SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ABBOTT LABORATORIES
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/ / No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(4) Date Filed:
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ABBOTT LABORATORIES
NOTICE OF
ANNUAL MEETING
OF SHAREHOLDERS
AND
PROXY STATEMENT
1997
[ABBOTT LABORATORIES LOGO]
ABBOTT LABORATORIES
100 ABBOTT PARK ROAD
ABBOTT PARK, ILLINOIS 60064-3500 U.S.A.
COVER:
WHEN RECURRING HEADACHES CAUSED KAREN WILLICK TO MISS OUT ON MANY OF HER
FAVORITE ACTIVITIES, HER NEUROLOGIST USED AN MRI SCAN OF HER BRAIN TO ENSURE AN
ACCURATE DIAGNOSIS. TO PROVIDE A CLEAR IMAGE OF KAREN'S BRAIN, HER DOCTOR USED
MAGNEVIST,-TM- AN MRI CONTRAST IMAGING AGENT DISTRIBUTED BY ABBOTT THROUGH A
CO-PROMOTION AGREEMENT WITH BERLEX LABORATORIES, INC. THE IMAGING PROCEDURE
ALLOWED THE DOCTOR TO ELIMINATE MANY POSSIBLE CAUSES OF KAREN'S HEADACHES AND
PRESCRIBE AN EFFECTIVE TREATMENT REGIMEN. TODAY, KAREN IS FREE FROM HEADACHES
AND ABLE TO ENJOY TIME WITH HER HUSBAND, PURSUE HER CAREER AND MAINTAIN A
REGULAR AEROBIC EXERCISE SCHEDULE.
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YOUR VOTE
IS IMPORTANT
PLEASE SIGN AND PROMPTLY RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The Annual Meeting of the Shareholders of Abbott Laboratories will be held at
the corporation's headquarters, 100 Abbott Park Road, at the intersection of
Route 137 and Waukegan Road, Lake County, Illinois, on Friday, April 25, 1997 at
9:00 a.m. for the following purposes:
(1) To elect twelve directors to hold office until the
next Annual Meeting or until their successors are elected (Item No. 1 on proxy
card);
(2) To ratify the appointment of Arthur Andersen LLP
as auditors of the corporation for 1997 (Item No. 2 on proxy card); and
(3) To transact such other business as may properly
come before the meeting.
The board of directors recommends that you vote FOR Items 1 and 2 on the proxy
card.
The close of business February 26, 1997 has been fixed as the record date for
determining the shareholders entitled to receive notice of, and to vote at, the
Annual Meeting.
Admission to the meeting will be by admission card only. If you plan to attend,
please complete and return the reservation form on the back cover, and an
admission card will be sent to you.
By order of the board of directors.
JOSE M. DE LASA
SECRETARY
March 11, 1997
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ABBOTT LABORATORIES
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited on behalf of the board of directors for use
at the Annual Meeting of Shareholders. The meeting will be held on April 25,
1997 at the corporation's headquarters, 100 Abbott Park Road, at the
intersection of Route 137 and Waukegan Road, Lake County, Illinois. This proxy
statement and the accompanying proxy card are being mailed to shareholders on or
about March 11, 1997. The corporation will bear the cost of making solicitations
from its shareholders and will reimburse banks and brokerage firms for
out-of-pocket expenses incurred in connection with this solicitation. Proxies
may also be solicited by mail or in person by directors, officers, or employees
of the corporation and its subsidiaries. The corporation has also retained
Georgeson & Company Inc. to aid in the solicitation of proxies, at an estimated
cost of $14,000 plus reimbursement for reasonable out-of-pocket expenses.
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VOTING SECURITIES AND RECORD DATE
Shareholders of record at the close of business on February 26, 1997 will be
entitled to notice of, and to vote at, the Annual Meeting. As of January 31,
1997, the corporation had 774,437,884 outstanding common shares, which are the
only outstanding voting securities.
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VOTING OF PROXIES
A shareholder may vote in person, by a duly executed proxy, or through an
authorized representative. The bylaws provide that a shareholder may authorize
no more than three persons as proxies to attend and vote at the meeting. Proxies
may be revoked at any time prior to the meeting. This may be done by written
notice delivered to the secretary of the corporation, or by signing and
delivering a proxy with a later date.
All shareholders have cumulative voting rights in the election of directors and
one vote per share on all other matters. Cumulative voting allows a shareholder
to multiply the number of shares owned by the number of directors to be elected
and to cast the total for one nominee or distribute the votes among the nominees
as the shareholder desires. Nominees who receive the greatest number of votes
will be elected.
Unless authority is withheld in accordance with instructions on the proxy, the
persons named in the proxy will vote the shares covered by proxies they receive
to elect the 12 nominees hereinafter named. These
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1
shares may be voted cumulatively so that one or more of the nominees may receive
fewer votes than the other nominees (or no votes at all). Should a nominee
become unavailable to serve, the shares will be voted for a substitute
designated by the board of directors, or for fewer than 12 nominees if, in the
judgment of the proxy holders, such action is necessary or desirable.
Where a shareholder has specified a choice for or against approval of the
ratification of Arthur Andersen LLP as auditors, the shares represented by the
proxy will be voted as specified. Where no choice has been specified, the proxy
will be voted FOR ratification of Arthur Andersen LLP as auditors.
A majority of the outstanding shares, entitled to vote on a matter, represented
in person or by proxy, shall constitute a quorum for consideration of such
matter at the meeting. The affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on a matter shall be the act of
the shareholders with respect to that matter. Abstentions and withheld votes
have the effect of votes against a matter.
A proxy may indicate that all or a portion of the shares represented by such
proxy are not being voted with respect to a particular matter. This could occur,
for example, when a broker or bank is not permitted to vote stock held in street
name on certain matters in the absence of instructions from the beneficial owner
of the stock. These "non-voted shares" will be considered shares not present
and, therefore, not entitled to vote on such matter, although these shares may
be considered present and entitled to vote for other purposes. Non-voted shares
will not affect the determination of the outcome of the vote on any matter to be
decided at the meeting.
It is the corporation's policy that all proxies, ballots and voting tabulations
that reveal how a particular shareholder has voted be kept confidential and not
be disclosed except: (i) where disclosure may be required by law or regulation,
(ii) where disclosure may be necessary in order for the corporation to assert or
defend claims, (iii) where a shareholder writes comments on his or her proxy
card, (iv) where a shareholder expressly requests disclosure, (v) to allow the
inspectors of election to certify the results of a vote, or (vi) in limited
circumstances, such as a contested election or proxy solicitation not approved
and recommended by the board of directors.
The inspectors of election and the tabulators of all proxies, ballots and voting
tabulations that identify shareholders are independent and are not employees of
the corporation.
The board of directors is not aware of any other issue which may properly be
brought before the meeting. If other matters are properly brought before the
meeting, the accompanying proxy will be voted in accordance with the judgment of
the proxy holders.
