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Filed Pursuant to Rule 424(b)(3)
Registration No. 333-83647
Prospectus Supplement to Prospectus dated November 11, 1999.
9,000,000 Shares
ABBOTT LABORATORIES
Common Shares
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The common shares are listed on the New York Stock Exchange under the symbol
"ABT." The last reported sale price of Abbott's common shares on the New York
Stock Exchange on November 11, 1999 was $37.00 per share.
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NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY OTHER REGULATORY BODY
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.
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<TABLE>
<CAPTION>
PER
SHARE TOTAL
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<S> <C> <C>
Initial price to public..................................... $36.875 $331,875,000
Underwriting discount(1).................................... $ 0.265 $ 2,385,000
Proceeds, before expenses, to Abbott........................ $36.610 $329,490,000
</TABLE>
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(1) In addition, the underwriter may receive from purchasers of the shares
normal brokerage commissions in amounts agreed with those purchasers.
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The underwriter expects to deliver the common shares against payment in New
York, New York on November 16, 1999.
GOLDMAN, SACHS & CO.
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Prospectus Supplement dated November 11, 1999.
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FORWARD-LOOKING STATEMENTS
This prospectus supplement and the accompanying prospectus include
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. You can
identify some of the forward-looking words, such as "believes," "expects,"
"may," "will," "approximately," "intends," "plans," "estimates," or
"anticipates," or the negative of those words or other similar words.
Forward-looking statements involve inherent risks and uncertainties. Important
factors that could cause actual results to differ materially from estimates or
projections contained in the forward-looking statements include, without
limitation:
- competitive pressures among health care products manufacturers and service
providers may increase significantly;
- costs or difficulties related to the integration of the business of Abbott
and Perclose, Inc. or of ALZA Corporation may be greater than expected;
- complying with the consent decree, described below, between Abbott and the
FDA and Abbott's ability to return products to the market successfully;
- general economic or business conditions, either internationally,
nationally or in the states in which Abbott, Perclose or ALZA is doing
business, may be less favorable than expected, resulting in, among other
things, a reduced demand for health care products and services;
- legislative or regulatory changes may adversely affect the business in
which Abbott, Perclose and ALZA are engaged;
- technological changes, including "Year 2000" data systems compliance
issues, may be more difficult or expensive than anticipated; and
- changes may occur in the securities markets.
In light of these risks, uncertainties and assumptions, the events anticipated
by our forward-looking statements might not occur. For those statements, Abbott
claims the protection of the safe harbor for forward-looking statements
contained in the Private Securities Litigation Reform Act of 1995. Abbott does
not take any responsibility to publicly update or revise any forward-looking
statements, whether as a result of new information, future events or otherwise.
RECENT DEVELOPMENTS
CONSENT DECREE BETWEEN ABBOTT AND FOOD AND DRUG ADMINISTRATION
On September 28, 1999, Abbott announced that it had been notified by the
United States Food and Drug Administration of alleged noncompliance with the
FDA's Quality System Regulation at Abbott's Diagnostics Division facilities in
Lake County, Illinois. Abbott and the FDA entered into discussions relating to a
proposed consent decree regarding these regulations.
On November 2, 1999, Abbott announced that it had reached agreement with the
FDA to have a consent decree entered which will settle issues involving Abbott's
diagnostic manufacturing operations in Lake County, Illinois. The consent decree
requires Abbott to ensure that its diagnostic manufacturing processes in Lake
County, Illinois conform with the FDA's current Quality System Regulation. The
consent decree does not represent an admission by Abbott of any violation of the
Federal Food, Drug and Cosmetic Act or its regulations. The products on the
market continue to provide accurate results. Abbott will not need to recall any
diagnostic products as a result of the consent decree.
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The decree allows for the continued manufacture and distribution of
medically necessary diagnostic products made in Lake County, Illinois, such as
assays for hepatitis, retrovirus, cardiovascular disease, cancer, thyroid
disorders, fertility, drug monitoring, and congenital and respiratory
conditions. However, Abbott is prohibited from manufacturing or distributing
certain diagnostic products until Abbott ensures that the processes in its Lake
County, Illinois diagnostics manufacturing operations conform with the current
Quality System Regulation.
Under the terms of the consent decree, among other actions, Abbott has
agreed to submit to the FDA a proposed master compliance and validation plan to
ensure that its processes conform with the current Quality System Regulation.
The consent decree requires Abbott to ensure that its facilities are in
conformance with the current Quality System Regulation within one year.
The consent decree has resulted in a one-time pretax charge of
$168 million, which includes charges associated with actions required by the FDA
and a $100 million payment to the U.S. Government. Abbott believes that fourth
quarter earnings may be negatively impacted by as much as two cents per share.
For the full-year 2000, sales may be negatively impacted up to $250 million and
earnings may be negatively impacted up to 10 cents per share.
The consent decree does not affect Abbott's MediSense, i-STAT, hematology or
Murex products; the clinical chemistry products Abbott
Spectrum-Registered Trademark-, Aeroset-TM- and Alcyon-TM-; or any other Abbott
divisions or products. The consent decree also allows Abbott to export
diagnostic products and components for sale and distribution outside the United
States if they meet the export requirements of the Federal Food, Drug and
Cosmetic Act.
PENDING ACQUISITIONS
On July 8, 1999, Abbott, its wholly-owned subsidiary AL Acquisition Corp.
and Perclose entered into a merger agreement which provides for the merger of
Perclose with and into AL Acquisition Corp. Subject to the terms of the merger
agreement, holders of Perclose common stock will receive between 1.10 and 1.35
Abbott common shares for each share of Perclose common stock. As a result,
Abbott expects to issue up to 17,889,168 common shares in the merger, including
shares issuable upon the exercise of options. Perclose stockholders are
scheduled to meet on November 19, 1999 to vote upon the merger. Although there
can be no assurance, Abbott does not anticipate that the combined company will
incur any material charges associated with the merger.
On September 21, 1999, ALZA stockholders approved the merger of ALZA with
and into AC Merger Sub Inc., a wholly-owned subsidiary of Abbott. Subject to the
terms of the merger agreement, each share of ALZA common stock outstanding
immediately before the effective time of the merger will be converted into 1.2
Abbott common shares. As a result, Abbott anticipates issuing up to 164,750,000
common shares in the merger, including shares issuable upon the exercise of
options. Abbott and ALZA will not close the merger before December 30, 1999,
absent a new vote of the ALZA stockholders.
Abbott and ALZA estimate they will incur combined aggregate direct
transaction costs of approximately $45 million associated with the merger,
consisting of transaction fees for investment bankers, attorneys, accountants
and other related costs. These one-time transaction costs will be charged to
operations upon completion of the merger. It is expected that following the
merger, the combined company will incur additional one-time expenses, currently
estimated to be approximately $55 million. There can be no assurance that the
combined company will not incur additional charges to reflect costs associated
with the merger.
The principal reason for offering the Abbott common shares is to facilitate
the accounting treatment of the Perclose merger as a "pooling of interests,"
which is a condition to the completion of the merger under the merger agreement.
While Abbott believes that conditions to the completion
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of the mergers will be satisfied or waived, where permissible, Abbott cannot
make any assurances that the mergers will in fact be completed.
ADOPTION OF SHAREHOLDER RIGHTS PLAN
On November 10, 1999, the Abbott board of directors declared a dividend
distribution of one right for each outstanding common share of Abbott to
shareholders of record at the close of business on December 1, 1999, the record
date. Except as described below, each right, when exercisable, entitles the
registered holder to purchase from Abbott one ten-thousandth of a share of
series A junior participating preferred stock, par value $1.00 per share, at a
purchase price of $200 for each one ten-thousandth of a share, subject to
adjustment. The description and terms of the rights are set forth in the form of
rights agreement which was filed with the Securities and Exchange Commission as
an exhibit to Abbott's Current Report on Form 8-K dated November 10, 1999.
