MANAGEMENT INCENTIVE PLAN

 

                             Adopted by the Board of Directors on December 13,
                             1985.  Amended by the Board of Directors on
                             3/14/86, 12/11/87, 4/14/89, 2/8/91, 4/10/92,
                             9/10/93 and 12/1/96.

                                 ABBOTT LABORATORIES
                              MANAGEMENT INCENTIVE PLAN

                                      SECTION 1
                                     INTRODUCTION

    1.1  BACKGROUND AND PURPOSES.  This 1986 ABBOTT LABORATORIES MANAGEMENT
INCENTIVE PLAN (the "Plan") is a successor Plan to the 1961, 1971 and 1981
Management Incentive Plans (the "Predecessor Plans").  This Plan is being
established by ABBOTT LABORATORIES ("Abbott") for the following purposes:
    (a)  To provide greater incentive for participants in the Plan to attain
         and maintain the highest standards of managerial performance by
         rewarding them for services rendered with compensation, in addition to
         their base salaries, in proportion to the success of Abbott and to the
         participants' respective contribution to such success; and

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

    1.2  EFFECTIVE DATE AND FISCAL YEAR.  The Plan shall be effective as of
January 1, 1986.  The term "fiscal year," as used in this Plan, means the fiscal
period from time to time employed by Abbott for the purpose of reporting
earnings to shareholders.
    1.3  ADMINISTRATION.  The Plan will be administered by the Compensation
Committee (the "Committee") appointed by the Board
of Directors of Abbott.
                                      SECTION 2
                            ELIGIBILITY AND PARTICIPATION

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

                                       -2-

    2.2  PARTICIPANTS.  The term "participant," as used in the Plan, shall
include both active participants and inactive participants.
    2.3  ACTIVE PARTICIPANTS.  For each fiscal year, there shall be a group of
active participants which, except as provided below, shall not exceed forty-five
persons and shall consist of those persons eligible for participation who shall
have been designated as active participants and notified of that fact by the
Committee at any time before or during the fiscal year.  If, as a result of the
growth of Abbott and its subsidiaries or changes in Abbott's organization, the
Board of Directors deems it appropriate, the Board of Directors may, in its
discretion, from time to time, increase the number of persons who may be
designated as active participants for any fiscal year beyond the limit of
forty-five persons provided for above.  Selection as an active participant for
any fiscal year shall not confer upon any person a right to be an active
participant in any subsequent fiscal year, nor shall it confer upon him the
right to receive any allocation under the Plan, other than amounts allocated to
him by the Committee pursuant to the Plan, and all such allocations shall be
subject to all of the terms and conditions of the Plan. 
    2.4  INACTIVE PARTICIPANTS.  Inactive participants shall consist of those
persons, including beneficiaries of deceased participants, if any, for whom an
allocation shall have been made for a prior fiscal year under this Plan or a
Predecessor Plan, the payment of which was deferred and remains unpaid.  Status
as an inactive participant shall not preclude a person from also being an active
participant during any fiscal year.

                                      SECTION 3
                            MANAGEMENT INCENTIVE PLAN FUND

    3.1  BASE FOR MANAGEMENT INCENTIVE PLAN FUND.  The "base earnings" for
determining whether any portion of consolidated net income for any fiscal year
may be allocated to the Management Incentive Plan Fund for such year shall be
that amount of consolidated net income (as defined in subsection 3.2) which is
equal to 15 percent of the Abbott Common Shareholder's Equity for such fiscal
year.  For this purpose, "Abbott Common Shareholders' Equity" for any

                                       -3-

fiscal year shall mean the Shareholders' Investment, as reflected in the 
consolidated balance sheet of Abbott as of the close of the next preceding 
fiscal year, plus or minus such adjustments thereof as may be determined by the
Committee in order to reflect:
    (a)  The existence, issuance, sale, exchange, conversion or retirement of
         any securities, other than common shares, of Abbott (whether involving
         preferred stock, debt, convertible preferred stock or convertible debt
         securities); and