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INFORMATION CONCERNING SECURITY OWNERSHIP
On January 31, 1997, the Abbott Laboratories Stock Retirement Trust, c/o Abbott
Laboratories, 100 Abbott Park Road, Abbott Park, Illinois 60064-3500, held
60,423,224 common shares (approximately 7.8 percent of the outstanding common
shares) of the corporation. These shares were held for the individual accounts
of approximately 37,342 employees and other plan participants who participate in
the Abbott Laboratories Stock Retirement Plan. The Stock Retirement Trust is
administered by both a trustee and three co-trustees. The trustee of the Trust
is Putnam Fiduciary Trust Company. The co-trustees are G. P. Coughlan, T. C.
Freyman, and E. M. Walvoord, officers of the corporation. The voting power with
respect to the shares owned by the Trust is held by and shared among the
co-trustees. The co-trustees must solicit and follow voting instructions from
the participants, if the co-trustees determine that a matter to be voted on at a
shareholder meeting could materially affect the interests of participants. The
individual participants have investment power over these shares, as provided by
the terms of the Trust. The Trust Agreement is of unlimited duration. The
co-trustees are also fiduciaries for certain other employee benefit trusts
maintained by the corporation and have shared voting and/or investment power
with respect to the 209,652 common shares (approximately .03 percent of the
outstanding shares of the corporation) held by those trusts.
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COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors, which held seven meetings in 1996, has four committees
established in the corporation's bylaws: the executive committee, audit
committee, compensation committee, and nominations and board affairs committee.
The executive committee, whose members are D. L. Burnham, chairman, H. L.
Fuller, W. D. Smithburg, J. R. Walter, and W. L. Weiss, did not hold any
meetings in 1996. This committee may exercise all the authority of the board in
the management of the corporation, except for matters expressly reserved by law
for board action.
The audit committee, whose members are J. R. Walter, chairman, K. F. Austen, D.
A. Jones, D. A. L. Owen, B. Powell, Jr., and W. A. Reynolds, held two meetings
in 1996. This committee provides advice and assistance regarding accounting,
auditing, and financial reporting
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2
practices of the corporation. Each year, it recommends to the board a firm of
independent public accountants to serve as auditors. The audit committee reviews
with such auditors the scope and results of their audit, fees for services, and
independence in servicing the corporation. The committee also meets with the
corporation's internal auditors to evaluate the effectiveness of the work they
perform.
The compensation committee, whose members are W. D. Smithburg, chairman, H. L.
Fuller, A. F. Jacobson, A. B. Rand, and W. L. Weiss held two meetings in 1996.
This committee is responsible for setting and administering the policies and
programs that govern both annual compensation and stock ownership programs.
The nominations committee held two meetings in 1996. In December of 1996, the
nominations committee assumed the functions previously performed by the board
affairs committee and was renamed the nominations and board affairs committee.
The members of this committee are W. A. Reynolds, chairman, K. F. Austen, D. A.
Jones, D. A. L. Owen, B. Powell, Jr., and A. B. Rand. This committee develops
general criteria regarding the qualifications and selection of board members and
officers, recommends candidates for such positions to the board of directors,
and advises the board of directors with respect to the conduct of board
activities, including assisting the board in the evaluation of the board's own
performance. A shareholder may recommend persons as potential nominees for
director or directly nominate persons for director by complying with the
procedures on page 14.
The board affairs committee, whose members were W. L. Weiss, chairman, K. F.
Austen, H. L. Fuller, A. F. Jacobson, and D. A. Jones, held one meeting in 1996.
This committee was responsible for advising the board of directors with respect
to the conduct of board activities. In cooperation with the nominations
committee, it assisted the board in the evaluation of the board's own
performance. Its functions have been assumed by the nominations and board
affairs committee.
The average attendance of all directors at board and committee meetings in 1996
was 91 percent. B. Powell, Jr. attended 73 percent of the total number of board
meetings and meetings held by the committees on which he served.
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INFORMATION CONCERNING NOMINEES FOR DIRECTORS
(ITEM NO. 1 ON PROXY CARD)
Twelve directors are to be elected to hold office until the next Annual Meeting
or until their successors are elected. All of the nominees are currently serving
as directors. A. F. Jacobson is not standing for reelection.
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NOMINEES FOR ELECTION AS DIRECTORS
K. FRANK AUSTEN, M.D. AGE 68 DIRECTOR SINCE 1983
PROFESSOR OF MEDICINE, HARVARD MEDICAL SCHOOL, BOSTON, MASSACHUSETTS
[PHOTO1] DR. AUSTEN IS THE THEODORE B. BAYLES PROFESSOR OF MEDICINE ON THE FACULTY OF
HARVARD MEDICAL SCHOOL. DR. AUSTEN IS A DIRECTOR OF HUMANA INC., A TRUSTEE OF
AMHERST COLLEGE AND A MEMBER OF THE NATIONAL ACADEMY OF SCIENCES AND OF THE
AMERICAN ACADEMY OF ARTS AND SCIENCES. HE HAS SERVED AS PRESIDENT OF THE AMERICAN
ASSOCIATION OF IMMUNOLOGISTS, THE AMERICAN ACADEMY OF ALLERGY AND IMMUNOLOGY, AND
THE ASSOCIATION OF AMERICAN PHYSICIANS.
DUANE L. BURNHAM AGE 55 DIRECTOR SINCE 1985
CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER, ABBOTT LABORATORIES
[PHOTO2] MR. BURNHAM JOINED ABBOTT IN 1982. HE WAS ELECTED VICE CHAIRMAN IN 1986, CHIEF
EXECUTIVE OFFICER IN 1989, AND CHAIRMAN OF THE BOARD IN 1990. MR. BURNHAM
RECEIVED BOTH HIS UNDERGRADUATE AND M.B.A. DEGREES FROM THE UNIVERSITY OF
MINNESOTA. HE SERVES AS A DIRECTOR OF NCR CORPORATION, SARA LEE CORPORATION,
EVANSTON HOSPITAL CORPORATION, THE LYRIC OPERA OF CHICAGO, AND THE HEALTHCARE
LEADERSHIP COUNCIL; AS A TRUSTEE OF NORTHWESTERN UNIVERSITY AND THE MUSEUM OF
SCIENCE AND INDUSTRY; AS A MEMBER OF THE BUSINESS ROUNDTABLE; AND AS CHAIRMAN OF
THE EMERGENCY COMMITTEE FOR AMERICAN TRADE.
