-5.

     6-6.    Any supplemental pension due a participant under this Section 6
shall be actuarially adjusted as provided in the Annuity Plan to reflect the
pension form selected by the participant and the participant's age at
commencement of the pension, and shall be paid as provided in subsection 7-2.

                                    SECTION 7
                         CORPORATE OFFICER ANNUITY PLAN
                      SUPPLEMENTAL EARLY RETIREMENT BENEFIT

     7-1.    The benefits described in this Section 7 shall apply to all persons
described in subsection 6-1.

                                       -8-


     7-2.    The supplemental pension due under Sections 2, 3, 4, 5 and 6 to
each participant described in subsection 7-1 shall be reduced as provided in
subsections 5-3 and 5-6 of the Annuity Plan for each month by which its
commencement date precedes the last day of the month in which the participant
will attain age 60. No reduction will be made for the period between the last
day of the months the participant will attain age 60 and age 62.

     7-3.    Each participant described in subsection 7-1 shall receive a
monthly supplemental pension under this Supplemental Plan equal to any reduction
made in such participant's Annuity Plan pension under subsections 5-3 or 5-6 of
the Annuity Plan for the period between the last day of the months the
participant will attain age 60 and age 62.

                                    SECTION 8
                                  MISCELLANEOUS

     8-1.    For purposes of this Supplemental Plan, the term "Management
Incentive Plan" shall mean the Abbott Laboratories 1971 Management Incentive
Plan, the Abbott Laboratories 1981 Management Incentive Plan and all successor
plans to those plans.

     8-2.    The supplemental pension described in Sections 2, 3, 4, 5, 6 and 7
shall be paid to the participant or his or her beneficiary based on the
particular pension option elected by the participant, in the same manner, at the
same time, for the same period and on the same terms and conditions as the
pension payable to the participant or his beneficiary under the Annuity Plan. In
the event a participant is paid his or her pension under the Annuity Plan in a
lump sum, any supplemental pension due under Sections 2, 3, 4, 5, 6 or 7 shall
likewise be paid in a lump sum. Notwithstanding the foregoing provision of this
subsection 8-2: (a) if the present value of the vested supplemental pensions
described in Sections 2, 3, 4, 5, 6 and 7 of a participant who is actively

                                       -9-


employed by Abbott as a corporate officer exceeds $100,000, then payment of such
pensions shall be made to the participant under Section 9 below; and (b) if the
monthly vested supplemental pensions, expressed as a straight life annuity, due
a participant or his or her beneficiary under Sections 2, 3, 4, 5, 6 and 7 do
not exceed an aggregate of One Hundred Fifty Dollars ($150.00) as of the
commencement date of the pension payable such participant or his or her
beneficiary under the Annuity Plan, and payment of such supplemental pension has
not previously been made under Section 9, the present value of such supplemental
pensions shall be paid such participant or beneficiary in a lump-sum.

     8-3.    Notwithstanding any other provisions of this Supplemental Plan, if
employment of any participant with Abbott and its subsidiaries and affiliates
should terminate for any reason within five (5) years after the date of a Change
in Control:

     (a)     The present value of any supplemental pension due the participant
             under Section 2 (whether or not then payable) shall be paid to the
             participant in a lump sum within thirty (30) days following such
             termination; and

     (b)     The present value of any supplemental pension due the participant
             under Sections 3, 4 or 5 (whether or not then payable) shall be
             paid to the participant in a lump sum within thirty (30) days
             following such termination.

The supplemental pension described in paragraph (a) shall be computed using as
the applicable limit under Section 415, Internal Revenue Code, such limit as is
in effect on the termination date and based on the assumption that the
participant will receive his or her Annuity Plan pension in the form of a
straight life annuity with no ancillary benefits. The present values of the
supplemental pensions described in paragraphs (a) and (b) shall be computed as
of the date of payment by using an interest rate equal to the Pension Benefit
Guaranty Corporation interest rate applicable to an immediate annuity, as in
effect on the date of payment.

                                      -10-


     8-4.    For purposes of subsection 8-3, a "Change in Control" shall be
deemed to have occurred on the earliest of the following dates:

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

     (b)     the date the following individuals cease for any reason to
             constitute a majority of the number of directors then serving:
             individuals who, on the date hereof, constitute the Board of
             Directors and any new director (other than a director whose initial
             assumption of office is in connection with an actual or threatened
             election contest, including but not limited to a consent
             solicitation, relating to the election of directors of Abbott)
             whose appointment or election by the Board of Directors or
             nomination for election by Abbott's shareholders was approved or
             recommended by a vote of at least two-thirds (2/3) of the directors
             then still in office who either were directors on the date hereof
             or whose appointment, election or nomination for election was
             previously so approved or recommended; or

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

                                      -11-


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

             Notwithstanding the foregoing, a "Change in Control" shall not be
             deemed to have occurred by virtue of the consummation of any
             transaction or series of integrated transactions immediately
             following which the record holders of the common stock of Abbott
             immediately prior to such transaction or series of transactions
             continue to have substantially the same proportionate ownership in
             an entity which owns all or substantially all of the assets of
             Abbott immediately following such transaction or series of
             transactions.

             For purposes of this Supplemental Plan: "Affiliate" shall have the
             meaning set forth in Rule 12b-2 promulgated under Section 12 of the
             Exchange Act; "Beneficial Owner" shall have the meaning set forth
             in Rule 13d-3 under the Exchange Act; "Exchange Act" shall mean the
             Securities Exchange Act of 1934, as amended from time to time; and
             "Person" shall have the meaning given in Section 3(a)(9) of the
             Exchange Act, as modified and used in Sections 13(d) and 14(d)
             thereof, except that such term shall not include (i) Abbott or any
             of its subsidiaries, (ii) a trustee or other fiduciary holding
             securities under an employee benefit plan of Abbott or any of its
             Affiliates, (iii) an underwriter temporarily holding securities
             pursuant to an offering of such securities, or (iv) a corporation
             owned, directly or indirectly, by the shareholders of Abbott in
             substantially the same proportions as their ownership of stock of
             Abbott.

     8-5     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

                                      -12-


             actions the consummation of which would constitute a Change in
             Control; provided that a Potential Change in Control described in
             this paragraph (b) shall cease to exist upon the withdrawal of such
             intention, or upon a determination by the Board of Directors that
             there is no reasonable chance that such actions would be
             consummated.

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

     (d)     The Board of Directors adopts a resolution to the effect that, for
             purposes of this Agreement, a Potential Change in Control exists;
             provided that a Potential Change in Control described in this
             paragraph (d) shall cease to exist upon a determination by the
             Board of Directors that the reasons that gave rise to the
             resolution providing for the existence of a Potential Change in
             Control have expired or no longer exist.

     8-6.    The provisions of subsections 8-3, 8-4, 8-5 and this subsection 8-6
may not be amended or deleted, nor superseded by any other provision of this
Supplemental 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.

     8-7.    All benefits due under this Supplemental Plan shall be paid by
Abbott and Abbott shall be reimbursed for such payments by the employee's
employer. In the event the employee is employed by more than one employer, each
employer shall reimburse Abbott in proportion to the period of time the employee
was employed by such employer, as determined by the Board of Review in its sole
discretion.

     8-8.    The benefits under the Supplemental Plan are not in any way subject
to the debts or other obligations of the persons entitled to benefits and may
not be voluntarily or involuntarily sold, transferred or assigned.

                                      -13-


     8-9     Nothing contained in this Supplemental Plan shall confer on any
employee the right to be retained in the employ of Abbott or any of its
subsidiaries or affiliates.

     8-10.   Upon adoption of this Supplemental Plan, the prior resolutions
shall be deemed rescinded.

                                    SECTION 9
                   ALTERNATE PAYMENT OF SUPPLEMENTAL PENSIONS

     9-1.    If, as of December 31, 1995 or any subsequent December 31, the
present value of the supplemental pension described in Sections 2, 3, 4, 5, 6
and 7 of a participant, who is actively employed by Abbott as a corporate
officer, exceeds $100,000, then payment of such present value shall be made, at
the direction of the participant, by either of the following methods: (a)
current payment in cash directly to the participant, or (b) current payment of a
portion of such present value (determined as of that December 31) in cash for
the participant directly to a Grantor Trust established by the participant, and
current payment of the balance of such present value in cash directly to the
participant, provided that the payment made directly to the participant shall
approximate the aggregate federal, state and local individual income taxes
attributable to the amount paid pursuant to this subparagraph 9-1(b) (as
determined pursuant to the tax rates set forth in subsection 9-14).

     9-2.    If the present value of a participant's supplemental pension has
been paid to the participant (including amounts paid to the participant's
Grantor Trust) pursuant to subsection 9-1 (either as in effect prior to June 1,
1996 that applied to any participant with a supplemental pension with a present
value in excess of $100,000 or as currently in effect that requires the
participant to have a supplemental pension with a present value in excess of
$100,000 and to be a corporate

                                      -14-


officer), then as of each subsequent December 31, such participant shall be
entitled to a payment in an amount equal to: (i) the present value (as of that
December 31) of the participant's supplemental pension described in Sections 2,
3, 4, 5, 6 and 7 less (ii) the current value (as of that December 31) of the
payments previously made to the participant under subsections 9-1 and 9-2.
Payments under this subsection 9-2 shall be made, at the direction of the
participant, by either of the following methods: (a) current payment in cash
directly to the participant, or (b) current payment of a portion of such amount
in cash for the participant directly to the Grantor Trust established by the
participant; and current payment of the balance of such amount in cash directly
to the participant, provided that the payment made directly to the participant
shall approximate the aggregate federal, state and local individual income taxes
attributable to the amount paid pursuant to this subparagraph 9-2(b) (as
determined pursuant to the tax rates set forth in subsection 9-14). No payments
shall be made under this subsection 9-2 as of any December 31 after the calendar
year in which the participant retires or otherwise terminates employment with
Abbott.

     9-3.    Present values for the purposes of subsections 9-1, 9-2, 9-4 and
9-5 shall be determined using reasonable actuarial assumptions specified for
this purpose by Abbott and consistently applied. The "current value" of the
payments previously made to a participant under subsections 9-1 and 9-2 means
the aggregate amount of such payments, with interest thereon (at the rate
specified for this purpose by Abbott). For purposes of subsections 9-4 and 9-5,
"Projected Taxes" with respect to any payment of supplemental pension benefits
under subsections 9-1 or 9-2, shall mean the taxes which Abbott projects will be
incurred by the participant on the income earned (i) on the payment (net of
taxes) that is made pursuant to subsections 9-1 or 9-2, (ii) on the
corresponding payment(s) for Projected Taxes that are made pursuant to
subsection 9-4 and, if

                                      -15-


applicable, 9-5 and (iii) on the accumulated income earned on any of the
payments covered by parts (i) and (ii) hereof, during the life of such
participant's Grantor Trust (or during the period that such Grantor Trust would
have been in existence if the participant had elected to receive all of the
payments under subsections 9-1 and 9-2 in cash). In calculating such Projected
Taxes, Abbott shall use the aggregate of the current federal, state and local
tax rates specified by subsection 9-14.

     9-4.    Effective as of December 31, 1995, or any subsequent December 31,
as a result of any payment made to a Qualified Participant for any calendar year
pursuant to subsection 9-1 or 9-2, Abbott shall also make a corresponding
payment to such Qualified Participant in the amount of the present value of the
Projected Taxes. A "Qualified Participant" is either (i) a participant who as of
December 31, 1995 was actively employed by Abbott and who had previously
received, or as of such date was qualified to receive, a payment under
subsection 9-1; or (ii) a participant who as of any subsequent December 31
qualifies to receive a payment pursuant to subsection 9-1. The payment for
Projected Taxes under this subsection 9-4 shall be made to the Qualified
Participant in the identical manner that the payment under subsection 9-1 or 9-2
was made. For example, (a) if the Qualified Participant elected to receive the
payment under subsection 9-1 directly in cash, then Abbott shall also pay the
present value of the Projected Taxes on such payment in cash directly to the
Qualified Participant, and (b) if the Qualified Participant elected to receive
the payment under subsection 9-1 into a Grantor Trust established by the
Qualified Participant, then Abbott shall pay the present value of the Projected
Taxes on such payment as follows: current payment of a portion of such present
value (determined as of that December 31) in cash for such Qualified Participant
directly to a Grantor Trust established by such participant, and current payment
of the balance of such present value in cash directly to such Qualified
Participant, provided that the payment made

                                      -16-


directly to such participant shall approximate the aggregate federal, state and
local individual income taxes attributable to the amount paid pursuant to this
subparagraph 9-4(b) (as determined pursuant to the tax rates set forth in
subsection 9-14). No payments shall be made under this subsection 9-4 as of any
December 31 after the calendar year in which the participant retires or
otherwise terminates employment with Abbott.