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

Any adjustments to be made in accordance with (a) and (b) above in determining
Abbott Common Shareholders' Equity for any fiscal year shall be determined by
the Committee after consultation with Abbott's independent auditors, and any
determination made by the Committee after such consultation shall be conclusive
upon all persons.
    3.2  CONSOLIDATED NET INCOME.  For the purposes of this Plan, for any
fiscal year or period, the "consolidated net income" shall be the consolidated
net income of Abbott and its subsidiaries, prepared in accordance with generally
accepted accounting principles, consistently applied, after provision for any
interest accrued with respect to such period on account of deferred payments
under this Plan or a Predecessor Plan, but before allowances for any amount to
be allocated to the Management Incentive Plan Fund, both net of applicable
income taxes, and after such adjustments for the following, as may be determined
by the Committee after consultation with Abbott's independent auditors (all net
of applicable income taxes):
    (a)  The exclusion of any charges for amortization of goodwill arising out
         of acquisitions made for securities which, as a result of adjustments
         made in determining Abbott Common Shareholders' Equity pursuant to
         subsection 3.1, are treated as common share equivalents; and

    (b)  The exclusion of any interest on debt securities which are convertible
         into common shares of Abbott and which shall have been considered as
         common share equivalents in determining Abbott

                                       -4-
         Common Shareholders' Equity pursuant to subsection 3.1 hereof; and

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

In the sole discretion of the Committee there shall also be excluded in the
calculation of "consolidated net income" unusual gains and losses and the tax
effects thereof, changes in generally accepted accounting principles and the tax
effects thereof and extraordinary gains and losses.
    3.3  DETERMINATION OF MANAGEMENT INCENTIVE PLAN AMOUNT FOR ANY YEAR.  For
each fiscal year that consolidated net income exceeds base earnings, and as soon
as practicable after ascertainment of that fact, the Committee shall determine a
tentative amount as the Management Incentive Plan Amount for that year, which
tentative amount shall not exceed the lesser of:
    (a)  an amount which, when treated as an expense currently deductible for
         income tax purposes in such year, would cause a 5 percent reduction in
         such year's excess of consolidated net income over the base earnings
         for such year; and

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

    (c)  an amount which equals 100 percent of the aggregate base salaries of
         all active participants for such year.

For purposes of the Plan "base salary" means the amount of salary paid to each
active participant by Abbott and its subsidiaries for such year, and does not
include bonuses, awards, or any other compensation of any kind.  Following
determination of such tentative Management Incentive Plan Amount, the Committee
shall report in writing the amount of such tentative amount to the Board of
Directors.  At the meeting of the Board of Directors coincident with or next
following receipt by it of the Committee's determination, the Board of Directors
shall have the power to approve or

                                       -5-

reduce, but not to increase, the tentative amount reported to it by the 
Committee.  The amount approved by the Board of Directors shall be the 
Management Incentive Plan Amount for such year.
    3.4  THE MANAGEMENT INCENTIVE PLAN FUND.  The Management Incentive Plan
Fund at any time shall consist of an amount equal to the aggregate of the
Management Incentive Plan Amounts established pursuant to subsection 3.3 of this
Plan for all fiscal years during which this Plan shall have been operative, plus
the amounts established as Management Incentive Plan Amounts for any prior
fiscal year pursuant to a Predecessor Plan, reduced by an amount equal to the
aggregate of the amounts of awards which shall have been allocated to
participants in accordance with this Plan or a Predecessor Plan, and which
awards either have been paid or remain payable to participants or their
beneficiaries.

                                      SECTION 4
                       ALLOCATION OF MANAGEMENT INCENTIVE FUND

    4.1  ANNUAL ALLOCATION OF MANAGEMENT INCENTIVE FUND.  As soon as
practicable after the close of each fiscal year, part or all of the amount then
in the Management Incentive Plan Fund (including the Management Incentive Plan
Amount for such fiscal year) will be allocated by the Committee among active
participants in the Plan for such fiscal year, having due regard for the
purposes for which the Plan was established, in the following manner and order:
    (a)  First, if the Chairman of the Board of Abbott shall be an active
         participant for such year, the members of the Committee, other than
         the Chairman of the Board, shall determine the amount, if any, to be
         allocated to the Chairman of the Board from such Fund for such year;
         and

    (b)  Next, all or a part of the balance of such Fund may be allocated among
         the active participants (other than the Chairman of the Board) for
         such year, in such amounts and proportions as the Committee shall
         determine.

provided, however, that the amount allocated to any active participant for any
year shall not exceed 125 percent of such participants' base salary for that
year.

