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SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934 (Amendment No. )
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/ / Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted by Rule
14a-6(e)(2))
/X/ Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section240.14a-11(c) or
Section240.14a-12
ABBOTT LABORATORIES
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(Name of Registrant as Specified In Its Charter)
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(Name of Person(s) Filing Proxy Statement, if other than the Registrant)
Payment of Filing Fee (Check the appropriate box):
/X/ No fee required.
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(1)
and 0-11.
(1) Title of each class of securities to which transaction applies:
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(2) Aggregate number of securities to which transaction applies:
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(3) Per unit price or other underlying value of transaction computed
pursuant to Exchange Act Rule 0-11 (set forth the amount on which the
filing fee is calculated and state how it was determined):
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(4) Proposed maximum aggregate value of transaction:
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(5) Total fee paid:
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/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by Exchange Act Rule
0-11(a)(2) and identify the filing for which the offsetting fee was paid
previously. Identify the previous filing by registration statement number,
or the Form or Schedule and the date of its filing.
(1) Amount Previously Paid:
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(2) Form, Schedule or Registration Statement No.:
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(3) Filing Party:
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(4) Date Filed:
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[PHOTO]
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[ABBOTT LABORATORIES LOGO]
ABBOTT LABORATORIES
100 ABBOTT PARK ROAD
ABBOTT PARK, ILLINOIS 60064-6400 U.S.A.
COVER:
FOR THREE TO FOUR LONG YEARS, ELLEN SAVAGE, 45, AN OB-GYN NURSE FROM HIGHLAND
PARK, ILL., SUFFERED THROUGH THE AGONY OF DAILY MIGRAINE HEADACHES. BATTLING
THROUGH DAILY PAIN DRAINED HER ENERGY AND ROBBED HER OF THE ABILITY TO MAINTAIN
AN ACTIVE LIFESTYLE.
BY EARLY 1997, SHE HAD TRIED, WITHOUT SUCCESS, APPROXIMATELY 10 DIFFERENT
MEDICATIONS, AND COMBINATIONS OF MEDICATIONS. THEN HER DOCTOR PRESCRIBED
DEPAKOTE-REGISTERED TRADEMARK-, AND SHE ACHIEVED DRAMATIC RESULTS WITHIN THREE
MONTHS.
ORIGINALLY LAUNCHED AS AN ANTI-CONVULSANT FOR THE TREATMENT OF EPILEPSY,
DEPAKOTE IS NOW THE NUMBER ONE BRANDED THERAPY FOR MIGRAINE HEADACHE PREVENTION.
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YOUR VOTE
IS IMPORTANT
PLEASE SIGN AND PROMPTLY RETURN YOUR
PROXY IN THE ENCLOSED ENVELOPE OR VOTE
YOUR SHARES BY TELEPHONE OR USING THE INTERNET.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
The Annual Meeting of the Shareholders of Abbott Laboratories will be held at
Abbott's headquarters, 100 Abbott Park Road, at the intersection of Route 137
and Waukegan Road, Lake County, Illinois, on Friday, April 23, 1999, at 9:00
a.m. for the following purposes:
(1) To elect 13 directors to hold office until the next
Annual Meeting or until their successors are elected (Item 1 on proxy card);
(2) To ratify the appointment of Arthur Andersen LLP
as auditors of Abbott for 1999 (Item 2 on proxy card); and
(3) To transact such other business as may properly
come before the meeting, including consideration of the shareholder proposals on
the endorsement of the CERES Principles and the Phase-Out Production of PVC
Medical Products, if such proposals are presented at the meeting (Items 3 and 4
on proxy card).
The board of directors recommends that you vote FOR Items 1 and 2 on the proxy
card. The board of directors OPPOSES both shareholder proposals and recommends
that you vote AGAINST Items 3 and 4 on the proxy card.
The close of business February 24, 1999, has been fixed as the record date for
determining the shareholders entitled to receive notice of and to vote at the
Annual Meeting.
Admission to the meeting will be by admission card only. If you plan to attend,
please complete and return the reservation form on the back cover, and an
admission card will be sent to you.
By order of the board of directors.
JOSE M. DE LASA
SECRETARY
March 9, 1999
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ABBOTT LABORATORIES
PROXY STATEMENT
SOLICITATION OF PROXIES
The accompanying proxy is solicited on behalf of the board of directors for use
at the Annual Meeting of Shareholders. The meeting will be held on April 23,
1999, at Abbott's headquarters, 100 Abbott Park Road, at the intersection of
Route 137 and Waukegan Road, Lake County, Illinois. This proxy statement and the
accompanying proxy card are being mailed to shareholders on or about March 9,
1999. Abbott will bear the cost of making solicitations from its shareholders
and will reimburse banks and brokerage firms for out-of-pocket expenses incurred
in connection with this solicitation. Proxies may be solicited by mail or in
person by directors, officers, or employees of Abbott and its subsidiaries.
Abbott has retained Georgeson & Company Inc. to aid in the solicitation of
proxies, at an estimated cost of $14,000 plus reimbursement for reasonable
out-of-pocket expenses.
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VOTING SECURITIES AND RECORD DATE
Shareholders of record at the close of business on February 24, 1999, will be
entitled to notice of and to vote at the Annual Meeting. As of January 31, 1999,
Abbott had 1,517,068,371 outstanding common shares, which are the only
outstanding voting securities.
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VOTING OF PROXIES
A shareholder may vote in person or through the valid appointment of a proxy.
The bylaws provide that a shareholder may authorize no more than three persons
as proxies to attend and vote at the meeting. Proxies may be revoked at any time
prior to the meeting. This may be done by written notice delivered to the
secretary of Abbott, or by delivering an authorized proxy with a later date.
Most of Abbott's shareholders may vote their shares by telephone, using the
internet, or by mail. If you vote by telephone or using the internet, you do not
need to return your proxy card. The instructions for voting by telephone or
using the internet can be found with your proxy card.
All shareholders have cumulative voting rights in the election of directors and
one vote per share on all other matters. Cumulative voting allows a shareholder
to multiply the number of shares owned by the number of directors to be elected
and to cast the total for one nominee or distribute the votes among the nominees
as the shareholder desires. Nominees who receive the greatest number of votes
will be elected. If you wish to
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cumulate your votes, you must sign and mail in your proxy card or attend the
Annual Meeting.
Unless authority is withheld in accordance with instructions on the proxy, the
persons named in the proxy will vote the shares covered by proxies they receive
to elect the 13 nominees hereinafter named. These shares may be voted
cumulatively so that one or more of the nominees may receive fewer votes than
the other nominees (or no votes at all). Should a nominee become unavailable to
serve, the shares will be voted for a substitute designated by the board of
directors, or for fewer than 13 nominees if, in the judgment of the proxy
holders, such action is necessary or desirable.
Where a shareholder has specified a choice for or against the ratification of
the appointment of Arthur Andersen LLP as auditors, or the approval of either or
both of the shareholder proposals, or where the shareholder has abstained on
these matters, the shares represented by the proxy will be voted as specified.
Where no choice has been specified, the proxy will be voted FOR ratification of
Arthur Andersen LLP as auditors and AGAINST both shareholder proposals.
A majority of the outstanding shares entitled to vote on a matter, represented
in person or by proxy, shall constitute a quorum for consideration of such
matter at the meeting. The affirmative vote of a majority of the shares
represented at the meeting and entitled to vote on a matter shall be the act of
the shareholders with respect to that matter. Abstentions and withheld votes
have the effect of votes against a matter.
A proxy may indicate that all or a portion of the shares represented by such
proxy are not being voted with respect to a particular matter. This could occur,
for example, when a broker or bank is not permitted to vote stock held in street
name on certain matters in the absence of instructions from the beneficial owner
of the stock. These "non-voted shares" will be considered shares not present
and, therefore, not entitled to vote on such matter, although these shares may
be considered present and entitled to vote for other purposes. Non-voted shares
will not affect the determination of the outcome of the vote on any matter to be
decided at the meeting.
It is Abbott's policy that all proxies, ballots, and voting tabulations that
reveal how a particular shareholder has voted be kept confidential and not be
disclosed, except: (i) where disclosure may be required by law or regulation,
(ii) where disclosure may be necessary in order for Abbott to assert or defend
claims, (iii) where a shareholder provides comments with his or her proxy, (iv)
where a shareholder expressly requests disclosure, (v) to allow the inspectors
of election to certify the results of a vote, or (vi) in limited circumstances,
such as a contested election or proxy solicitation not approved and recommended
by the board of directors.
The inspectors of election and the tabulators of all proxies, ballots, and
voting tabulations that identify shareholders are independent and are not Abbott
employees.
The board of directors is not aware of any other issue which may properly be
brought before the meeting. If other matters are properly brought before the
meeting, the accompanying proxy will be voted in accordance with the judgment of
the proxy holders.
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INFORMATION CONCERNING SECURITY OWNERSHIP
On January 31, 1999, the Abbott Laboratories Stock Retirement Trust, c/o Abbott
Laboratories, 100 Abbott Park Road, Abbott Park, Illinois 60064-6400, held
106,719,327 of Abbott's common shares (approximately 7.0 percent of the
outstanding common shares). These shares were held for the individual accounts
of approximately 36,399 employees and other plan participants who participate in
the Abbott Laboratories Stock Retirement Plan. The Stock Retirement Trust is
administered by both a trustee and three co-trustees. The trustee of the Trust
is Putnam Fiduciary Trust Company. The co-trustees are G. P. Coughlan, T. C.