     9-5.    In the event that Abbott has made any payment for projected Taxes
under subsection 9-4 in cash directly to the Qualified Participant and there is
a subsequent increase in the tax rates for such Qualified Participant, Abbott
shall make a further cash payment to such Qualified Participant in the amount of
(a) the present value of the Projected Taxes on the payments that were made
under subsections 9-1 and 9-2 in cash directly to such Qualified Participant
using the actual tax rates for previous years and the new tax rates (determined
in accordance with subsection 9-14) for the current and subsequent years, less
(b) the amount that would have been in the Qualified Participant's Tax Payment
Account with respect to the payments made under subsections 9-1 and 9-2 in cash
directly to the Participant, if such payments had instead been made to the
Qualified Participant's Grantor Trust. Such amount shall be paid by Abbott
directly to the Qualified Participant in cash. In the event that Abbott has made
any payment for Projected Taxes under subsection 9-4 to the Qualified
Participant's Grantor Trust, then Abbott shall as of December 31 of each year,
make a further payment to the Qualified Participant in the amount of (a) the
present value (as of that December 31) of the Projected Taxes on the payments
that were made under subsections 9-1 and 9-2 into the Qualified Participant's
Grantor Trust less (b) the balance of such Qualified Participant's Tax Payment
Account (as described in subsection 9-8). Such payment shall be paid by Abbott
as follows: the current payment of a portion of such amount in cash directly to
the Qualified

                                      -17-


Participant's Grantor Trust and the current payment of the balance of such
amount in cash directly to such Qualified Participant; provided, that the
payments made directly to such Qualified Participant shall approximate the
aggregate federal, state and local individual income taxes attributable to the
amount paid pursuant to this subsection 9-5. No payments shall be made under
this subsection 9-5 for any year following the participant's death. In the event
that the calculation required by this subsection 9-5 for a Grantor Trust
demonstrates that there has been an overpayment of projected taxes, such
overpayment shall be held within the Grantor Trust in an Excess Tax Account and
may be used by Abbott as a credit against any payments due hereunder or as
specified in subsection 9-12.

     9-6.    For each Qualified Participant whose Grantor Trust has received a
payment pursuant to subsection 9-4, Abbott, as the administrator of such Grantor
Trust, shall direct the trustee to distribute to the participant from the income
of such Grantor Trust, a sum of money sufficient to pay the taxes on trust
earnings for such year. The taxes shall be calculated by multiplying the income
of the Grantor Trust by the aggregate of the federal, state, and local tax rates
(determined in accordance with subsection 9-14).

     9-7.    A participant shall be deemed to have irrevocably waived and shall
be foreclosed from any right to receive any supplemental pension benefits on
that portion of the supplemental pension that the participant elects to be paid
in cash under subsection 9-1 or 9-2. A participant, who has elected to receive a
payment under subsection 9-1 or 9-2 to a Grantor Trust, must establish such
trust in a form which Abbott determines to be substantially similar to the trust
attached to this Supplemental Plan as Exhibit A. If a participant fails to make
an election under subsection 9-1 or 9-2, or if a participant makes an election
under subsection 9-1 or 9-2 to receive payment in a Grantor Trust but fails to
establish a Grantor Trust, then payment shall be made in cash directly to the

                                      -18-


participant. Each payment required under subsections 9-1, 9-2, 9-4 and 9-5 shall
be made as soon as practicable after the amount thereof can be ascertained by
Abbott, but in no event later than the last day of the calendar year following
the December 31 as of which such payment becomes due.

     9-8.    Abbott will establish and maintain a separate Supplemental Pension
Account in the name of each participant, a separate After-Tax Supplemental
Pension Account in the name of each participant, and a separate Tax Payment
Account in the name of each participant. The Supplemental Pension Account shall
reflect any amounts: (i) paid to a participant (including amounts paid to a
participant's Grantor Trust) pursuant to subsections 9-1 and 9-2; (ii) credited
to such Account pursuant to subsection 9-9; and (iii) disbursed to a participant
for supplemental pension benefits (or which would have been disbursed to a
participant if the participant had not elected to receive a cash disbursement
pursuant to subsections 9-1 and 9-2). The After-Tax Supplemental Pension Account
shall also reflect such amounts but shall be maintained on an after-tax basis.
The Tax Payment Account shall reflect any amounts (i) paid to a Qualified
Participant (net of taxes) pursuant to subsections 9-4 and 9-5 and
(ii) disbursed to a participant for the payment of taxes pursuant to subsection
9-6. The accounts established pursuant to this subsection 9-8 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.

     9-9.    As of the end of each calendar year, a participant's Supplemental
Pension Account shall be credited with interest calculated at a reasonable rate
of interest specified for this purpose by Abbott and consistently applied. Any
amount so credited shall be referred to as a participant's "Interest Accrual".
The calculation of the Interest Accrual shall be based on the balance of the
payments made pursuant to subsections 9-1 and 9-2 and any Interest Accrual
thereon from previous

                                      -19-


years. As of the end of each calendar year a participant's After-Tax
Supplemental Pension Account shall be credited with interest which shall be
referred to as the After-Tax Interest Accrual. The "After-Tax Interest Accrual"
shall be an amount equal to (a) the Interest Accrual credit to the participant's
Supplemental Pension Account for such year less (b) the product of (i) the
amount of such Interest Accrual multiplied by (ii) the aggregate of the federal,
state and local income tax rates (determined in accordance with subsection
9-14). The Excess Interest Account shall be the cumulative amount, if any, by
which the net income earned by the Grantor Trust on the payments made pursuant
to Sections 9-1, 9-2, 9-4, 9-5 and 9-10 (and interest earned thereon) for all
years that the Grantor Trust has been in existence exceeds the After-Tax
Interest Accrual for such years.

     9-10.   In addition to any payment made to a participant for any calendar
year pursuant to subsections 9-1, 9-2, 9-4 and 9-5, Abbott shall also make a
payment to a participant's Grantor Trust (a "Guaranteed Rate Payment"), for any
year in which the net income of such trust does not equal or exceed the
participant's After-Tax Interest Accrual for that year. The Guaranteed Rate
Payment shall equal the difference between the participant's After-Tax Interest
Accrual and such net income of the participant's Grantor Trust for the year, and
shall be paid within 180 days of the end of that year. Any funds in a
participant's Excess Interest Account may be used by Abbott as a credit against
any Guaranteed Rate Payment due to the participant under this subsection 9-10 or
as specified in subsection 9-12. No payments shall be made under this subsection
9-10 for any year following the year of the participant's death.

     9-11.   If at any time after a participant's retirement or other
termination of employment with Abbott, there is no longer a balance in his or
her Grantor Trust, then such participant (or his or her surviving spouse if such
spouse is entitled to periodic payments from the Grantor Trust) shall be

                                      -20-


entitled to a "Continuation Payment" under this subsection 9-11. The amount of
the Continuation Payment shall be equal to the amount of the supplemental
pension that would have been payable to the participant (or surviving spouse)
had no payments been made to or for the participant's Grantor Trust under
subsections 9-1 and 9-2. Continuation Payments shall be made monthly, beginning
with the month in which there is no longer a sufficient balance in the
participant's Grantor Trust and ending with the month of the participant's (or
surviving spouse's) death. Payments under this subsection 9-11 shall be made by
the employers (in such proportions as Abbott shall designate) directly from
their general corporate assets. Appropriate adjustments to the Continuation
Payments shall be made in the event distributions have been made from a
participant's Grantor Trust for reasons other than benefit payments to the
participant or surviving spouse.

     9-12.   To the extent that Abbott is obligated to make a payment to a
participant under subsections 9-1, 9-2, 9-4, 9-5 or 9-10, Abbott shall have the
right to offset such payment with any funds in the participant's Excess Interest
Account or Excess Tax Account. In addition, any funds in a participant's Excess
Tax Account may be used by Abbott as a credit against any future Guaranteed Rate
Payment due to the participant under subsection 9-10.

     9-13.   For participants who are not Qualified Participants that received
any payment pursuant to subsection 9-4, in addition to the payments provided
under subsections 9-1 and 9-2, each participant shall also be entitled to a Tax
Gross Up payment for each year there is a balance in his or her Supplemental
Pension Account. The "Tax Gross Up" shall approximate: (a) the product of (i)
the participant's After-Tax Interest Accrual for the year (calculated using the
greater of the rate of return of the Grantor Trusts or the rate specified in
subsection 9-9), multiplied by (ii) the aggregate of the federal, state and
local tax rates (determined in accordance with subsection 9-14) plus (b) an

                                      -21-


amount equal to the product of (i) any payment made pursuant to this subsection
9-13, multiplied by (ii) the aggregate tax rate determined under subparagraph
9-13(a)(ii) above, such that the participant is fully compensated for taxes on
payments made hereunder. Payment of the Tax Gross Up shall be made by the
employers (in such proportions as Abbott shall designate) directly from their
general corporate assets. The Tax Gross Up for a year shall be paid to the
participant as soon as practicable after the amount of the Tax Gross Up can be
ascertained by Abbott, but in no event later than the last day of the calendar
year following the calendar year to which the Tax Gross Up relates. No payments
shall be made under this subsection 9-13 for any year following the year of the
participant's death.

     9-14.   For purposes of this Supplemental Plan, a participant's federal
income tax rate shall be deemed to be the highest marginal rate of federal
individual income tax in effect in the calendar year in which a calculation
under this Supplemental Plan 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 in the calendar year for
which such a calculation is to be made, net of any federal tax benefits.

                                      -22-


                              SUPPLEMENTAL BENEFIT
                                  GRANTOR TRUST

     THIS AGREEMENT, made this _________ day of ___________________, 19 __, by
and between ____________________________, (the "grantor"), and The Northern
Trust Company, located at Chicago, Illinois, as trustee (the "trustee"),

                                WITNESSETH THAT:

     WHEREAS, the grantor desires to establish and maintain a trust to hold
certain benefits received by the grantor under the Abbott Laboratories
Supplemental Pension 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 "_________________________ Supplemental Benefit
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.

                                       -1-


                                   ARTICLE II
                         DISTRIBUTION OF THE TRUST FUND

     II-1.   SUPPLEMENTAL PENSION ACCOUNT. The administrator shall maintain a
"supplemental pension account" under the trust. As of the end of each calendar
year, the administrator shall charge the account with all distributions made
from the account during that year; and credit the account with its share of
trust income and realized gains and charge the account with its share of trust
expenses and realized losses for the year.

     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 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 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
amounts from time to time credited to the supplemental pension account to the
grantor, if then living, in the same manner, at the same time and over the same
period as the pension payable to the grantor under Abbott Laboratories Annuity
Retirement Plan.

     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 upon the grantor's death. The grantor may direct that such
amounts be distributed in a lump sum or, if the beneficiary is the grantor's
spouse (or a trust [a "Trust"] for which the grantor's spouse is the sole income
beneficiary), in the same manner, at the same time and over the same period as
the pension payable to the grantor's surviving spouse under the Abbott
Laboratories Annuity Retirement Plan. If the grantor directs the same method of
distribution as the pension payable to the surviving spouse under the Abbott
Laboratories Annuity Retirement Plan 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 the same method of distribution as the pension payable to the
surviving spouse under the Abbott Laboratories Annuity Retirement Plan to a
Trust for which the grantor's spouse is the sole income beneficiary, any amounts
remaining at the death of the spouse shall be distributed in a lump sum to such
Trust. Despite the foregoing, if (i) the beneficiary is a Trust for which the
grantor's spouse is the sole income beneficiary, (ii) payments are being made
pursuant to this paragraph II-3 other than in a lump sum and (iii) income earned
by the trust fund for the year exceeds the amount of the annual installment
payment, then such Trust may elect to withdraw such excess income by written
notice to the trustee. Each designation shall revoke all prior designations,
shall be in writing and shall be effective only when filed by the grantor with
the administrator during the grantor's lifetime. If the grantor fails to direct
a method of distribution, the distribution shall be made in a lump sum. If the
grantor fails to designate a beneficiary as provided above, then on the
grantor's death, the trustee shall distribute the balance of the trust fund in a
lump sum to the executor or administrator of the grantor's estate."

                                       -2-


     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 invest and reinvest 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 and in any mutual funds,
             common trust funds or collective investment funds which invest
             solely in such obligations, provided that to the extent practicable
             no more than Ten Thousand Dollars ($10,000) shall be invested in
             such mutual funds, common trust funds or collective investment
             funds at any time; 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, in
             amounts not in excess of those reasonably necessary to make
             distributions from the trust.

     (d)     To borrow from anyone, with the administrator's approval, such sum
             or sum 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-


     (e)     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.

     (f)     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.

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

     (h)     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.

     (i)     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.

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

     (k)     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.

     (l)     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.

     (m)     Upon the prior written consent of the administrator, 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.

     (n)     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.

                                       -4-


     (o)     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.

     (p)     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.   DISAGREEMENTS 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 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

                                       -5-


entitled thereto; 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; and the trustee shall not be liable
for any action taken because of the specific direction of the administrator.