Initially, the rights will automatically attach to all common share
certificates representing shares then outstanding, and no separate certificates
evidencing the rights will be distributed. The rights will be evidenced by the
common share certificates and not by separate certificates until the earlier to
occur of:
- ten days following a public announcement that a person or group of
affiliated or associated persons, referred to as the acquiring persons,
has acquired, or obtained the right to acquire, beneficial ownership of
10% or more of Abbott's outstanding common shares, which is what the
rights agreement calls the shares acquisition date; or
- 15 business days, or a later date as may be determined by action of the
board of directors prior to the time that any person becomes an acquiring
person, following the commencement of, or a public announcement of an
intention to make, a tender or exchange offer if, upon consummation of
that offer, the acquiring person or persons would be the beneficial owner
of 10% or more of Abbott's outstanding common shares,
The earlier of these two dates is referred to in the rights agreement as the
distribution date.
The rights agreement also provides that, until the distribution date, the
rights will be transferred with and only with the Abbott common shares. Until
the distribution date or earlier redemption, expiration or termination of the
rights, the transfer of any certificates for Abbott common shares will also
constitute the transfer of the rights associated with the Abbott common shares
represented by such certificates. As soon as practicable following the
distribution date, right certificates will be mailed to holders of record of the
Abbott common shares as of the close of business on the distribution date, and,
subsequently, such separate right certificates alone will evidence the rights.
Any Abbott common shares issued after the distribution date will generally be
accompanied by right certificates only if such Abbott common shares are issued
pursuant to the exercise of options or under any employee plan or arrangement or
upon the exercise, conversion or exchange of other securities issued by Abbott,
or in other circumstances where the issuance of accompanying right certificates
is deemed necessary or appropriate by the Abbott board of directors.
The rights are not exercisable until the distribution date and will expire
at the earliest of:
- November 10, 2009, the final expiration date;
- upon redemption by Abbott as described below; or
- upon exchange of all rights for common shares as described below.
If any person, other than Abbott, its affiliates or any person receiving
newly-issued common shares directly from Abbott, becomes the beneficial owner of
10% or more of the then outstanding common shares, each rightsholder will
subsequently have the right to receive, upon exercise at the
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then current exercise price of the right, common shares, or, in certain
circumstances, cash, property or other securities of Abbott, having a value
equal to two times the exercise price of the right.
If, after an acquiring person obtains 10% or more of the outstanding Abbott
common shares, Abbott is acquired in a merger or other business combination
transaction or 50% or more of Abbott's assets or earning power are sold, proper
provision will be made so that each holder of a right will subsequently have the
right to receive, upon exercise at the then current exercise price of the right,
common stock of the acquiring or surviving company having a value equal to two
times the exercise price of the right.
Notwithstanding the foregoing, following the occurrence of any of the events
set forth in the preceding two paragraphs, any rights that are, or, under
certain circumstances specified in the rights agreement, were, beneficially
owned by any acquiring person will immediately become null and void.
At any time after the acquisition by a person or group of affiliated or
associated persons of beneficial ownership of 10% or more of the outstanding
common shares and prior to the acquisition by that person or group of 50% or
more of the outstanding common shares or the existence of a solicitation
participant, the board of directors may exchange the rights, other than rights
owned by that person or group, which have become void, in whole or in part, at
an exchange ratio of one common share for each right, subject to adjustment.
Subject to the following paragraph, at any time after the date of the rights
agreement until the earlier of the time that a person becomes an acquiring
person or November 10, 2009, the board of directors may redeem the rights in
whole, but not in part, at a price of $.0001 for each right, which may, at the
option of Abbott be paid in cash, common shares or other consideration deemed
appropriate by the board. Upon the effectiveness of any action of the board
ordering redemption of the rights, the rights will terminate leaving the
rightsholders with only the right to receive this redemption price.
If at any time prior to a person becoming an acquiring person:
- there occurs a change, resulting from one or more proxy or consent
solicitations, in a majority of the directors in office at the
commencement of the first of these solicitations, and
- any person who is a participant in any of these solicitations has proposed
or initiated a business combination transaction involving Abbott,
then the approval by holders of at least 85% of the outstanding common shares,
known as the shareholder approval, would be required prior to any redemption of
the rights or any amendment of the rights agreement that would adversely affect
the interests of rightsholders or facilitate a transaction with a solicitation
participant.
The rights have certain anti-takeover effects. The rights will cause
substantial dilution to a person or group that attempts to acquire Abbott
without conditioning the offer on the rights being redeemed or a substantial
number of rights being acquired, and under certain circumstances the rights
beneficially owned by that person or group may become void. The rights should
not interfere with any merger or other business combination approved by the
board of directors because the board may, at its option subject to shareholder
approval, if applicable, at any time prior to the time that any person becomes
an acquiring person, redeem all, but not less than all, of the then outstanding
rights at the redemption price.
This summary description of the rights does not purport to be complete and
is qualified in its entirety by reference to the rights agreement.
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CERTAIN UNITED STATES FEDERAL TAX CONSIDERATIONS
FOR NON-U.S. HOLDERS OF COMMON SHARES
The following is a general discussion of certain U.S. Federal income and
estate tax consequences of the ownership and disposition of common shares by a
beneficial owner that is a non-U.S. holder. For purposes of this discussion, you
are considered to be a non-U.S. holder unless you are a citizen or resident of
the United States, a corporation or partnership created or organized in the
United States or under the law of the United States or of any State or political
subdivision of the foregoing, any estate whose income is includible in gross
income for U.S. Federal income tax purposes regardless of its source, or a
United States trust. A United States trust is any trust with respect to which:
- a court within the United States is able to exercise primary supervision
over the administration of the trust; and
- one or more U.S. persons have the authority to control all substantial
decisions of the trust.
The following summary does not furnish information in the level of detail or
with the attention to an investor's particular tax circumstances that would be
provided by an investor's own tax advisor and does not discuss all aspects of
U.S. Federal income taxation that may be important to a particular investor in
light of its particular circumstances, such as special tax rules that would
apply to dealers in securities, financial institutions, banks, insurance
companies, partnerships or holders of more than 5% of Abbott's common shares.
For example, this discussion does not address state, local or non-U.S. tax
considerations. Furthermore, the following discussion is based on provisions of
the U.S. Internal Revenue Code of 1986, as amended, Treasury Regulations
promulgated under the Internal Revenue Code and administrative and judicial
interpretations as of the date of this prospectus supplement, all of which are
subject to change, possibly with retroactive effect. Each prospective investor
is urged to consult its own tax advisor with respect to the U.S. Federal, state
and local consequences of owning and disposing of the common shares, as well as
any tax consequences arising under the laws of any other taxing jurisdiction.
U.S. FEDERAL INCOME AND ESTATE TAX CONSEQUENCES
Dividends paid by Abbott to you will be subject to U.S. withholding tax at a
30% rate unless you provide Abbott or its paying agent, as the case may be, with
a properly executed:
- Internal Revenue Service Form W-8BEN or, if prior to January 1, 2001, IRS
Form 1001, claiming an exemption from withholding tax or a reduction in
the applicable withholding tax rate under the benefit of a tax treaty; or
- IRS Form W-8ECI or, if prior to January 1, 2001, IRS Form 4224, stating
that the dividends paid by Abbott are not subject to withholding tax
because they are effectively connected with the conduct of your U.S. trade
or business, or if certain tax treaties apply, are attributable to your
U.S. permanent establishment.