Freyman, and T. M. Wascoe, officers of Abbott. The voting power with respect to
the shares owned by the Trust is held by and shared among the co-trustees. The
co-trustees must solicit and follow voting instructions from the participants,
if the co-trustees determine that a matter to be voted on at a shareholder
meeting could materially affect the interests of participants. The individual
participants have investment power over these shares, as provided by the terms
of the Trust. The Trust Agreement is of unlimited duration. The co-trustees are
also fiduciaries for certain other employee benefit trusts maintained by Abbott
and have shared voting and/or investment power with respect to the 2,995,750
common shares (approximately .2 percent of the outstanding shares of Abbott)
held by those trusts.
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COMMITTEES OF THE BOARD OF DIRECTORS
The board of directors, which held eight meetings in 1998, has four committees
established in Abbott's bylaws: the executive committee, audit committee,
compensation committee, and nominations and board affairs committee.
The executive committee, whose members are D. L. Burnham, chairman, H. L.
Fuller, W. D. Smithburg, J. R. Walter, and W. L. Weiss, did not hold any
meetings in 1998. This committee may exercise all the authority of the board in
the management of Abbott, except for matters expressly reserved by law for board
action.
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The audit committee, whose members are W. A. Reynolds, chairman, K. F. Austen,
D. A. Jones, D. A. L. Owen, B. Powell Jr., and J. R. Walter, held two meetings
in 1998. This committee provides advice and assistance regarding accounting,
auditing, and financial reporting practices of Abbott. Each year, it recommends
to the board a firm of independent public accountants to serve as auditors. The
audit committee reviews with such auditors the scope and results of their audit,
fees for services, and independence in servicing Abbott. The committee also
meets with Abbott's internal auditors to evaluate the effectiveness of the work
they perform.
The compensation committee, whose members are H. L. Fuller, chairman, B. Powell
Jr., A. B. Rand, W. D. Smithburg, and W. L. Weiss, held three meetings in 1998.
This committee is responsible for setting and administering the policies and
programs that govern both annual compensation and stock ownership programs.
The nominations and board affairs committee, whose members are D. A. Jones,
chairman, K. F. Austen, D. A. L. Owen, A. B. Rand, W. A. Reynolds and R. S.
Roberts, held three meetings in 1998. This committee develops general criteria
regarding the qualifications and selection of board members and officers,
recommends candidates for such positions to the board of directors, and advises
the board of directors with respect to the conduct of board activities,
including assisting the board in the evaluation of the board's own performance.
A shareholder may recommend persons as potential nominees for director or
directly nominate persons for director by complying with the procedures on page
19.
The average attendance of all directors at board and committee meetings in 1998
was 96 percent.
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INFORMATION CONCERNING NOMINEES FOR DIRECTORS (ITEM 1 ON PROXY CARD)
Thirteen directors are to be elected to hold office until the next Annual
Meeting or until their successors are elected. All of the nominees, except J. M.
Leiden, are currently serving as directors. P. N. Clark and T. R. Hodgson have
retired. K. F. Austen and D. L. Burnham will retire as directors following the
Annual Meeting and are not standing for reelection.
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NOMINEES FOR ELECTION AS DIRECTORS
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H. LAURANCE FULLER AGE 60 DIRECTOR SINCE 1988
[PHOTO] CO-CHAIRMAN OF THE BOARD, BP AMOCO, P.L.C., LONDON, UNITED KINGDOM (INTEGRATED PETROLEUM
AND CHEMICALS COMPANY)
MR. FULLER WAS ELECTED PRESIDENT OF AMOCO CORPORATION IN 1983 AND CHAIRMAN AND CHIEF
EXECUTIVE OFFICER IN 1991. HE BECAME CO-CHAIRMAN OF BP AMOCO, P.L.C. AS THE RESULT OF THE
MERGER OF BP AND AMOCO EFFECTIVE DECEMBER 31, 1998. HE IS A DIRECTOR OF THE CHASE
MANHATTAN CORPORATION AND THE CHASE MANHATTAN BANK, N.A., MOTOROLA, INC., SECURITY CAPITAL
GROUP, INC., THE AMERICAN PETROLEUM INSTITUTE, AND THE REHABILITATION INSTITUTE OF
CHICAGO; AND A TRUSTEE OF THE ORCHESTRAL ASSOCIATION AND CORNELL UNIVERSITY.
DAVID A. JONES AGE 67 DIRECTOR SINCE 1982
[PHOTO] CHAIRMAN AND RETIRED CHIEF EXECUTIVE OFFICER, HUMANA INC., LOUISVILLE, KENTUCKY (HEALTH
PLAN BUSINESS)
MR. JONES IS CO-FOUNDER OF HUMANA INC. AND SERVED AS CHAIRMAN AND CHIEF EXECUTIVE OFFICER
SINCE ITS ORGANIZATION IN 1961 UNTIL HE RETIRED AS CHIEF EXECUTIVE OFFICER ON DECEMBER 1,
1997.
JEFFREY M. LEIDEN, M.D., PH.D. AGE 43 NEW DIRECTOR NOMINEE
[PHOTO] PROFESSOR OF MEDICINE AND PATHOLOGY, UNIVERSITY OF CHICAGO, CHICAGO, ILLINOIS
DR. LEIDEN IS THE FREDERICK H. RAWSON PROFESSOR OF MEDICINE AND PATHOLOGY AND CHIEF OF THE
SECTION OF CARDIOLOGY AT THE UNIVERSITY OF CHICAGO. HE IS CURRENTLY THE PRESIDENT-ELECT OF
THE AMERICAN SOCIETY OF CLINICAL INVESTIGATION, PRESIDENT OF THE MOLECULAR MEDICINE
SOCIETY, AND A MEMBER OF THE AMERICAN ASSOCIATION OF PHYSICIANS. HE WAS A FOUNDER AND
SCIENTIFIC ADVISORY BOARD MEMBER OF CARDIOGENE, INC., A BIOTECHNOLOGY COMPANY SPECIALIZING
IN CARDIOVASCULAR GENE THERAPY. SINCE 1994, HE HAS SERVED AS A MEMBER OF THE BOARD OF
SCIENTIFIC COUNSELORS OF THE NATIONAL HEART LUNG AND BLOOD INSTITUTE OF THE NATIONAL
INSTITUTES OF HEALTH.
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THE RT. HON. LORD OWEN CH AGE 60 DIRECTOR SINCE 1996
[PHOTO] PHYSICIAN, POLITICIAN, AND BUSINESSMAN, LONDON, UNITED KINGDOM
DAVID OWEN IS A BRITISH SUBJECT. HE WAS A NEUROLOGIST AND RESEARCH FELLOW ON THE MEDICAL
UNIT OF ST. THOMAS' HOSPITAL, LONDON, FROM 1965 THROUGH 1968 AND A MEMBER OF PARLIAMENT
FOR PLYMOUTH IN THE HOUSE OF COMMONS FROM 1966 UNTIL HE RETIRED IN MAY OF 1992. IN 1992,
HE WAS CREATED A LIFE PEER AND A MEMBER OF THE HOUSE OF LORDS. IN AUGUST OF 1992, THE
EUROPEAN UNION, AS PART OF ITS PEACE SEEKING EFFORTS IN THE BALKANS, APPOINTED HIM CO-
CHAIRMAN OF THE INTERNATIONAL CONFERENCE ON FORMER YUGOSLAVIA. HE STEPPED DOWN FROM THAT
POST IN JUNE OF 1995. LORD OWEN WAS SECRETARY FOR FOREIGN AND COMMONWEALTH AFFAIRS FROM
1977 TO 1979 AND MINISTER OF HEALTH FROM 1974 TO 1976. HE IS CURRENTLY A DIRECTOR OF COATS
VIYELLA PLC AND EXECUTIVE CHAIRMAN OF MIDDLESEX HOLDINGS PLC.
ROBERT L. PARKINSON JR. AGE 48 DIRECTOR SINCE 1998
[PHOTO] PRESIDENT AND CHIEF OPERATING OFFICER, ABBOTT LABORATORIES
MR. PARKINSON JOINED ABBOTT IN 1976. HE WAS ELECTED VICE PRESIDENT, EUROPEAN OPERATIONS IN
1990, SENIOR VICE PRESIDENT, CHEMICAL AND AGRICULTURAL PRODUCTS IN 1993, SENIOR VICE
PRESIDENT, INTERNATIONAL OPERATIONS IN 1995, EXECUTIVE VICE PRESIDENT ON FEBRUARY 13,
1998, AND PRESIDENT AND CHIEF OPERATING OFFICER ON JANUARY 1, 1999. MR. PARKINSON RECEIVED
BOTH HIS UNDERGRADUATE AND M.B.A. DEGREES FROM LOYOLA UNIVERSITY OF CHICAGO. HE SERVES AS
A MEMBER OF THE BOARD OF DIRECTORS OF NORTHWESTERN MEMORIAL CORP. AND AS A TRUSTEE OF THE
MUSEUM OF SCIENCE AND INDUSTRY.
BOONE POWELL JR. AGE 62 DIRECTOR SINCE 1985
[PHOTO] PRESIDENT AND CHIEF EXECUTIVE OFFICER, BAYLOR HEALTH CARE SYSTEM AND BAYLOR UNIVERSITY
MEDICAL CENTER, DALLAS, TEXAS
MR. POWELL HAS BEEN ASSOCIATED WITH BAYLOR UNIVERSITY MEDICAL CENTER SINCE 1980 WHEN HE
WAS NAMED PRESIDENT AND CHIEF EXECUTIVE OFFICER. PRIOR TO JOINING BAYLOR, HE WAS PRESIDENT
OF HENDRICK MEDICAL CENTER IN ABILENE, TEXAS. MR. POWELL SERVES AS AN ACTIVE MEMBER OF
VOLUNTARY HOSPITALS OF AMERICA. HE IS A DIRECTOR OF COMERICA BANK-TEXAS, PHYSICIAN
RELIANCE NETWORK AND HEALTHWAY INTERACTIVE AND A FELLOW OF THE AMERICAN COLLEGE OF HEALTH
CARE EXECUTIVES. MR. POWELL IS A GRADUATE OF BAYLOR UNIVERSITY. HE RECEIVED A MASTER'S
DEGREE IN HOSPITAL ADMINISTRATION FROM THE UNIVERSITY OF CALIFORNIA.