                                       -6-

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

                                      SECTION 5
                     PAYMENT OF AMOUNTS ALLOCATED TO PARTICIPANTS

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

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

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

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

                                       -7-

maintain a Trust Account in accordance with subsection 5.2 and for purposes of
subsection 5.4, shall treat such payment as if it were an allocation made for 
that fiscal year.
    5.2  SEPARATE ACCOUNTS.  The Committee will maintain two separate Accounts,
a "Deferred Account" and a "Trust Account," in the name of each participant. 
The Deferred Account shall be comprised of any allocations the payment of which
is deferred pursuant to subsection 5.1(c) and any adjustments made pursuant to
subsection 5.3.  The Trust Account shall be comprised of any allocations paid in
cash to a participant (including amounts paid to a participant's Grantor Trust)
pursuant to subsection 5.1(b) and any adjustments made pursuant to subsection
5.4.
    5.3  ADJUSTMENT OF DEFERRED ACCOUNTS.  As of the end of each fiscal year,
the Committee shall adjust each participant's Deferred Account as follows:
         (a)  FIRST, charge an amount equal to any payments made to the
              participant during that year pursuant to subsections 5.11 or
              5.12;

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

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

    5.4  ADJUSTMENT OF TRUST ACCOUNTS.  As of the end of each fiscal year, the
Committee shall adjust each participant's Trust Account as follows:
         (a)  FIRST, charge an amount equal to the product of:  (i) any
              payments made to the participant during that year from the
              participant's Grantor Trust (other than distributions of trust
              earnings in excess of the Net Interest Accrual authorized by the
              administrator of the trust to provide for the Tax Gross Up under
              subsection 6.6); multiplied by (ii) a fraction, the numerator of
              which is the balance in the participant's Trust Account as of the
              end of the prior fiscal year and the denominator of which is the
              balance of the participant's Grantor Trust (as determined by the
              administrator of the trust) as of that same date;

         (b)  NEXT, credit an amount equal to the allocation for that year that
              is paid to the Participant (including the amount paid to 

                                       -8-

              the participant's Grantor Trust) pursuant to subsection 5.l(b);
              and

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

    5.5  INTEREST ACCRUALS ON ACCOUNTS.  As of the end of each fiscal year, a
participant's Deferred Account and Trust Account shall be credited with interest
equal to:  (a) the average of the prime rates of interest charged by the two
largest banks located in the City of Chicago on loans made by them as of January
1 and the end of each month of the fiscal year; plus (b) two hundred twenty-five
(225) basis points.  Such interest shall be credited on the conditions
established by the Committee, provided that any allocation of an award from the
Management Incentive Plan Fund shall be considered to have been made and
credited to a participant's Deferred Account and Trust Account as of the first
day of the fiscal year in which such award is made regardless of the date upon
which the Committee actually makes the determination to award such allocation.
    5.6  GUARANTEED RATE PAYMENTS.  In addition to any allocation made to a
participant for any fiscal year pursuant to subsection 4.1 which is paid or
deferred pursuant to subsection 5.1, Abbott shall also make a payment to a
participant's Grantor Trust (a "Guaranteed Rate Payment") for any year in which
the net earnings of such trust do not equal or exceed the participant's Net
Interest Accrual for that year.  A participant's "Net Interest Accrual" for a
year is an amount equal to: (a) the Interest Accrual credited to the
participant's Trust Account for that year; less (b) the product of (i) the
amount of such Interest Accrual, multiplied by (ii) the aggregate of the
federal, state and local individual income tax rates (determined in accordance
with subsection 6.7).  The Guaranteed Rate Payment shall equal the difference
between the participant's Net Interest Accrual and the net earnings of the
participant's Grantor Trust for the year, and shall be paid within 90 days of
the end of the fiscal year.