In the case of a non-U.S. partnership, the certification requirement would
generally be applied to the partners of the partnership unless the non-U.S.
partnership is a qualified intermediary. If you are eligible for a reduced rate
of U.S. withholding tax pursuant to an income tax treaty, you may obtain a
refund of any excess amount withheld by filing an appropriate claim for refund
with the IRS.
If you are engaged in a trade or business in the United States and dividends
paid on the common shares are effectively connected with the conduct of that
trade or business or if you maintain a U.S. permanent establishment to which
such dividends are attributable, although you will be exempt from the
withholding tax discussed above, you will be subject to U.S. Federal income tax
on your dividend income on a net income basis in the same manner as if you were
a
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U.S. person. In addition, if you are a non-U.S. corporation, you may be subject
to a branch profits tax equal to 30%, or, if applicable, a lower treaty rate, of
your effectively connected earnings and profits for the taxable year, subject to
certain adjustments.
Under current law, you generally will not be subject to U.S. Federal income
tax on any capital gain realized on a sale or other disposition of common
shares, unless:
- Abbott is or has been during the five-year period ending on the date of
disposition of the common shares a United States real property holding
corporation for U.S. Federal income tax purposes (which Abbott does not
believe that it has been or is currently and does not anticipate
becoming);
- the gain is effectively connected with a trade or business that you
conduct within the United States and, if certain tax treaties apply, is
attributable to a permanent establishment that you maintain in the United
States;
- you are an individual who has been present in the United States for 183
days or more in the taxable year; or
- you are subject to tax pursuant to the Code provisions applicable to
certain U.S. expatriates.
Common shares owned or treated as owned by an individual who is a citizen or
resident, as specially defined for U.S. Federal estate tax purposes and which
definition is different from the definition of resident for U.S. Federal income
tax purposes, of the United States at the date of death, or common shares
subject to certain lifetime transfers made by that individual, will be included
in such individual's estate for U.S. Federal estate tax purposes, unless an
applicable estate tax treaty provides otherwise.
BACKUP WITHHOLDING AND INFORMATION REPORTING
DIVIDENDS
Except as provided below, Abbott must annually report to you and the IRS the
amount of dividends paid to you and the amount of the tax withheld with respect
to your dividend distributions. These information reporting requirements apply
regardless of whether withholding was reduced or eliminated by an applicable tax
treaty. Copies of these information returns may also be made available to tax
authorities in your country of residence under the provisions of a specific
treaty or agreement with such tax authorities. In general, backup withholding at
a rate of 31% and additional information reporting will apply to dividends paid
on common shares to holders that are not exempt recipients and that fail to
provide in the manner required certain identifying information, such as the
holder's name, address and taxpayer identification number. Generally,
individuals are not exempt recipients, whereas corporations and certain other
entities generally are exempt recipients. However, dividends that are subject to
U.S. withholding tax at the 30% statutory rate or at a reduced tax treaty rate
are exempt from backup withholding of U.S. Federal income tax and such
additional information reporting.
BROKER SALES
If you sell common shares through a U.S. office of a U.S. or foreign broker,
the broker is required to file an information return with the IRS regarding such
sale and is required to withhold 31% of the sale proceeds unless you are an
exempt recipient or have provided the broker with the information and
statements, under penalties of perjury, necessary to establish an exemption from
backup withholding. If the proceeds of the sale of a common share are paid to
you by or through the foreign office of a broker, that broker will not be
required to backup withhold or, except as provided in the next sentence, to file
information returns. In the case of proceeds from a sale of a
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common share that are paid to you by or through the foreign office of a U.S.
broker or a foreign office of a foreign broker that is:
- a controlled foreign corporation for U.S. Federal income tax purposes;
- a person 50% or more of whose gross income for the three-year period
ending with the close of the taxable year preceding the year of payment,
or for the part of that period that the broker has been in existence, is
effectively connected with the conduct of a trade or business within the
United States, referred to as a foreign U.S. connected broker; or
- effective January 1, 2001, a non-U.S. partnership (i) more than 50% of the
income or capital interest in which is owned by U.S. persons or (ii) that
is engaged in a trade or business within the United States.
Information reporting by the broker is required unless the broker has
documentary evidence in its files that the payee is not a U.S. person and
certain other conditions are met, or the payee otherwise establishes an
exemption from information reporting. Effective January 1, 2001, backup
withholding will be required if the broker has actual knowledge that the payee
is a U.S. person.
Under the withholding tax regulations to be effective beginning January 1,
2001, certification on IRS Form W-8BEN or other certification in the case of
common shares held in an offshore account will be required to avoid backup
withholding and information reporting if:
- the sale of the common shares occurs within the United States; or
- the sale of the common shares is made through a foreign U.S. connected
broker.
REFUNDS
Any amounts withheld under the backup withholding rules from a payment to
you may be refunded or credited against your U.S. Federal income tax liability,
provided that you furnish the required information to the IRS.
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UNDERWRITING
Abbott and Goldman, Sachs & Co. ("Goldman Sachs") have entered into an
underwriting agreement with respect to the shares being offered. Subject to
certain conditions, Goldman Sachs has agreed to purchase all of the common
shares.
Shares sold by Goldman Sachs to the public will initially be offered at the
initial public offering price set forth on the cover of this prospectus
supplement. In addition, Goldman Sachs may receive from purchasers of shares
normal brokerage commissions in amounts agreed with those purchasers. If all the
shares are not sold at the initial offering price, Goldman Sachs may change the
offering price and other selling terms.
Abbott has agreed with Goldman Sachs not to dispose of or hedge any of its
common shares or securities convertible into or exchangeable for or that
represent the right to receive Abbott common shares during the period from the
date of this prospectus supplement continuing through the date 90 days after the
date of this prospectus supplement, except with the prior written consent of
Goldman Sachs, other than (A) as contemplated by the merger agreement with
Perclose, (B) as contemplated by the merger agreement with ALZA, (C) the
issuance by Abbott of common shares upon the exercise of an option or warrant or
the conversion of a security outstanding on the date of this prospectus
supplement or (D) the granting of common share options or the issuance of
restricted common shares under Abbott's current employee benefit plans.
In connection with the offering, Goldman Sachs may purchase and sell common
shares in the open market. These transactions may include short sales,
stabilizing transactions and purchases to cover positions created by short
sales. Short sales involve the sale by Goldman Sachs of a greater number of
shares than it is required to purchase in the offering. Stabilizing transactions
consist of certain bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the common shares while the offering
is in progress.
These activities by Goldman Sachs may stabilize, maintain or otherwise
affect the market price of the common shares. As a result, the price of the
common shares may be higher than the price that otherwise might exist in the
open market. If these activities are commenced, they may be discontinued by
Goldman Sachs at any time. These transactions may be effected on the New York
Stock Exchange, in the over-the-counter market or otherwise.
Abbott estimates that its total expenses for the offering, excluding
underwriting discounts and commissions, will be approximately $225,000.
Abbott has agreed to indemnify Goldman Sachs against certain liabilities,
including liabilities under the Securities Act of 1933.
Goldman Sachs has provided from time to time, and is expected to provide in
the future, investment banking and other financial services to Abbott, and
certain of Goldman Sachs' affiliates have engaged and may in the future engage
in commercial transactions in the ordinary course of business with Abbott.
Goldman Sachs acted as Abbott's financial advisor in connection with Abbott's
acquisition of Perclose. In the ordinary course of business, Goldman Sachs may
actively trade in Abbott's debt and equity securities for its own account or for
the accounts of customers and, accordingly, it may at any time hold long or
short positions in those securities.