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ADDISON BARRY RAND AGE 54 DIRECTOR SINCE 1992
[PHOTO] FORMER EXECUTIVE VICE PRESIDENT, XEROX CORPORATION, STAMFORD, CONNECTICUT (DOCUMENT
PROCESSING, INSURANCE AND FINANCIAL SERVICES COMPANY)
MR. RAND SERVED AS EXECUTIVE VICE PRESIDENT OF WORLDWIDE OPERATIONS, XEROX CORPORATION,
FROM 1992 THROUGH 1998. MR. RAND EARNED A BACHELOR'S DEGREE FROM AMERICAN UNIVERSITY AND
MASTER'S DEGREES IN BUSINESS ADMINISTRATION AND MANAGEMENT SCIENCES FROM STANFORD
UNIVERSITY. HE HAS ALSO BEEN AWARDED SEVERAL HONORARY DOCTORATE DEGREES. MR. RAND SERVES
AS A DIRECTOR OF AMERITECH CORPORATION AND HONEYWELL, INC. HE IS ALSO A MEMBER OF THE
BOARD OF DIRECTORS OF THE URBAN FAMILY INSTITUTE AND A MEMBER OF THE STANFORD UNIVERSITY
GRADUATE SCHOOL OF BUSINESS ADVISORY COUNCIL. IN 1993 HE WAS ELECTED TO THE NATIONAL
SALES/MARKETING HALL OF FAME.
W. ANN REYNOLDS, PH.D. AGE 61 DIRECTOR SINCE 1980
[PHOTO] PRESIDENT, THE UNIVERSITY OF ALABAMA AT BIRMINGHAM, BIRMINGHAM, ALABAMA
IN 1997, DR. REYNOLDS WAS APPOINTED PRESIDENT OF THE UNIVERSITY OF ALABAMA AT BIRMINGHAM.
FROM 1990 TO 1997, SHE SERVED AS CHANCELLOR OF THE CITY UNIVERSITY OF NEW YORK. PRIOR TO
THAT, DR. REYNOLDS SERVED AS CHANCELLOR OF THE CALIFORNIA STATE UNIVERSITY, CHIEF ACADEMIC
OFFICER OF OHIO STATE UNIVERSITY AND ASSOCIATE VICE CHANCELLOR FOR RESEARCH AND DEAN OF
THE GRADUATE COLLEGE OF THE UNIVERSITY OF ILLINOIS MEDICAL CENTER. SHE ALSO HELD
APPOINTMENTS AS PROFESSOR OF ANATOMY, RESEARCH PROFESSOR OF OBSTETRICS AND GYNECOLOGY, AND
ACTING ASSOCIATE DEAN FOR ACADEMIC AFFAIRS AT THE UNIVERSITY OF ILLINOIS COLLEGE OF
MEDICINE. DR. REYNOLDS IS A GRADUATE OF EMPORIA STATE UNIVERSITY (KANSAS) AND HOLDS M.S.
AND PH.D. DEGREES IN ZOOLOGY FROM THE UNIVERSITY OF IOWA. SHE IS ALSO A DIRECTOR OF HUMANA
INC., MAYTAG CORPORATION, AND OWENS CORNING.
ROY S. ROBERTS AGE 59 DIRECTOR SINCE 1998
[PHOTO] VICE PRESIDENT AND GROUP EXECUTIVE, NORTH AMERICAN VEHICLE SALES, SERVICE AND MARKETING,
GENERAL MOTORS CORPORATION, DETROIT, MICHIGAN (MANUFACTURER OF MOTOR VEHICLES)
MR. ROBERTS WAS ELECTED VICE PRESIDENT OF GENERAL MOTORS CORPORATION AND GROUP EXECUTIVE
NORTH AMERICAN VEHICLE SALES, SERVICE AND MARKETING IN OCTOBER 1998. HE WAS VICE PRESIDENT
OF GENERAL MOTORS CORPORATION AND GENERAL MANAGER OF THE PONTIAC-GMC DIVISION FROM
FEBRUARY 1996 TO OCTOBER 1998, AND GENERAL MANAGER OF THE GMC TRUCK DIVISION FROM OCTOBER
1992 TO FEBRUARY 1996. MR. ROBERTS FIRST JOINED GENERAL MOTORS CORPORATION IN 1977 AND
BECAME A CORPORATE OFFICER OF GENERAL MOTORS CORPORATION IN APRIL 1987. MR. ROBERTS EARNED
A BACHELOR'S DEGREE FROM WESTERN MICHIGAN UNIVERSITY. HE SERVES AS A DIRECTOR OF
BURLINGTON NORTHERN SANTA FE CORPORATION AND VOLVO HEAVY TRUCK CORPORATION; AS TRUSTEE
EMERITUS AT WESTERN MICHIGAN UNIVERSITY; ON THE NATIONAL BOARD OF DIRECTORS AND EXECUTIVE
COMMITTEE FOR THE BOY SCOUTS OF AMERICA; AND ON THE NATIONAL BOARD OF THE COLLEGE FUND/
UNCF.
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WILLIAM D. SMITHBURG AGE 60 DIRECTOR SINCE 1982
[PHOTO] RETIRED CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER, THE QUAKER OATS COMPANY, CHICAGO,
ILLINOIS (WORLDWIDE FOOD MANUFACTURER AND MARKETER OF BEVERAGES AND GRAIN-BASED PRODUCTS)
MR. SMITHBURG RETIRED FROM QUAKER OATS IN OCTOBER 1997. MR. SMITHBURG JOINED QUAKER OATS
IN 1966 AND BECAME PRESIDENT AND CHIEF EXECUTIVE OFFICER IN 1981, AND CHAIRMAN AND CHIEF
EXECUTIVE OFFICER IN 1983 AND ALSO SERVED AS PRESIDENT FROM NOVEMBER 1990 TO JANUARY 1993
AND AGAIN FROM NOVEMBER 1995. MR. SMITHBURG WAS ELECTED TO THE QUAKER BOARD IN 1978 AND
SERVED ON ITS EXECUTIVE COMMITTEE UNTIL HE RETIRED. HE IS ALSO A DIRECTOR OF NORTHERN
TRUST CORPORATION, CORNING INCORPORATED, AND PRIME CAPITAL CORP. HE IS A MEMBER OF THE
BOARD OF TRUSTEES OF NORTHWESTERN UNIVERSITY. MR. SMITHBURG EARNED A B.S. DEGREE FROM
DEPAUL UNIVERSITY AND AN M.B.A. DEGREE FROM NORTHWESTERN UNIVERSITY.
JOHN R. WALTER AGE 52 DIRECTOR SINCE 1990
[PHOTO] RETIRED PRESIDENT AND CHIEF OPERATING OFFICER, AT&T CORPORATION, BASKING RIDGE, NEW JERSEY
(TELECOMMUNICATIONS COMPANY); AND FORMER CHAIRMAN AND CHIEF EXECUTIVE OFFICER, R.R.
DONNELLEY & SONS COMPANY, CHICAGO, ILLINOIS (PRINTING COMPANY)
MR. WALTER SERVED AS PRESIDENT AND CHIEF OPERATING OFFICER OF AT&T CORPORATION FROM
OCTOBER 1996 UNTIL JULY 1997. PRIOR TO THAT TIME, HE WAS CHAIRMAN AND CHIEF EXECUTIVE
OFFICER OF R.R. DONNELLEY & SONS COMPANY, A PRINTING COMPANY, HAVING BEEN ELECTED TO THOSE
POSITIONS IN 1989. HE HOLDS A BACHELOR'S DEGREE FROM MIAMI UNIVERSITY OF OHIO. MR. WALTER
SERVES AS A DIRECTOR OF CELESTICA INC., DEERE & COMPANY, LASALLE PARTNERS AND PRIME
CAPITAL CORP. AND AS A TRUSTEE OF THE CHICAGO SYMPHONY ORCHESTRA AND NORTHWESTERN
UNIVERSITY.
WILLIAM L. WEISS AGE 69 DIRECTOR SINCE 1984
[PHOTO] CHAIRMAN EMERITUS, AMERITECH CORPORATION, CHICAGO, ILLINOIS (TELECOMMUNICATIONS COMPANY)
ON JANUARY 1, 1984, MR. WEISS BECAME CHAIRMAN AND CHIEF EXECUTIVE OFFICER OF AMERITECH
CORPORATION AND SERVED IN THAT CAPACITY UNTIL JANUARY 1994 WHEN HE WAS NAMED CHAIRMAN OF
THE BOARD. HE HAS BEEN CHAIRMAN EMERITUS SINCE MAY 1994. PRIOR TO THAT, HE WAS CHAIRMAN
AND CHIEF EXECUTIVE OFFICER (1982-83) AND PRESIDENT AND CHIEF EXECUTIVE OFFICER (1981-82)
OF ILLINOIS BELL TELEPHONE COMPANY. PREVIOUSLY, HE WAS PRESIDENT OF INDIANA BELL TELEPHONE
COMPANY (1978-81) AND SERVED IN VARIOUS OTHER CAPACITIES WITH THE BELL SYSTEM. MR. WEISS
IS A DIRECTOR OF THE QUAKER OATS COMPANY, AND MERRILL LYNCH & CO., INC. HE IS ALSO A
TRUSTEE OF NORTHWESTERN UNIVERSITY, THE PENNSYLVANIA STATE UNIVERSITY, THE ORCHESTRAL
ASSOCIATION, AND THE MUSEUM OF SCIENCE AND INDUSTRY.