H. LAURANCE FULLER AGE 58 DIRECTOR SINCE 1988
CHAIRMAN AND CHIEF EXECUTIVE OFFICER, AMOCO CORPORATION, CHICAGO, ILLINOIS
[PHOTO3] (INTEGRATED PETROLEUM AND CHEMICALS COMPANY)
MR. FULLER WAS ELECTED PRESIDENT OF AMOCO CORPORATION IN 1983 AND CHAIRMAN AND
CHIEF EXECUTIVE OFFICER IN 1991. HE IS A MEMBER OF AMOCO CORPORATION'S EXECUTIVE
COMMITTEE AND HAS BEEN A DIRECTOR OF AMOCO SINCE 1981, WHEN HE BECAME EXECUTIVE
VICE PRESIDENT. FROM 1978 UNTIL 1981, MR. FULLER WAS PRESIDENT OF AMOCO OIL
COMPANY, WHICH WAS RESPONSIBLE FOR AMOCO CORPORATION'S PETROLEUM REFINING,
MARKETING, AND TRANSPORTATION OPERATIONS. HE IS A DIRECTOR OF THE CHASE MANHATTAN
CORPORATION AND THE CHASE MANHATTAN BANK, N.A., MOTOROLA, INC., THE AMERICAN
PETROLEUM INSTITUTE, AND THE REHABILITATION INSTITUTE OF CHICAGO; AND A TRUSTEE
OF THE ORCHESTRAL ASSOCIATION AND NORTHWESTERN UNIVERSITY.
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THOMAS R. HODGSON AGE 55 DIRECTOR SINCE 1985
PRESIDENT AND CHIEF OPERATING OFFICER, ABBOTT LABORATORIES
[PHOTO4] MR. HODGSON JOINED ABBOTT IN 1972. HE WAS ELECTED EXECUTIVE VICE PRESIDENT IN 1985, AND
PRESIDENT AND CHIEF OPERATING OFFICER IN 1990. MR. HODGSON HAS A B.S. DEGREE FROM PURDUE
UNIVERSITY, AN M.S.E. DEGREE IN CHEMICAL ENGINEERING FROM THE UNIVERSITY OF MICHIGAN, AN
M.B.A. DEGREE FROM HARVARD BUSINESS SCHOOL, AND WAS AWARDED AN HONORARY DOCTORATE OF
ENGINEERING FROM PURDUE UNIVERSITY. HE SERVES AS TRUSTEE OF RUSH-PRESBYTERIAN-ST. LUKE'S
MEDICAL CENTER AND ON THE ENGINEERING VISITING COMMITTEE AT PURDUE UNIVERSITY.
DAVID A. JONES AGE 65 DIRECTOR SINCE 1982
CHAIRMAN AND CHIEF EXECUTIVE OFFICER, HUMANA INC., LOUISVILLE, KENTUCKY (HEALTH PLAN
[PHOTO5] BUSINESS)
MR. JONES IS CO-FOUNDER OF HUMANA INC. AND HAS BEEN CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SINCE ITS ORGANIZATION IN 1961. HE RECEIVED A B.S. DEGREE FROM THE UNIVERSITY OF
LOUISVILLE AND A J.D. DEGREE FROM YALE UNIVERSITY.
THE RT. HON. LORD OWEN CH AGE 58 DIRECTOR SINCE 1996
PHYSICIAN, POLITICIAN, AND BUSINESSMAN, LONDON, UNITED KINGDOM
[PHOTO6] DAVID OWEN IS A BRITISH SUBJECT. HE WAS A NEUROLOGIST AND RESEARCH FELLOW ON THE MEDICAL
UNIT OF ST. THOMAS' HOSPITAL, LONDON FROM 1965 THROUGH 1968. HE SERVED AS A MEMBER OF
PARLIAMENT FOR PLYMOUTH IN THE HOUSE OF COMMONS FROM 1966 UNTIL HE RETIRED IN MAY OF 1992.
IN 1992 HE WAS CREATED A LIFE PEER AND WAS MADE A MEMBER OF THE HOUSE OF LORDS. IN AUGUST
OF 1992, THE EUROPEAN UNION, AS PART OF ITS PEACE SEEKING EFFORTS IN THE BALKANS,
APPOINTED HIM CO-CHAIRMAN OF THE INTERNATIONAL CONFERENCE ON FORMER YUGOSLAVIA. HE STEPPED
DOWN FROM THAT POST IN JUNE OF 1995. LORD OWEN WAS SECRETARY FOR FOREIGN AND COMMONWEALTH
AFFAIRS FROM 1977 TO 1979 AND MINISTER OF HEALTH FROM 1974 TO 1976. HE IS CURRENTLY A
DIRECTOR OF COATS VIYELLA PLC AND EXECUTIVE CHAIRMAN OF MIDDLESEX HOLDINGS PLC.
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BOONE POWELL, JR. AGE 60 DIRECTOR SINCE 1985
PRESIDENT AND CHIEF EXECUTIVE OFFICER, BAYLOR HEALTH CARE SYSTEM AND BAYLOR UNIVERSITY
[PHOTO7] MEDICAL CENTER, AND VICE PRESIDENT, BAYLOR UNIVERSITY, DALLAS, TEXAS
MR. POWELL HAS BEEN ASSOCIATED WITH BAYLOR UNIVERSITY MEDICAL CENTER SINCE 1980 WHEN HE
WAS NAMED PRESIDENT AND CHIEF EXECUTIVE OFFICER. PRIOR TO JOINING BAYLOR, HE WAS PRESIDENT
OF HENDRICK MEDICAL CENTER IN ABILENE, TEXAS. MR. POWELL SERVES AS AN ACTIVE MEMBER OF
VOLUNTARY HOSPITALS OF AMERICA. HE IS A DIRECTOR OF COMERICA BANK-TEXAS, PHYSICIAN
RELIANCE NETWORK AND CABLE HEALTHCARE AND A FELLOW OF THE AMERICAN COLLEGE OF HEALTH CARE
EXECUTIVES. MR. POWELL IS A GRADUATE OF BAYLOR UNIVERSITY. HE RECEIVED A MASTER'S DEGREE
IN HOSPITAL ADMINISTRATION FROM THE UNIVERSITY OF CALIFORNIA.
ADDISON BARRY RAND AGE 52 DIRECTOR SINCE 1992
EXECUTIVE VICE PRESIDENT, XEROX CORPORATION, STAMFORD, CONNECTICUT (DOCUMENT PROCESSING,
[PHOTO8] INSURANCE AND FINANCIAL SERVICES COMPANY)
MR. RAND JOINED XEROX CORPORATION IN 1968. HE WAS ELECTED A CORPORATE OFFICER IN 1985,
NAMED PRESIDENT OF THE COMPANY'S U.S. MARKETING GROUP IN 1986, AND APPOINTED TO HIS
PRESENT POSITION IN 1992. MR. RAND EARNED A BACHELOR'S DEGREE FROM AMERICAN UNIVERSITY AND
MASTER'S DEGREES IN BUSINESS ADMINISTRATION AND MANAGEMENT SCIENCES FROM STANFORD
UNIVERSITY. HE HAS ALSO BEEN AWARDED SEVERAL HONORARY DOCTORATE DEGREES. MR. RAND SERVES
AS A DIRECTOR OF AMERITECH CORPORATION AND HONEYWELL, INC. HE IS ALSO A MEMBER OF THE
BOARD OF OVERSEERS OF THE ROCHESTER PHILHARMONIC ORCHESTRA AND A MEMBER OF THE STANFORD
UNIVERSITY GRADUATE SCHOOL OF BUSINESS ADVISORY COUNCIL. IN 1993 HE WAS ELECTED TO THE
NATIONAL SALES/MARKETING HALL OF FAME.