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LEGAL MATTERS
The validity of the common shares offered by this prospectus supplement will
be passed upon for Abbott by Jose M. de Lasa, Esq., Abbott's Senior Vice
President, Secretary and General Counsel and by Mayer, Brown & Platt, Chicago,
Illinois, and for the underwriter by Skadden, Arps, Slate, Meagher & Flom
(Illinois), Chicago, Illinois. As of November 11, 1999, Mr. de Lasa beneficially
owned approximately 162,921 Abbott common shares and held options to acquire
413,175 shares of which options to purchase 188,977 shares are currently
exercisable. These amounts include approximately 932 shares held for the benefit
of Mr. de Lasa in the Abbott Laboratories Stock Retirement Trust pursuant to the
Abbott Laboratories Stock Retirement Plan. Skadden, Arps, Slate, Meagher & Flom
(Illinois) and its affiliates from time to time also represent Abbott in
connection with certain other matters.
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PROSPECTUS
ABBOTT LABORATORIES
By this prospectus, Abbott may offer from time to time a total of up to
$1,350,000,000 of common shares and debt securities, which may include up to:
--$600,000,000 of common shares
--$1,350,000,000 of debt securities
Abbott will provide you with the specific terms and the public offering
prices of these securities in supplements to this prospectus. You should read
this prospectus and the prospectus supplements carefully before you invest. This
prospectus may not be used to offer and sell securities unless accompanied by a
prospectus supplement.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus is truthful and complete. Any representation to the contrary is a
criminal offense.
This prospectus is dated November 11, 1999
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ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that Abbott filed with
the Securities and Exchange Commission under the shelf process. Abbott may sell
common shares for up to $600,000,000 and debt securities for up to
$1,350,000,000 under this prospectus, but the total sales of all securities sold
under this prospectus may not exceed $1,350,000,000. This prospectus provides
you with a general description of the securities Abbott may offer. Each time
Abbott sells securities, Abbott will provide a prospectus supplement that will
contain specific information about the terms of that offering. The prospectus
supplement may also add, update or change information contained in this
prospectus. You should read both this prospectus and any prospectus supplement
together with additional information described under the heading "Where You Can
Find More Information."
ABBOTT LABORATORIES
Abbott Laboratories is an Illinois corporation incorporated in 1900.
Abbott's principal business is the discovery, development, manufacture and sale
of a broad and diversified line of health care products and services.
Abbott has six revenue segments:
(1) Pharmaceutical Products--includes a broad line of adult and pediatric
pharmaceuticals which are sold primarily on the prescription or
recommendation of physicians.
(2) Diagnostic Products--includes diagnostic systems and tests for blood
banks, hospitals, commercial laboratories, alternate-care testing sites
and consumers.
(3) Hospital Products--includes drug and drug delivery systems,
perioperative and intensive care products, cardiovascular products, renal
products, oncology products, intravenous and irrigation solutions,
related manual and electronic administration equipment and diagnostic
imaging products for hospitals and alternate-care sites.
(4) Ross Products--includes a broad line of adult and pediatric
nutritionals. These products are sold primarily on the recommendation of
physicians or other health care professionals. The segment also includes
specialty pharmaceuticals and consumer products.
(5) International--includes a broad line of hospital, pharmaceutical and
adult and pediatric nutritional products marketed and primarily
manufactured outside the United States. These products are sold primarily
on the prescription or recommendation of physicians and other health care
professionals. This segment also includes consumer products.
(6) Chemical and Agricultural Products--includes agricultural and chemical
products, bulk pharmaceuticals and animal health products.
Abbott also has a 50 percent owned joint venture, TAP Holdings Inc. TAP and
its subsidiary develop and market pharmaceutical products in the United States.
TAP's products are generally sold directly to physicians, retailers,
wholesalers, health care facilities and government agencies.
Abbott purchases, in the ordinary course of business, necessary raw
materials and supplies essential to Abbott's operations from numerous suppliers
worldwide. Abbott markets products in approximately 130 countries through
affiliates and distributors. Most of Abbott's products are sold both in the
United States and internationally. Abbott employs approximately 56,000 persons
in its various offices, plants and facilities located throughout North America,
South America, Europe, Africa, Asia and Australia. Abbott's corporate offices
are located at 100 Abbott Park Road, Abbott Park, Illinois 60064-6400, and the
telephone number is (847) 937-6100.
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USE OF PROCEEDS
Abbott will use the net proceeds from the sale of the securities for general
corporate purposes.
DESCRIPTION OF DEBT SECURITIES
The debt securities will be issued under an indenture between Abbott and
Harris Trust and Savings Bank, as trustee. The following is a summary of the
material provisions of the indenture and is qualified in its entirety by the
provisions of the indenture, including definitions of certain terms used in the
indenture. Wherever Abbott refers to particular sections or defined terms of the
indenture, those sections or defined terms are incorporated by reference in this
prospectus or prospectus supplement. You should review the indenture that is
filed as an exhibit to the registration statement for additional information.
The following summarizes certain general terms and provisions of the debt
securities. Each time Abbott offers debt securities, the prospectus supplement
relating to that offering will describe the terms of the debt securities Abbott
is offering.
GENERAL
Abbott may issue debt securities from time to time in one or more series
without limitation as to aggregate principal amount. The debt securities will be
Abbott's unsecured and unsubordinated obligations and will rank equally and
ratably with Abbott's other unsecured and unsubordinated obligations.
Unless otherwise indicated in the prospectus supplement, principal of,
premium, if any, and interest on the debt securities will be payable, and the
transfer of debt securities will be registrable, at the office or agency to be
maintained by Abbott in Chicago and at any other office or agency Abbott
maintains for such purpose. The debt securities will be issued only in fully
registered form without coupons and, unless otherwise indicated in the
applicable prospectus supplement, in denominations of $1,000 or integral
multiples thereof. No service charge will be made for any registration of
transfer or exchange of the debt securities, but Abbott may require you to pay a
sum sufficient to cover any tax or other governmental charge imposed in
connection therewith.
The prospectus supplement will describe the following terms of the debt
securities Abbott is offering:
- the title of the debt securities;
- any limit on the aggregate principal amount of the debt securities;
- the date or dates on which the principal of the debt securities is
payable;
- the rate or rates, which may be fixed or variable, at which the debt
securities will bear interest or the method by which the rate or rates
will be determined, if any, the date or dates from which any interest will
accrue, the interest payment dates on which any interest will be payable,
and the regular record date for the interest payable on any interest
payment date;
- the place or places where the principal of and any premium and interest on
the debt securities will be payable;
- the person who is entitled to receive any interest on the debt securities,
if other than the record holder on the record date;
- the period or periods within which, the price or prices at which and the
terms and conditions upon which the debt securities may be redeemed, in
whole or in part, at the option of Abbott;
- the obligation, if any, of Abbott to redeem, purchase or repay the debt
securities pursuant to any sinking fund or analogous provisions or at the
option of a holder and the period or periods
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within which, the price or prices at which and the terms and conditions
upon which Abbott will redeem, purchase or repay, in whole or in part, the
debt securities pursuant to such obligation;
- the currency, currencies or currency units in which Abbott will pay the
principal of and any premium and interest on any debt securities, if other
than the currency of the United States of America;
- if the amount of payments of principal of or any premium or interest on
any debt securities may be determined with reference to an index or
formula, the manner in which such amounts will be determined;
- if the principal of or any premium or interest on any debt securities is
to be payable, at Abbott's election or at the election of the holder, in
one or more currencies or currency units other than that or those in which
the debt securities are stated to be payable, the currency, currencies or
currency units in which payment of the principal of and any premium and
interest on the debt securities as to which such election is made will be
payable, and the periods within which and the terms and conditions upon
which such election is to be made;
- if other than the principal amount thereof, the portion of the principal
amount of the debt securities which will be payable upon declaration of
acceleration of the maturity;
- the applicability of the provisions described in the section of this
prospectus captioned, "Defeasance and Covenant Defeasance;"
- if the debt securities will be issued in whole or in part in the form of a
book-entry security as described in the section of this prospectus
captioned, "Book-Entry Securities," the depository Abbott appointed or its
nominee with respect to the debt securities and the circumstances under
which the book-entry security may be registered for transfer or exchange
or authenticated and delivered in the name of a person other than the
depository or its nominee; and
- any other terms of the debt securities.