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MILES D. WHITE AGE 43 DIRECTOR SINCE 1998
[PHOTO] CHIEF EXECUTIVE OFFICER, ABBOTT LABORATORIES
MR. WHITE JOINED ABBOTT IN 1984. HE WAS ELECTED VICE PRESIDENT, DIAGNOSTICS SYSTEMS
OPERATIONS IN 1993, SENIOR VICE PRESIDENT, DIAGNOSTICS OPERATIONS IN 1994, EXECUTIVE VICE
PRESIDENT ON FEBRUARY 13, 1998, AND CHIEF EXECUTIVE OFFICER ON JANUARY 1, 1999. MR. WHITE
RECEIVED BOTH HIS BACHELOR'S DEGREE IN MECHANICAL ENGINEERING AND M.B.A. DEGREE FROM
STANFORD UNIVERSITY. HE SERVES ON THE BOARD OF TRUSTEES OF THE HEALTHCARE LEADERSHIP
COUNCIL, AS A MEMBER OF THE POLICY COMMITTEE OF THE BUSINESS ROUNDTABLE AND AS A TRUSTEE
OF THE FIELD MUSEUM IN CHICAGO.
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EXECUTIVE COMPENSATION
Report of the Compensation Committee
The compensation committee of the board of directors is composed entirely of
directors who have never been employees of the corporation. The committee is
responsible for setting and administering the policies and programs that govern
both annual compensation and stock ownership programs.
The foundation of the executive compensation program is based on principles
designed to align compensation with the corporation's business strategy, values
and management initiatives. The program:
- Integrates compensation programs which link total shareholder return with
both the corporation's annual and long-term strategic planning and
measurement processes.
- Supports a performance-oriented environment that rewards actual
performance that is related to both goals and performance of the
corporation as compared to that of industry performance levels.
- Helps attract and retain key executives who are critical to the long-term
success of the corporation.
The key components of the compensation program are base salary, annual incentive
award, and equity participation. These components are administered with the goal
of providing total compensation that is competitive in the marketplace,
recognizes meaningful differences in individual performance and offers the
opportunity to earn above average rewards when merited by individual and
corporate performance.
The marketplace is defined by comparing the corporation to a group of major
corporations with similar characteristics, including industry and technology
emphasis. These companies are included in the Standard and Poor's Healthcare
Composite Index. A select group of non-healthcare companies chosen for size and
performance comparability to the corporation is used as a secondary source of
comparison.
Using compensation survey data from the comparison groups, a target for total
compensation and each of its elements -- base, incentive, and equity-based
compensation -- is established. The intent is to deliver total compensation that
will be in the upper range of pay practices of peer companies when merited by
the corporation's performance. To achieve this objective, a substantial portion
of executive pay is delivered through performance-related variable compensation
programs which are based upon achievement of the corporation's goals. Each year
the committee reviews the elements of executive compensation to ensure that the
total compensation program, and each of its elements, meets the overall
objectives discussed above.
In 1998, total compensation was paid to executives based on individual
performance and on the extent to which the business plans for their areas of
responsibility were achieved or exceeded. On balance, performance goals were
substantially met or exceeded and therefore compensation was paid accordingly.
Base compensation was determined by an assessment of each executive's
performance, current salary in relation to the salary range designated for the
job, experience, and potential for advancement as well as by the performance of
the corporation. While many aspects of performance can be measured in financial
terms, the committee also evaluated the success of the management team in areas
of performance that cannot be measured by traditional accounting tools,
including the development and execution of strategic plans, the development of
management and employees, and the exercise of leadership within the industry and
in the communities that Abbott serves. All of these factors were collectively
taken into account by management and the compensation committee in determining
the appropriate level of base compensation and annual increases.
The Abbott Management Incentive Plan (MIP) and Performance Incentive Plan (PIP)
are designed to reward executives when the corporation achieves certain
financial objectives and when each executive's area of responsibility meets its
predetermined goals. These goals include financial elements such as consolidated
net earnings, profitability, total sales, and earnings per share and
non-financial elements such as the achievement of selected strategic goals and
the successful development of human resources. Each year, individual incentive
targets are established for MIP participants based on competitive survey data
from the group of companies discussed above. As noted above, targets are set to
deliver total compensation between the mid and upper range of competitive
practice as warranted by corporate performance. For 1998, 40% of the Management
Incentive Plan target award was earned for achievement of the corporation's
earning per share goal. The remainder of the targeted incentive was earned based
on the committee's overall assessment of each participant's achievement of the
predetermined goals discussed above. Each year, individual base award
allocations are established for PIP participants as a percentage of consolidated
net earnings. For 1998, each PIP
- --------------------------------------------------------------------------------
9
<PAGE>
participant's final award allocation was based on the committee's overall
assessment of each participant's achievement of the predetermined goals
discussed above.
To motivate and reward its executives and managers and to directly align key
employee and shareholder interests, the corporation has provided forms of equity
participation for many years. Grants of stock options, replacement stock
options, and restricted stock awards are important parts of this relationship.
To ensure this objective is achieved, executives follow fixed stock ownership
guidelines.
Targeted award ranges for stock options and restricted stock opportunities are
determined taking into account competitive practice among the comparison
companies noted above. Equity participation targets are set based on established
salary ranges and level of performance. As noted above, the target ranges are
established such that equity participation opportunities will be in the mid-
to-upper range of pay practices of peer companies when merited by corporation
and individual performance.
Actual individual awards are determined based on the established competitive
target range and the committee's overall assessment of individual performance.
The committee considers the amounts of options and restricted stock previously
granted and the aggregate size of current awards in deciding to award additional
options and restricted stock.
In 1998, the committee granted Mr. Burnham, the corporation's Chairman and Chief
Executive Officer, a base salary increase of 4.0% which was consistent with the
corporation's established merit increase program. As reflected in the
corporation's financial statements, Abbott's performance in 1998 included 5.0%
growth in sales, and 12.5% growth in earnings per share. In light of this
performance and their overall assessment of his performance, the committee
determined to grant Mr. Burnham a bonus, stock options and restricted stock. In
recognition of successful completion of management succession ahead of schedule,
Abbott will pay Mr. Burnham $2,205,000 in 1999, and he will act as a consultant
during this year.
It is the committee's policy to establish and maintain compensation programs for
executive officers which operate in the best interests of the corporation and
its stockholders in achieving the corporation's long-term business objectives.
To that end, the committee continues to assess the impact of the Omnibus Budget
Reconciliation Act of 1993 on its executive compensation strategy and take
action to assure that appropriate levels of deductibility are maintained.
COMPENSATION COMMITTEE
H. L. Fuller, chairman, B. Powell Jr., A. B. Rand, W. D. Smithburg and W. L.
Weiss.
- --------------------------------------------------------------------------------
10
<PAGE>
- --------------------------------------------------------------------------------
Summary Compensation Table
The following table summarizes compensation earned in 1998, 1997, and 1996 by
the Chief Executive Officer and the five other most highly paid executive
officers (the "named officers") in 1998.
<TABLE>
<CAPTION>
Annual Compensation Long-term Compensation
--------------------------------- -------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Other Restricted Securities
Annual Stock Underlying All Other
Name and Salary Compen- Award(s) Options/ Compen-
Principal Position (1) Year ($) Bonus ($) sation ($) ($)(2)(3) SARs (#) sation ($)(8)
- -------------------------------------------------------------------------------------------------------------------
Duane L. Burnham 1998 $913,077 $1,500,000 $ 819,205 $4,440,000(4) 650,000 $ 35,692
Chairman of the Board 1,294,360(7)
and Director 1997 877,769 1,175,000 593,916 2,335,000(5) 450,000 32,661
115,576(7)
1996 846,923 1,055,000 518,747 1,310,625(6) 420,000 30,013
- -------------------------------------------------------------------------------------------------------------------
Miles D. White 1998 669,615 1,000,000 19,363 740,000(4) 350,000 26,019
Chief Executive Officer 57,774(7)
and Director 1997 393,654 475,000 34,082 1,167,500(5) 80,000 16,659
37,342(7)
1996 370,769 350,000 1,387 0 100,000 14,285
- -------------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 1998 653,900 850,000 346,252 0 320,000 26,322
Retired President and 343,368(7)
Chief Operating Officer 1997 628,631 850,000 209,422 1,751,250(5) 320,000 24,089
70,244(7)
1996 606,554 755,000 148,555 733,950(6) 264,000 22,179
- -------------------------------------------------------------------------------------------------------------------
Robert L. Parkinson Jr. 1998 598,461 700,000 27,412 740,000(4) 320,000 23,811
President, Chief Operating 167,098(7)
Officer and Director 1997 393,654 475,000 18,868 1,167,500(5) 80,000 14,910
107,446(7)
1996 372,500 395,000 18,494 0 100,000 13,453
- -------------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 1998 463,846 465,000 258,909 0 80,000 17,700
Senior Vice President, 275,439(7)
Finance and Chief 1997 445,385 450,000 191,025 1,167,500(5) 80,000 16,177
Financial Officer 137,636(7)
1996 430,384 430,000 137,999 0 100,000 14,863
- -------------------------------------------------------------------------------------------------------------------
Joy A. Amundson 1998 382,692 360,000 50,169 740,000(4) 80,000 14,959
Senior Vice President, 42,853(7)
Ross Products 1997 291,538 300,000 56,678 1,167,500(5) 80,000 10,848
67,944(7)
1996 267,308 245,000 2,967 0 100,000 9,473
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE FOOTNOTES
(1) The titles reflected in this table are effective as of
January 1, 1999. D. L. Burnham retired from the role of Chief Executive
Officer at the end of 1998 and T. R. Hodgson retired as President and Chief
Operating Officer on December 30, 1998. During 1998, M. D. White and R. L.