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

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

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

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

                                    ARTICLE V
                               CHANGES IN TRUSTEE

     V-1.    RESIGNATION OR REMOVAL OF TRUSTEE. The trustee may resign at any
time by giving thirty days' advance 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.

                                       -6-


                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

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

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

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

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

                                      * * *

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


                                   ---------------------------------
                                               Grantor

                                   The Northern Trust Company, as Trustee


                                   By
                                       -----------------------------

                                   Its
                                       -----------------------------

                                       -7-



                                                                   EXHIBIT 10.5

                                      1986
                               ABBOTT LABORATORIES
                            MANAGEMENT INCENTIVE PLAN
                   (AS AMENDED AND RESTATED ON JUNE 20, 2003)

                                    SECTION 1

                                  INTRODUCTION

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

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

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

          1.2     EFFECTIVE DATE AND FISCAL YEAR. The Plan shall be effective as
of January 1, 1986. The term "fiscal year," as used in this Plan, means the
fiscal period from time to time employed by Abbott for the purpose of reporting
earnings to shareholders.

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

                                    SECTION 2

                          ELIGIBILITY AND PARTICIPATION

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

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

          2.3     ACTIVE PARTICIPANTS. For each fiscal year, there shall be a
group of active participants which, except as provided below, shall not exceed
forty-five

                                        1


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

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

                                    SECTION 3

                         MANAGEMENT INCENTIVE PLAN FUND

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

                  (a)    The existence, issuance, sale, exchange, conversion or
                         retirement of any securities, other than common shares,
                         of Abbott (whether involving preferred stock, debt,
                         convertible preferred stock or convertible debt
                         securities); and

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

                  Any adjustments to be made in accordance with (a) and (b)
above in determining Abbott Common Shareholders' Equity for any fiscal year
shall be determined by the Committee after consultation with Abbott's
independent auditors, and

                                        2


any determination made by the Committee after such consultation shall be
conclusive upon all persons.

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

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

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

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

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

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

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

                                        3


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

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

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

          3.4     THE MANAGEMENT INCENTIVE PLAN FUND. The Management Incentive
Plan Fund at any time shall consist of an amount equal to the aggregate of the
Management Incentive Plan Amounts established pursuant to subsection 3.3 of this
Plan for all fiscal years during which this Plan shall have been operative, plus
the amounts established as Management Incentive Plan Amounts for any prior
fiscal year pursuant to a Predecessor Plan, reduced by an amount equal to the
aggregate of the amounts of awards which shall have been allocated to
participants in accordance with this Plan or a Predecessor Plan, and awards, or
any other compensation of any kind. Following determination of such tentative
Management Incentive Plan Amount, the Committee shall report in writing the
amount of such tentative amount to the Board of Directors. At the meeting of the
Board of Directors coincident with or next following receipt by it of the
Committee's determination, the Board of Directors shall have the power to
approve or reduce, but not to increase, the tentative amount reported to it by
the Committee. The amount approved by the Board of Directors shall be the
Management Incentive Plan Amount for such year.

                                    SECTION 4

                     ALLOCATION OF MANAGEMENT INCENTIVE FUND

          4.1     ANNUAL ALLOCATION OF MANAGEMENT INCENTIVE FUND. As soon as
practicable after the close of each fiscal year, part or all of the amount then
in the Management Incentive Plan Fund (including the Management Incentive Plan

                                        4


Amount for such fiscal year) will be allocated by the Committee among active
participants in the Plan for such fiscal year, having due regard for the
purposes for which the Plan was established, in the following manner and order:

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

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

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

                                    SECTION 5

                  PAYMENT OF AMOUNTS ALLOCATED TO PARTICIPANTS

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

                  (a)    current payment in cash to the participant;

                  (b)    current payment of a portion of the allocation in cash
                         for the participant directly to a "Grantor Trust"
                         established by the participant, provided such trust is
                         in a form which the Committee determines is
                         substantially similar to the trust attached to this
                         Plan as Exhibit A; and current payment of the balance
                         of the allocation in cash directly to the participant,
                         provided that the payment made directly to the
                         participant shall approximate the aggregate federal,
                         state and local individual income taxes (determined in
                         accordance with subsection 6.7) attributable to the
                         allocation paid pursuant to this paragraph (b); or

                                        5


                  (c)    deferral of payment until such time and in such manner
                         as determined in accordance with subsection 5.11.

          A participant shall make the preceding direction within 30 days of the
date he is notified of his eligibility to participate in the Plan. A participant
may change such direction with respect to any future allocation, provided that
the change is made prior to the beginning of the fiscal year to which such
allocation relates. Payment of a participant's allocation for the 1988 fiscal
year and of any allocations deferred under the Plan prior to such year shall be
made in accordance with the provisions of either or both of paragraphs (a) and
(b) above. The Committee shall establish and maintain a Trust Account in
accordance with subsection 5.2 and for purposes of subsection 5.4, shall treat
such payment as if it were an allocation made for that fiscal year.

          5.2     SEPARATE ACCOUNTS. The Committee will maintain two separate
Accounts, a "Deferred Account" and a "Trust Account," in the name of each
participant. The Deferred Account shall be comprised of any allocations the
payment of which is deferred pursuant to subsection 5.1(c) and any adjustments
made pursuant to subsection 5.3. The Trust Account shall be comprised of any
allocations paid in cash to a participant (including amounts paid to a
participant's Grantor Trust) pursuant to subsection 5.1(b) and any adjustments
made pursuant to subsection 5.4.

          5.3     ADJUSTMENT OF DEFERRED ACCOUNTS. As of the end of each fiscal
year, the Committee shall adjust each participant's Deferred Account as follows:

                  (a)    FIRST, charge an amount equal to any payments made to
                         the participant during that year pursuant to
                         subsections 5.11 or 5.12;

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

                  (c)    FINALLY, credit an amount equal to the Interest Accrual
                         earned for that year pursuant to subsection 5.5.

          5.4     ADJUSTMENT OF TRUST ACCOUNTS. As of the end of each fiscal
year, the Committee shall adjust each participant's Trust Account as follows:

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

                                        6


                         Grantor Trust (as determined by the administrator of
                         the trust) as of that same date;

                  (b)    NEXT, credit an amount equal to the allocation for that
                         year that is paid to the Participant (including the
                         amount paid to the participant's Grantor Trust)
                         pursuant to subsection 5.l(b); and

                  (c)    FINALLY, credit an amount equal to the Interest Accrual
                         earned for that Year pursuant to subsection 5.5.

          5.5     INTEREST ACCRUALS ON ACCOUNTS. As of the end of each fiscal
year, a participant's Deferred Account and Trust Account shall be credited with
interest equal to: (a) the average of the prime rates of interest charged by the
two largest banks located in the City of Chicago on loans made by them as of
January 1 and the end of each month of the fiscal year; plus (b) two hundred
twenty-five (225) basis points. Such interest shall be credited on the
conditions established by the Committee, provided that any allocation of an
award from the Management Incentive Plan Fund shall be considered to have been
made and credited to a participant's Deferred Account and Trust Account as of
the first day of the fiscal year in which such award is made regardless of the
date upon which the Committee actually makes the determination to award such
allocation.

          5.6     GUARANTEED RATE PAYMENTS. In addition to any allocation made
to a participant for any fiscal year pursuant to subsection 4.1 which is paid or
deferred pursuant to subsection 5.1, Abbott shall also make a payment to a
participant's Grantor Trust (a "Guaranteed Rate Payment") for any year in which
the net earnings of such trust do not equal or exceed the participant's Net
Interest Accrual for that year. A participant's "Net Interest Accrual" for a
year is an amount equal to: (a) the Interest Accrual credited to the
participant's Trust Account for that year; less (b) the product of (i) the
amount of such Interest Accrual, multiplied by (ii) the aggregate of the
federal, state and local individual income tax rates (determined in accordance
with subsection 6.7). The Guaranteed Rate Payment shall equal the difference
between the participant's Net Interest Accrual and the net earnings of the
participant's Grantor Trust for the year, and shall be paid within 90 days of
the end of the fiscal year.

          5.7     DESIGNATION OF BENEFICIARIES. Subject to the conditions and
limitations set forth below, each participant, and after a participant's death,
each primary beneficiary designated by a participant in accordance with the
provisions of this subsection 5.7, shall have the right from time to time to
designate a primary beneficiary or beneficiaries and, successive or contingent
beneficiary or beneficiaries to receive unpaid amounts from the participant's
Deferred Account under the Plan and the Predecessor Plans. Beneficiaries may be
a natural person or persons or a fiduciary, such as a trustee of a trust or the
legal representative of an estate. Any such designation shall take effect upon
the death of the participant or such beneficiary, as the case may be, or in the
case of any fiduciary beneficiary, upon the termination of all of its duties
(other than the duty to dispose of the right to receive amounts remaining to be
paid under the Plan or

                                        7


a Predecessor Plan). The conditions and limitations relating to the designation
of beneficiaries are as follows:

                  (a)    A nonfiduciary beneficiary shall have the right to
                         designate a further beneficiary or beneficiaries only
                         if the original participant or the next preceding
                         primary beneficiary, as the case may be, shall have
                         expressly so provided in writing; and

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

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

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

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

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

          5.9     NON-ASSIGNABILITY AND FACILITY OF PAYMENT. Amounts payable to
participants and their beneficiaries under the Plan are not in any way subject
to their debts and other obligations, and may not be voluntarily or
involuntarily sold, transferred or assigned; provided that the preceding
provisions of this section shall not be construed as restricting in any way a
designation right granted to a beneficiary pursuant to the terms of subsection
5.7. 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

                                        8


direct that payments shall be made to the participant's or beneficiary's legal
representative, or to a relative or friend of the participant or beneficiary for
the benefit of the participant or beneficiary, or the Committee may direct the
payment or distribution for the benefit of the participant or beneficiary in any
manner that the Committee determines.

          5.10    PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS. Any amount
allocated to a participant in the Plan 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 this Plan for that year shall
be an obligation of each of the respective employers in proportion to the
respective amounts of base salary paid by each of them in that fiscal year.

          5.11    MANNER OF PAYMENT. Subject to subsection 5.12, a participant
shall elect the timing and manner of payment of his Deferred Account at the time
of his deferral election under subsection 5.l. The participant may select a
payment method from among alternative payment methods established by the
Committee.

          5.12    PAYMENTS UPON TERMINATION FOLLOWING CHANGE IN CONTROL.
Notwithstanding any other provisions of this Plan or the Predecessor Plans, or
the provisions of any award made under this Plan or the Predecessor Plans: if
the employment of any participant with Abbott and its subsidiaries should
terminate for any reason within five (5) years after the date of a Change in
Control, the aggregate unpaid balance of all awards previously made to such
participant under this Plan and all Predecessor Plans, plus any unpaid interest
credited thereon, shall be paid to the participant in a lump sum within thirty
(30) days following the date of such termination.

          5.13    CHANGE IN CONTROL. A "Change in Control" shall be deemed to
have occurred on the earliest of the following dates:

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

                  (b)    the date the following individuals cease for any reason
                         to constitute a majority of the number of directors
                         then serving: individuals who, on the date hereof,
                         constitute the Board of Directors and any new director
                         (other than a director whose initial assumption of
                         office is in connection

                                        9


                         with an actual or threatened election contest,
                         including but not limited to a consent solicitation,
                         relating to the election of directors of Abbott) whose
                         appointment or election by the Board of Directors or
                         nomination for election by Abbott's shareholders was
                         approved or recommended by a vote of at least
                         two-thirds (2/3) of the directors then still in office
                         who either were directors on the date hereof or whose
                         appointment, election or nomination for election was
                         previously so approved or recommended; or

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

                  (d)    the date the shareholders of Abbott approve a plan of
                         complete liquidation or dissolution of Abbott or there
                         is consummated an agreement for the sale or disposition
                         by Abbott of all or substantially all of Abbott's
                         assets, other than a sale or disposition by Abbott of
                         all or substantially all of Abbott's assets to an
                         entity, at least 50% of the combined voting power of
                         the voting securities of which are owned by
                         shareholders of Abbott, in combination with

                                       10


                         the ownership of any trustee or other fiduciary holding
                         securities under an employee benefit plan of Abbott or
                         any subsidiary of Abbott, in substantially the same
                         proportions as their ownership of Abbott immediately
                         prior to such sale.

                         Notwithstanding the foregoing, a "Change in Control"
                         shall not be deemed to have occurred by virtue of the
                         consummation of any transaction or series of integrated
                         transactions immediately following which the record
                         holders of the common stock of Abbott immediately prior
                         to such transaction or series of transactions continue
                         to have substantially the same proportionate ownership
                         in an entity which owns all or substantially all of the
                         assets of Abbott immediately following such transaction
                         or series of transactions.