                                       -9-

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

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

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

                                       -10-

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

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

    5.8  STATUS OF BENEFICIARIES.  Following a participant's death, the
participant's beneficiary or beneficiaries will be considered and treated as an
inactive participant for all purposes of this Plan.
    5.9  NON-ASSIGNABILITY AND FACILITY OF PAYMENT.  Amounts payable to
participants and their beneficiaries under the Plan are not in any way subject
to their debts and other obligations, and may not be voluntarily or
involuntarily sold, transferred or assigned; provided that the preceding
provisions of this section shall not be construed as restricting in any way a
designation right granted to a beneficiary pursuant to the terms of subsection
5.7.  When a participant or the beneficiary of a participant is under legal
disability, or in the Committee's opinion is in any way incapacitated so as to
be unable to manage his or her financial affairs, the Committee may direct that
payments shall be made to the participant's or beneficiary's legal
representative, or to a relative or friend of the participant or beneficiary for
the benefit of the participant or beneficiary, or the Committee may direct the
payment or distribution for the benefit of the participant or beneficiary in any
manner that the Committee determines.
    5.10 PAYER OF AMOUNTS ALLOCATED TO PARTICIPANTS.  Any amount allocated to a
participant in the Plan and any interest credited thereto will be paid by the
employer (or such employer's successor) by whom the participant was employed
during the fiscal year for which any amount was allocated, and for that purpose,
if a participant shall have been employed by two or more employers during any
fiscal year the amount allocated under this Plan for that year shall be an
obligation of each of the respective employers in proportion to the respective
amounts of base salary paid by each of them in that fiscal year.

                                       -11-

    5.11 MANNER OF PAYMENT.  Subject to subsections 5.12, a participant shall
elect the timing and manner of payment of his Deferred Account at the time of
his deferral election under subsection 5.l.  The participant may select a
payment method from among alternative payment methods established by the
Committee.
    5.12 PAYMENT UPON TERMINATION FOLLOWING CHANGE IN CONTROL. Notwithstanding
any other provisions of this Plan or the Predecessor Plans, or the provisions of
any award made under this Plan or the Predecessor Plans, if employment of any
participant with Abbott and its subsidiaries should terminate for any reason
within five (5) years after the date of a Change in Control, the aggregate
unpaid balance of all awards previously made to such participant under this Plan
and all Predecessor Plans, plus any unpaid interest credited thereon, shall be
paid to the participant in a lump sum within thirty (30) days following the date
of such termination.
    5.13 CHANGE IN CONTROL.  A "Change in Control" shall be deemed to have
occurred on the earliest of the following dates:
    (i)    The date any entity or person (including a "group" as defined in
           Section 13(d)(3) of the Securities Exchange Act of 1934 (the 
           "Exchange Act")) shall have become the beneficial owner of, or shall
           have obtained voting control over thirty percent (30%) or more of 
           the outstanding common shares of Abbott;

    (ii)   The date the shareholders of Abbott approve a definitive agreement 
           (A) to merge or consolidate Abbott with or into another corporation,
           in which Abbott is not the continuing or surviving corporation or
           pursuant to which any common shares of Abbott would be converted 
           into cash, securities or other property of another corporation, 
           other than a merger of Abbott in which holders of common shares 
           immediately prior to the merger have the same proportionate 
           ownership of common stock of the surviving corporation immediately
           after the merger as immediately before, or (B) to sell or otherwise
           dispose of substantially all the assets of Abbott; or

    (iii)  The date there shall have been a change in a majority of the Board
           of Directors of Abbott within a twelve (12) month period unless the
           nomination for election by Abbott's shareholders of each new 
           director was approved by the vote of two-thirds of the directors 
           then still in office who were in office at the beginning of the 
           twelve (12) month period.

                                       -12-

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

                                      SECTION 6
                                    MISCELLANEOUS
    6.1  RULES.  The Committee may establish such rules and regulations as it
may consider necessary or desirable for the effective and efficient
administration of the Plan.
    6.2  MANNER OF ACTION BY COMMITTEE.  A majority of the members of the
Committee qualified to act on any particular question may act by meeting or by
writing signed without meeting, and may execute any instrument or document
required or delegate to one of its members authority to sign.  The Committee
from time to time may delegate the performance of certain ministerial functions
in connection with the Plan, such as the keeping of records, to such person or
persons as the Committee may select. Except as otherwise expressly provided in
the Plan, the costs of administration of the Plan will be paid by Abbott.  Any
notice required to be given to, or any document required to be filed with the
Committee, will be properly given or filed if mailed or delivered in writing to
the Secretary of Abbott.
    6.3  RELIANCE UPON ADVICE.  The Board of Directors and the Committee may
rely upon any information or advice furnished to it by any Officer of Abbott or
by Abbott's independent auditors, or other consultants, and shall be fully
protected in relying upon such information or advice.  No member of the Board of
Directors or the Committee shall be liable for any act or failure to act on
their part, excepting only any acts done or omitted to be done in bad faith, nor
shall they be liable for any act or failure to act of any other member.
    6.4  TAXES.  Any employer shall be entitled, if necessary or desirable, to
pay, or withhold the amount of any federal, state or local tax, attributable to
any amounts payable by it under the Plan after giving the person entitled to
receive such amount notice as far in advance