Parkinson Jr. served as Executive Vice Presidents.
(2) Where necessary, the share balances shown in this
table and its footnotes have been adjusted to reflect the May 1998 stock
split.
(3) The number and value of restricted shares held,
respectively, as of December 31, 1998, were as follows: D. L. Burnham -
220,000 / $10,780,000; M. D. White - 68,000 / $3,332,000; T. R. Hodgson -
71,200 / $3,488,800; R. L. Parkinson Jr. - 70,000 / $3,430,000; G. P.
Coughlan - 40,000 / $1,960,000; and J. A. Amundson - 60,000 / $2,940,000.
The officers receive all dividends paid on these shares.
(4) The number of shares covered by these awards are
120,000 for D. L. Burnham; 20,000 for M. D. White; 20,000 for R. L.
Parkinson Jr.; and 20,000 for J. A. Amundson. D. L. Burnham's shares vested
on January 4, 1999. The other shares covered by these awards vest on
February 13, 2003.
(5) The number of shares covered by these awards are
80,000 for D. L. Burnham; 40,000 for M. D. White; 60,000 for T. R. Hodgson;
40,000 for R. L. Parkinson Jr.; 40,000 for G. P. Coughlan; and 40,000 for J.
A. Amundson. T. R. Hodgson's shares vested on January 31, 1999. D. L.
Burnham's shares will vest on April 23, 1999. The other shares covered by
this award vest on February 14, 2002.
(6) The number of shares covered by these awards are
60,000 for D. L. Burnham and 33,600 for T. R. Hodgson. These awards vested
in three equal installments on January 2, 1997, January 2, 1998 and on
January 4, 1999.
(7) These options are replacement stock options. They
are described in the table captioned "Option/SAR Grants in Last Fiscal Year"
on page 12.
(8) Employer contributions made to the Stock
Retirement Plan and made or accrued with respect to the 401(k) Supplemental
Plan.
- --------------------------------------------------------------------------------
11
<PAGE>
- --------------------------------------------------------------------------------
Stock Options
The following tables summarize the named officers' stock option activity during
1998.
Option/SAR Grants in Last Fiscal Year
<TABLE>
<CAPTION>
Individual Grants
- ------------------------------------------------------------------------------------------------ Potential Realizable Value at
% of Total Assumed Annual Rates of Stock
Options/ SARs Price Appreciation for Option
Number of Securities Granted to Exercise or Term (4):
Underlying Options/ Employees in Base Price Expiration ---------------------------------
Name SARs Granted (#)(1) Fiscal Year ($/Sh.) Date 5% ($) 10% ($)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Duane L. Burnham 650,000(2)(3) 3.6% $37.00 02/12/08 $15,124,916 $38,329,506
Replacement Options: 123,132 0.7% 35.18 04/11/01 732,943 1,549,133
159,554 0.9% 35.18 04/09/02 1,277,888 2,769,407
192,568 1.1% 35.18 04/15/03 1,958,143 4,354,135
58,444 0.3% 35.18 09/09/03 646,775 1,453,923
255,970 1.4% 35.18 04/28/04 3,243,584 7,426,514
195,470 1.1% 35.18 04/27/05 2,944,623 6,925,999
86,295 0.5% 43.72 04/27/05 1,409,517 3,245,148
100,818 0.6% 43.72 02/08/06 1,887,435 4,439,405
122,109 0.7% 43.72 02/13/07 2,667,260 6,448,483
- -----------------------------------------------------------------------------------------------------------------------------------
Miles D. White 200,000(3) 1.1% 37.00 02/12/08 4,653,820 11,793,694
150,000(3) 0.8% 43.16 09/14/08 4,071,464 10,317,889
Replacement Options: 9,191 0.1% 42.16 04/09/02 76,779 164,363
48,583 0.3% 42.16 04/27/05 792,674 1,834,360
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 320,000(3) 1.8% 37.00 02/12/08 7,446,112 18,869,911
Replacement Options: 129,488 0.7% 35.72 04/27/05 1,948,049 4,568,380
68,882 0.4% 35.72 02/08/06 1,174,762 2,813,760
58,972 0.3% 38.76 04/27/05 915,216 2,128,041
86,026 0.5% 44.64 02/13/07 1,946,999 4,720,883
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Parkinson Jr. 200,000(3) 1.1% 37.00 02/12/08 4,653,820 11,793,694
120,000(3) 0.7% 43.16 09/14/08 3,257,171 8,254,311
Replacement Options: 39,986 0.2% 43.14 04/27/05 656,013 1,514,296
48,266 0.3% 43.14 02/08/06 906,260 2,137,719
21,847 0.1% 43.14 02/13/07 477,841 1,158,621
6,974 0.0% 43.14 04/11/01 40,789 85,023
50,025 0.3% 43.14 04/09/02 415,114 886,668
- -----------------------------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 80,000(3) 0.4% 37.00 02/12/08 1,861,528 4,717,478
Replacement Options: 28,036 0.2% 38.43 04/09/02 238,740 515,807
7,898 0.0% 37.05 04/09/02 61,368 131,911
51,364 0.3% 37.05 04/27/05 761,976 1,771,730
51,366 0.3% 37.05 02/08/06 868,482 2,065,117
23,504 0.1% 37.05 02/13/07 460,810 1,126,532
17,457 0.1% 47.94 05/03/00 55,025 111,306
9,906 0.1% 47.94 06/07/00 33,717 68,385
28,105 0.2% 47.94 04/11/01 160,386 331,853
57,803 0.3% 47.94 04/09/02 484,909 1,027,875
- -----------------------------------------------------------------------------------------------------------------------------------
Joy A. Amundson 80,000(3) 0.4% 37.00 02/12/08 1,861,528 4,717,478
Replacement Options: 40,209 0.2% 43.14 04/27/05 659,672 1,522,741
2,644 0.0% 43.14 02/08/06 49,645 117,104
- -----------------------------------------------------------------------------------------------------------------------------------
Gain for all Shareholders at Assumed Rates for Appreciation (5): $46,718,765,076 $118,394,523,367
- ---------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE FOOTNOTES
(1) These options contain a replacement option feature.
When the option's exercise price is paid (or, in the case of a non-qualified
stock option, when the option's exercise price or the withholding taxes
resulting on exercise of that option are paid) with shares of Abbott's
common stock, a replacement option is granted for the number of shares used
to make that payment. The replacement option has an exercise price equal to
the market value of Abbott's common stock on the date the replacement option
is granted and a term expiring on the expiration date of the original
option.
- --------------------------------------------------------------------------------
12
<PAGE>
(2) Limited stock appreciation rights have been granted
in tandem with these options. These rights are exercisable only for 60 days
following a change in control of Abbott. Upon exercise, the optionee must
surrender the related option and will receive a payment, in cash, in an
amount equal to the difference between the option's price and the fair
market value of the shares subject to the option.
(3) One-third of the shares covered by these options are
exercisable after one year; two-thirds after two years; and all after three
years.
(4) The dollar amounts under these columns are the
result of calculations at the 5% and 10% rates required by the SEC and,
therefore, are not intended to forecast possible future appreciation, if
any, of the stock price.
(5) Amounts were determined using total shares
outstanding at December 31, 1998 of 1,516,063,494 and a December 31, 1998
closing market price of $49.00 per share.
Aggregated Option/SAR Exercises in Last Fiscal Year and FY-end Option/SAR Values
<TABLE>
<CAPTION>
Number of securities Value of Unexercised
underlying unexercised in-the-money
Shares acquired options/SARs at options/SARs at
on exercise Value fiscal year end (#) fiscal year end ($)
Name (#)(1) Realized ($) Exercisable/ unexercisable Exercisable/unexercisable
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Duane L. Burnham 1,892,068 $38,322,467 1,100,714 / 1,399,222 $ 15,780,335 / $19,395,391
- ------------------------------------------------------------------------------------------------------------------------------
Miles D. White 113,398 2,938,659 148,944 / 494,438 3,562,014 / 5,709,926
- ------------------------------------------------------------------------------------------------------------------------------
Thomas R. Hodgson 454,668 7,358,274 1,074,596 / 707,358 30,882,490 / 10,940,940
- ------------------------------------------------------------------------------------------------------------------------------
Robert L. Parkinson Jr. 215,582 3,737,059 83,024 / 573,762 2,002,708 / 6,131,144
- ------------------------------------------------------------------------------------------------------------------------------
Gary P. Coughlan 373,726 6,260,134 172,384 / 279,935 2,226,818 / 3,085,292
- ------------------------------------------------------------------------------------------------------------------------------
Joy A. Amundson 90,806 2,375,454 181,856 / 209,517 4,104,622 / 3,205,337
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
TABLE FOOTNOTES
(1) Balances adjusted to reflect the May 1998 stock split.
- --------------------------------------------------------------------------------
13
<PAGE>
- --------------------------------------------------------------------------------
Pension and Retirement Arrangements
Abbott and certain subsidiaries maintain a defined benefit pension plan known as
the Abbott Laboratories Annuity Retirement Plan covering most employees in the
United States, age 21 or older. Pension benefits are generally based on service
and eligible earnings for the 60 consecutive months within the final 120 months
of employment for which eligible earnings were highest. Pension benefits are
partially offset for Social Security benefits.