W. ANN REYNOLDS, PH.D. AGE 59 DIRECTOR SINCE 1980
CHANCELLOR, THE CITY UNIVERSITY OF NEW YORK, NEW YORK, NEW YORK
[PHOTO9] DR. REYNOLDS WAS APPOINTED CHANCELLOR OF THE CITY UNIVERSITY OF NEW YORK IN 1990, AFTER
SERVING AS CHANCELLOR OF THE CALIFORNIA STATE UNIVERSITY SINCE 1982. PRIOR TO THAT, DR.
REYNOLDS SERVED AS CHIEF ACADEMIC OFFICER OF OHIO STATE UNIVERSITY AND ASSOCIATE VICE
CHANCELLOR FOR RESEARCH AND DEAN OF THE GRADUATE COLLEGE OF THE UNIVERSITY OF ILLINOIS
MEDICAL CENTER. SHE ALSO HELD APPOINTMENTS AS PROFESSOR OF ANATOMY, RESEARCH PROFESSOR OF
OBSTETRICS AND GYNECOLOGY, AND ACTING ASSOCIATE DEAN FOR ACADEMIC AFFAIRS AT THE
UNIVERSITY OF ILLINOIS COLLEGE OF MEDICINE. DR. REYNOLDS IS A GRADUATE OF EMPORIA STATE
UNIVERSITY (KANSAS) AND HOLDS M.S. AND PH.D. DEGREES IN ZOOLOGY FROM THE UNIVERSITY OF
IOWA. SHE IS ALSO A DIRECTOR OF HUMANA INC., MAYTAG CORPORATION, AND OWENS-CORNING
FIBERGLAS CORP.
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WILLIAM D. SMITHBURG AGE 58 DIRECTOR SINCE 1982
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE QUAKER OATS COMPANY, CHICAGO,
[PHOTO10] ILLINOIS (WORLDWIDE FOOD MANUFACTURER AND MARKETER OF BEVERAGES AND GRAIN-BASED PRODUCTS)
MR. SMITHBURG JOINED QUAKER OATS IN 1966 AND BECAME PRESIDENT AND CHIEF EXECUTIVE OFFICER
IN 1981, AND CHAIRMAN AND CHIEF EXECUTIVE OFFICER IN 1983 AND ALSO SERVED AS PRESIDENT
FROM NOVEMBER 1990 TO JANUARY 1993 AND AGAIN FROM NOVEMBER 1995. MR. SMITHBURG WAS ELECTED
TO THE QUAKER BOARD IN 1978 AND SERVES ON ITS EXECUTIVE COMMITTEE. HE IS ALSO A DIRECTOR
OF NORTHERN TRUST CORPORATION, CORNING INCORPORATED, AND PRIME CAPITAL CORP. HE IS A
MEMBER OF THE BOARD OF TRUSTEES OF NORTHWESTERN UNIVERSITY. MR. SMITHBURG EARNED A B.S.
DEGREE FROM DEPAUL UNIVERSITY AND AN M.B.A. DEGREE FROM NORTHWESTERN UNIVERSITY.
JOHN R. WALTER AGE 50 DIRECTOR SINCE 1990
PRESIDENT AND CHIEF OPERATING OFFICER, AT&T CORPORATION, BASKING RIDGE, NEW JERSEY
[PHOTO11] (TELECOMMUNICATIONS COMPANY)
IN OCTOBER 1996, MR. WALTER WAS NAMED PRESIDENT AND CHIEF OPERATING OFFICER OF AT&T
CORPORATION. PRIOR TO THAT TIME, MR. WALTER WAS CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF R.
R. DONNELLEY & SONS COMPANY, A PRINTING COMPANY. MR. WALTER JOINED R.R. DONNELLEY & SONS
COMPANY IN 1969 AND WAS NAMED GROUP PRESIDENT IN 1985 AND EXECUTIVE VICE PRESIDENT IN
1986. HE WAS ELECTED PRESIDENT IN 1987 AND CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE
OFFICER IN 1989. MR. WALTER WAS ELECTED TO THE DONNELLEY BOARD IN 1987 AND SERVED ON ITS
BOARD UNTIL OCTOBER OF 1996. HE HOLDS A BACHELOR'S DEGREE FROM MIAMI UNIVERSITY OF OHIO.
MR. WALTER SERVES AS A DIRECTOR OF AT&T CORPORATION, DAYTON HUDSON CORPORATION, DEERE &
COMPANY, AND AS A TRUSTEE OF THE ORCHESTRAL ASSOCIATION AND NORTHWESTERN UNIVERSITY.
WILLIAM L. WEISS AGE 67 DIRECTOR SINCE 1984
CHAIRMAN EMERITUS, AMERITECH CORPORATION, CHICAGO, ILLINOIS (TELECOMMUNICATIONS COMPANY)
[PHOTO12] ON JANUARY 1, 1984, MR. WEISS BECAME CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF AMERITECH
CORPORATION AND SERVED IN THAT CAPACITY UNTIL JANUARY 1994 WHEN HE WAS NAMED CHAIRMAN OF
THE BOARD. HE HAS BEEN CHAIRMAN EMERITUS SINCE MAY 1994. PRIOR TO THAT, HE WAS CHAIRMAN
AND CHIEF EXECUTIVE OFFICER (1982-83) AND PRESIDENT AND CHIEF EXECUTIVE OFFICER (1981-82)
OF ILLINOIS BELL TELEPHONE COMPANY. PREVIOUSLY, HE WAS PRESIDENT OF INDIANA BELL TELEPHONE
COMPANY (1978-81) AND SERVED IN VARIOUS OTHER CAPACITIES WITH THE BELL SYSTEM. MR. WEISS
IS A DIRECTOR OF THE QUAKER OATS COMPANY, MERRILL LYNCH & CO., INC., AND TENNECO
CORPORATION. HE IS ALSO A TRUSTEE OF NORTHWESTERN UNIVERSITY, THE PENNSYLVANIA STATE
UNIVERSITY, THE ORCHESTRAL ASSOCIATION, THE LYRIC OPERA OF CHICAGO, AND THE MUSEUM OF
SCIENCE AND INDUSTRY.