                                       -13-

as practicable, and may defer making payment of any amount with respect to 
which any such tax question may be pending unless and until indemnified to its
satisfaction.
    6.5  RIGHTS OF PARTICIPANTS.  Employment rights of participants with Abbott
and its subsidiaries shall not be enlarged or affected by reason of
establishment of or inclusion as a participant in the Plan.  Nothing contained
in the Plan shall require Abbott or any subsidiary to segregate or earmark any
assets, funds or property for the purpose of payment of any amounts which may
have been deferred.  The Deferred and Trust Accounts established pursuant to
subsection 5.2 are for the convenience of the administration of the Plan and no
trust relationship with respect to such Accounts is intended or should be
implied.  Participant's rights shall be limited to payment to them at the time
or times and in such amounts as are contemplated by the Plan.  Any decision made
by the Board of Directors or the Committee, which is within the sole and
uncontrolled discretion of either, shall be conclusive and binding upon the
other and upon all other persons whomsoever.
    6.6  TAX GROSS UP.  In addition to the allocations provided under
subsection 4.1, each participant (or, if the participant is deceased, the
beneficiary designated under the participant's Grantor Trust) shall be entitled
to a Tax Gross Up payment for each year there is a balance in his or her Trust
Account.  The "Tax Gross Up" shall approximate: (a) the amount necessary to
compensate the participant (or beneficiary) for the net increase in the
participant's (or beneficiary's) federal, state and local income taxes as a
result of the inclusion in his or her taxable income of the income of the
participant's Grantor Trust and any Guaranteed Rate Payment for that year; less
(b) any distribution to the participant (or beneficiary) of his or her Grantor
Trust's net earnings for that year; plus (c) an amount necessary to compensate
the participant (or beneficiary) for the net increase in the taxes described in
(a) above as a result of the inclusion in his or her taxable income of any
payment made pursuant to this subsection 6.6.  Payment of the Tax Gross

                                       -14-
Up shall be made by the employers (in such proportions as Abbott shall 
designate) directly from their general corporate assets.
    6.7  INCOME TAX ASSUMPTIONS.  For purposes of Sections 5 and 6, a
participant's federal income tax rate shall be deemed to be the highest marginal
rate of federal income individual tax in effect in the calendar year in which a
calculation under those Sections is to be made, and state and local tax rates
shall be deemed to be the highest marginal rates of individual income tax in
effect in the state and locality of the participant's residence on the date such
a calculation is made, net of any federal tax benefits.
    6.8  PAYMENT OF PRIOR DEFERRALS.  Notwithstanding any other provision of
this Plan, the Committee, in its absolute discretion, may direct that all or a
portion of the balance in a participant's Deferred Account be paid in accordance
with the provisions of subsection 5.1(b).  In such event, the Committee shall
establish and maintain a Trust Account in accordance with subsection 5.2 and,
for purposes of subsection 5.4, shall treat such payment as if it were an
allocation made for that fiscal year.

                                      SECTION 7
                         AMENDMENT, TERMINATION AND CHANGE OF
                           CONDITIONS RELATING TO PAYMENTS

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

                                       -15-

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

                                                                   Exhibit A

                         IRREVOCABLE GRANTOR TRUST AGREEMENT

    THIS AGREEMENT, made this       day of             , 1991, by and between   
                     of            , Illinois (the "grantor"), and The Northern
Trust Company located at Chicago, Illinois, as trustee (the "trustee"),

                                   WITNESSETH THAT:

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

    NOW, THEREFORE, IT IS AGREED as follows:

                                      ARTICLE I

                                     INTRODUCTION

    I-1.  NAME.  This agreement and the trust hereby evidenced (the "trust")
may be referred to as the "                 1991 Grantor Trust".

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

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

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

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

                                      ARTICLE II
                            DISTRIBUTION OF THE TRUST FUND

    II-1.  SEPARATE ACCOUNTS.  The administrator shall maintain two separate
accounts under the trust, a "rollout account" and a "deferred account." Funds
delivered to the trustee shall be allocated between the accounts by the trustee
as directed by the administrator.  As of the end of each calendar year, the
administrator shall charge each account with all distributions made from such
account during that year; and credit each account with its share of income and
realized gains and

                                       -2-

charge each account with its share of expenses and realized losses for the 
year.  The trustee shall not be required to make any separate investment of 
the trust fund for the accounts, and may administer and invest all funds 
delivered to it under the trust as one trust fund.