Abbott may offer and sell the debt securities as original issue discount
securities at a substantial discount below their stated principal amount. The
prospectus supplement will describe the federal income tax consequences and
other special considerations applicable to original issue discount securities
and any debt securities the federal tax laws treat as having been issued with
original issue discount. "Original issue discount securities" means any debt
security which provides for an amount less than its principal amount to be due
and payable upon the declaration of acceleration of the maturity of the debt
security upon the occurrence and continuation of an "Event of Default."
The indenture does not contain covenants or other provisions designed to
afford holders of the debt securities protection in the event of a highly
leveraged transaction, change in credit rating or other similar occurrence.
BOOK-ENTRY SECURITIES
The debt securities will be represented by one or more global securities.
Unless otherwise indicated in the prospectus supplement, the global security
representing the debt securities will be deposited with, or on behalf of, The
Depository Trust Company, New York, New York, or other successor depository
Abbott appoints and registered in the name of the depository or its nominee. The
debt securities will not be issued in definitive form unless otherwise provided
in the prospectus supplement.
DTC will act as securities depository for the securities. The debt
securities will be issued as fully-registered securities registered in the name
of Cede & Co. (DTC's partnership nominee). One fully-registered global security
will be issued with respect to each $200 million of principal amount and an
additional certificate will be issued with respect to any remaining principal
amount of debt securities.
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DTC is a limited-purpose trust company organized under the New York Banking
Law, a "banking organization" within the meaning of the New York Banking Law, a
member of the Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code, and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Securities Exchange
Act of 1934. DTC holds securities that its participants deposit with DTC. DTC
also facilitates the settlement among participants of securities transactions,
such as transfers and pledges, in deposited securities through electronic
computerized book-entry changes in participants' accounts, thereby eliminating
the need for physical movement of securities certificates. Direct participants
include securities brokers and dealers, banks, trust companies, clearing
corporations, and certain other organizations. DTC is owned by a number of its
direct participants and by the New York Stock Exchange, Inc., the American Stock
Exchange, Inc., and the National Association of Securities Dealers, Inc. Access
to the DTC system is also available to indirect participants such as securities
brokers and dealers, banks, and trust companies that clear through or maintain a
custodial relationship with a direct participant, either directly or indirectly.
The rules applicable to DTC and its participants are on file with the SEC.
Purchases of debt securities under the DTC system must be made by or through
direct participants, which will receive a credit for the debt securities on
DTC's records. The ownership interest of each actual purchaser of each debt
security is in turn to be recorded on the direct and indirect participants'
records. These beneficial owners will not receive written confirmation from DTC
of their purchase, but beneficial owners are expected to receive a written
confirmation providing details of the transaction, as well as periodic
statements of their holdings, from the direct or indirect participants through
which the beneficial owner entered into the transaction. Transfers of ownership
interests in the debt securities are to be accomplished by entries made on the
books of participants acting on behalf of beneficial owners. Beneficial owners
will not receive certificates representing their ownership interests in debt
securities, except in the event that use of the book-entry system for the debt
securities is discontinued.
To facilitate subsequent transfers, all debt securities deposited by
participants with DTC are registered in the name of DTC's partnership nominee,
Cede & Co. The deposit of debt securities with DTC and their registration in the
name of Cede & Co. will effect no change in beneficial ownership. DTC has no
knowledge of the actual beneficial owners of the debt securities; DTC's records
reflect only the identity of the direct participants to whose accounts the debt
securities are credited, which may or may not be the beneficial owners. The
participants will remain responsible for keeping account of their holdings on
behalf of their customers.
Delivery of notices and other communications by DTC to direct participants,
by direct participants to indirect participants, and by direct participants and
indirect participants to beneficial owners will be governed by arrangements
among them, subject to any statutory or regulatory requirements as may be in
effect from time to time.
Redemption notices shall be sent to DTC. If less than all of the debt
securities within an issue are being redeemed, DTC's practice is to determine by
lot the amount of the interest of each direct participant in such issue to be
redeemed.
Neither DTC nor Cede & Co will consent or vote with respect to debt
securities. Under its usual procedures, DTC mails an omnibus proxy to Abbott as
soon as possible after the record date. The omnibus proxy assigns Cede & Co.'s
consenting or voting rights to those direct participants to whose accounts the
debt securities are credited on the record date (identified in a listing
attached to the omnibus proxy).
Principal and interest payments, if any, on the debt securities will be made
to Cede & Co., as nominee of DTC. DTC's practice is to credit direct
participants' accounts, upon DTC's receipt of funds and corresponding detail
information from Abbott or the trustee, on the applicable payable date in
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accordance with their respective holdings shown on DTC's records. Payments by
participants to beneficial owners will be governed by standing instructions and
customary practices, as is the case with securities held for the accounts of
customers in bearer form or registered in "street name," and will be the
responsibility of that participant and not of DTC, the trustee or Abbott,
subject to any statutory or regulatory requirements as may be in effect from
time to time. Payment of principal and interest to Cede & Co. is Abbott's
responsibility or the trustee's, disbursement of payments to direct participants
shall be the responsibility of DTC, and disbursement of payments to beneficial
owners is the responsibility of direct and indirect participants.
A beneficial owner must give notice to elect to have its debt securities
purchased or tendered, through its participant, to a tender agent, and shall
effect delivery of debt securities by causing the direct participants to
transfer the participant's interest in the debt securities, on DTC's records, to
a tender agent. The requirement for physical delivery of debt securities in
connection with an optional tender or a mandatory purchase will be deemed
satisfied when the ownership rights in the debt securities are transferred by
direct participants on DTC's records and followed by a book-entry credit of
tendered debt securities to the tender agent's account.
DTC may discontinue providing its services as securities depository with
respect to the debt securities at any time by giving reasonable notice to Abbott
or the trustee. Under these circumstances, in the event that a successor
securities depository is not obtained debt security certificates are required to
be printed and delivered.
Abbott may decide to discontinue use of the system of book-entry transfers
through DTC (or a successor securities depository). In that event, debt security
certificates will be printed and delivered.
The information in this section concerning DTC and DTC's book-entry system
has been obtained from sources that Abbott believes to be reliable, but Abbott
takes no responsibility for their accuracy.
CERTAIN COVENANTS OF THE COMPANY
RESTRICTIONS ON SECURED DEBT. Unless otherwise provided in the prospectus
supplement with respect to any series of the debt securities, if Abbott or any
domestic subsidiary incurs, issues, assumes or guarantees any indebtedness for
borrowed money represented by notes, bonds, debentures or other similar
evidences of indebtedness, secured by a mortgage, pledge or other lien on any
principal domestic property or on any shares of stock or debt of any domestic
subsidiary, Abbott will secure, or cause its domestic subsidiary to secure, the
debt securities equally and ratably with, or prior to, that indebtedness, so
long as that indebtedness is to be secured, unless after giving effect to it the
aggregate amount of all secured indebtedness, together with all attributable
debt in respect of sale and leaseback transactions involving principal domestic
properties, would not exceed 15% of Abbott's consolidated net assets. This
restriction will not apply to, and there shall be excluded in computing secured
indebtedness for the purpose of this restriction, indebtedness secured by:
- mortgages on property of, or on any shares of stock or debt of, any
corporation existing at the time that corporation becomes a domestic
subsidiary;
- mortgages in favor of Abbott or any domestic subsidiary;
- mortgages in favor of U.S. or foreign governmental bodies to secure
partial, progress, advance or other payments;
- mortgages on property, shares of stock or debt existing at the time of
acquisition, including acquisition through merger or consolidation,
purchase money mortgages and construction cost mortgages existing at or
incurred within 120 days of the time of acquisition;
- mortgages existing on the first date on which the debt security is
authenticated by the trustee;
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- mortgages incurred in connection with pollution control, industrial
revenue or similar financings; and
- any extension, renewal or replacement of any debt secured by any mortgage
referred to in the foregoing list, inclusive.
