Exhibit 10.6
Amended and Restated effective
April 27, 2007
ABBOTT LABORATORIES NON-EMPLOYEE
DIRECTORS’ FEE PLAN
SECTION 1.
PURPOSE
ABBOTT LABORATORIES NON-EMPLOYEE
DIRECTORS’ FEE PLAN - referred to below as the
“Plan” - has been established by ABBOTT LABORATORIES -
referred to below as the “Company” - to attract and
retain as members of its Board of Directors persons who are not
full-time employees of the Company or any of its subsidiaries but
whose business experience and judgment are a valuable asset to the
Company and its subsidiaries.
SECTION 2.
DIRECTORS COVERED
As used in the Plan, the term
“Director” means any person who is elected to the Board
of Directors of the Company in April, 1962 or at any time
thereafter, and is not a full-time employee of the Company or any
of its subsidiaries.
SECTION 3.
FEES PAYABLE TO
DIRECTORS
3.1.
Each Director shall be entitled to a
deferred monthly fee of Eight Thousand Dollars ($8,000.00) for each
calendar month or portion thereof (excluding the month in which he
is first elected a Director) that he holds such office with the
Company.
3.2.
A Director who serves as Chairman of
the Executive Committee of the Board of Directors shall be entitled
to a deferred monthly fee of One Thousand Six Hundred Dollars
($1,600.00) for each calendar month or portion thereof (excluding
the month in which he is first elected to such position) that he
holds such position.
3.3.
Audit Committee Fees
(a)
A Director who serves as Chairman of
the Audit Committee of the Board of Directors shall be entitled to
a deferred monthly fee of One Thousand Five Hundred Dollars
($1,500.00) for each calendar month or portion thereof (excluding
the month in which he is first elected to such position) that he
holds such position.
(b)
Each Director who serves on the
Audit Committee of the Board of Directors (other than the Chairman
of the Audit Committee) shall be entitled to a deferred monthly fee
of Five Hundred Dollars ($500.00) for
each calendar month or portion
thereof (excluding the month in which he is first elected to such
position) that he holds such position.
3.4.
A Director who serves as Chairman of
the Compensation Committee of the Board of Directors shall be
entitled to a deferred monthly fee of One Thousand Dollars
($1,000.00) for each calendar month or portion thereof (excluding
the month in which he is first elected to such position) that he
holds such position.
3.5.
A Director who serves as Chairman of
the Nominations Committee of the Board of Directors shall be
entitled to a deferred monthly fee of One Thousand Dollars
($1,000.00) for each calendar month or portion thereof (excluding
the month in which he is first elected to such position) that he
holds such position.
3.6.
A Director who serves as Chairman of
any other Committee created by this Board of Directors shall be
entitled to a deferred monthly fee of One Thousand Dollars
($1,000.00) for each calendar month or portion thereof (excluding
the month in which he is first elected to such position) that he
holds such position.
3.7.
A Director’s Deferred Fee
Account shall be credited with interest annually. During the
calendar years 1968 and prior, the rate of interest credited to
deferred fees shall be four (4) percent per annum. During the
calendar years 1969 through 1992, the rate of interest credited to
deferred fees shall be the average of the prime rates being charged
by the two largest commercial banks in the City of Chicago as of
the end of the month coincident with or last preceding the date
upon which said interest is so credited. During the calendar years
1993 and subsequent, the rate of interest credited to deferred fees
shall be equal to: (a) the average of the prime rates being
charged by the two largest commercial banks in the City of Chicago
as of the end of the month coincident with or last preceding the
date upon which said interest is so credited; plus (b) two
hundred twenty-five (225) basis points. For purposes of the
provisions of the Plan, the term “deferred fees” shall
include “deferred monthly fees,” and “deferred
meeting fees,” and shall also include any such interest
credited thereon.
SECTION 4.
PAYMENT OF DIRECTORS’
FEES
4.1.
A Director’s deferred fees
earned pursuant to the Plan shall commence to be paid on the first
day of the calendar month next following the earlier of his death
or his attainment of age sixty-five (65) if he is not then serving
as a Director, or the termination of his service as a Director if
he serves as a Director after the attainment of age sixty-five
(65); provided that any Director may, by written notice filed with
the Secretary of the Company, elect to receive current payment of
all or any portion of the monthly and meeting fees earned by him in
calendar years subsequent to the calendar year in which he files
such notice (or all or any portion of such fees earned by him in
the calendar year he first becomes a Director, if such notice is
filed within 30 days of becoming a Director), in which case such
fees or the portion thereof so designated earned in such calendar
years shall not be deferred but shall be paid quarterly as earned
and no interest shall be credited thereon. Such election may be
revoked or modified by any Director by written notice to the
Secretary of the Company as to fees to be earned by him in calendar
years subsequent to the calendar year in which he files such
notice.
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4.2.