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EXECUTIVE COMPENSATION
Report of the Compensation Committee
The compensation committee of the board of directors is composed entirely of
directors who have never been employees of the corporation. The committee is
responsible for setting and administering the policies and programs that govern
both annual compensation and stock ownership programs.
The foundation of the executive compensation program is based on principles
designed to align compensation with the corporation's business strategy, values
and management initiatives. The program:
- Integrates compensation programs which link total shareholder return with
both the corporation's annual and long-term strategic planning and
measurement processes.
- Supports a performance-oriented environment that rewards actual
performance that is related to both goals and performance of the
corporation as compared to that of industry performance levels.
- Helps attract and retain key executives critical to the long-term success
of the corporation.
The key components of the compensation program are base salary, annual incentive
award, and equity participation. These components are administered with the goal
of providing total compensation that is competitive in the marketplace,
recognizes meaningful differences in individual performance and offers the
opportunity to earn above average rewards when merited by individual and
corporate performance.
The marketplace is defined by comparing the corporation to a group of major
corporations with similar characteristics, including industry and technology
emphasis. These companies are included in the Standard and Poor's Healthcare
Composite Index. A select group of non-healthcare companies chosen for size and
performance comparability to the corporation is used as a secondary source of
comparison.
Using compensation survey data from the comparison groups, a target for total
compensation and each of its elements -- base, incentive, and equity-based
compensation -- is established. The intent is to deliver total compensation that
will be in the upper range of pay practices of peer companies when merited by
the corporation's performance. To achieve this objective, a substantial portion
of executive pay is delivered through performance-related variable compensation
programs which are based upon achievement of the corporation's goals. Each year
the committee reviews the elements of executive compensation to ensure that the
total compensation program, and each of its elements, meets the overall
objectives discussed above.
In 1996, total compensation was paid to executives based on individual
performance and on the extent to which the business plans for their areas of
responsibility were achieved or exceeded. On balance, performance goals were
substantially met or exceeded and therefore compensation was paid accordingly.
Base compensation was determined by an assessment of each executive's
performance, current salary in relation to the salary range designated for the
job, experience, and potential for advancement as well as by the performance of
the corporation. While many aspects of performance can be measured in financial
terms, the committee also evaluated the success of the management team in areas
of performance that cannot be measured by traditional accounting tools,
including the development and execution of strategic plans, the development of
management and employees, and the exercise of leadership within the industry and
in the communities that Abbott serves. All of these factors were collectively
taken into account by management and the compensation committee in determining
the appropriate level of base compensation and annual increases.
The Abbott Management Incentive Plan is designed to reward executives when the
corporation achieves certain financial objectives and when each executive's area
of responsibility meets its predetermined goals. These goals include financial
elements such as profitability, total sales, and earnings per share and
non-financial elements such as the achievement of selected strategic goals and
the successful development of human resources. Each year, individual incentive
targets are established for incentive plan participants based on competitive
survey data from the group of companies discussed above. As noted above, targets
are set to deliver total compensation between the mid and upper range of
competitive practice as warranted by corporate performance. For 1996, 40% of the
target award was earned for achievement of the corporation's earning per share
goal. The remainder of the targeted incentive was earned based on the
committee's overall assessment of each participant's achievement of the
predetermined goals discussed above.
The corporation has provided forms of equity participation as a key part of its
total program for motivating and rewarding executives and managers for many
years. Grants of stock options and restricted stock
- --------------------------------------------------------------------------------
8
have provided an important part of the equity link to shareholders. Through
these vehicles, the corporation has encouraged its executives to obtain and hold
the corporation's stock. Targeted award ranges for stock options and restricted
stock opportunities are determined taking into account competitive practice
among the comparison companies noted above. Equity participation targets are set
based on established salary ranges and level of performance. As noted above, the
target ranges are established such that equity participation opportunities will
be in the mid-to-upper range of pay practices of peer companies when merited by
corporation and individual performance.
Actual individual awards are determined based on the established competitive
target range and the committee's overall assessment of individual performance.
The committee considers the amounts of options and restricted stock previously
granted and the aggregate size of current awards in deciding to award additional
options and restricted stock.
In 1996, the committee granted Mr. Burnham, the corporation's Chairman and Chief
Executive Officer, a base salary increase of 3.5% which was consistent with the
corporation's established merit increase program. As reflected in the
corporation's financial statements, Abbott's performance in 1996 included 10.0%
growth in sales and 13.7% growth in earnings per share. In light of this
performance and their overall assessment of his performance, the committee
determined to grant Mr. Burnham a bonus, stock option grant and restricted
stock.
It is the committee's policy to establish and maintain compensation programs for
executive officers which operate in the best interests of the corporation and
its stockholders in achieving the corporation's long-term business objectives.
To that end, the committee will continue to assess the impact of the Omnibus
Budget Reconciliation Act of 1993 on its executive compensation strategy and
take action to assure that appropriate levels of deductibility are maintained.
COMPENSATION COMMITTEE
W. D. Smithburg, chairman, H. L. Fuller, A. F. Jacobson, A. B. Rand, and W. L.
Weiss.
- --------------------------------------------------------------------------------
9
- --------------------------------------------------------------------------------
Summary Compensation Table
The following table summarizes compensation earned in 1996, 1995, and 1994 by
the Chief Executive Officer and the four other most highly paid executive
officers (the "named officers") in 1996.
Annual Compensation Long-term Compensation
--------------------------------- ----------------------
Other Restricted Securities
Annual Stock Underlying All Other
Name and Salary Compen- Award(s) Options/ Compen-
Principal Position Year ($) Bonus ($) sation ($) ($)(1) SARs (#) sation ($)(3)
- ---------------------------------------------------------------------------------------------------------------
Duane L. Burnham 1996 $846,923 $1,055,000 $ 518,747 $1,310,625(2) 210,000 $ 30,013
Chairman of the Board, 1995 818,269 1,000,000 413,422 0 195,000 26,987
Chief Executive Officer and
Director 1994 794,269 800,000 207,556 0 195,000 25,471
- ---------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 1996 606,554 755,000 148,555 733,950(2) 132,000 22,179
President, 1995 585,919 725,000 109,061 0 130,000 19,941
Chief Operating Officer and
Director 1994 569,438 650,000 58,311 0 130,002 18,847
- ---------------------------------------------------------------------------------------------------------------
Paul N. Clark 1996 378,654 440,000 1,156 0 50,000 15,119
Senior Vice President, 1995 361,692 415,000 875 0 40,000 13,032
Pharmaceutical Operations 1994 342,692 390,000 1,100 0 0 10,920
- ---------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 1996 430,384 430,000 137,999 0 50,000 14,863
Senior Vice President, 1995 416,923 400,000 104,237 0 40,000 13,399
Finance and Chief Financial
Officer 1994 406,923 380,000 40,684 0 0 12,715
- ---------------------------------------------------------------------------------------------------------------
John G. Kringel 1996 375,865 405,000 98,453 0 50,000 13,404
Senior Vice President, 1995 363,365 365,000 85,810 0 40,000 12,062
Hospital Products 1994 352,692 350,000 25,276 0 0 11,383
- ---------------------------------------------------------------------------------------------------------------
TABLE FOOTNOTES
(1) The number and value of restricted shares held, respectively, as of
December 31, 1996 were as follows: D. L. Burnham - 54,000/$2,740,500; T. R.