                         For purposes of this Plan: "Affiliate" shall have the
                         meaning set forth in Rule 12b-2 promulgated under
                         Section 12 of the Exchange Act; "Beneficial Owner"
                         shall have the meaning set forth in Rule 13d-3 under
                         the Exchange Act; "Exchange Act" shall mean the
                         Securities Exchange Act of 1934, as amended from time
                         to time; and "Person" shall have the meaning given in
                         Section 3(a)(9) of the Exchange Act, as modified and
                         used in Sections 13(d) and 14(d) thereof, except that
                         such term shall not include (i) Abbott or any of its
                         subsidiaries, (ii) a trustee or other fiduciary holding
                         securities under an employee benefit plan of Abbott or
                         any of its Affiliates, (iii) an underwriter temporarily
                         holding securities pursuant to an offering of such
                         securities, or (iv) a corporation owned, directly or
                         indirectly, by the shareholders of Abbott in
                         substantially the same proportions as their ownership
                         of stock of Abbott.

          5.14    POTENTIAL CHANGE IN CONTROL. A "Potential Change in Control"
shall exist during any period in which the circumstances described in paragraphs
(a), (b), (c) or (d), below, exist (provided, however, that a Potential Change
in Control shall cease to exist not later than the occurrence of a Change in
Control):

                  (a)    Abbott enters into an agreement, the consummation of
                         which would result in the occurrence of a Change in
                         Control, provided that a Potential Change in Control
                         described in this paragraph (a) shall cease to exist
                         upon the expiration or other termination of all such
                         agreements.

                  (b)    Any Person (without regard to the exclusions set forth
                         in subsections (i) through (iv) of such definition)
                         publicly

                                       11


                         announces an intention to take or to consider taking
                         actions the consummation of which would constitute a
                         Change in Control; provided that a Potential Change in
                         Control described in this paragraph (b) shall cease to
                         exist upon the withdrawal of such intention, or upon a
                         determination by the Board of Directors that there is
                         no reasonable chance that such actions would be
                         consummated.

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

                  (d)    The Board of Directors adopts a resolution to the
                         effect that, for purposes of this Agreement, a
                         Potential Change in Control exists; provided that a
                         Potential Change in Control described in this paragraph
                         (d) shall cease to exist upon a determination by the
                         Board of Directors that the reasons that gave rise to
                         the resolution providing for the existence of a
                         Potential Change in Control have expired or no longer
                         exist.

          5.15    PROHIBITION AGAINST AMENDMENT. The provisions of subsections
5.12, 5.13, 5.14 and this subsection 5.15 may not be amended or deleted, nor
superseded by any other provision of this Plan, (i) during the pendency of a
Potential Change in Control and (ii) during the period beginning on the date of
a Change in Control and ending on the date five (5) years following such Change
in Control.

                                    SECTION 6

                                  MISCELLANEOUS

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

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

                                       12


required to be filed with the Committee, will be properly given or filed if
mailed or delivered in writing to the Secretary of Abbott.

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

          6.4     TAXES. Any employer shall be entitled, if necessary or
desirable, to pay, or withhold the amount of any federal, state or local tax,
attributable to any amounts payable by it under the Plan after giving the person
entitled to receive such amount notice as far in advance as practicable, and may
defer making payment of any amount with respect to which any such tax question
may be pending unless and until indemnified to its satisfaction.

          6.5     RIGHTS OF PARTICIPANTS. Employment rights of participants with
Abbott and its subsidiaries shall not be enlarged or affected by reason of
establishment of or inclusion as a participant in the Plan. Nothing contained in
the Plan shall require Abbott or any subsidiary to segregate or earmark any
assets, funds or property for the purpose of payment of any amounts which may
have been deferred. The Deferred and Trust Accounts established pursuant to
subsection 5.2 are for the convenience of the administration of the Plan and no
trust relationship with respect to such Accounts is intended or should be
implied. Participant's rights shall be limited to payment to them at the time or
times and in such amounts as are contemplated by the Plan. Any decision made by
the Board of Directors or the Committee, which is within the sole and
uncontrolled discretion of either, shall be conclusive and binding upon the
other and upon all other persons whomsoever.

          6.6     TAX GROSS UP. In addition to the allocations provided under
subsection 4.1, each participant (or, if the participant is deceased, the
beneficiary designated under the participant's Grantor Trust) shall be entitled
to a Tax Gross Up payment for each year there is a balance in his or her Trust
Account. The "Tax Gross Up" shall approximate: (a) the amount necessary to
compensate the participant (or beneficiary) for the net increase in the
participant's (or beneficiary's) federal, state and local income taxes as a
result of the inclusion in his or her taxable income of the income of the
participant's Grantor Trust and any Guaranteed Rate Payment for that year; less
(b) any distribution to the participant (or beneficiary) of his or her Grantor
Trust's net earnings for that year; plus (c) an amount necessary to compensate
the participant (or beneficiary) for the net increase in the taxes described in
(a) above as a result of the inclusion in his or her taxable income of any
payment made pursuant to this subsection 6.6. Payment of the Tax Gross Up shall
be made by the employers (in such proportions as Abbott shall designate)
directly from their general corporate assets.

                                       13


          6.7     INCOME TAX ASSUMPTIONS. For purposes of Sections 5 and 6, a
participant's federal income tax rate shall be deemed to be the highest marginal
rate of federal income individual tax in effect in the calendar year in which a
calculation under those Sections is to be made, and state and local tax rates
shall be deemed to be the highest marginal rates of individual income tax in
effect in the state and locality of the participant's residence on the date such
a calculation is made, net of any federal tax benefits.

          6.8     PAYMENT OF PRIOR DEFERRALS. Notwithstanding any other
provision of this Plan, the Committee, in its absolute discretion, may direct
that all or a portion of the balance in a participant's Deferred Account be paid
in accordance with the provisions of subsection 5.1(b). In such event, the
Committee shall establish and maintain a Trust Account in accordance with
subsection 5.2 and, for purposes of subsection 5.4, shall treat such payment as
if it were an allocation made for that fiscal year.

                                    SECTION 7

                      AMENDMENT, TERMINATION AND CHANGE OF
                         CONDITIONS RELATING TO PAYMENTS

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

          7.2     CHANGE OF CONDITIONS RELATING TO PAYMENTS. Following the
establishment by the Committee of any conditions relating to the payment of any
amount allocated to a participant for any fiscal year and any interest credited
thereon (including the time of payment or the time of commencement of payment
and any period over which payment shall be made), neither the Committee nor the
participant concerned, acting unilaterally, shall have the power to change the
conditions originally established by the Committee. However, in order to
effectuate the purposes of the Plan, any conditions initially established by the
Committee may be changed thereafter by mutual agreement of the Committee and the
participant concerned.

                                       14


                                    EXHIBIT A

                       IRREVOCABLE GRANTOR TRUST AGREEMENT

               THIS AGREEMENT, made this _____ day of ____________, 1991, 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 "______________ 1991 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 days' advance written notice to the administrator
and



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

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

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

                                   ARTICLE VI
                            AMENDMENT AND TERMINATION

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

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

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

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



                                  *    *    *

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


                                   -----------------------------------------
                                   Grantor


                                   The Northern Trust Company as
                                   Trustee
                                   By
                                   -----------------------------------------

                                   Its
                                   -----------------------------------------



                                                                   EXHIBIT 10.6

                               AGREEMENT REGARDING
                                CHANGE IN CONTROL

          THIS AGREEMENT ("Agreement"), is made and entered into as of the 20th
day of June, 2003 (the "Effective Date") by and between Abbott Laboratories (the
"Company") and _____________ (the "Executive") and amends and restates, in its
entirety, an Agreement regarding Change in Control dated as of the 1st day of
January, 2000, as amended and restated on the 8th day of December, 2000, also by
and between the Company and the Executive (the "Original Agreement");

                                WITNESSETH THAT:

          WHEREAS, the Company considers it essential to the best interests of
its shareholders to foster the continuous employment of key management
personnel, and the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, a change in control
might occur and that such possibility, and the uncertainty and questions which
it may raise among management, may result in the departure or distraction of
management personnel to the detriment of the Company and its shareholders; and

          WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a change in control of the Company;

          NOW, THEREFORE, to induce the Executive to remain in the employ of the
Company and in consideration of the premises and mutual covenants set forth
herein, IT IS HEREBY AGREED by and between the parties as follows:

          1. AGREEMENT TERM. The initial "Agreement Term" shall begin on the
Effective Date and shall continue through December 31, 2005. As of December 31,
2003, and as of each December 31 thereafter, the Agreement Term shall extend
automatically to the third anniversary thereof unless the Company gives notice
to the Executive prior to the date of such extension that the Agreement Term
will not be extended. Notwithstanding the foregoing, if a Change in Control (as
defined in Section 7 below), occurs during the Agreement Term, the Agreement
Term shall continue through and terminate on the second anniversary of the date
on which the Change in Control occurs.

          2. ENTITLEMENT TO CHANGE IN CONTROL BENEFITS. The Executive shall be
entitled to the Change in Control Benefits described in Section 3 hereof if the
Executive's employment by the Company is terminated during the Agreement Term
but after a Change in Control (i) by the Company for any reason other than
Permanent Disability or Cause, (ii) by the Executive for Good Reason or (iii) by
the Executive for any reason during the 30-day period commencing on the first
date which is six months after the date of the Change in Control. For purposes
of this Agreement:



               (a)  A termination of the Executive's employment shall be treated
                    as a termination by reason of "Permanent Disability" only
                    if, due to a mental or physical disability, the Executive is
                    absent from the full time performance of duties with the
                    Company for a period of at least twelve consecutive months
                    and fails to return to the full time performance of duties
                    within 30 days after receipt of a demand by the Company to
                    do so.

               (b)  The term "Cause" shall mean the willful engaging by the
                    Executive in illegal conduct or gross misconduct which is
                    demonstrably and materially injurious to the Company. For
                    purposes of this Agreement, no act, or failure to act, on
                    the Executive's part shall be deemed "willful" unless done,
                    or omitted to be done, by the Executive not in good faith
                    and without reasonable belief that the Executive's action or
                    omission was in the best interest of the Company.
                    Notwithstanding the foregoing, the Executive shall not be
                    deemed to have been terminated for Cause unless and until
                    the Company delivers to the Executive a copy of a resolution
                    duly adopted by the affirmative vote of not less than
                    three-quarters of the entire membership of the Board at a
                    meeting of the Board called and held for such purpose (after
                    reasonable notice to the Executive and an opportunity for
                    the Executive, together with counsel, to be heard before the
                    Board) finding that, in the good faith opinion of the Board,
                    the Executive was guilty of conduct set forth above and
                    specifying the particulars thereof in detail.

               (c)  The term "Good Reason" shall mean the occurrence of any of
                    the following circumstances without the Executive's express
                    written consent:

                    (i)    a significant adverse change in the nature, scope or
                           status of the Executive's position, authorities or
                           duties from those in effect immediately prior to the
                           Change in Control, including, without limitation, if
                           the Executive was, immediately prior to the Change in
                           Control, an executive officer of a public company,
                           the Executive ceasing to be an executive officer of a
                           public company;

                    (ii)   the failure by the Company to pay the Executive any
                           portion of the Executive's current compensation, or
                           to pay the Executive any portion of any installment
                           of deferred compensation under any deferred
                           compensation program of the



                           Company, within seven days of the date such
                           compensation is due;

                    (iii)  a reduction in the Executive's annual base salary (or
                           a material change in the frequency of payment) as in
                           effect immediately prior to the Change in Control as
                           the same may be increased from time to time;

                    (iv)   the failure by the Company to award the Executive an
                           annual bonus in any year which is at least equal to
                           the annual bonus, awarded to the Executive under the
                           annual bonus plan of the Company for the year
                           immediately preceding the year of the Change in
                           Control;

                    (v)    the failure by the Company to award the Executive
                           equity-based incentive compensation (such as stock
                           options, shares of restricted stock, or other
                           equity-based compensation) on a periodic basis
                           consistent with the Company's practices with respect
                           to timing, value and terms prior to the Change in
                           Control;

                    (vi)   the failure by the Company to continue to provide the
                           Executive with the welfare benefits, fringe benefits
                           and perquisites enjoyed by the Executive immediately
                           prior to the Change in Control under any of the
                           Company's plans or policies, including, but not
                           limited to, those plans and policies providing
                           pension, life insurance, medical, health and
                           accident, disability, vacation, executive automobile,
                           executive tax or financial advice benefits or club
                           dues;

                    (vii)  the relocation of the Company's principal executive
                           offices to a location more than thirty-five miles
                           from the location of such offices immediately prior
                           to the Change in Control or the Company requiring the
                           Executive to be based anywhere other than the
                           Company's principal executive offices except for
                           required travel to the Company's business to an
                           extent substantially consistent with the Executive's
                           business travel obligations immediately prior to the
                           Change in Control; or

                    (viii) the failure of the Company to obtain a satisfactory
                           agreement from any successor to the Company to



                           assume and agree to perform this Agreement as
                           contemplated by Section 16.

                    For purposes of any determination regarding the existence of
                    Good Reason, any good faith determination by the Executive
                    that Good Reason exists shall be conclusive.