The following table shows the estimated annual benefits payable to employees
upon normal retirement. The amounts shown are computed on a straight life
annuity basis without giving effect to Social Security offsets and include
supplemental benefits under a nonqualified supplemental pension plan.
Pension Plan Table
<TABLE>
<CAPTION>
Years of Service
- ------------- -----------------------------------------------------
Remuneration 15 20 25 30 35
<S> <C> <C> <C> <C> <C>
- ------------- -----------------------------------------------------
$ 900,000 $ 303,750 $ 405,000 $ 472,500 $ 499,500 $ 499,500
1,100,000 371,250 495,000 577,500 610,500 610,500
1,300,000 438,750 585,000 682,500 721,500 721,500
1,500,000 506,250 675,000 787,500 832,500 832,500
1,700,000 573,750 765,000 892,500 943,500 943,500
1,900,000 641,250 855,000 997,500 1,054,500 1,054,500
2,100,000 708,750 945,000 1,102,500 1,165,500 1,165,500
2,300,000 776,250 1,035,000 1,207,500 1,276,500 1,276,500
2,500,000 843,750 1,125,000 1,312,500 1,387,500 1,387,500
2,700,000 911,250 1,215,000 1,417,500 1,498,500 1,498,500
2,900,000 978,750 1,305,000 1,522,500 1,609,500 1,609,500
3,100,000 1,046,250 1,395,000 1,627,500 1,720,500 1,720,500
3,300,000 1,113,750 1,485,000 1,732,500 1,831,500 1,831,500
3,500,000 1,181,250 1,575,000 1,837,500 1,942,500 1,942,500
3,700,000 1,248,750 1,665,000 1,942,500 2,053,500 2,053,500
3,900,000 1,316,250 1,755,000 2,047,500 2,164,500 2,164,500
4,100,000 1,383,750 1,845,000 2,152,500 2,275,500 2,275,500
- ------------- -----------------------------------------------------
</TABLE>
The table above covers the aggregate pension accrued under both the Annuity
Retirement Plan and the supplemental pension plan. The compensation considered
in determining the pensions payable to the named officers is the compensation
shown in the "Salary" and "Bonus" columns of the Summary Compensation Table on
page 11 and, for D. L. Burnham and T. R. Hodgson, the restricted stock awards
vesting during the year and on January 4, 1999: $5,313,750 for D. L. Burnham and
$489,300 for T. R. Hodgson. Pensions accrued under the Annuity Retirement Plan
are funded through the Abbott Laboratories Annuity Retirement Trust, established
on behalf of all participants in that plan. Pensions accrued under the
nonqualified supplemental pension plan with present values exceeding $100,000
are funded through individual trusts established on behalf of the officers who
participate in that plan. In addition, Abbott has agreed to make an additional
payment into D. L. Burnham's trust during 1999 to fund an additional monthly
pension benefit of $6,238.08. During 1998 (and 1999 for D. L. Burnham), the
following amounts, less applicable tax withholdings, were deposited in such
individual trusts established on behalf of the named officers: D. L. Burnham,
$8,028,711; M. D. White, $155,204; T. R. Hodgson, $895,476; R. L. Parkinson Jr.,
$179,864; G. P. Coughlan, $133,201; and J. A. Amundson, $94,886. As of December
31, 1998, the years of service credited under the Plan for the named officers
were as follows: D. L. Burnham, - 16; M. D. White, - 14; T. R. Hodgson, - 26; R.
L. Parkinson Jr., - 22; G. P. Coughlan, - 8; and J. A. Amundson, - 15. In 1998,
Abbott and D. L. Burnham established the consulting arrangement described in the
Compensation Committee Report on page 10.
- --------------------------------------------------------------------------------
Compensation of Directors
Abbott employees are not compensated for serving on the board or board
committees. Non-employee directors are compensated under the Abbott Laboratories
Non-Employee Directors' Fee Plan in the amounts of $4,167 for each month of
service as director and $667 for each month of service as a chairman of a board
committee ($1,600 for each month of service as chairman of the executive
committee). Effective with the 1999 Annual Meeting, non-employee directors will
be compensated $5,000 for each month of service as director.
- --------------------------------------------------------------------------------
14
<PAGE>
Fees earned under this Plan are paid in cash to the director, paid in the form
of non-qualified stock options, or deferred (as a non-funded obligation of
Abbott or paid into a grantor trust established by the director) until payments
commence (generally at age 65 or upon retirement from the board of directors).
If the fees are deferred, the director may elect to have the fees credited to a
stock equivalent account under which the fees accrue the same return they would
have earned if invested in Abbott common shares. Interest is accrued annually on
deferred fees not credited to a stock equivalent account.
If a non-employee director elects to receive any or all of his or her directors'
fees in the form of non-qualified stock options, the fees covered by that
election are converted into stock options based upon an independent appraisal of
the value of the options. These options are granted annually, on the date of the
annual shareholder meeting. The options have a purchase price equal to the fair
market value of the shares covered by the option on the grant date. An option
may be exercised during the ten year period following its grant and provides for
the automatic grant of a replacement stock option if all or any portion of its
exercise price is paid by delivery of Abbott common shares. The replacement
stock option covers the number of shares surrendered to pay that exercise price,
has an exercise price equal to the fair market value of such shares on the date
the replacement stock option is granted, and expires on the expiration date of
the original stock option.
Under the Abbott Laboratories 1996 Incentive Stock Program, each non-employee
director who is elected to the board of directors at the annual shareholder
meeting receives a restricted stock award with a fair market value on the date
of the award closest to, but not exceeding, $47,000 for 1998 and $52,000 for
1999. In 1998, this was 650 shares (before giving effect to a two-for-one stock
split effective in May 1998). The non-employee directors are entitled to vote
these shares and receive all dividends paid on the shares. The shares are
nontransferable prior to termination, retirement from the board, death, or a
change in control of Abbott.
In 1998, K. F. Austen, a non-employee director, performed services for Abbott
pursuant to a consulting agreement in the areas of research and development, new
technology, and immunopharmacology. The consulting agreement, which expires on
March 31, 1999, provides that the fees he earns under the agreement may be
deferred in the same manner as fees earned under the Abbott Laboratories
Non-Employee Directors' Fee Plan. In 1998, Dr. Austen received $50,000 for his
consulting services.
- --------------------------------------------------------------------------------
Performance Graph
The following graph compares the change in Abbott's cumulative total shareholder
return on its common shares with the Standard and Poor's-Registered Trademark-
500 Stock Index and the Standard and Poor's-Registered Trademark- Healthcare
Composite Index.
EDGAR REPRESENTATION OF DATA POINTS USED IN PRINTED GRAPHIC
<TABLE>
<CAPTION>
ABBOTT LABORATORIES S&P HEALTHCARE COMPOSITE S&P 500
<S> <C> <C> <C>
Dec93 100.00 100.00 100.00
Dec94 112.94 113.12 101.32
Dec95 147.18 178.55 139.40
Dec96 183.25 215.61 171.40
Dec97 240.65 309.86 228.59
Dec98 365.38 446.87 293.91
</TABLE>
- --------------------------------------------------------------------------------
15
<PAGE>
- --------------------------------------------------------------------------------
Security Ownership of Executive Officers and Directors
The table below reflects the numbers of common shares beneficially owned by the
directors, director nominee, named officers, and all directors and executive
officers of Abbott as a group as of January 31, 1999. It also reflects the
number of equivalent stock units held by non-employee directors under the Abbott
Laboratories Non-Employee Directors' Fee Plan and by K. F. Austen under the
consulting agreement which are described on page 15.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------
Shares Beneficially
Owned, Excluding Equivalent
Name Options (1)(2) Stock Units
<S> <C> <C>
- ---------------------------------------------------------------------
Joy A. Amundson 183,920 0
- ---------------------------------------------------------------------
K. Frank Austen, M.D. 23,794 16,878
- ---------------------------------------------------------------------
Duane L. Burnham 1,060,728 0
- ---------------------------------------------------------------------
Gary P. Coughlan 273,023 0
- ---------------------------------------------------------------------
H. Laurance Fuller 31,930 37,613
- ---------------------------------------------------------------------
Thomas R. Hodgson 1,306,537 0
- ---------------------------------------------------------------------
David A. Jones 297,922 97,587
- ---------------------------------------------------------------------
Jeffrey M. Leiden, M.D., Ph.D. 1,000 0
- ---------------------------------------------------------------------
The Lord Owen CH 5,196 4,815
- ---------------------------------------------------------------------
Robert L. Parkinson Jr. 290,636 0
- ---------------------------------------------------------------------
Boone Powell Jr. 25,294 55,674
- ---------------------------------------------------------------------
Addison Barry Rand 12,439 0
- ---------------------------------------------------------------
<CAPTION>
- ---------------------------------------------------------------------
Shares Beneficially
Owned, Excluding Equivalent
Name Options (1)(2) Stock Units
<S> <C> <C>
- ---------------------------------------------------------------------
W. Ann Reynolds, Ph.D. 26,814 58,610
- ---------------------------------------------------------------------
Roy S. Roberts 3,300 0
- ---------------------------------------------------------------------
William D. Smithburg 42,924 86,756
- ---------------------------------------------------------------------
John R. Walter 19,384 24,428
- ---------------------------------------------------------------------
William L. Weiss 49,394 18,174
- ---------------------------------------------------------------------
Miles D. White 177,980 0
- ---------------------------------------------------------------------
All directors, director
nominee, and executive officers
as a group (3)(4) 5,949,954 400,535
- ---------------------------------------------------------------
</TABLE>
TABLE FOOTNOTES
(1) The table excludes unexercised option shares which
are exercisable within 60 days after January 31, 1999 as follows: J. A.