After a Director’s deferred
fees shall have commenced to be payable pursuant to Paragraph 4.1
they shall be payable in annual installments in the order in which
they shall have been deferred (i.e. the deferred fees for the
earliest year of service as a Director will be paid on the date
provided for in Section 4.1, the deferred fees for the next
earliest year of service as a Director will be paid on the
anniversary of the payment of the first installment,
etc.).
4.3.
A Director’s deferred fees
shall continue to be paid until all deferred fees which he is
entitled to receive under the Plan shall have been paid to him (or,
in case of his death, to his beneficiary).
4.4.
Notwithstanding any other provisions
of the Plan, if a Director’s service as a Director should
terminate for any reason within five (5) years after the date
of a Change in Control, the aggregate unpaid balance of such
Director’s deferred fees plus all unpaid interest credited
thereon, shall be paid to such Director in a lump sum within thirty
(30) days following the date of such termination.
4.5.
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
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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 Plan:
“Affiliate” shall have the meaning set forth in
Rule 12b-2 promulgated under Section 12 of the Exchange
Act; “Beneficial Owner” shall have the meaning set
forth in Rule 13d-3 under the Exchange Act; “Exchange
Act” shall mean the Securities Exchange Act of 1934, as
amended from time to time; and “Person” shall have the
meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof,
except that such term shall not include (i) the Company or any
of its subsidiaries, (ii) a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or any of
its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities, or
(iv) a corporation owned, directly or indirectly, by the
shareholders of the Company in substantially the same proportions
as their ownership of stock of the Company.
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4.6.
A “Potential Change in
Control” shall exist during any period in which the
circumstances described in paragraphs (i), (ii), (iii) or
(iv), below, exist (provided, however, that a Potential Change in
Control shall cease to exist not later than the occurrence of a
Change in Control):
(i)
The Company enters into an
agreement, the consummation of which would result in the occurrence
of a Change in Control, provided that a Potential Change in Control
described in this paragraph (a) shall cease to exist upon the
expiration or other termination of all such agreements.
(ii)
Any Person (without regard to the
exclusions set forth in subsections (i) through (iv) of
such definition) publicly announces an intention to take or to
consider taking actions the consummation of which would constitute
a Change in Control; provided that a Potential Change in Control
described in this paragraph (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.
(iii)
Any Person becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 10% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the
Company’s then outstanding securities (not including in the
securities beneficially owned by such Person any securities
acquired directly from the Company or its Affiliates).
(iv)
The Board of Directors adopts a
resolution to the effect that, for purposes of this Agreement, a
Potential Change in Control exists; provided that a Potential
Change in Control described in this paragraph (iv) shall cease
to exist upon a determination by the Board of Directors that the
reasons that gave rise to the resolution providing for the
existence of a Potential Change in Control have expired or no
longer exist.
4.7.
The provisions of Paragraphs 4.4,
4.5, 4.6 and this Paragraph 4.7 may not be amended or deleted, nor
superseded by any other provision of this Plan, (i) during the
pendency of a Potential Change in Control and (ii) during the
period beginning on the date of a Change in Control and ending on
the date five (5) years following such Change in
Control.
SECTION 5.
DIRECTORS’ RETIREMENT
BENEFIT
5.1.
Effective April 30, 1998, each
of the persons serving as a Director on December 12, 1997
shall be credited with a retirement benefit of $4,167 a month for
120 months of continuous service and no additional retirement
benefits shall accrue under the Plan. Each of the persons serving
as a Director on December 12, 1997 may elect: (a) to have
his or her retirement benefit under the Plan treated as provided in
Section 5.2 of the Plan; or (b) to have the present value
of that retirement benefit credited to an unfunded phantom stock
account and converted into phantom stock units based on the closing
price of the Company’s common stock on April 30, 1998,
with those phantom stock units then being credited with the same
cash and stock
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dividends, stock splits and other
distributions and adjustments as are paid on the Company’s
common stock. The phantom stock units shall be payable to the
Director in annual payments commencing on the first day of the
calendar month next following the earlier of the Director’s
death or termination of service as a Director, in an amount
determined by the closing price of the Company’s common stock
on the first business day preceding the payment date. Unless the
retirement benefit is terminated, the annual benefit shall continue
to be paid on the anniversary of the day on which the first such
retirement benefit payment was made, until the benefit has been
paid for ten years, or until the death of the Director or surviving
spouse, if earlier. If a Director should die with such benefit
still in effect, prior to receipt of all payments due hereunder,
the annual benefit shall continue to be paid to the surviving
spouse of such Director until all payments due hereunder have been
made or until the death of the surviving spouse, if
earlier.
5.2.
