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[ABBOTT LABORATORIES LETTERHEAD]
August 8, 2000
Mr. Robert L. Parkinson, Jr.
1332 Edgewood Lane
Northbrook, IL 60062
Dear Bob:
You have expressed a desire to retire from Abbott Laboratories on January 31,
2001, after nearly 25 years of exemplary service with the Company. This
letter reflects our agreement concerning the timing and other matters
relating to your retirement. Most importantly, since you may consider other
opportunities in the health care field, this letter provides an additional
benefit in return for your agreement not to compete with Abbott for a certain
period of time following your retirement. We both agreed this commitment is
necessary to protect Abbott's best interest.
Our agreement is as follows:
1. You will resign as a Director and Officer of Abbott and of all its
subsidiaries and related entities and as a Director of TAP Pharmaceutical
Products Inc., effective September 1, 2000.
2. You will remain as an employee of Abbott until your retirement date of
January 31, 2001 at your current monthly salary. In consideration for
your agreement under paragraph 5 below, on January 31, 2001, you, or in
the event of your death, your estate or a beneficiary designated by you
for this purpose in a written notice to Abbott, will be paid $4,263,000
(equivalent to approximately two years base salary and bonus). Such
payment will not be included as earnings for purposes of determining your
retirement benefits from Abbott.
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Mr. Robert L. Parkinson
August 8, 2000
Page 2
3. You will be entitled to participate in all Abbott employee benefit plans
(including Abbott's stock option plans) in accordance with their terms,
based on your compensation and service with Abbott as an employee through
January 31, 2001, and as a retiree thereafter (including retirement under
the Abbott Laboratories Annuity Retirement Plan and coverage for yourself
and your eligible dependents under normal Abbott retiree medical and
dental coverage and retiree life insurance under the normal provisions of
the Abbott plans as they may be in effect from time to time), subject to
the following:
a. The restrictions on the stock awards granted to you on February 14,
1997, and on February 13, 1998, of Abbott's common stock will be
removed effective as of the date of your retirement.
b. You will receive a bonus award in the amount of $1,089,000 on January
31, 2001. This represents the normal bonus you would have earned in
2000 under the Company's Performance Incentive Plan assuming targets
were met.
c. You will be paid on January 31, 2001 for eight weeks of unused
vacation for 2000 and 2001.
d. You will have the option to take title for your company automobile on
or before January 31, 2001, and will be responsible for all taxes
associated with that transfer, including imputed income.
4. You will remain bound by the non-compete provisions of your Abbott
Employee Agreement and your stock option agreements in accordance with
their terms.
5. In consideration of the payment referred to in paragraph 2 above, you
agree that until July 31, 2002, you will not engage directly or
indirectly in any activity, employment or business which is competitive
with any business conducted by, or under current consideration by, Abbott
or any of its subsidiaries or affiliates, including TAP Pharmaceutical
Products Inc.
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Mr. Robert L. Parkinson
August 8, 2000
Page 3
6. You will be entitled to indemnification from Abbott to the same extent as
other current or former directors or officers of Abbott. You will also be
entitled to coverage under the directors and officers liability insurance
coverage maintained by Abbott (as in effect from time to time) to the
same extent as other current or former officers and directors of Abbott;
provided, however, that nothing in this paragraph 6 will be construed to
require Abbott to continue to maintain any such directors or officers
liability insurance coverage. Any liability intended to be covered by the
foregoing protection will extend to your activities not only on behalf of
Abbott, but also that of its subsidiaries and affiliates, including TAP
Pharmaceutical Products Inc.
If you are in agreement with the foregoing, please sign a copy of this letter
in the space provided.
I know you reached your decision to retire after significant thought and
deliberation. While we are disappointed to see you leave Abbott, we
understand your desire to pursue other personal and professional challenges.
Sincerely,
/s/ Miles
Miles D. White
MDW:aam
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ACCEPTED: /s/ Robert Parkinson Jr.
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(Name)
Date: 8/9/00
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