Hodgson - 32,800/$1,664,600; P. N. Clark - 9,600/$487,200; G. P. Coughlan -
9,600/$487,200; and J. G. Kringel - 9,600/$487,200. The officers receive
all dividends paid on these shares.
(2) The number of shares covered by these awards are 30,000 for D. L. Burnham
and 16,800 for T. R. Hodgson. These awards vest in three equal installments
on January 2, 1997, January 2, 1998, and January 4, 1999.
(3) Employer contributions made to the Stock Retirement Plan and made or
accrued with respect to the 401(k) Supplemental Plan.
- --------------------------------------------------------------------------------
10
- --------------------------------------------------------------------------------
Stock Options
The following tables summarize the named officers' stock option activity during
1996.
Option/SAR Grants in Last Fiscal Year
Individual Grants
- -------------------------------------------------------------------------------------------------- Potential Realizable Value at
% of Total Assumed Annual Rates of Stock
Options/ SARs Price Appreciation for Option
Number of Securities Granted to Term (2):
Underlying Options/ Employees in Exercise or Base Expiration --------------------------------
Name SARs Granted (#)(1) Fiscal Year Price ($/Sh.) Date 5% ($) 10% ($)
- ------------------------------------------------------------------------------------------------------------------------------------
Duane L. Burnham 210,000 3.4% $43.70 2/9/06 $5,771,369 $14,625,770
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 132,000 2.2 43.70 2/9/06 3,627,718 9,193,341
- ------------------------------------------------------------------------------------------------------------------------------------
Paul N. Clark 50,000 0.8 43.70 2/9/06 1,374,136 3,482,326
- ------------------------------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 50,000 0.8 43.70 2/9/06 1,374,136 3,482,326
- ------------------------------------------------------------------------------------------------------------------------------------
John G. Kringel 50,000 0.8 43.70 2/9/06 1,374,136 3,482,326
- ------------------------------------------------------------------------------------------------------------------------------------
Gain for all
Shareholders at
Assumed Rates for
Appreciation (3): $24,717,647,734 $62,639,317,111
- ---------------------------------------------------------------------------------------------------------------------------------
TABLE FOOTNOTES
(1) One-third of the shares covered by these options are exercisable after one
year; two-thirds after two years; and all after three years. Limited stock
appreciation rights have been granted in tandem with these options. These
rights are only exercisable for sixty days following a change in control of
the corporation. Upon exercise, the optionee must surrender the related
option and will receive a payment, in cash, in an amount equal to the
difference between the option's price and the fair market value of the
shares subject to the option.
(2) The dollar amounts under these columns are the result of calculations at the
5% and 10% rates required by the SEC and, therefore, are not intended to
forecast possible future appreciation, if any, of the stock price.
(3) Amounts were determined using total shares outstanding at December 31, 1996
of 774,449,226 and December 31, 1996 closing market price of $50.75 per
share.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end Option/SAR Values
Number of Securities
Underlying Value of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
FY-end (#) FY-end ($)
Shares Acquired Value Exercisable/ Exercisable/
Name on Exercise (#) Realized ($) Unexercisable Unexercisable
- ---------------------------------------------------------------------------------------------------------------
Duane L. Burnham 0 $ 0 676,670 / 405,000 $16,084,800 / $4,730,700
- ---------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 0 0 390,012 / 262,000 8,776,340 / 3,091,407
- ---------------------------------------------------------------------------------------------------------------
Paul N. Clark 0 0 232,078 / 76,666 6,563,141 / 719,592
- ---------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 0 0 174,660 / 76,666 4,189,778 / 719,592
- ---------------------------------------------------------------------------------------------------------------
John G. Kringel 0 0 129,068 / 76,666 2,703,992 / 719,592
- ---------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
Annuity Retirement Plan
The corporation and certain subsidiaries maintain a defined benefit pension plan
known as the Abbott Laboratories Annuity Retirement Plan covering most employees
in the United States, age 21 or older. Pension benefits are generally based on
service and eligible earnings for the 60 consecutive months within the final 120
months of employment for which eligible earnings were highest. Pension benefits
are partially offset for Social Security benefits.
The following table shows the estimated annual benefits payable to employees
upon normal retirement. The amounts shown are computed on a straight life
annuity basis without giving effect to Social Security offsets and include
supplemental benefits under a nonqualified supplemental pension plan.
- --------------------------------------------------------------------------------
11
- --------------------------------------------------------------------------------
Pension Plan Table
Years of Service
- ------------- -----------------------------------------------------
Remuneration 15 20 25 30 35
- ------------- -----------------------------------------------------
$ 900,000 $ 303,750 $ 405,000 $ 472,500 $ 499,500 $ 499,500
1,100,000 371,250 495,000 577,500 610,500 610,500
1,300,000 438,750 585,000 682,500 721,500 721,500
1,500,000 506,250 675,000 787,500 832,500 832,500
1,700,000 573,750 765,000 892,500 943,500 943,500
1,900,000 641,250 855,000 997,500 1,054,500 1,054,500
2,100,000 708,750 945,000 1,102,500 1,165,500 1,165,500
2,300,000 776,250 1,035,000 1,207,500 1,276,500 1,276,500
2,500,000 843,750 1,125,000 1,312,500 1,387,500 1,387,500
2,700,000 911,250 1,215,000 1,417,500 1,498,500 1,498,500
- ------------- -----------------------------------------------------
The table above covers the aggregate pension accrued under both the Annuity
Retirement Plan and the supplemental pension plan. The compensation considered
in determining the pensions payable to the named officers is the compensation
shown in the "Salary" and "Bonus" columns of the Summary Compensation Table on
page 10 and, for D. L. Burnham and T. R. Hodgson, the restricted stock awards
vesting during the year ($262,500 and $157,500, respectively, for 1996).
Pensions accrued under the Annuity Retirement Plan are funded through the Abbott
Laboratories Annuity Retirement Trust, established on behalf of all participants
in that plan. Pensions accrued under the nonqualified supplemental pension plan
with present values exceeding $100,000 are funded through individual trusts
established on behalf of the officers who participate in that plan. During 1996,
the following amounts, less applicable tax withholdings, were deposited in such
individual trusts established on behalf of the named officers: D. L. Burnham,
$2,469,190; T. R. Hodgson, $2,813,898; P. N. Clark, $425,200; G. P. Coughlan,
$358,613; and J. G. Kringel, $860,538. As of December 31, 1996, the years of
service credited under the Plan for the named officers were as follows: D. L.
