Exhibit 10.11
ABBOTT LABORATORIES
1996 INCENTIVE STOCK
PROGRAM
(as amended and restated through
the
6th Amendment February 20,
2009)
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 (the “Code”), 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 grant Benefits under the Program other than to persons
subject to Section 16(b) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”) with respect
to transactions involving equity securities of the Company at the
time that delegated authority is exercised. All such grants by the
Chief Executive Officer shall be reported annually to the
Committee, however, the Committee is not required to take any
action with respect to such grants.
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 and
Restricted Stock Units 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 of 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) Restricted Stock Units; (g) Performance Awards; and
(h) 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
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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:
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(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:
4
(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 AND
RESTRICTED STOCK UNITS
(a)
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).
(b)
RESTRICTED STOCK UNITS.
Restricted Stock Units will consist of an unfunded promise to
deliver shares of stock at some future date to participants without
other payment therefor as additional compensation for their
services to the Company or any of its subsidiaries. Stock
delivered under this paragraph 10(b) shall be satisfied from
the Company’s available treasury shares. Restricted
Stock Units granted under this paragraph 10(b) 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 stock units, the rights of the
Company to provide for the forfeiture of such stock units upon
termination of the participant’s employment within specified
periods and the right to receive dividend equivalent
payments.
(c)
No more than ten percent (10%) of
the total number of shares available for grant in any calendar year
may be granted as Restricted Stock Units or Restricted Stock Awards
(in the aggregate) under paragraphs 10 and 13 in that
year.
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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 Code
Section 162(m), 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 UNIT 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) Restricted Stock Units 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) Restricted Stock Units covering a number of
com