          3. CHANGE IN CONTROL BENEFITS. In the event of a termination of
employment entitling the Executive to benefits in accordance with Section 2, the
Executive shall receive the following:

               (a)  The Executive shall be entitled to receive the following
                    employee welfare benefits: medical, accident, dental,
                    prescription, and life insurance coverage for the Executive
                    (and, where applicable under the Company's welfare benefit
                    plans, the Executive's family) through the third anniversary
                    of the Executive's date of termination of employment, or, if
                    earlier, the date on which the Executive becomes employed by
                    another employer. The benefits provided by the Company shall
                    be no less favorable in terms of coverage and cost to the
                    Executive than those provided under the Company's welfare
                    benefit plans applicable to the Executive (and, where
                    applicable, the Executive's family) prior to the Change in
                    Control, determined as if the Executive remained in the
                    employ of the Company through such third anniversary. For
                    purposes of determining eligibility of the Executive for
                    retiree welfare benefits, the Executive shall be considered
                    to have remained in the employ of the Company through such
                    third anniversary.

               (b)  If the Executive's date of termination occurs after the end
                    of a performance period applicable to an annual incentive
                    (bonus) award, and prior to the payment of the award for the
                    period, the Executive shall be entitled to a lump sum
                    payment in cash no later than twenty (20) business days
                    after the date of termination equal to the greatest of (i)
                    the Executive's annual incentive (bonus) award for that
                    period, as determined under the terms of that incentive
                    award arrangement, (ii) the Executive's annual incentive
                    (bonus) award for that period, with the determination of the
                    amount of such award based on an assumption that the target
                    level of performance had been achieved or (iii) the
                    Participant's average annual incentive (bonus) award for the
                    three annual performance periods preceding that period
                    (provided that if the Participant was not a participant in
                    the incentive award arrangement for any of those three prior
                    years, the



                    averaging period shall be reduced from three years to the
                    number of years during the three year period in which the
                    Participant was a participant; and further provided that if
                    the Participant's award for any such year was reduced
                    because the Participant was not a participant for the full
                    year, such amount shall be annualized for purposes of the
                    computation in this clause (iii)).

               (c)  For any annual incentive (bonus) plan or arrangement in
                    which the Executive participates for the performance period
                    in which the Executive's termination of employment occurs,
                    the Executive shall be entitled to a lump sum payment in
                    cash no later than twenty (20) business days after the date
                    of termination equal to the greater of (i) the Executive's
                    annual incentive (bonus) award for the performance period
                    that includes the date of termination, with the
                    determination of the amount of such award based on an
                    assumption that the target level of performance has been
                    achieved or (ii) the Executive's average annual incentive
                    (bonus) award for the three annual performance periods
                    preceding the performance period that includes the date of
                    termination (provided that if the Executive was not a
                    participant in the incentive award arrangement for any of
                    those three prior years, the averaging period shall be
                    reduced from three years to the number of years during the
                    three year period in which the Executive was a participant;
                    and further provided that if the Executive's award for any
                    such year was reduced because the Executive was not a
                    participant for the full year, such amount shall be
                    annualized for purposes of the computation in this clause
                    (ii)); provided that such payment shall be subject to a
                    pro-rata reduction to reflect the number of days in the
                    performance period following the date of termination. The
                    amount payable under this paragraph (c) shall be in lieu of
                    any amounts that may otherwise be due to the Executive with
                    respect to any annual incentive (bonus) plan or arrangement
                    in which the Executive participates for the performance
                    period in which the Executive's date of termination occurs.

               (d)  The Executive shall be entitled to a lump sum payment in
                    cash no later than twenty business days after the
                    Executive's date of termination equal to the sum of:

                    (i)    an amount equal to three times the Executive's annual
                           salary rate in effect on the date of the



                           Change in Control or, or if greater, as in effect
                           immediately prior to the date of termination; plus

                    (ii)   an amount equal to three times the greater of (x) the
                           Executive's annual incentive (bonus) award for the
                           performance period that includes the date of the
                           Executive's termination of employment, with the
                           determination of the amount of such award based on an
                           assumption that the target level of performance has
                           been achieved or (y) the Executive's average annual
                           incentive (bonus) award for the three annual
                           performance periods preceding the performance period
                           that includes the date of termination (provided that
                           if the Executive was not a participant in the
                           incentive award arrangement for any of those three
                           prior years, the averaging period shall be reduced
                           from three years to the number of years during the
                           three year period in which the Executive was a
                           participant; and further provided that if the
                           Executive's award for any such year was reduced
                           because the Executive was not a participant for the
                           full year, such amount shall be annualized for
                           purposes of the computation in this subparagraph
                           (ii)).

                    The amount payable under this paragraph (d) shall be
                    inclusive of the amounts, if any, to which the Executive
                    would otherwise be entitled as severance pay under any
                    severance pay plan, or by law and shall be in addition to
                    (and not inclusive of) any amount payable under any written
                    agreement(s) directly between the Executive and the Company
                    or any of its subsidiaries.

               (e)  The Executive shall be entitled to benefits under the Abbott
                    Laboratories Supplemental Pension Plan (the "Supplemental
                    Plan") which shall be determined as if the Executive had
                    been credited for benefit accrual purposes with three
                    additional years of service and three additional years of
                    eligible earnings at the higher of the Executive's eligible
                    earnings on the date of termination or the Executive's
                    eligible earnings on the date of the Change in Control and,
                    for purposes of determining the Executive's eligibility for
                    subsidized early retirement benefits, determined as if the
                    Executive were three years older than the Executive's actual
                    age on the date of termination. For purposes of this
                    paragraph (e), "eligible earnings" shall include salary,
                    annual incentive (bonus) awards and all



                    other forms of compensation used to calculate benefits under
                    the Supplemental Plan. The amounts of the annual incentive
                    (bonus) awards shall be calculated in accordance with this
                    paragraph (e) and, to the extent applicable, paragraphs (b)
                    and (c) above. The Executive's benefits under the
                    Supplemental Plan shall be determined, paid and administered
                    without regard to any termination or amendment (including
                    any amendment affecting actuarial factors) of such plan or
                    of any other plan, which is adopted on or after a Change in
                    Control or in contemplation of a Change in Control and,
                    subject to paragraph (f) below, shall be paid in accordance
                    with the terms of that plan and the Executive's elections
                    under that plan. Within twenty (20) days of Executive's date
                    of termination, the Company shall provide the Executive with
                    all forms, elections and materials required in connection
                    with the funding or payment of the Executive's benefits
                    under that plan. Within twenty (20) days of the Company's
                    receipt of properly executed and completed forms, elections
                    and other required materials from the Executive, the Company
                    shall fund the additional benefits to the extent provided by
                    the terms of such plan.

               (f)  The Executive shall be entitled to elect that all or any
                    portion of the amounts payable under paragraphs 3(b) and
                    3(c) and subparagraph 3(d)(ii) above (less applicable tax
                    withholding) be paid directly to a grantor trust established
                    by the Executive to the same extent as bonuses payable under
                    the 1986 Abbott Laboratories Management Incentive Plan, the
                    1998 Abbott Laboratories Performance Incentive Plan, or any
                    successor plans thereto with all of the rights and
                    entitlements attendant thereto.

               (g)  The Company shall provide the Executive with outplacement
                    services and tax and financial counseling suitable to the
                    Executive's position through the third anniversary of the
                    date of the Executive's termination of employment, or, if
                    earlier, the date on which the Executive becomes employed by
                    another employer.

               If the Executive is a participant in the 1998 Abbott Laboratories
Performance Incentive Plan or any successor thereto, the Executive's annual
incentive (bonus) award for the performance period which includes the date of
termination under paragraphs (c) and (d)(ii) above and, if applicable, for the
period preceding the date of termination under paragraph (b) shall, be
determined under the bonus levels communicated in writing to the Executive by
the Company for such year and shall not be the Executive's individual base award
allocation as defined in Section 4.2 of the 1998



Abbott Laboratories Performance Incentive Plan (or any corresponding provision
of any successor plan).

          4. MITIGATION. The Executive shall not be required to mitigate the
amount of any payment provided for in this Agreement by seeking other employment
or otherwise. Except as set forth in paragraph 3(a) with respect to benefits,
the Company shall not be entitled to set off against the amounts payable to the
Executive under this Agreement any amounts owed to the Company by the Executive,
any amounts earned by the Executive in other employment after the Executive's
termination of employment with the Company, or any amounts which might have been
earned by the Executive in other employment had the Executive sought such other
employment.

          5. MAKE-WHOLE PAYMENTS. If any payment or benefit to which the
Executive (or any person on account of the Executive) is entitled, whether under
this Agreement or otherwise, in connection with a Change in Control or the
Executive's termination of employment (a "Payment") constitutes a "parachute
payment" within the meaning of section 280G of the Internal Revenue Code of
1986, as amended (the "Code"), and as a result thereof the Executive is subject
to a tax under section 4999 of the Code, or any successor thereto, (an "Excise
Tax"), the Company shall pay to the Executive an additional amount (the
"Make-Whole Amount") which is intended to make the Executive whole for such
Excise Tax. The Make-Whole Amount shall be equal to (i) the amount of the Excise
Tax, plus (ii) the aggregate amount of any interest, penalties, fines or
additions to any tax which are imposed in connection with the imposition of such
Excise Tax, plus (iii) all income, excise and other applicable taxes imposed on
the Executive under the laws of any Federal, state or local government or taxing
authority by reason of the payments required under clauses (i) and (ii) and this
clause (iii).

               (a)  For purposes of determining the Make-Whole Amount, the
                    Executive shall be deemed to be taxed at the highest
                    marginal rate under all applicable local, state, federal and
                    foreign income tax laws for the year in which the Make-Whole
                    Amount is paid. The Make-Whole Amount payable with respect
                    to an Excise Tax shall be paid by the Company coincident
                    with the Payment with respect to which such Excise Tax
                    relates.

               (b)  All calculations under this Section 5 shall be made
                    initially by the Company and the Company shall provide
                    prompt written notice thereof to the Executive to enable the
                    Executive to timely file all applicable tax returns. Upon
                    request of the Executive, the Company shall provide the
                    Executive with sufficient tax and compensation data to
                    enable the Executive or the Executive's tax advisor to
                    independently make the calculations described in
                    subparagraph (a) above and the Company shall reimburse the
                    Executive for reasonable fees and expenses incurred for any
                    such verification.



               (c)  If the Executive gives written notice to the Company of any
                    objection to the results of the Company's calculations
                    within 60 days of the Executive's receipt of written notice
                    thereof, the dispute shall be referred for determination to
                    independent tax counsel selected by the Company and
                    reasonably acceptable to the Executive ("Tax Counsel"). The
                    Company shall pay all fees and expenses of such Tax Counsel.
                    Pending such determination by Tax Counsel, the Company shall
                    pay the Executive the Make-Whole Amount as determined by it
                    in good faith. The Company shall pay the Executive any
                    additional amount determined by Tax Counsel to be due under
                    this Section 5 (together with interest thereon at a rate
                    equal to 120% of the Federal short-term rate determined
                    under section 1274(d) of the Code) promptly after such
                    determination.

               (d)  The determination by Tax Counsel shall be conclusive and
                    binding upon all parties unless the Internal Revenue
                    Service, a court of competent jurisdiction, or such other
                    duly empowered governmental body or agency (a "Tax
                    Authority") determines that the Executive owes a greater or
                    lesser amount of Excise Tax with respect to any Payment than
                    the amount determined by Tax Counsel.

               (e)  If a Taxing Authority makes a claim against the Executive
                    which, if successful, would require the Company to make a
                    payment under this Section 5, the Executive agrees to
                    contest the claim with counsel reasonably satisfactory to
                    the Company, on request of the Company subject to the
                    following conditions:

                    (i)    The Executive shall notify the Company of any such
                           claim within 10 days of becoming aware thereof. In
                           the event that the Company desires the claim to be
                           contested, it shall promptly (but in no event more
                           than 30 days after the notice from the Executive or
                           such shorter time as the Taxing Authority may specify
                           for responding to such claim) request the Executive
                           to contest the claim. The Executive shall not make
                           any payment of any tax which is the subject of the
                           claim before the Executive has given the notice or
                           during the 30-day period thereafter unless the
                           Executive receives written instructions from the
                           Company to make such payment together with an advance
                           of funds sufficient to make the requested payment
                           plus any amounts payable under this Section 5
                           determined as



                           if such advance were an Excise Tax, in which case the
                           Executive will act promptly in accordance with such
                           instructions.