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

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

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

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

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

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

                                       -3-

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

    II-4.  DISTRIBUTIONS FROM THE TRUST FUND AFTER THE GRANTOR'S DEATH.  The
grantor, from time to time may name any person or persons (who may be named
contingently or successively and who may be natural persons or fiduciaries) to
whom the principal of the trust fund and all accrued or undistributed income
thereof shall be distributed in a lump sum or, if the beneficiary is the
grantor's spouse, in installments, as directed by the grantor, upon the
grantor's death.  If the grantor directs an installment method of distribution,
any amounts remaining at the death of the spouse beneficiary shall be
distributed in a lump sum.  Each designation shall revoke all prior
designations, shall be in writing and shall be effective only when filed by the
grantor with the administrator during the grantor's lifetime.  If the grantor
fails to direct a method of distribution, the distribution shall be made in a
lump sum.  If the grantor fails to designate a beneficiary as provided above,
then on the grantor's death, the trustee shall distribute the balance of the
trust fund in a lump sum to the executor or administrator of the grantor's
estate.

    II-5.  FACILITY OF PAYMENT.  When a person entitled to a distribution
hereunder is under legal disability, or, in the trustee's opinion, is in any way
incapacitated so as to be unable to manage his or her financial affairs, the
trustee may make such distribution to such person's legal representative, or to
a relative or friend of such person for such person's benefit.  Any distribution
made in accordance with the preceding sentence shall be a full and complete
discharge of any liability for such distribution hereunder.

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

                                     ARTICLE III
                             MANAGEMENT OF THE TRUST FUND

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

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

                                       -4-

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

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

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

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

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

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

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

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

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

                                       -5-

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

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

    (m)  To deal without restriction with the legal representative of the
         grantor's estate or the trustee or other legal representative of any
         trust created by the grantor or a trust or estate in which a
         beneficiary has an interest, even though the trustee, individually,
         shall be acting in such other capacity, without liability for any loss
         that may result.

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

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

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

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

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

    III-3.  STATEMENTS.  The trustee shall prepare and deliver monthly to the
administrator and annually to the grantor, if then living, otherwise to each
beneficiary then entitled

                                       -6-

to distributions under this agreement, a statement (or series of statements) 
setting forth (or which taken together set forth) all investments, receipts,
disbursements and other transactions effected by the trustee during the 
reporting period; and showing the trust fund and the value thereof at the end
of such period.

    III-4.  COMPENSATION AND EXPENSES.  All reasonable costs, charges and
expenses incurred in the administration of this trust, including compensation to
the trustee, any compensation to agents, attorneys, accountants and other
persons employed by the trustee, and expenses incurred in connection with the
sale, investment and reinvestment of the trust fund shall be paid from the trust
fund.

                                       -7-

                                      ARTICLE IV
                                  GENERAL PROVISIONS

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

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

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

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

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

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

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

                                      ARTICLE V
                                  CHANGES IN TRUSTEE

    V-1.  RESIGNATION OR REMOVAL OF TRUSTEE.  The trustee may resign at any
time by giving thirty days' advance written notice to the administrator and the
grantor.  The administrator may remove a trustee by written notice to the
trustee and the grantor.

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

                                       -8-

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

                                      ARTICLE VI
                              AMENDMENT AND TERMINATION

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

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

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

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

                                 *    *    *

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

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

                        The Northern Trust Company as Trustee

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

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

Basic Info X:

Name: MANAGEMENT INCENTIVE PLAN
Type: Incentive Plan
Date: March 11, 1997
Company: ABBOTT LABORATORIES
State: Illinois

Other info:

Date:

  • December 13 , 1985
  • January 1 , 1986
  • December 31 , 1988
  • within 90 days of the end of the fiscal year
  • ten years from the end of the calendar year

Organization:

  • Abbott Common Shareholders
  • Management Incentive Plan Amounts
  • Board of Abbott
  • City of Chicago
  • Board of Directors of Abbott
  • Internal Revenue Code
  • Abbott Laboratories Management Incentive Plan
  • United States Government
  • State of Illinois

Location:

  • Chicago
  • Illinois
  • Abbott

Person:

  • Abbott

Percent:

  • 15 percent
  • 1-12 percent
  • thirty percent
  • 30 %