Amundson, 311,375; D. L. Burnham, 1,132,128; G. P. Coughlan, 259,050; H. L.
Fuller, 14,456; T. R. Hodgson, 714,946; R. L. Parkinson Jr., 376,788; W. A.
Reynolds, 15,140; R. S. Roberts, 4,152; W. D. Smithburg, 13,740; J. R.
Walter, 13,740; W. L. Weiss, 13,530; M. D. White, 333,384; and all directors
and executive officers as a group, 5,650,205.
(2) The table includes the shares held in the named
officers' accounts in the Abbott Laboratories Stock Retirement Trust as
follows: J. A. Amundson, 11,736; D. L. Burnham, 12,043; G. P. Coughlan,
9,566; T. R. Hodgson, 56,617; R. L. Parkinson Jr., 25,242; M. D. White,
10,280; all executive officers as a group, 406,920. Each officer has shared
voting power and sole investment power with respect to the shares held in
his or her account.
(3) G. P. Coughlan is a fiduciary of several employee
benefit trusts maintained by Abbott. As such, he has shared voting and/or
investment power with respect to the common shares held by those trusts. The
table does not include the shares held by the trusts. As of January 31,
1999, these trusts owned a total of 109,715,077 (7.2%) of the outstanding
shares of Abbott.
(4) Excluding G. P. Coughlan's shared voting and/or
investment power over the shares held by the trusts described in footnote 3,
the directors and executive officers as a group together own beneficially
less than one percent of the outstanding shares of Abbott.
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16
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SELECTION OF INDEPENDENT PUBLIC ACCOUNTANTS (ITEM 2 ON PROXY CARD)
Abbott's bylaws provide that, upon the recommendation of the audit committee,
the board of directors shall appoint annually a firm of independent public
accountants to serve as auditors and that such appointment shall be submitted
for ratification by the shareholders at the Annual Meeting. The board has
appointed Arthur Andersen LLP to act as auditors for the current year. This firm
has served as Abbott's auditors since 1963. The board of directors recommends a
vote FOR ratification of the selection of Arthur Andersen LLP as independent
public accountants for 1999.
Representatives of Arthur Andersen LLP are expected to be present at the Annual
Meeting and will be given the opportunity to make a statement if they desire to
do so. They will also be available to respond to appropriate questions.
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SECTION 16(A) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
Three reports for M. D. White covering a sale of Abbott common shares, his
becoming co-trustee of a trust upon the death of his father, and a subsequent
sale of shares by the trust were filed late.
- --------------------------------------------------
SHAREHOLDER PROPOSALS
Two shareholder proposals have been received. Abbott is advised that the
proposals will be presented for action at the Annual Meeting. The proposed
resolutions and the statements made in support thereof are presented below. The
names and addresses of the shareholders submitting the proposals will be
furnished by Abbott to any person requesting such information. The board of
directors recommends that you vote AGAINST both proposals.
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SHAREHOLDER PROPOSAL ON THE ENDORSEMENT OF THE CERES PRINCIPLES (ITEM 3 ON PROXY
CARD)
WHEREAS: All leaders of industry in the United States now acknowledge their
obligation to pursue superior environmental performance and to disclose
information about that performance to their investors and other stakeholders.
The integrity, utility, and comparability of environmental disclosure depends on
the creation of environmental reports that employ a common format, use credible
metrics, and follow a set of a generally accepted environmental disclosure
standards.
The Coalition for Environmentally Responsible Economies (CERES), a ten year old
partnership among some of the largest investors, environmental groups, and
corporations in the country, has established what we believe is the most
thorough and well-respected environmental disclosure form in the United States.
CERES has also gathered leading international organizations, including the
United Nations Environment Programme, into a collaborative Global Reporting
Initiative to guide and accelerate the worldwide trend toward standardized
environmental reporting.
The CERES Principles and the CERES Report have already been adopted by leading
firms in highly diverse industries such as Bank America, Baxter International,
Bethlehem Steel, Coca-Cola, General Motors, Interface, ITT Industries,
Pennsylvania Power and Light, Polaroid, and Sun Company.
We believe endorsing the CERES Principles commits a company to the prudent
oversight of its financial and physical resources through: 1) protection of the
biosphere; 2) sustainable use of natural resources; 3) waste reduction; 4)
energy conservation; 5) risk reduction; 6) safe products/services; 7)
environmental restoration; 8) informing the public; 9) management commitment;
10) audits and reports. (The full text of the CERES Principles and accompanying
CERES Report form are obtainable from CERES, 11 Arlington Street, Boston
Massachusetts 02116, (617) 247-0700 or at www.ceres.org).
RESOLVED: Shareholders request that the company endorse the CERES Principles as
a reasonable and beneficial component of their corporate commitment to be
publicly accountable for environmental performance.
- --------------------------------------------------
PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL ON THE ENDORSEMENT OF
THE CERES PRINCIPLES
Recent studies show that the integration of environmental commitment into
business operations provide competitive advantage and improve long-term
financial performance for companies. In addition, the depth of a firm's
environmental commitment and the quality with which it manages its environmental
performance provide us with indicators of the foresight of its management.
Given investors' needs for credible information about a firm's environmental
performance, and given the large number of companies that have already endorsed
the CERES Principles and adopted its report format,
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17
<PAGE>
endorsement of the CERES Principles is a reasonable, widely accepted step for
any company wishing to demonstrate its seriousness about superior environmental
performance.
The goal of the CERES Principles is continuous improvement in corporate
environmental performance, coupled with public accountability. One cannot
measure improvement without having data over time. Standardizing that data
enables investors to assess environmental progress within and across industries.
By endorsing the CERES Principles, a company agrees to a single consistent
standard for environmental reporting. An endorsing company works with CERES and
other endorsing companies in setting that reporting standard.
Your vote FOR this resolution serves the best interests of our Company and its
shareholders.
- --------------------------------------------------
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL ON THE CERES
PRINCIPLES (ITEM 3 ON PROXY CARD)
Your board of directors opposes the shareholder proposal and recommends that you
vote AGAINST the proposal.
Abbott is committed to operating its businesses in an environmentally
responsible manner. Abbott considers environmental responsibility a priority
that helps protect our planet for future generations. Abbott's environmental
commitment also supports its business objectives and enhances the corporation's
long-term financial growth. To this end, Abbott's written environmental policy
commits the corporation to accountability for its environmental performance. The
policy requires that all Abbott employees and operations throughout the world
comply with applicable environmental laws and regulations. The policy describes
the corporation's commitment to implement environmental management practices and
programs which help to protect human health and the environment, including
continuing efforts to reduce or eliminate waste and the release of pollutants
into the environment, to conserve resources, to reuse and recycle materials
where feasible at every stage of the product life cycle, and to reduce,
eliminate or change the use of materials or practices as appropriate which may
adversely affect human health and the environment. The policy also promotes
environmental training and education of employees. The corporation's compliance
with its environmental policy substantially implements the objectives of the
CERES Principles.
Abbott has developed this policy because it represents a sound use of the
corporation's resources and is part of the corporation's commitment to being a
responsible member of the communities in which we operate. The corporation is
committed to continuous improvement in this area.
The corporation files hundreds of environmental reports with federal, state, and
local government agencies. In addition, Abbott prepares its own report which
focuses on environmental performance and is available both in print and on the
company's web site (www.abbott.com). Imposing another layer of standards and
reports that would be required as a CERES signatory is duplicative and will
unnecessarily increase costs.
For these reasons, the board of directors recommends you to vote AGAINST the
proposal.
- --------------------------------------------------
SHAREHOLDER PROPOSAL ON THE PHASE-OUT PRODUCTION OF PVC MEDICAL PRODUCTS
(ITEM 4 ON PROXY CARD)
Whereas: Polyvinyl chloride (PVC) plastic, the primary component in 25 percent
of all medical products including IV and blood bags, dialysis tubing, surgical
gloves and sterile packaging, creates dioxin during PVC production process;
PVC also produces dioxin when burned in a medical or solid waste incinerator;
Dioxin is a known human carcinogen and has been linked to a host of other human
health effects, including endocrine (hormone system) disruption, reproductive
abnormalities, altered glucose tolerance, testicular atrophy, neurological
problems, infertility, and other effects in both animals and humans;
The EPA has determined that the U.S. population already has dioxin levels in
their bodies at or near the levels which have caused adverse effects in
laboratory animals;
Large quantities of chemicals called "phthalates" are used to manufacture
flexible PVC medical products; as a result, a significant percentage of any
flexible PVC product may be comprised of diethylhexyl-phthalate (DEHP), a
plasticizer that is a probable human carcinogen, reproductive toxicant and
possible hormone disrupter. DEHP is also toxic to the heart and the kidneys;
DEHP has been found to leach out of medical devices and into the fluids they are
carrying, thus putting at risk for DEHP exposure vulnerable populations, such as
premature infants, dialysis patients, and people with AIDS;
The leaching of DEHP into patients has been linked to adverse health impacts in
premature infants;
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18
<PAGE>
All patients deserve to receive medical treatment using products and technology
which present the least risk to their health;
Abbott Laboratories shareholders voted not to endorse the CERES Principles, but
affirmed that the company's "current environmental policy reflects a strong
commitment to environmental responsibility";
Abbott has "committed more than $1.3 billion to research and development,
resulting in new products and new indications for existing products";
Therefore, be it resolved that the shareholders request the Board of Directors
of Abbott Laboratories to adopt a policy of phasing out the production of PVC-
containing or phthalate-containing medical supplies.