Burnham - 14; T. R. Hodgson - 24; P. N. Clark - 12; G. P. Coughlan - 6; and J.
G. Kringel - 16.
- --------------------------------------------------------------------------------
Compensation of Directors
Employees of the corporation are not compensated for serving on the board or on
board committees. Non-employee directors are compensated under the Abbott
Laboratories Non-Employee Directors' Fee Plan in the amounts of $4,167 for each
month of service as director and $667 for each month of service as chairman of a
board committee ($1,600 for each month of service as chairman of the executive
committee).
Fees earned under this Plan are paid in cash to the director, paid in the form
of non-qualified stock options, or deferred (as a non-funded obligation of the
corporation or paid into a secular trust established by the director) until
payments commence (generally at age 65 or upon retirement from the board of
directors). If the fees are deferred, the director may elect to have the fees
credited to a stock equivalent account under which the fees accrue the same
return they would have earned if invested in common shares of the corporation.
Interest is accrued annually on deferred fees not credited to a stock equivalent
account.
If a non-employee director elects to receive any or all of his or her directors'
fees in the form of non-qualified stock options, the fees covered by that
election are converted into stock options based on an independent appraisal of
the value of the options. The options are granted on the date the corresponding
fees would otherwise be paid and at a purchase price equal to the fair market
value of the shares covered by the option on the grant date. Each such option is
fully exercisable after six months from the grant date and may be exercised
during the ten year period following its grant date.
Under the Plan, the corporation may grant a director who retires from the board
a retirement benefit, and such benefit will be payable to the surviving spouse
of any director who dies while serving as a director. The retirement benefit
consists of payment of an amount equal to the monthly director's fee in effect
on the date the director retires (or, for a director who dies, the fee in effect
on the date of death) for a period equal to his or her service on the board to a
maximum of 120 months. In return for the retirement benefit, the director agrees
to provide consulting services to the board.
Under the Abbott Laboratories 1996 Incentive Stock Program, each non-employee
director who is elected to the board of directors at the annual shareholder
meeting receives a restricted stock award with a fair market value on the date
of the award closest to, but not exceeding, twenty-two thousand dollars. In
1996, this was 537 shares. The shares are nontransferable prior to termination,
retirement from the board, death, or a change in control of the corporation. The
non-employee directors are entitled to vote the shares and receive all dividends
paid on the shares.
In 1996, K. F. Austen, a non-employee director, performed services for the
corporation pursuant to a consulting agreement in the areas of research and
development, new technology and immunopharmacology. The consulting agreement,
which expires on March 31, 1998, provides that the fees he earns under the
agreement may receive the same treatment as fees earned under the Abbott
Laboratories Non-Employee Directors' Fee Plan. In 1996, Dr. Austen received
$50,000 for his consulting services.
- --------------------------------------------------------------------------------
12
- --------------------------------------------------------------------------------
Performance Graph
The following graph compares the change in the corporation's cumulative total
shareholder return on its common shares with the Standard and Poor's 500 Stock
Index and the Standard and Poor's Healthcare Composite Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
ABBOTT LABORATORIES
1991 $100
1992 89.86
1993 89.80
1994 101.42
1995 132.17
1996 164.56
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
ASSUMING $100 INVESTED ON 12/31/91 WITH DIVIDENDS REINVESTED
S&P HEALTH CARE COMPOSITE S&P 500
1991 $100 $100
1992 83.71 107.62
1993 76.67 118.46
1994 86.73 120.03
1995 136.90 165.13
1996 165.31 203.05
COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
ASSUMING $100 INVESTED ON 12/31/91 WITH DIVIDENDS REINVESTED
- --------------------------------------------------------------------------------
Security Ownership of Executive Officers and Directors
The table below reflects the numbers of common shares beneficially owned by the
directors, named officers, and all directors and executive officers of the
corporation as a group as of January 31, 1997. It also reflects the number of
equivalent stock units held by non-employee directors under the Abbott
Laboratories Non-Employee Directors' Fee Plan described on page 12 and by K. F.
Austen under the consulting agreement described on page 12.
- ---------------------------------------------------------------------
SHARES BENEFICIALLY
OWNED, EXCLUDING EQUIVALENT
NAME OPTIONS (1)(2) STOCK UNITS
- ---------------------------------------------------------------------
K. Frank Austen, M.D. 10,874 7,077
- ---------------------------------------------------------------------
Duane L. Burnham 404,337 0
- ---------------------------------------------------------------------
Paul N. Clark 94,759 0
- ---------------------------------------------------------------------
Gary P. Coughlan 70,688 0
- ---------------------------------------------------------------------
H. Laurance Fuller 14,942 16,055
- ---------------------------------------------------------------------
Thomas R. Hodgson 425,565 0
- ---------------------------------------------------------------------
Allen F. Jacobson 4,536 4,871
- ---------------------------------------------------------------------
David A. Jones 147,938 42,142
- ---------------------------------------------------------------
- ---------------------------------------------------------------------
SHARES BENEFICIALLY
OWNED, EXCLUDING EQUIVALENT
NAME OPTIONS (1)(2) STOCK UNITS
- ---------------------------------------------------------------------
John G. Kringel 123,700 0
- ---------------------------------------------------------------------
The Lord Owen CH 1,523 0
- ---------------------------------------------------------------------
Boone Powell, Jr. 11,624 25,616
- ---------------------------------------------------------------------
Addison Barry Rand 5,030 0
- ---------------------------------------------------------------------
W. Ann Reynolds, Ph.D. 12,055 26,068
- ---------------------------------------------------------------------
William D. Smithburg 20,291 39,870
- ---------------------------------------------------------------------
John R. Walter 7,874 11,838
- ---------------------------------------------------------------------
William L. Weiss 22,874 4,638
- ---------------------------------------------------------------------
All directors and executive
officers as a group (3)(4) 2,139,690 178,175
- ---------------------------------------------------------------
TABLE FOOTNOTES
(1) The table excludes unexercised option shares which are exercisable within 60
days after January 31, 1997 as follows: D. L. Burnham, 746,670; P. N. Clark,
248,745; G. P. Coughlan, 191,327; H. L. Fuller, 758; A. F. Jacobson, 758; T.
R. Hodgson, 434,012; J. G. Kringel, 145,735; W. A. Reynolds, 879; W. D.
Smithburg, 879; J. R. Walter, 879; W. L. Weiss, 879 and all directors and
executive officers as a group 2,933,811.
(2) The table includes the shares held in the named officers' accounts in the
Abbott Laboratories Stock Retirement Trust as follows: D. L. Burnham, 5,575;
P. N. Clark, 3,862; G. P. Coughlan, 4,184; T. R. Hodgson, 27,175; J. G.
Kringel, 11,784 and all executive officers as a group, 197,823. Each officer
has shared voting power and sole investment power with respect to the shares
held in his account.