                    (ii)   If the Company so requests, the Executive will
                           contest the claim by either paying the tax claimed
                           and suing for a refund in the appropriate court or
                           contesting the claim in the United States Tax Court
                           or other appropriate court, as directed by the
                           Company; PROVIDED, HOWEVER, that any request by the
                           Company for the Executive to pay the tax shall be
                           accompanied by an advance from the Company to the
                           Executive of funds sufficient to make the requested
                           payment plus any amounts payable under this Section 5
                           determined as if such advance were an Excise Tax. If
                           directed by the Company in writing the Executive will
                           take all action necessary to compromise or settle the
                           claim, but in no event will the Executive compromise
                           or settle the claim or cease to contest the claim
                           without the written consent of the Company; PROVIDED,
                           HOWEVER, that the Executive may take any such action
                           if the Executive waives in writing the Executive's
                           right to a payment under this Section 5 for any
                           amounts payable in connection with such claim. The
                           Executive agrees to cooperate in good faith with the
                           Company in contesting the claim and to comply with
                           any reasonable request from the Company concerning
                           the contest of the claim, including the pursuit of
                           administrative remedies, the appropriate forum for
                           any judicial proceedings, and the legal basis for
                           contesting the claim. Upon request of the Company,
                           the Executive shall take appropriate appeals of any
                           judgment or decision that would require the Company
                           to make a payment under this Section 5. Provided that
                           the Executive is in compliance with the provisions
                           of this section, the Company shall be liable for and
                           indemnify the Executive against any loss in
                           connection with, and all costs and expenses,
                           including attorneys' fees, which may be incurred as a
                           result of, contesting the claim, and shall provide to
                           the Executive within 30 days after each written
                           request therefor by the Executive cash advances or
                           reimbursement for all such costs and expenses
                           actually incurred or reasonably expected to be
                           incurred by the Executive as a result of contesting
                           the claim.



               (f)  Should a Tax Authority finally determine that an additional
                    Excise Tax is owed, then the Company shall pay an additional
                    Make-Whole Amount to the Executive in a manner consistent
                    with this Section 5 with respect to any additional Excise
                    Tax and any assessed interest, fines, or penalties. If any
                    Excise Tax as calculated by the Company or Tax Counsel, as
                    the case may be, is finally determined by a Tax Authority to
                    exceed the amount required to be paid under applicable law,
                    then the Executive shall repay such excess to the Company
                    within 30 days of such determination; provided that such
                    repayment shall be reduced by the amount of any taxes paid
                    by the Executive on such excess which is not offset by the
                    tax benefit attributable to the repayment.

          6. TERMINATION DURING POTENTIAL CHANGE IN CONTROL. If a Potential
Change in Control (as defined in Section 8) occurs during the Agreement Term,
and the Company terminates the Executive's employment for reasons other than
Permanent Disability or Cause during such Potential Change in Control, the
Executive shall be entitled to receive the benefits that the Executive would
have received under Section 3, such benefits to be calculated based upon the
Executive's compensation prior to the actual termination of employment but paid
within 20 business days of the date of such termination.

          7. CHANGE IN CONTROL. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred on the earliest of the following
dates:

               (a)  the date any Person is or becomes the Beneficial Owner,
                    directly or indirectly, of securities of 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 (i) of
                    paragraph (c) below; or

               (b)  the date on which 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 the Company) whose appointment or
                    election by the Board 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

               (c)  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 (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 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 (B)
                    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 (ii) 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 Company or its
                    Affiliates) representing 20% or more of the combined voting
                    power of the Company's then outstanding securities; or

               (d)  the date on which 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 Agreement: "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.

          8. 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)  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 (a) shall cease to exist upon the expiration
                    or other termination of all such agreements;

               (b)  Any Person (without regard to the exclusions set forth in
                    subsections (i) through (iv) of such definition) publicly
                    announces an intention to take or to consider taking actions
                    the consummation of which would constitute a Change in
                    Control; provided that a Potential Change in Control



                    described in this paragraph (b) shall cease to exist upon
                    the withdrawal of such intention, or upon a determination by
                    the Board 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 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 in the securities
                    beneficially owned by such Person any securities acquired
                    directly from the Company 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.

          9. STOCK AND OPTION AWARDS. With respect to any award granted to the
Executive under the Company's 1996 Incentive Stock Program (the "Program"), any
Prior Program (as defined in the Program) or any successor program, the
following shall apply:

               (a)  if the award (other than incentive stock options granted
                    pursuant to Section 422 of the Internal Revenue Code (each
                    an "Incentive Stock Option") prior to the first date on
                    which the Original Agreement was executed) includes a
                    provision substantially similar to the provision contained
                    in the first paragraph in Appendix A, then after a Change in
                    Control no forfeiture shall be effected pursuant to such
                    provision unless the Executive shall have been terminated
                    for "Cause" within the meaning of paragraph 2(b) above;

               (b)  if the award (other than an Incentive Stock Option granted
                    prior to the Effective Date) includes a provision
                    substantially similar to the provision contained in the
                    second paragraph in Appendix A, then after a Change in
                    Control no forfeiture shall be effected pursuant to such
                    provision unless the Executive shall have been terminated
                    for "Cause" within the meaning of paragraph 2(b) above; and

               (c)  if the Executive becomes entitled to Change in Control
                    Benefits under Section 2 above, then in determining the



                    Executive's rights with respect to that award, other than
                    Incentive Stock Options granted prior to the later of:

                    (i)    December 8, 2000, or

                    (ii)   the first date on which the Original Agreement was
                           executed, the Executive shall be treated as having
                           incurred a termination of employment due to
                           retirement.

          10. WITHHOLDING. All payments to the Executive under this Agreement
will be subject to withholding of applicable taxes. The Company shall withhold
the applicable taxes in an amount calculated at the minimum statutory rate and
shall pay the amount so withheld to the appropriate tax authority.

          11. NONALIENATION. The interests of the Executive under this Agreement
are not subject in any manner to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance, attachment, or garnishment by creditors of the
Executive or the Executive's beneficiary.

          12. AMENDMENT. This Agreement may be amended or canceled only by
mutual agreement of the parties in writing without the consent of any other
person. So long as the Executive lives, no person, other than the parties
hereto, shall have any rights under or interest in this Agreement or the subject
matter hereof.

          13. APPLICABLE LAW. The provisions of this Agreement shall be
construed in accordance with the laws of the State of Illinois, without regard
to the conflict of law provisions of any state.

          14. SEVERABILITY. The invalidity or unenforceability of any provision
of this Agreement will not affect the validity or enforceability of any other
provision of this Agreement, and this Agreement will be construed as if such
invalid or unenforceable provision were omitted (but only to the extent that
such provision cannot be appropriately reformed or modified).

          15. WAIVER OF BREACH. No waiver by any party hereto of a breach of any
provision of this Agreement by any other party, or of compliance with any
condition or provision of this Agreement to be performed by such other party,
will operate or be construed as a waiver of any subsequent breach by such other
party of any similar or dissimilar provisions and conditions at the same or any
prior or subsequent time. The failure of any party hereto to take any action by
reason of such breach will not deprive such party of the right to take action at
any time while such breach continues.

          16. SUCCESSORS, ASSUMPTION OF CONTRACT. This Agreement shall be
binding upon and inure to the benefit of the Company and any successor of the
Company. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business and/or assets of the Company to expressly assume and agree to perform
this Agreement



in the same manner and to the same extent that the Company would be required to
perform it if no succession had taken place. This Agreement is personal to the
Executive and may not be assigned by the Executive without the written consent
of the Company. However, to the extent that rights or benefits under this
Agreement otherwise survive the Executive's death, the Executive's heirs and
estate shall succeed to such rights and benefits pursuant to the Executive's
will or the laws of descent and distribution; provided that the Executive shall
have the right at any time and from time to time, by notice delivered to the
Company, to designate or to change the beneficiary or beneficiaries with respect
to such benefits.

          17. NOTICES. Notices and all other communications provided for in this
Agreement shall be in writing and shall be delivered personally or sent by
registered or certified mail, return receipt requested, postage prepaid
(provided that international mail shall be sent via overnight or two-day
delivery), or sent by facsimile or prepaid overnight courier to the parties at
the addresses set forth below. Such notices, demands, claims and other
communications shall be deemed given:

               (a)  in the case of delivery by overnight service with guaranteed
                    next day delivery, the next day or the day designated for
                    delivery;

               (b)  in the case of certified or registered U.S. mail, five days
                    after deposit in the U.S. mail; or

               (c)  in the case of facsimile, the date upon which the
                    transmitting party received confirmation of receipt by
                    facsimile, telephone or otherwise;

provided, however, that in no event shall any such communications be deemed to
be given later than the date they are actually received. Communications that are
to be delivered by the U.S. mail or by overnight service or two-day delivery
service are to be delivered to the addresses set forth below:

     to the Company:

          Senior Vice President, Human Resources
          Abbott Laboratories
          100 Abbott Park Road
          Abbott Park, Illinois 60064

     with a copy (which shall not constitute notice) to:

          General Counsel and Secretary
          Abbott Laboratories
          100 Abbott Park Road
          Abbott Park, Illinois 60064

     or to the Executive:



          Name
          Address
          City, State Zip

Each party, by written notice furnished to the other party, may modify the
applicable delivery address, except that notice of change of address shall be
effective only upon receipt.

          18. RESOLUTION OF ALL DISPUTES. Any controversy or claim arising out
of or relating to this Agreement (or the breach thereof) (a "Dispute") shall be
settled by alternative dispute resolution procedures in accordance with Appendix
B hereto. During the pendency of any Dispute, the Company shall continue to pay
the Executive the full compensation in effect when the notice giving rise to the
Dispute was given (including, but not limited to, salary) and continue the
Executive (and, where applicable, the Executive's family) as a participant in
all compensation, benefit and insurance plans in which the Executive was
participating when the notice giving rise to the Dispute was given, until such
Dispute is resolved.

          19. LEGAL AND ENFORCEMENT COSTS. The provisions of this Section 19
shall apply if it becomes necessary or desirable for the Executive to retain
legal counsel or incur other costs and expenses in connection with enforcing any
and all rights under this Agreement or any other compensation plan maintained by
the Company, including, but not limited to, the Abbott Laboratories Deferred
Compensation Plan, the Abbott Laboratories 1991 Incentive Stock Program, the
Abbott Laboratories 1996 Incentive Stock Program, the 1998 Abbott Laboratories
Performance Incentive Plan, the Abbott Laboratories 401(k) Supplemental Plan,
the Abbott Laboratories Supplemental Pension Plan, the 1986 Abbott Laboratories
Management Incentive Plan or, in each case, any trust adopted pursuant thereto:

               (a)  The Executive shall be entitled to recover from the Company
                    reasonable attorneys' fees, costs and expenses incurred in
                    connection with such enforcement or defense.

               (b)  Payments required under this Section 19 shall be made by the
                    Company to the Executive (or directly to the Executive's
                    attorney) promptly following submission to the Company of
                    appropriate documentation evidencing the incurrence of such
                    attorneys' fees, costs, and expenses.

               (c)  The Executive shall be entitled to select legal counsel;
                    provided, however, that such right of selection shall not
                    affect the requirement that any costs and expenses
                    reimbursable under this Section 19 be reasonable.



               (d)  The Executive's rights to payments under this Section 19
                    shall not be affected by the final outcome of any dispute
                    with the Company.

          20. SURVIVAL OF AGREEMENT. Except as otherwise expressly provided in
this Agreement, the rights and obligations of the parties to this Agreement
shall survive the termination of the Executive's employment with the Company.

          21. ENTIRE AGREEMENT. Except as otherwise provided herein, this
Agreement constitutes the entire agreement between the parties concerning the
subject matter hereof and supersedes all prior or contemporaneous agreements,
between the parties relating to the subject matter hereof including but not
limited to the Original Agreement; provided, however, that nothing in this
Agreement shall be construed to limit any policy or agreement that is otherwise
applicable relating to confidentiality, rights to inventions, copyrightable
material, business and/or technical information, trade secrets, solicitation of
employees, interference with relationships with other businesses, competition,
and other similar policies or agreement for the protection of the business and
operations of the Company and the subsidiaries.

          22. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, any one of which shall be deemed the original without reference to
the others.



          IN WITNESS THEREOF, the Executive has hereunto set his hand, and the
Company has caused these presents to be executed in its name and on its behalf,
and its corporate seal to be hereunto affixed on this _____ day of ___________,
2003, all as of the Effective Date.


                                        ----------------------------------------
                                        EXECUTIVE


                                        ABBOTT LABORATORIES


                                        By
                                        ----------------------------------------

                                        Its
                                        ----------------------------------------
ATTEST:


- ------------------------------
          (Seal)



                                   APPENDIX A

                      AGREEMENT REGARDING CHANGE IN CONTROL
                  FORFEITURE PROVISION REFERENCED IN SECTION 9

          Notwithstanding paragraphs (x*), (y*) and (z*), these options (this
restricted stock award, etc.) shall immediately terminate (be forfeited), if in
the sole opinion and discretion of the Compensation Committee or its delegate,
the employee (a) engages in a material breach of the company's Code of Business
Conduct; (b) commits an act of fraud, embezzlement or theft in connection with
the employee's duties or in the course of employment; or (c) wrongfully
discloses secret processes or confidential information of the company or its
subsidiaries.