The following are the meanings of terms that are important in understanding
the restrictive covenants previously described:
- "subsidiary" means any corporation of which Abbott directly or indirectly
owns or controls stock which under ordinary circumstances, not dependent
upon the happening of a contingency, has the voting power to elect a
majority of that corporation's board of directors. The term does not
include any corporation that does not own a principal domestic property
and Abbott's principal executive officer, president and principal
financial officer determine in good faith that Abbott's existing aggregate
investments, including those of its domestic subsidiaries, in the
corporation are not of material importance to the total business
conducted, or assets owned, by Abbott or its domestic subsidiaries.
- "domestic subsidiary" means a subsidiary of Abbott which transacts
substantially all of its business or maintains substantially all of its
property within the United States, excluding its territories, possessions
and Puerto Rico, except a subsidiary which:
(1) is engaged primarily in financing operations outside of the United
States or in leasing personal property or financing inventory,
receivables or other property; or
(2) does not own a principal domestic property.
- "principal domestic property" means any building, structure or other
facility, together with the land on which it is erected and fixtures
comprising a part of it, used primarily for manufacturing, processing,
research, warehousing or distribution, located in the United States,
excluding its territories, possessions and Puerto Rico, owned or leased by
Abbott or one of Abbott's subsidiaries and having a net book value in
excess of 2% of Abbott's consolidated net assets, other than any such
building, structure or other facility or a portion which is a pollution
control facility financed by state or local governmental obligations or
which Abbott's principal executive officer, president and principal
financial officer determine in good faith is not of material importance to
the total business conducted or assets owned by Abbott and its
subsidiaries as an entirety.
- "consolidated net assets" means the aggregate amount of assets, less
reserves and other deductible items, after deducting current liabilities,
as shown on Abbott's consolidated balance sheet contained in the latest
annual report to Abbott's stockholders and prepared in accordance with
generally accepted accounting principles.
- "attributable debt" means the present value (discounted at the rate of 8%
each year compounded monthly) of the obligations for rental payments
required to be paid during the remaining term of any lease of more than 12
months.
RESTRICTIONS ON SALES AND LEASEBACKS. Unless otherwise provided in the
prospectus supplement with respect to any series of the debt securities, neither
Abbott nor any domestic subsidiary may enter into any sale and leaseback
transaction involving any principal domestic property, the acquisition or
completion of construction and commencement of full operation of which has
occurred more than 120 days prior thereto, unless:
- Abbott or the domestic subsidiary could incur a mortgage on the property
under the restrictions described above under "Restrictions on Secured
Debt" in an amount equal to the attributable debt with respect to the sale
and leaseback transaction without equally and ratably securing the debt
securities; or
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- Abbott, within 120 days after the sale or transfer by Abbott or any
domestic subsidiary, apply to the retirement of Abbott's funded debt,
which is defined as indebtedness for borrowed money having a maturity of,
or by its terms extendible or renewable for, a period of more than
12 months after the date of determination of the amount, an amount equal
to the greater of:
(1) the net proceeds of the sale of the principal domestic property sold
and leased under such arrangement; or
(2) the fair market value of the principal domestic property sold and
leased, subject to credits for certain voluntary retirements of
funded debt.
EVENTS OF DEFAULT
With respect to a series of debt securities, any one of the following events
will constitute an event of default under the indenture:
- failure to pay any interest on any debt security of that series when due,
continued for 30 days;
- failure to pay principal of or any premium on any debt security of that
series when due;
- failure to deposit any sinking fund payment, when due, in respect of any
debt security of that series;
- Abbott's failure to perform, or breach of, any other covenant or warranty
in the indenture, other than a covenant included in the indenture solely
for the benefit of a series of debt securities other than that series,
continued for 90 days after written notice as provided in the indenture;
- certain events involving the bankruptcy, insolvency or reorganization of
Abbott; or
- any other event of default provided with respect to debt securities of
that series.
If any event of default occurs and continues, either the trustee of the
holders of at least 25 percent in aggregate principal amount of the outstanding
debt securities of that series may declare the principal amount or, if the debt
securities of that series are original issue discount securities, the portion of
the principal amount as may be specified in the terms of those debt securities,
of all the debt securities of that series to be due and payable immediately by a
notice in writing to Abbott, and to the trustee if given by holders. The
principal amount (or specified amount) will then be immediately due and payable.
After acceleration, but before a judgment or decree based on acceleration has
been obtained, the holders of a majority in aggregate principal amount of
outstanding debt securities of that series may, under certain circumstances,
rescind and annul the acceleration.
The prospectus supplement relating to any series of debt securities that are
original issue discount securities will contain the particular provisions
relating to acceleration of the stated maturity of a portion of the principal
amount of that series of original issue discount securities upon the occurrence
and continuation of an event of default.
The indenture provides that, subject to the duty of the trustee during
default to act with the required standard of care, the trustee will be under no
obligation to exercise any of its rights or powers under the indenture at the
request or direction of any of the holders, unless the holders offer the trustee
reasonable indemnity. Generally, the holders of a majority in aggregate
principal amount of the debt securities of any series will have the right to
direct the time, method and place of conducting any proceeding for any remedy
available to the trustee, or exercising any trust or power conferred on the
trustee.
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A holder of any series of debt securities will not have any right to
institute any proceeding with respect to the indenture, or for the appointment
of a receiver or trustee, or for any other remedy, unless:
- the holder has previously given to the trustee written notice of a
continuing event of default;
- the holders of at least 25 percent in principal amount of the debt
securities of that series have made written request, and offered
reasonable indemnity, to the trustee to institute such proceeding as
trustee;
- the trustee shall not have received from the holders of a majority in
aggregate principal amount of the debt securities of that series a
direction inconsistent with such request; and
- the trustee has not instituted proceedings within 60 days.
However, these limitations do not apply to a suit instituted by a holder for
enforcement of payment of the principal of and premium, if any, or interest on
their debt security on or after the respective due dates.
Abbott is required to furnish to the trustee annually a statement as to its
performance of certain obligations under the indenture and as to any default.
MODIFICATION AND WAIVER
Abbott and the trustee may modify and amend the indenture with the consent
of the holders of not less than the majority in aggregate principal amount of
the outstanding debt securities of each series which is affected. Neither Abbott
nor the trustee may, however, modify or amend without the consent of the holders
of all debt securities affected if such action would:
- change the stated maturity of the principal of, or any installment of
principal of or interest on, any debt security;
- reduce the principal amount of, or the premium, if any, or, except as
otherwise provided in the prospectus supplement, interest on, any debt
security, including in the case of an original issue discount security the
amount payable upon acceleration of the maturity;
- change the place or currency of payment of principal of, premium, if any,
or interest on any debt security;
- impair the right to institute suit for the enforcement of any payment on
any debt security on or at the stated maturity thereof, or in the case of
redemption, on or after the redemption date;
- reduce the percentage in principal amount of outstanding debt securities
of any series, the consent of whose holders is required for modification
or amendment of the indenture or for waiver of compliance with certain
provisions of the indenture or for waiver of certain defaults; or
- modify certain provisions of the indenture, except to increase any
percentage of principal amount whose holders are required to approve any
change to such provision or to provide that certain other provisions of
the indenture cannot be modified or waived without the consent of each
holder affected.