- --------------------------------------------------
PROPONENT'S STATEMENT IN SUPPORT OF SHAREHOLDER PROPOSAL ON THE PHASE-OUT
PRODUCTION OF PVC MEDICAL PRODUCTS
Establishing as a priority the development and marketing of blood bags and
tubing made from resins that do not contain phthalate plasticizers would provide
safer patient care in the applications which currently expose patients to the
greatest health risks.
As a primary supplier of PVC medical devices used in health care, Abbott
Laboratories' marketing of any non-PVC products already developed would be
demonstration of a commitment to risk-reduction and safe products. Utilizing
packaging materials which do not contain phthalates, where such alternatives are
available, would be another demonstration of this commitment.
Allocation of sufficient funding for the research and development on non-PVC
alternative polymers, for which non-vinyl options do not currently exist, and
the commercial production of non-PVC medical products would be an important
contribution to the health and safety of all peoples.
Please vote your proxy for these concerns.
- --------------------------------------------------
BOARD OF DIRECTORS STATEMENT IN OPPOSITION TO SHAREHOLDER PROPOSAL "PHASE-OUT
PRODUCTION OF PVC MEDICAL PRODUCTS"
(ITEM 4 ON PROXY CARD)
Your board of directors opposes the shareholder proposal and recommends that you
vote AGAINST the proposal.
As a supplier of health care products and services and a company whose mission
is to improve lives, Abbott is committed to the safety of its products and to
environmental stewardship. To assure safe products, Abbott stays abreast of
developments regarding materials used in its products and relies on scientific
data generated by government agencies and other credible sources to determine
the safety of these materials.
PVC has been used safely in a variety of medical products for more than 25 years
and during that time it has been widely studied. Numerous scientific studies by
organizations such as the World Health Organization (WHO), the U.S.
Environmental Protection Agency (EPA), and the U.S. Office of Science and
Technology of the Center for Devices and Radiological Health demonstrate that
PVC- and DEHP-containing medical products are safe. Abbott uses PVC for medical
products because it is compatible with the medications used with it; its
flexibility, clarity and sterilizability make it easy to use in a health care
setting; and it is cost effective.
For these reasons, the board of directors recommends you vote AGAINST the
proposal.
- --------------------------------------------------
DATE FOR RECEIPT OF SHAREHOLDER PROPOSALS FOR THE 2000 ANNUAL MEETING PROXY
STATEMENT
Shareholder proposals for presentation at the 2000 Annual Meeting must be
received by Abbott no later than November 9, 1999 and must otherwise comply with
the applicable requirements of the Securities and Exchange Commission to be
considered for inclusion in the proxy statement and proxy for the 2000 meeting.
- --------------------------------------------------
PROCEDURE FOR RECOMMENDATION AND NOMINATION OF DIRECTORS AND TRANSACTION OF
BUSINESS AT ANNUAL MEETINGS
A shareholder may recommend persons as potential nominees for director by
submitting the names of such persons in writing to the chairman of the
nominations and board affairs committee or the secretary of Abbott.
Recommendations should be accompanied by a statement of qualifications and
confirmation of the person's willingness to serve.
A shareholder may directly nominate persons for director only by complying with
the following procedure: the shareholder must submit the names of such persons
in writing to the secretary of Abbott not earlier than the October 1 nor later
than the first business day of January prior to the date of the Annual Meeting.
The nominations must be accompanied by a statement setting forth the name, age,
business address, residence address, principal occupation, qualifications, and
number of shares of Abbott owned by the nominee and the name, record address,
and number of shares of Abbott owned by the shareholder making the nomination.
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19
<PAGE>
A shareholder may properly bring business before the Annual Meeting of
Shareholders only by complying with the following procedure: the shareholder
must submit to the secretary of Abbott, not earlier than the October 1 nor later
than the first business day of January prior to the date of the Annual Meeting,
a written statement describing the business to be discussed, the reasons for
conducting such business at the Annual Meeting, the name, record address, and
number of shares of Abbott owned by the shareholder making the submission, and a
description of any material interest of the shareholder in such business.
- --------------------------------------------------------------------------------
GENERAL
It is important that proxies be returned promptly. Shareholders are urged,
regardless of the number of shares owned, to vote their shares. Most of Abbott's
shareholders may vote their shares by telephone or using the internet.
Shareholders who wish to vote by mail should sign and return their proxy card in
the enclosed business reply envelope. Shareholders who vote by telephone or
using the internet do not need to return their proxy card.
The Annual Meeting will be held at Abbott's headquarters, 100 Abbott Park Road,
located at the intersection of Route 137 and Waukegan Road, Lake County,
Illinois. Admission to the meeting will be by admission card only. A shareholder
planning to attend the meeting should promptly complete and return the
reservation form to assure timely receipt of an admission card.
By order of the board of directors.
JOSE M. DE LASA
SECRETARY
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20
<PAGE>
[LOGO]
ABBOTT LABORATORIES
100 ABBOTT PARK ROAD
ABBOTT PARK, ILLINOIS 60064-6400 U.S.A.
NOTICE OF ANNUAL MEETING
OF SHAREHOLDERS
AND PROXY STATEMENT
MEETING DATE
APRIL 23, 1999
YOUR VOTE IS IMPORTANT!
Please sign and promptly return your proxy in the enclosed envelope or vote
your shares by telephone or using the internet.
RESERVATION FORM FOR ANNUAL MEETING
I am a shareholder of Abbott Laboratories and
plan to attend the Annual Meeting to be held
at Abbott's headquarters, 100 Abbott Park
Road, located at the intersection of Route
137 and Waukegan Road, Lake County, Illinois
at 9:00 a.m. on Friday, April 23, 1999.
Please send me an admission card.
Name _________________________________________________________________________
Please Print
Address ______________________________________________________________________
City __________________________ State ____ Zip Code __________________________
Area code and phone number ___________________________________________________
IF YOU PLAN TO ATTEND THE MEETING, PLEASE COMPLETE AND RETURN THE
RESERVATION FORM DIRECTLY TO ABBOTT LABORATORIES, ANNUAL MEETING TICKET
REQUESTS, D-32L AP6D, 100 ABBOTT PARK ROAD, ABBOTT PARK, ILLINOIS
60064-6049.
TO AVOID A DELAY IN THE RECEIPT OF YOUR ADMISSION CARD, DO NOT RETURN THIS
FORM WITH YOUR PROXY CARD OR MAIL IT IN THE ENCLOSED BUSINESS ENVELOPE.
<PAGE>
PROXY
ABBOTT LABORATORIES
SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS
The undersigned, revoking previous proxies, acknowledges receipt of the
Notice and Proxy Statement dated March 9, 1999, in connection with the Annual
Meeting of Shareholders of Abbott Laboratories to be held at 9:00 a.m. on
April 23, 1999, at the corporation's headquarters, and hereby appoints
MILES D. WHITE and JOSE M. DE LASA, or either of them, proxy for the
undersigned, with power of substitution, to represent and vote all shares of
the undersigned upon all matters properly coming before the Annual Meeting or
any adjournments thereof.
INSTRUCTIONS: THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER
DIRECTED HEREIN BY THE UNDERSIGNED SHAREHOLDER. IF NO DIRECTION IS MADE, THIS
PROXY WILL BE VOTED FOR ITEMS 1 AND 2 AND AGAINST ITEMS 3 AND 4.
SEE REVERSE (IMPORTANT - PLEASE SIGN AND DATE ON OTHER SIDE.) SEE REVERSE
SIDE SIDE
<PAGE>
ABBOTT LABORATORIES
Dear Shareholder:
Abbott Laboratories invites you to take advantage of new and convenient ways
by which you can vote your shares. You can now vote your shares
electronically through the Internet or by telephone. This eliminates the need
to return your proxy card. To access the system and vote your shares
electronically, you must use the control number printed above the
shareholder(s)' name.
1. To vote over the Internet:
- Go to the web site http://www.eproxyvote.com/abt
2. To vote by telephone in the United States and Canada toll free:
- On a touch-tone telephone call 1-877-PRX-VOTE (1-877-779-8683)
24 hours a day, 7 days a week
Your electronic vote authorizes the named proxies in the same manner as if
you marked, signed, dated and returned the proxy card.
If you choose to vote your shares electronically, there is no need for you to
mail back your proxy card.
YOUR VOTE IS IMPORTANT. THANK YOU FOR VOTING.
DETACH HERE
PLEASE MARK
/X/ VOTES AS IN
THIS EXAMPLE.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE FOR ITEMS 1 AND 2.
1. Election of 13 Directors.
NOMINEES: (01) H.L. Fuller, (02) D.A. Jones, (03) J.M. Leiden, (04) D.A.L.
Owen, (05) R.L. Parkinson Jr., (06) B. Powell Jr., (07) A.B. Rand,
(08) W.A. Reynolds, (09) R.S. Roberts, (10) W.D. Smithburg, (11) J.R.
Walter, (12) W.L. Weiss and (13) M.D. White
FOR WITHHELD
/ / / /
/ / __________________________________________________________
FOR, except vote withheld from the above nominee(s).
FOR AGAINST ABSTAIN
2. Ratification of Arthur Andersen LLP as / / / / / /
auditors.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE
AGAINST ITEMS 3 AND 4.
FOR AGAINST ABSTAIN
3. Shareholder Proposal - CERES Principles. / / / / / /
4. Shareholder Proposal - Phase-Out / / / / / /
Production of PVC Medical Products.
MARK HERE FOR ADDRESS CHANGE AND NOTE AT LEFT / /
Each joint tenant should sign; executors, administrators, trustees, etc.
should give full title and, where more than one is named, a majority
should sign.
PLEASE READ OTHER SIDE BEFORE SIGNING.
Signature:___________________ Date:______ Signature:_______________ Date:______