          Notwithstanding paragraphs (x*), (y*) and (z*), these options shall
immediately terminate in the event the employee engages directly or indirectly,
for the benefit of the employee or others, in any activity, employment or
business during employment or within twelve (12) months after the date of
termination or retirement which, in the sole opinion and discretion of the
compensation committee or its delegate, is competitive with the company or any
of its subsidiaries.

- ----------
* Provisions contained in the agreements pertaining to nonforfeiture for death,
disability, etc.



                                   APPENDIX B

                      AGREEMENT REGARDING CHANGE IN CONTROL
                    ALTERNATIVE DISPUTE RESOLUTION PROCEDURES

          The parties to the Agreement Regarding Change in Control dated as of
the 20th day of June, 2003 (the "Agreement") recognize that a bona fide dispute
as to certain matters may arise from time to time during the term of the
Agreement which relates to either party's rights and/or obligations. To have
such a dispute resolved by this Alternative Dispute Resolution ("ADR")
provision, a party first must send written notice of the dispute to the other
party for attempted resolution by good faith negotiations between the Executive
and the Company within twenty-eight (28) days after such notice is received (all
references to "days" in the ADR provision are to calendar days).

          If the matter has not been resolved within twenty-eight (28) days of
the notice of dispute, or if the parties fail to meet within such twenty-eight
(28) days, either party may initiate an ADR proceeding as provided herein. The
parties shall have the right to be represented by counsel in such a proceeding.

          1.   To begin an ADR proceeding, a party shall provide written notice
to the other party of the issues to be resolved by ADR. Within fourteen (14)
days after its receipt of such notice, the other party may, by written notice to
the party initiating the ADR, add additional issues to be resolved within the
same ADR.

          2.   Within twenty-one (21) days following receipt of the original ADR
notice, the parties shall select a mutually acceptable neutral to preside in the
resolution of any disputes in this ADR proceeding. If the parties are unable to
agree on a mutually acceptable neutral within such period, either party may
request the President of the CPR Institute for Dispute Resolution ("CPR"), 366
Madison Avenue, 14th Floor, New York, New York 10017, to select a neutral
pursuant to the following procedures:

               (a)  The CPR shall submit to the parties a list of not less than
                    five (5) candidates within fourteen (14) days after receipt
                    of the request, along with a CURRICULUM VITAE for each
                    candidate. No candidate shall be an employee, director or
                    shareholder of either party or any of their subsidiaries or
                    affiliates.

               (b)  Such list shall include a statement of disclosure by each
                    candidate of any circumstances likely to affect his or her
                    impartiality.

               (c)  Each party shall number the candidates in order of
                    preference (with the number one (1) signifying the greatest
                    preference) and shall deliver the list to the CPR within
                    seven (7) days following receipt of the list of candidates.
                    If a party believes a conflict of interest exists regarding
                    any of the candidates, that party shall provide a written



                    explanation of the conflict to the CPR along with its list
                    showing its order of preference for the candidates. Any
                    party failing to return a list of preferences on time shall
                    be deemed to have no order of preference.

               (d)  If the parties collectively have identified fewer than three
                    (3) candidates deemed to have conflicts, the CPR immediately
                    shall designate as the neutral the candidate for whom the
                    parties collectively have indicated the greatest preference.
                    If a tie should result between two candidates, the CPR may
                    designate either candidate. If the parties collectively have
                    identified three (3) or more candidates deemed to have
                    conflicts, the CPR shall review the explanations regarding
                    conflicts and, in its sole discretion, may either (i)
                    immediately designate as the neutral the candidate for whom
                    the parties collectively have indicated the greatest
                    preference, or (ii) issue a new list of not less than five
                    (5) candidates, in which case the procedures set forth in
                    subparagraphs 2(a)-2(d) shall be repeated.

          3.   No earlier than twenty-eight (28) days or later than fifty-six
(56) days after selection, the neutral shall hold a hearing to resolve each of
the issues identified by the parties. The ADR proceeding shall take place at a
location agreed upon by the parties. If the parties cannot agree, the neutral
shall designate a location other than the principal place of business of either
party or any of the subsidiaries or affiliates.

          4.   At least seven (7) days prior to the hearing, each party shall
submit the following to the other party and the neutral:

               (a)  a copy of all exhibits on which such party intends to rely
                    in any oral or written presentation to the neutral;

               (b)  a list of any witnesses such party intends to call at the
                    hearing, and a short summary of the anticipated testimony of
                    each witness;

               (c)  a proposed ruling on each issue to be resolved, together
                    with a request for a specific damage award or other remedy
                    for each issue. The proposed rulings and remedies shall not
                    contain any recitation of the facts or any legal arguments
                    and shall not exceed one (1) page per issue.

               (d)  a brief in support of such party's proposed rulings and
                    remedies, provided that the brief shall not exceed twenty
                    (20) pages. This page limitation shall apply regardless of
                    the number of issues raised in the ADR proceeding. Except as
                    expressly set forth in subparagraphs 4(a) - 4(d), no



                    discovery shall be required or permitted by any means,
                    including deposition, interrogatories, requests for
                    admissions or production of documents.

          5.   The hearing shall be conducted on two (2) consecutive days and
shall be governed by the following rules:

               (a)  Each party shall be entitled to five (5) hours of hearing
                    time to present its case. The neutral shall determine
                    whether each party has had the five (5) hours to which it is
                    entitled.

               (b)  Each party shall be entitled, but not required, to make an
                    opening statement, to present regular or rebuttal testimony,
                    documents or other evidence, to cross-examine witnesses and
                    to make a closing argument. Cross-examination of witnesses
                    shall occur immediately after their direct testimony, and
                    cross-examination time shall be charged against the party
                    conducting the cross-examination.

               (c)  The party initiating the ADR shall begin the hearing and, if
                    it chooses to make an opening statement, shall address not
                    only issues it raised, but also any issues raised by the
                    responding party. The responding party, if it chooses to
                    make an opening statement, also shall address all issues
                    raised in the ADR. Thereafter, the presentation of regular
                    and rebuttal testimony and documents, other evidence and
                    closing arguments shall proceed in the same sequence.

               (d)  Except when testifying, witnesses shall be excluded from the
                    hearing until closing arguments.

               (e)  Settlement negotiations, including any statements made
                    therein, shall not be admissible under any circumstances.
                    Affidavits prepared for purposes of the ADR hearing also
                    shall not be admissible. As to all other matters, the
                    neutral shall have sole discretion regarding the
                    admissibility of any evidence.

          6.   Within seven (7) days following completion of the hearing, each
party may submit to the other party and the neutral a post-hearing brief in
support of its proposed rulings and remedies, provided that such brief shall not
contain or discuss any new evidence and shall not exceed ten (10) pages. This
page limitation shall apply regardless of the number of issues raised in the ADR
proceeding.

          7.   The neutral shall rule on each disputed issue within fourteen
(14) days following completion of the hearing. Such ruling shall adopt in its
entirety the proposed ruling and remedy of one of the parties on each disputed
issue but may adopt one party's proposed rulings and remedies on some issues and
the other party's proposed



rulings and remedies on other issues. The neutral shall not issue any written
opinion or otherwise explain the basis of the ruling.

          8.   The neutral shall be paid a reasonable fee plus expenses by the
Company. The Company shall bear its own fees and expenses. The Executive's fees
and expenses shall be paid or reimbursed by the Company to the extent provided
by the Agreement.

          9.   The rulings of the neutral and the allocation of fees and
expenses shall be binding, non-reviewable, and non-appealable, and may be
entered as a final judgment in any court having jurisdiction.

          10.  Except as provided in Section 9 or as required by law, the
existence of the dispute, any settlement negotiations, the ADR hearing, any
submissions (including exhibits, testimony, proposed rulings, and briefs), and
the rulings shall be deemed Confidential Information. The neutral shall have the
authority to impose sanctions for unauthorized disclosure of Confidential
Information.



                                                                   EXHIBIT 10.7

                                                                       EXHIBIT A

                               ABBOTT LABORATORIES
                      EQUITY-BASED AWARD / RECOGNITION PLAN

     1.   PURPOSE. Abbott Laboratories (the "Company") previously established
the Equity-based Award / Recognition Plan (the "Plan") to recognize outstanding
performance of employees of the Company and its Subsidiaries (as defined below)
by transferring shares of Stock (as defined below) to such employees. The
following provisions constitute an amendment, restatement and continuation of
the Plan as of June 20, 2003, the "Effective Date" of the Plan as set forth
herein.

     2.   ADMINISTRATION. The Plan will be administered by the Company's Senior
Vice President, Human Resources (or, in the event that the Company does not then
have a Senior Vice President, Human Resources, the individual performing the
duties of the Company's Senior Vice President, Human Resources) (the "Plan
Administrator"). The Plan Administrator shall interpret the Plan, prescribe,
amend and rescind rules and regulations relating thereto and make all other
determinations necessary or advisable for the administration of the Plan. The
Plan Administrator may, from time to time, delegate any or all of his or her
duties, powers and authority to any person or persons.

     3.   PROGRAMS. Subject to the terms and conditions of the Plan, the Plan
Administrator or his or her delegate may establish one or more programs under
the Plan (the "Programs"). Each Program shall provide for the award of Stock
under the Plan, and shall contain the terms and conditions described in
Supplement A to the Plan (which is attached to and forms a part of the Plan) or
such other terms and conditions as determined to be appropriate by the Plan
Administrator. Programs may be established, modified, and terminated from time
to time in the discretion of the Plan Administrator.

                                        1


     4.   ELIGIBLE EMPLOYEES. Any employee of the Company and its Subsidiaries
shall be eligible to participate in the Plan to the extent provided under the
terms of one or more Programs; provided, however, that no award may be made to
an employee who is an officer of the Company on the date that such award is
made.

     5.   SHARES RESERVED UNDER THE PLAN. There is hereby reserved for awards
under the Plan made after the Effective Date an aggregate of 500,000 shares of
Stock which shall be purchased in accordance with paragraph 6 in the open market
or in private transactions. The maximum award under the Plan for any one
calendar year for any one participant (with such limit to be applied as of the
date of the award) shall be 50 shares of Stock; provided, however, that, to the
extent that the Company or a Subsidiary provides additional cash to satisfy any
or all tax liability associated with an award, that amount shall be disregarded
in applying the foregoing limits.

     6.   PURCHASE AND DELIVERY OF SHARES. Each award under the Plan shall be
made under the terms of a Program. All awards under the Plan shall be settled in
shares of Stock (except to the extent that the Company or a Subsidiary provides
additional cash to satisfy any or all tax liability associated with the award).
To settle any award under the Plan, the Treasury Department of the Company shall
deliver to a broker an amount, in cash, necessary to purchase the number of
shares of Stock specified for the award. With respect to each award, the broker
shall purchase in the name of the award recipient in the open market or in
private transactions the specified number of shares of Stock. Such shares shall
be delivered by the broker to the award recipient in accordance with the
applicable Program.

                                        2


     7.   AWARDS OUTSIDE THE UNITED STATES. Awards under the Plan may be made to
participants in the Plan who are residing in jurisdictions outside the United
States as the Plan Administrator in his or her sole discretion may determine
from time to time. The Plan Administrator, in his or her discretion, may adopt
such modifications to the Plan and any Program as may be necessary to comply
with the applicable laws of jurisdictions outside the United States and to
afford participants favorable treatment under such laws.

     8.   OTHER PROVISIONS. Any award under any Program may be subject to such
provisions not otherwise set forth in the Program description (whether or not
applicable to the award made to any other participant) as the Plan Administrator
determines appropriate, including, without limitation, such provisions as may be
appropriate to comply with federal or state securities laws and stock exchange
requirements.

     9.   TERM OF PLAN AND AMENDMENT OF AWARDS. The Plan shall continue in
effect until terminated by the Board. A participant's right to receive awards
that have been made under the Plan but have not yet been settled in Stock may be
amended, modified or canceled by mutual agreement between the Plan Administrator
and the participant or beneficiary.

     10.  TAXES. The Company shall be entitled to withhold the amount of any tax
attributable to any shares deliverable under the Plan after giving the person
entitled to receive such shares reasonable advance notice, and the Company may
defer making delivery if any such tax may be pending unless and until
indemnified to its satisfaction. The Plan Administrator may, in its discretion
and subject to such rules as he or she may adopt, permit or require a
participant to pay all or a portion of the federal, state and local taxes,
including FICA and medicare withholding tax, arising in connection with the
receipt of any award under the Plan by having the Company withhold cash
otherwise deliverable to the broker with respect to the award.

                                        3


A Program may provide for additional cash to be provided by the Company or a
Subsidiary to satisfy any or all tax liability associated with an award
(including any tax liability resulting from the provision of such additional
cash).

     11.  DEFINITIONS.

(a)  BOARD. The term "Board" means the Board of Directors of the Company or any
     person or persons to whom the Board of Directors of the Company delegates
     its duties, powers and authority under the Plan.

(b)  STOCK. The term "Stock" means common stock of the Company.