The holders of at least a majority in aggregate principal amount of the
outstanding debt securities of any series may, on behalf of all holders of that
series, waive compliance by Abbott with certain restrictive provisions of the
indenture. The holders of not less than a majority in aggregate principal amount
of the outstanding debt securities of any series may, on behalf of all holders
of that series, waive any past default under the indenture, except (1) a default
in the payment of principal, premium or interest and (2) in respect of a
covenant or provision of the indenture that cannot be modified or
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amended without the consent of those holders of each outstanding debt security
of that series who were affected.
CONSOLIDATION, MERGER AND SALE OF ASSETS
Abbott may not consolidate with or merge into any other company or entity or
convey, transfer or lease its properties and assets substantially as an entirety
and may not permit any company or entity to merge into or consolidate with
Abbott or convey, transfer or lease its properties and assets substantially as
an entirety to Abbott, unless:
- in case Abbott consolidates with or merges into another person or conveys,
transfers or leases its properties substantially as an entirety to any
person, the person formed by that consolidation or into which Abbott is
merged or the person which acquires by conveyance or transfer, or which
leases, Abbott's properties and assets substantially as an entirety is a
corporation, partnership, or trust organized under the laws of the United
States of America, any State or the District of Columbia, and expressly
assumes Abbott's obligations on the debt securities under a supplemental
indenture;
- immediately after giving effect to the transaction no event of default,
and no event which, after notice or lapse of time or both, would become an
event of default, has occurred and is continuing;
- if Abbott's properties or assets become subject to a mortgage, pledge,
lien, security interest or other encumbrance not permitted by the
indenture, Abbott or such successor, as the case may be, takes the
necessary steps to secure the debt securities equally and ratably with, or
prior to, all indebtedness secured thereby; and
- Abbott has delivered to the trustee an officers' certificate and an
opinion of counsel stating compliance with these provisions.
DEFEASANCE AND COVENANT DEFEASANCE
The indenture provides, unless otherwise indicated in the prospectus
supplement relating to that particular series of debt securities, that, at
Abbott's option, Abbott:
- will be discharged from any and all obligations in respect of the debt
securities of any series, except for certain obligations to register the
transfer of or exchange of debt securities of that series, replace stolen,
lost or mutilated debt securities of that series, maintain paying agencies
and hold moneys for payment in trust; or
- need not comply with certain restrictive covenants of the indenture,
including those described in the section of the prospectus captioned,
"Certain Covenants of the Company," and the occurrence of an event
described in the fourth bullet point in the section of the prospectus
captioned, "Event of Default" will no longer be an event of default, in
each case, if Abbott deposits, in trust, with the trustee money or U.S.
Government Obligations, which through the payment of interest and
principal in accordance with their terms will provide money, in an amount
sufficient to pay all the principal of and premium, if any, and interest
on the debt securities of that series on the dates such payments are due,
which may include one or more redemption dates that Abbott designates, in
accordance with the terms of the debt securities of that series.
Abbott may establish this trust only if, among other things:
- no event of default or event which with the giving of notice or lapse of
time, or both, would become an event of default under the indenture shall
have occurred and is continuing on the date of the deposit or insofar as
an event of default resulting from certain events involving Abbott's
bankruptcy or insolvency at any time during the period ending on the 121st
day after
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the date of the deposit or, if longer, ending on the day following the
expiration of the longest preference period applicable to Abbott in
respect of the deposit;
- the deposit will not cause the trustee to have any conflicting interest
with respect to any other of Abbott's securities or result in the trust
arising from the deposit to constitute, unless it is qualified as, a
"regulated investment company";
- the defeasance will not result, in a breach or violation of, or constitute
a default under, the indenture or any other agreement or instrument to
which Abbott is a party or by which Abbott is bound; and
- Abbott has delivered an opinion of counsel to the effect that the holders
will not recognize income, gain or loss for federal income tax purposes as
a result of the deposit or defeasance and will be subject to federal
income tax in the same manner as if the defeasance had not occurred, which
opinion of counsel, in the case of first item above, must refer to and be
based upon a published ruling of the Internal Revenue Service, a private
ruling of the Internal Revenue Service addressed to Abbott, or otherwise a
change in applicable federal income tax law occurring after the date of
the indenture.
In the event Abbott omits to comply with its remaining obligations under the
indenture after a defeasance of the indenture with respect to the debt
securities of any series as described under the second item of the preceding
sentence and the debt securities of such series are declared due and payable
because of the occurrence of any event of default, the amount of money and U.S.
Government obligations on deposit with the trustee may be insufficient to pay
amounts due on the debt securities of that series at the time of the
acceleration resulting from the event of default. Abbott will, however, remain
liable for those payments.
CONCERNING THE TRUSTEE
Harris Trust and Savings Bank is trustee under the indenture. The trustee
performs services for Abbott in the ordinary course of business.
DESCRIPTION OF COMMON SHARES
AUTHORIZED AND OUTSTANDING
As of June 30, 1999, Abbott had 2,400,000,000 authorized common shares, of
which 1,521,151,090 were outstanding, and 1,000,000 authorized preferred shares,
of which none were outstanding. Abbott's board of directors determines the terms
and the manner in which the preferred shares may be issued.
LISTING
Abbott's common shares are listed on the New York, Chicago, Pacific and
London exchanges, as well as the Swiss stock exchange. They are traded on the
Boston, Cincinnati and Philadelphia exchanges. The ticker symbol for Abbott's
common shares is ABT.
DIVIDENDS
The board of directors may authorize, and Abbott may make, distributions to
its common shareholders, subject to any restriction in Abbott's articles of
incorporation and to those limitations prescribed by law.
FULLY PAID
All of Abbott's outstanding common shares are fully paid and non-assessable.
Any additional common shares that Abbott issues will be fully paid and
non-assessable.
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VOTING RIGHTS
Each of Abbott's outstanding common shares is entitled to one vote in each
matter submitted to a vote at a meeting of shareholders and, in all elections
for directors, every shareholder has the right to vote the number of shares
owned by it for as many persons as there are directors to be elected, or to
cumulate its votes and give one candidate as many votes as shall equal the
number of directors multiplied by the number of shares or to distribute its
cumulative votes in any proportion among any number of candidates, provided
directors are elected according to Abbott's articles of incorporation and
by-laws. Abbott's shareholders may vote either in person or by proxy.
SHAREHOLDER ACTION BY WRITTEN CONSENT; MEETINGS
Under Illinois corporate law, any action required to be taken by Abbott's
shareholders may be taken without a meeting and without a vote if a consent in
writing is signed by holders of shares having at least the number of votes
necessary at a shareholder meeting.
Abbott's by-laws provide that special meetings of the shareholders of the
corporation may be called only by:
- the board of directors;
- the chairman of the board of directors;
- the chief executive officer;
- the president; or
- the holders of not less than one-fifth of all outstanding shares entitled
to vote on the matter for which the meeting is called.
TRANSFER AGENT AND REGISTRAR
BankBoston, N.A. is Abbott's transfer agent and registrar. BankBoston is
located in Boston, Massachusetts.
PLAN OF DISTRIBUTION
Abbott may sell the securities:
- directly to purchasers, or
- through agents, underwriters, or dealers, or
- through a combination of any of these methods of sale.
Abbott may distribute the securities from time to time in one or more
transactions at a fixed price or prices, which may be changed, or at market
prices prevailing at the time of sale, at prices related to the prevailing
market prices or at negotiated prices.