(3) G. P. Coughlan is a fiduciary of several employee benefit trusts maintained
by the corporation. As such, he has shared voting and/ or investment power
with respect to the common shares held by those trusts. The table does not
include the shares held by the trusts. As of January 31, 1997, these trusts
owned a total of 60,632,876 (7.8%) of the outstanding shares of the
corporation.
(4) Excluding G. P. Coughlan's shared voting and/or investment power over the
shares held by the trusts described in footnote 3, the directors and
executive officers as a group together own beneficially less than one
percent of the outstanding shares of the corporation.
- --------------------------------------------------------------------------------
13
- ---------------------------------------------------------------
SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
As required under the Securities Exchange Act of 1934, the corporation notes
that a report for W. L. Weiss, a director of the corporation, covering a
purchase of common shares of the corporation by a family trust was filed late.
- --------------------------------------------------
SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS
(ITEM NO. 2 ON PROXY CARD)
The bylaws of the corporation provide that, upon the recommendation of the audit
committee, the board of directors shall appoint annually a firm of independent
public accountants to serve as auditors, and that such appointment shall be
submitted for ratification by the shareholders at the Annual Meeting. The board
has appointed Arthur Andersen LLP to act as auditors for the current year. This
firm has served as auditors of the corporation since 1963. The board of
directors recommends a vote FOR ratification of the selection of Arthur Andersen
LLP as independent public accountants for 1997.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting and will be given the opportunity to make a statement if they desire to
do so. They will also be available to respond to appropriate questions.
- --------------------------------------------------
DATE FOR RECEIPT OF 1998 SHAREHOLDER
PROPOSALS
Shareholder proposals for presentation at the 1998 Annual Meeting must be
received by the corporation no later than November 12, 1997 and must otherwise
comply with the applicable requirements of the Securities and Exchange
Commission to be considered for inclusion in the proxy statement and proxy for
the 1998 meeting.
- --------------------------------------------------
PROCEDURE FOR RECOMMENDATION AND
NOMINATION OF DIRECTORS AND TRANSACTION OF
BUSINESS AT ANNUAL MEETINGS
A shareholder may recommend persons as potential nominees for director by
submitting the names of such persons in writing to the chairman of the
nominations and board affairs committee or the secretary of the corporation.
Recommendations should be accompanied by a statement of qualifications and
confirmation of the person's willingness to serve.
A shareholder may directly nominate persons for director only by complying with
the following procedure: the shareholder must submit the names of such persons
in writing to the secretary of the corporation not earlier than the October 1
nor later than the February 15 prior to the date of the Annual Meeting. The
nominations must be accompanied by a statement setting forth the name, age,
business address, residence address, principal occupation, qualifications, and
number of shares of the corporation owned by the nominee and the name, record
address, and number of shares of the corporation owned by the shareholder making
the nomination.
A shareholder may properly bring business before the Annual Meeting of
Shareholders only by complying with the following procedure: the shareholder
must submit to the secretary of the corporation, not earlier than the October 1
nor later than the February 15 prior to the date of the Annual Meeting, a
written statement describing the business to be discussed, the reasons for
conducting such business at the Annual Meeting, the name, record address, and
number of shares of the corporation owned by the shareholder making the
submission, and a description of any material interest of the shareholder in
such business.
- --------------------------------------------------------------------------------
GENERAL
It is important that proxies be returned promptly. Shareholders are urged,
regardless of the number of shares owned, to sign and return their proxy card in
the enclosed business reply envelope.
The Annual Meeting will be held at the corporation's headquarters, 100 Abbott
Park Road, located at the intersection of Route 137 and Waukegan Road, Lake
County, Illinois. Admission to the meeting will be by admission card only. A
shareholder planning to attend the meeting should promptly complete and return
the reservation form to assure timely receipt of an admission card.
By order of the board of directors.
JOSE M. DE LASA
SECRETARY
- --------------------------------------------------------------------------------
14
[LOGO]
ABBOTT LABORATORIES
100 ABBOTT PARK ROAD
ABBOTT PARK, ILLINOIS 60064-3500 U.S.A.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
MEETING DATE
APRIL 25, 1997
YOUR VOTE IS IMPORTANT!
Please sign and promptly return your
proxy in the enclosed envelope.
RESERVATION FORM FOR ANNUAL MEETING
I am a shareholder of Abbott Laboratories and
plan to attend the Annual Meeting to be held
at the corporation's headquarters, 100 Abbott
Park Road, located at the intersection of
Route 137 and Waukegan Road, Lake County,
Illinois at 9:00 a.m. on Friday, April 25,
1997.
Please send me an admission card.
Name _________________________________________________________________________
Please Print
Address ______________________________________________________________________
City __________________________ State ____ Zip Code __________________________
Area code and phone number ___________________________________________________
Please complete and return this form in the business reply envelope provided,
if you plan to attend the meeting. If you hold your Abbott shares through a
broker, it is suggested that you return this form directly to the corporation
(rather than through your broker) to ensure timely receipt of an admission
card.
PROXY
ABBOTT LABORATORIES
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies, acknowledges receipt of the
Notice and Proxy Statement dated March 11, 1997 in connection with the Annual
Meeting of Shareholders of Abbott Laboratories to be held at 9:00 a.m. on April
25, 1997 at the corporation's headquarters, and hereby appoints DUANE L. BURNHAM
and JOSE M. DE LASA, or either of them, proxy for the undersigned, with power of
substitution, to represent and vote all shares of the undersigned upon all
matters properly coming before the Annual Meeting or any adjournments thereof.
INSTRUCTIONS: THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2.
(IMPORTANT - PLEASE SIGN AND DATE ON OTHER SIDE.)
PLEASE COMPLETE AND RETURN THE CARD BELOW.
/x/ Please mark votes as in this example.
The Board of Directors recommends that you vote FOR Items 1 and 2.
1. Election of 12 Directors.
NOMINEES: K.F. Austen, D.L. Burnham, H.L. Fuller, T.R. Hodgson, D.A. Jones,
D.A.L. Owen, B. Powell, Jr., A.B. Rand, W.A. Reynolds, W.D. Smithburg, J.R.
Walter, and W.L. Weiss.
FOR WITHHELD
/ / / /
FOR except vote withheld from the following nominees:
- -----------------------------------------------------
2. Ratification of Arthur Andersen LLP as auditors.
FOR AGAINST ABSTAIN
/ / / / / /
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Each joint tenant should sign; executors, administrators, trustees, etc. should
give full title and, where more than one is named, a majority should sign.
PLEASE READ OTHER SIDE BEFORE SIGNING.
Signature Date:
----------------------------------------- ------------------------
Signature Date:
----------------------------------------- ------------------------