Any person serving as a Director on
December 12, 1997 who elects to have his or her retirement
benefit paid pursuant to this Section 5.2 shall receive a
monthly benefit equal to $4,167. Payment of the monthly benefit
shall commence on the first day of the calendar month next
following the earlier of the Director’s death or termination
of service as a Director. Unless the retirement benefit is
terminated, the monthly benefit shall continue to be paid on the
first day of each calendar month thereafter, until the benefit has
been paid for one hundred and twenty (120) months, or until the
death of the Director or surviving spouse, if earlier. If a
Director should die with such benefit still in effect, prior to
receipt of all payments due hereunder, the monthly benefit shall
continue to the surviving spouse of such Director until all
payments due hereunder have been made or until the death of the
surviving spouse, if earlier.
5.3.
Directors who retired on or before
December 12, 1997 will receive the form and amount of
retirement benefit payable under the terms of the Plan in effect at
the time of their retirement.
5.4.
Each Director who is granted a
retirement benefit hereunder shall make him or herself available
for such consultation with the Board of Directors or any committee
or member thereof, as may be reasonably requested from time to time
by the Chairman of the Board of Directors, following such
Director’s termination of service as a Director. The Company
shall reimburse each such Director for all reasonable travel,
lodging and subsistence expenses incurred by the Director at the
request of the Company in rendering such consultation. The Company
may terminate the retirement benefit if the Director should fail to
render such consultation, unless prevented by disability or other
reason beyond the Director’s control.
5.5.
It is recognized that during a
Director’s period of service as a Director and as a
consultant hereunder, a Director will acquire knowledge of the
affairs of the Company and its subsidiaries, the disclosure of
which would be contrary to the best interests of the Company.
Accordingly, the Company may terminate the retirement benefit if,
without the express consent of the Company, the Director accepts
election to the Board of Directors of, acquires a partnership or
proprietary interest in, or renders services as an employee or
consultant to, any business entity which is engaged in substantial
competition with the Company or any of its subsidiaries.
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5.6.
An individual will be considered a
Director’s “surviving spouse” for purposes of
this Section 5 only if the Director and such individual were
married in a religious or civil ceremony recognized under the laws
of the state where the marriage was contracted and the marriage
remained legally effective at the date of the Director’s
death.
SECTION 6.
CONVERSION TO COMMON STOCK
UNITS
6.1.
Any Director who is then serving as
a director may, by written notice filed with the Secretary of the
Company, elect to have all or any portion of deferred fees
previously earned but not yet paid, transferred from the
Director’s Deferred Fee Account to a Stock Account maintained
on his or her behalf pursuant to paragraph 9.3. Any election as to
a portion of such fees shall be expressed as a percentage and the
same percentage shall be applied to all such fees regardless of the
calendar year in which earned or to all deferred fees earned in
designated calendar years, as specified by the Director. A Director
may make no more than one election under this paragraph 6.1 in any
calendar year. All such elections may apply only to deferred fees
for which an election has not previously been made and shall be
irrevocable.
6.2.
Any Director may, by written notice
filed with the Secretary of the Company, elect to have all or any
portion of deferred fees earned subsequent to the date such notice
is filed credited to a Stock Account established under this
Section 6. Fees covered by such election shall be credited to
such account at the end of each calendar quarter in, or for which,
such fees are earned. Such election may be revoked or modified by
such Director, by written notice filed with the Secretary of the
Company, as to deferred fees to be earned in calendar years
subsequent to the calendar year such notice is filed, but shall be
irrevocable as to deferred fees earned prior to such
year.
6.3.
Deferred fees credited to a Stock
Account under paragraph 6.1 shall be converted to Common Stock
Units by dividing the deferred fees so credited by the closing
price of common shares of the Company on the date notice of
election under paragraph 6.1 is received by the Company (or the
next business day, if there are no sales on such date) as reported
on the New York Stock Exchange Composite Reporting System. Deferred
fees credited to a Stock Account under paragraph 6.2 shall be
converted to Common Stock Units by dividing the deferred fees so
credited by the closing price of common shares of the Company as of
the last business day of the calendar quarter for which the credit
is made, as reported on the New York Stock Exchange Composite
Reporting System.
6.4.
Each Common Stock Unit shall be
credited with the same cash and stock dividends, stock splits and
other distributions and adjustments as are received by one common
share of the Company. All cash dividends and other cash
distributions credited to Common Stock Units shall be converted to
additional Common Stock Units by dividing each such dividend or
distribution by the closing price of common shares of the Company
on the payment date for such dividend or distribution, as reported
by the New York Stock Exchange Composite Reporting
System.
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6.5.
The value of the Common Stock Units
credited each Director shall be paid the Director in cash on the
dates specified in paragraph 4.2 (or, if applicable, paragraph
4.4). The amount of each payment shall be determined by multiplying
the Common Stock Units payable on each date specified in paragraph
4.2 (or, if applicable, paragraph 4.4) by the closing price of
common shares of the Company on the day prior to that date (or the
next preceding business day if there are no sales on such date), as
reported by the New York Stock Exchange Composite Reporting
System.
SECTION 7.
MISCELLANEOUS
7.1.
Each Director or former Director
entitled to payment of deferred fees hereunder, from time to time
may name any person or persons (who may be named contingently or
successively)