Abbott may designate agents to solicit offers to purchase the securities
from time to time. These agents may be deemed to be underwriters, as defined in
the Securities Act of 1933, involved in the offer or sale of the securities. The
prospectus supplement will name the agents and any commissions Abbott pays them.
Agents may be entitled to indemnification by Abbott against certain liabilities,
including liabilities under the Securities Act of 1933, under agreements between
Abbott and the agents, and the agents or their affiliates may extend credit to
or engage in transactions with or perform services for Abbott in the ordinary
course of business. Unless otherwise indicated in the prospectus supplement, any
agent will be acting on a reasonable efforts basis for the period of its
appointment.
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If Abbott uses any underwriters in the sale, Abbott will enter into an
underwriting agreement with them at the time of sale and the names of the
underwriters and the terms of the transaction will be set forth in the
prospectus supplement that the underwriters use to make resales of the
securities. The underwriters may be entitled under the relevant underwriting
agreement to indemnification by Abbott against certain liabilities, including
liabilities under the Securities Act of 1933, and the underwriters or their
affiliates may extend credit to or engage in transactions with or perform
services for us in the ordinary course of business.
If Abbott uses dealers in the sale of the securities, Abbott will sell the
securities to those dealers, as principal. The dealers may then resell the
securities to the public at varying prices to be determined by them at the time
of resale. Dealers may be entitled to indemnification by us against certain
liabilities, including liabilities under the Securities Act of 1933, and the
dealers or their affiliates may extend credit to or engage in transactions with
or perform services for Abbott in the ordinary course of business.
The debt securities are not proposed to be listed on a securities exchange,
and any underwriters or dealers will not be obligated to make a market in debt
securities. Abbott cannot predict the activity or liquidity of any trading in
the debt securities.
LEGAL OPINIONS
Certain legal matters in connection with the securities offered hereby will
be passed upon for Abbott by Jose M. de Lasa, Esq., Abbott's Senior Vice
President, General Counsel and Secretary and by Mayer, Brown & Platt, Chicago,
Illinois, and for the underwriters, dealers and agents, if any, by Skadden,
Arps, Slate, Meagher & Flom, Chicago, Illinois. As of July 21, 1999, Mr. de Lasa
beneficially owned approximately 168,117 Abbott common shares and held options
to acquire 413,175 shares of which options to purchase 188,977 shares are
currently exercisable. (These amounts include approximately 928 shares held for
the benefit of Mr. de Lasa in the Abbott Laboratories Stock Retirement Trust
pursuant to the Abbott Laboratories Stock Retirement Plan). The opinions of
Mr. de Lasa, Mayer, Brown & Platt and Skadden, Arps, Slate, Meagher & Flom may
be conditioned upon, and may be subject to certain assumptions regarding, future
action required to be taken by Abbott and any underwriter(s), dealer(s) or
agent(s) in connection with the issuance and sale of any securities. The
opinions of Mr. de Lasa, Mayer, Brown & Platt and Skadden, Arps, Slate, Meagher
& Flom with respect to securities may be subject to other conditions and
assumptions, as indicated in the prospectus supplement. Skadden, Arps, Slate,
Meagher & Flom from time to time also represents Abbott in connection with
certain other matters.
EXPERTS
Arthur Andersen LLP, independent public accountants, have audited Abbot's
consolidated financial statements and schedules included in the Annual Report on
Form 10-K for the year ended December 31, 1998, as indicated in their reports,
which is incorporated by reference in this registration statement. The
consolidated financial statements and schedules are incorporated by reference in
reliance on Arthur Andersen LLP's report which is given on their authority as
experts in accounting and auditing.
WHERE YOU CAN FIND MORE INFORMATION
Abbott files annual, quarterly and special reports, proxy statements and
other information with the SEC. You may read and copy any document Abbott files
at the SEC's public reference rooms at 450 Fifth Street, N.W., Washington D.C.
20549, and in New York, New York and Chicago, Illinois. Please call the SEC at
1-800-SEC-0330 for further information on the public reference rooms. Abbott's
SEC filings are also available to the public from the SEC's web site at
http://www.sec.gov. Abbott's
13
<PAGE>
common shares are listed on the New York Stock Exchange, the Chicago Stock
Exchange, and the Pacific Exchange, and information about Abbott also is
available there.
This prospectus is part of a registration statement that Abbott filed with
the SEC. The SEC allows Abbott to "incorporate by reference" the information
Abbott files with the SEC. This means that Abbott can disclose important
information to you by referring you to other documents that Abbott identifies as
part of this prospectus. The information incorporated by reference is considered
to be part of this prospectus. Abbott incorporates by reference the documents
listed below:
- Annual Report on Form 10-K for the year ended December 31, 1998.
- Quarterly Report on Form 10-Q for the quarter end March 31, 1999.
- Quarterly Report on Form 10-Q for the quarter ended June 30, 1999.
- Quarterly Report on Form 10-Q for the quarter ended September 30, 1999.
- Current Report on Form 8-K dated June 30, 1999.
- Current Report on Form 8-K dated September 28, 1999.
- Current Report on Form 8-K dated November 2, 1999.
- Current Report on Form 8-K dated November 10, 1999.
- Comparative per Share Information and Pro Forma Financial Information of
Abbott contained in the Form S-4 Registration Statement, File
No. 333-85265, filed with the SEC on August 16, 1999, and any amendment or
report filed for the purpose of updating that description.
- Comparative per Share Information and Pro Forma Financial Information of
Abbott contained in the supplement dated November 8, 1999 to the proxy
statement/prospectus dated August 26, 1999 contained in the Form S-4
Registration Statement, File No. 333-85867 filed with the SEC on
August 25, 1999 and any amendment or report filed for the purpose of
updating that description.
Abbott also incorporates by reference any future filings it makes with the SEC
under Sections 13(a), 13(c), 14 or 15(d) of the Securities Exchange Act of 1934
(1) after the date of the filing of this registration statement and before its
effectiveness and (2) until Abbott has sold all of the securities to which this
prospectus relates or the offering is otherwise terminated. Abbott's subsequent
filings with the SEC will automatically update and supersede information in this
prospectus.
You may obtain a copy of these filings at no cost by writing to or
telephoning Abbott at the following address and telephone number:
Abbott Laboratories
100 Abbott Park Road
Abbott Park, Illinois 60064-6020
Attention: Jose M. de Lasa,
Senior Vice President, Secretary
and General Counsel
Phone: (847) 937-8905
You should rely only on the information incorporated by reference or
provided in this prospectus or any supplement. Abbott has not authorized anyone
else to provide you with different information. This prospectus is an offer to
sell or buy only the securities described in this document, but only under
circumstances and in jurisdictions where it is lawful to do so. The information
contained in this prospectus is current and accurate only as of the date of this
prospectus.
14
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No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely on
any unauthorized information or representations. This prospectus is an offer to
sell only the shares offered hereby, but only under circumstances and in
jurisdictions where it is lawful to do so. The information contained in this
prospectus is current only as of its date.
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TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
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<S> <C>
Prospectus Supplement
Forward-Looking Statements........... S-2
Recent Developments.................. S-2
Certain United States Federal Tax
Considerations for Non-U.S. Holders
of Common Shares................... S-6
Underwriting......................... S-9
Legal Matters........................ S-10
Prospectus
About this Prospectus................ 2
Abbott Laboratories.................. 2
Use of Proceeds...................... 3
Description of Debt Securities....... 3
Description of Common Shares......... 11
Plan of Distribution................. 12
Legal Matters........................ 13
Experts.............................. 13
Where You Can Find More Information.. 13
</TABLE>
9,000,000 Shares
ABBOTT LABORATORIES
Common Shares
-----------------------------
PROSPECTUS SUPPLEMENT
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GOLDMAN, SACHS & CO.
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