(c)  SUBSIDIARY. The term "Subsidiary" means any corporation, partnership, joint
     venture or business trust, fifty percent (50%) or more of the control of
     which is owned, directly or indirectly, by the Company.

     12.  ADJUSTMENT PROVISIONS. In the event of a change in the number of
issued shares of Stock without new consideration to the Company (such as by
stock dividends or stock splits) or a reorganization, sale, merger,
consolidation, spin-off or similar occurrence with respect to the Company, the
total number of shares of Stock reserved for awards under the Plan and the
number of shares covered by awards that have been made under the Plan but have
not yet been settled in Stock shall be subject to equitable adjustment to
reflect such change as determined by the Plan Administrator.

     13.  AMENDMENT AND TERMINATION OF PLAN. The Board may amend the Plan from
time to time or terminate the Plan at any time, but no such action shall reduce
the then existing amount of any participant's award previously made that has not
yet been settled in Stock or adversely change the terms and conditions of such
previously made awards without the participant's consent.

                                        4


     14.  TRANSFERABILITY. Except as otherwise provided by the Plan
Administrator, a participant's right to receive awards that have been made under
the Plan but have not yet been settled in Stock is not transferable except as
designated by the participant by will or by the laws of descent and
distribution.

     15.  GENDER AND NUMBER. Where the context admits, words in any gender shall
include any other gender, words in the singular shall include the plural and the
plural shall include the singular.

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

     17.  PLAN NOT CONTRACT OF EMPLOYMENT. The Plan does not constitute a
contract of employment, and participation in the Plan will not give any employee
the right to be retained in the employ of the Company and its Subsidiaries nor
any right or claim to any benefits under the Plan, unless such right has
specifically accrued under the Plan.

                                        5



                                Exhibit 12


                             Abbott Laboratories

              Computation of Ratio of Earnings to Fixed Charges

                                 (Unaudited)

                      (DOLLARS IN MILLIONS EXCEPT RATIOS)





                                                               Six Months Ended
                                                                June 30, 2003
                                                               ----------------
                                                            
Net Earnings                                                         $1,048
Add (deduct):
  Taxes on earnings                                                     424
  Capitalized interest cost, net of amortization                          5
  Minority interest                                                       3
                                                                    -------

Net Earnings as adjusted                                             $1,480
                                                                    -------

Fixed Charges:
  Interest on long-term and short-term debt                              96
  Capitalized interest cost                                               3
  Rental expense representative of an interest factor                    32
                                                                    -------

Total Fixed Charges                                                     131
                                                                    -------

Total adjusted earnings available for payment of fixed charges       $1,611
                                                                    =======

Ratio of earnings to fixed charges                                     12.3
                                                                    =======


NOTE: For the purpose of calculating this ratio, (i) earnings have been
calculated by adjusting net earnings for taxes on earnings; interest expense;
capitalized interest cost, net of amortization; minority interest; and the
portion of rentals representative of the interest factor, (ii) Abbott
considers one-third of rental expense to be the amount representing return on
capital, and (iii) fixed charges comprise total interest expense,
including capitalized interest and such portion of rentals.



                                                                    Exhibit 31.1

                    CERTIFICATION OF CHIEF EXECUTIVE OFFICER
                REQUIRED BY RULE 13a-14(a) (17 CFR 240.13a-14(a))


I, Miles D. White, certify that:


1. I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of Abbott Laboratories
as of, and for, the periods presented in this report;

4. Abbott Laboratories' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for Abbott Laboratories and have:

     a) Designed such disclosure controls and procedures, or caused such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to Abbott Laboratories, including
     its consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

     b) Evaluated the effectiveness of Abbott Laboratories' disclosure controls
     and procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of the end of
     the period covered by this report based on such evaluation; and

     c) Disclosed in this report any change in Abbott Laboratories' internal
     control over financial reporting that occurred during Abbott Laboratories'
     most recent fiscal quarter that has materially affected, or is reasonably
     likely to materially affect, Abbott Laboratories' internal control over
     financial reporting; and



5. Abbott Laboratories' other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
Abbott Laboratories' auditors and the audit committee of Abbott Laboratories'
board of directors:

     a) All significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect Abbott Laboratories' ability to record, process,
     summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other
     employees who have a significant role in Abbott Laboratories' internal
     control over financial reporting.


Date: August 12, 2003                  /s/ Miles D. White
                                       ------------------------------------
                                       Miles D. White, Chairman of the Board
                                       and Chief Executive Officer



                                                                    Exhibit 31.2

                    CERTIFICATION OF CHIEF FINANCIAL OFFICER
                REQUIRED BY RULE 13a-14(a) (17 CFR 240.13a-14(a))


I, Thomas C. Freyman, certify that:


1. I have reviewed this quarterly report on Form 10-Q of Abbott Laboratories;

2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial
information included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of Abbott Laboratories
as of, and for, the periods presented in this report;

4. Abbott Laboratories' other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15(e)) for Abbott Laboratories and have:

     a) Designed such disclosure controls and procedures, or caused such
     disclosure controls and procedures to be designed under our supervision, to
     ensure that material information relating to Abbott Laboratories, including
     its consolidated subsidiaries, is made known to us by others within those
     entities, particularly during the period in which this report is being
     prepared;

     b) Evaluated the effectiveness of Abbott Laboratories' disclosure controls
     and procedures and presented in this report our conclusions about the
     effectiveness of the disclosure controls and procedures, as of the end of
     the period covered by this report based on such evaluation; and

     c) Disclosed in this report any change in Abbott Laboratories' internal
     control over financial reporting that occurred during Abbott Laboratories'
     most recent fiscal quarter that has materially affected, or is reasonably
     likely to materially affect, Abbott Laboratories' internal control over
     financial reporting; and

5. Abbott Laboratories' other certifying officer and I have disclosed, based on
our most recent evaluation of internal control over financial reporting, to
Abbott Laboratories' auditors and the audit committee of Abbott Laboratories'
board of directors:



     a) All significant deficiencies and material weaknesses in the design or
     operation of internal control over financial reporting which are reasonably
     likely to adversely affect Abbott Laboratories' ability to record, process,
     summarize and report financial information; and

     b) Any fraud, whether or not material, that involves management or other
     employees who have a significant role in Abbott Laboratories' internal
     control over financial reporting.


Date: August 12, 2003                  /s/ Thomas C. Freyman
                                       ---------------------------------------
                                       Thomas C. Freyman, Senior Vice President,
                                       Finance and Chief Financial Officer



                                                                    Exhibit 32.1

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

   In connection with the Quarterly Report of Abbott Laboratories (the
"Company") on Form 10-Q for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Miles
D. White, Chairman of the Board and Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906
of the Sarbanes-Oxley Act of 2002, that:

   (1) The Report fully complies with the requirements of section 13(a) or 15(d)
       of the Securities Exchange Act of 1934; and

   (2) The information contained in the Report fairly presents, in all material
       respects, the financial condition and results of operations of the
       Company.



/s/ Miles D. White
- ----------------------------
Miles D. White
Chairman of the Board and
Chief Executive Officer
August 12, 2003


A signed original of this written statement required by Section 906 has been
provided to Abbott Laboratories and will be retained by Abbott Laboratories and
furnished to the Securities and Exchange Commission or its staff upon request.



                                                                    Exhibit 32.2

                            CERTIFICATION PURSUANT TO
                             18 U.S.C. SECTION 1350
                             AS ADOPTED PURSUANT TO
                  SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

   In connection with the Quarterly Report of Abbott Laboratories (the
"Company") on Form 10-Q for the period ended June 30, 2003 as filed with the
Securities and Exchange Commission on the date hereof (the "Report"), I, Thomas
C. Freyman, Senior Vice President, Finance and Chief Financial Officer of the
Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to
Section 906 of the Sarbanes-Oxley Act of 2002, that:

   (1)  The Report fully complies with the requirements of section 13(a) or
        15(d) of the Securities Exchange Act of 1934; and

   (2)  The information contained in the Report fairly presents, in all material
        respects, the financial condition and results of operations of the
        Company.



/s/ Thomas C. Freyman
- ----------------------------
Thomas C. Freyman
Senior Vice President, Finance
and Chief Financial Officer
August 12, 2003


A signed original of this written statement required by Section 906 has been
provided to Abbott Laboratories and will be retained by Abbott Laboratories and
furnished to the Securities and Exchange Commission or its staff upon request.



                                                                    Exhibit 99.1

            CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

         The Financial Review and other sections of this Form 10-Q contain
forward-looking statements that are based on management's current expectations,
estimates and projections. Words such as "expects," "anticipates," "intends,"
"plans," "believes," "seeks," "estimates," variations of these words and similar
expressions are intended to identify these forward-looking statements. Certain
factors, including but not limited to those listed below, may cause actual
results to differ materially from current expectations, estimates, projections
and from past results.

     -    Competitive factors, including: (i) pricing pressures, both in the
          United States and abroad, primarily from managed care groups and
          government agencies, (ii) the development of new products by
          competitors having lower prices or superior performance or that are
          otherwise competitive with Abbott's current products, (iii) generic
          competition when Abbott's products lose their patent or regulatory
          protection, (iv) technological advances, patents and registrations
          obtained by competitors, and (v) business combinations among Abbott's
          competitors or major customers.

     -    Difficulties and delays inherent in the development, manufacturing,
          marketing, or sale of products, including: (i) uncertainties in the
          United States Food and Drug Administration and foreign regulatory
          approval processes, (ii) delays in the receipt of or the inability to
          obtain required approvals, (iii) efficacy or safety concerns, (iv) the
          suspension, revocation, or adverse amendment of the authority
          necessary for manufacture, marketing, or sale, (v) the imposition of
          additional or different regulatory requirements, such as those
          affecting labeling, (vi) seizure or recall of products, (vii) the
          failure to obtain, the imposition of limitations on the use of, or the
          loss of patent and other intellectual property rights, (viii) loss of
          regulatory exclusivity, (ix) manufacturing or distribution problems,
          (x) problems with licensors, suppliers and distributors, and (xi)
          labor disputes, strikes, slow-downs or other forms of labor or union
          activity.

     -    Governmental action including: (i) new laws, regulations and judicial
          decisions related to health care availability, method of delivery, or
          the method or amount of payment or reimbursement for health care
          products and services, (ii) changes in the United States Food and Drug
          Administration and foreign regulatory approval processes that may
          delay or prevent the approval of new products and result in lost
          market opportunity, (iii) new laws, regulations and judicial decisions
          affecting pricing or marketing, and (iv) changes in the tax laws
          relating to Abbott's operations, including laws related to the
          remittance of foreign earnings.



     -    Changes in economic conditions over which Abbott has no control,
          including changes in the rate of inflation, business conditions,
          interest rates, foreign currency exchange rates, market value of
          Abbott's equity investments, and the performance of investments held
          by Abbott's employee benefit trusts.

     -    Changes in business and political conditions, including (i) war,
          political instability, terrorist attacks in the U.S. and other parts
          of the world, the threat of future terrorist activity in the U.S. and
          other parts of the world and related U.S. military action, and (ii)
          the cost and availability of insurance due to any of the foregoing
          events.

     -    Changes in Abbott's business units and investments and changes in the
          relative and absolute contribution of each to earnings resulting from
          evolving business strategies and opportunities existing now or in the
          future, such as acquisitions, restructurings or dispositions.

     -    Changes in costs or expenses, including variations resulting from
          changes in product mix and changes in tax rates both in the United
          States and abroad.

     -    Legal difficulties, any of which could preclude commercialization of
          products or adversely affect profitability, including: (i) claims
          asserting antitrust violations, (ii) claims asserting securities law
          violations, (iii) claims asserting violations of the Federal False
          Claims Act, Anti-Kickback Statute, or other violations in connection
          with Medicare and/or Medicaid reimbursement, (iv) claims asserting
          violations of the Prescription Drug Marketing Act, (v) derivative
          actions, (vi) product liability claims, (vii) disputes over
          intellectual property rights (including patents), (viii) environmental
          matters, (ix) issues regarding compliance with any governmental
          consent decree, including the consent decree between Abbott and the
          United States Food and Drug Administration described in Abbott's 2002
          Form 10-K under the caption "Regulation," and Abbott's ability to
          successfully return diagnostic products affected by this consent
          decree to market, and (x) issues regarding compliance with any
          corporate integrity agreement, including the corporate integrity
          agreement between Abbott and the Office of Inspector General for the
          U.S. Department of Health and Human Services described under the
          caption "Legal Proceedings" in this Form 10-Q.

     -    Changes in accounting standards promulgated by the Financial
          Accounting Standards Board, the Securities and Exchange Commission or
          the American Institute of Certified Public Accountants.



         No assurance can be made that any expectation, estimate or projection
contained in a forward-looking statement will be achieved or will not be
affected by the factors cited above or other future events. Readers are
cautioned not to place undue reliance on such statements, which speak only as of
the date made. Abbott undertakes no obligation to release publicly any revisions
to forward-looking statements as the result of subsequent events or
developments.