AbbVie 2012 Annual Report Download

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2012 annual report on form 10 -k
2013 notice of annual meeting
and proxy statement

Table of contents

  • Page 1
    2012 annual repor t on form 10 -k notice of annual mee ting and prox y statement 2013

  • Page 2
    ... ABBVIE AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott. With its 125-year history, the company's mission is to use its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address...

  • Page 3
    ...of a global pharmaceutical company with the focus, culture and agility of a biotech. AbbVie represents a unique investment opportunity, with a number of attributes that set us apart from other healthcare companies. Our flagship product-Humira-delivered another year of outstanding performance in 2012...

  • Page 4

  • Page 5
    ...North Chicago, Illinois 60064-6400 (Address of principal executive offices) Securities Registered Pursuant to Section 12(b) of the Act: Title of Each Class 32-0375147 (I.R.S. employer identification number) (847) 932-7900 (telephone number) Name of Each Exchange on Which Registered New York Stock...

  • Page 6

  • Page 7
    ...trading ''regular-way'' under the ticker symbol ''ABBV'' on the New York Stock Exchange on January 2, 2013. Overview AbbVie is a global, research-based biopharmaceutical company. AbbVie develops and markets advanced therapies that address some of the world's most complex and serious diseases. AbbVie...

  • Page 8
    ..., chronic pancreatitis, and several other conditions. AbbVie's 2012 sales of Creon totaled $353 million. AbbVie has the rights to sell Synthroid, AndroGel, and Creon only in the United States. Virology products. AbbVie's virology products include two products for the treatment of HIV infection...

  • Page 9
    ... Stage 3, 4, and 5 chronic kidney disease (CKD). AbbVie's 2012 sales of Zemplar totaled $383 million. Research and Development Activities AbbVie has numerous compounds in clinical development, including potential treatments for highly prevalent conditions. Over the past five years, AbbVie has more...

  • Page 10
    ... the development process, and given the amount of time needed to complete clinical trials and other development activities required for regulatory approval, the length of time between product launch and patent expiration is significantly less than 20 years. The Drug Price Competition and Patent Term...

  • Page 11
    ... to treat conditions that afflict a relatively small population or for which there is not a reasonable expectation that the research and development costs will be recovered, the FDA may designate the pharmaceutical as an orphan drug and grant it seven years of market exclusivity. Applicable laws and...

  • Page 12
    ... Corporation, Cardinal Health, Inc., and AmerisourceBergen Corporation accounted for 38 percent, 27 percent, and 26 percent, respectively, of AbbVie's 2012 gross sales in the United States. These wholesalers purchase product from AbbVie under standard terms and conditions of sale. AbbVie directs...

  • Page 13
    ...for process development, analytical services, and manufacturing of certain products. AbbVie procures certain products and services from a limited number of suppliers and, in some cases, a single supply source. For example, the filling and packaging of HUMIRA syringes to be sold outside of the United...

  • Page 14
    ... of operations. Competition The markets for AbbVie's products are highly competitive. AbbVie competes with other researchbased pharmaceuticals and biotechnology companies that discover, manufacture, market, and sell proprietary pharmaceutical products and biologics. For example, HUMIRA competes...

  • Page 15
    ... face competitive pressure from these biologics and orally administered products. Regulation-Discovery and Clinical Development United States. Securing approval to market a new pharmaceutical product in the United States requires substantial effort and financial resources and takes several years to...

  • Page 16
    ... laws in the United States. Prescription drug manufacturers such as AbbVie are also subject to taxes, as well as application, product, user, establishment, and other fees. Compliance with these laws and regulations is costly and materially affects AbbVie's business. Among other effects, health care...

  • Page 17
    ... affect AbbVie's business. Similarly, the Veterans Health Care Act of 1992, as a prerequisite to participation in Medicaid and other federal health care programs, requires that manufacturers extend additional discounts on pharmaceutical products to various federal agencies, including the Department...

  • Page 18
    ... could affect access to health care products and services, increase rebates, reduce prices or the rate of price increases for health care products and services, change health care delivery systems, create new fees and obligations for the pharmaceuticals industry, or require additional reporting and...

  • Page 19
    ... risks and uncertainties develops into actual events, these events could have a material adverse effect on AbbVie's business, financial condition or results of operations. In such case, the trading price of AbbVie's common stock could decline. Risks Related to AbbVie's Business The expiration or...

  • Page 20
    ...Condition and Results of Operations-Results of Operations,'' and litigation regarding these patents is described in Item 3, ''Legal Proceedings.'' The U.S. composition of matter patent for HUMIRA, which is AbbVie's largest selling product and had worldwide sales of approximately $9.3 billion in 2012...

  • Page 21
    ... the market of HUMIRA for any reason. AbbVie's research and development efforts may not succeed in developing and marketing commercially successful products and technologies, which may cause its revenue and profitability to decline. To remain competitive, AbbVie must continue to launch new products...

  • Page 22
    ...develop, manufacture and sell biologics-including HUMIRA-could adversely impact AbbVie's business and results of operations. New products and technological advances by AbbVie's competitors may negatively affect AbbVie's results of operations. AbbVie competes with other research-based pharmaceuticals...

  • Page 23
    ...granted marketing authorizations for several biosimilars pursuant to a set of general and product class-specific guidelines for biosimilar approvals issued over the past few years. In addition, companies are developing biosimilars in other countries that could compete with AbbVie's biologic products...

  • Page 24
    ...the United States often have similar authority. New safety data may emerge from adverse event reports, post-marketing studies, whether conducted by AbbVie or by others and whether mandated by regulatory agencies or voluntary, and other sources and may adversely affect sales of AbbVie's products. For...

  • Page 25
    ...1, ''Business-Regulation-Commercialization, Distribution, and Manufacturing.'' To the extent these cost containment efforts are not offset by greater demand, increased patient access to health care, or other factors, AbbVie's future revenues and operating income will be reduced. In the United States...

  • Page 26
    ...prices or the rate of price increases for health care products and services, change health care delivery systems, create new fees and obligations for the pharmaceuticals industry, or require additional reporting and disclosure. Such legislation and regulation could adversely affect AbbVie's business...

  • Page 27
    ...outside the United States include: • fluctuations in currency exchange rates; • changes in medical reimbursement policies and programs; • multiple legal and regulatory requirements that are subject to change and that could restrict AbbVie's ability to manufacture, market, and sell its products...

  • Page 28
    ... its assets, as part of its business strategy. AbbVie may not complete these transactions in a timely manner, on a cost-effective basis, or at all, and may not realize the expected benefits. If AbbVie is successful in making an acquisition, the products and technologies that are acquired may not be...

  • Page 29
    ... tax rate changes, changes to the laws related to the treatment and remittance of foreign earnings, new tax laws, and subsequent interpretations of tax law in the United States and other jurisdictions. AbbVie has debt obligations that could adversely affect its business and its ability to meet...

  • Page 30
    ... favorable to it, if at all. If AbbVie loses its investment grade credit rating or adequate funds are not available on acceptable terms, AbbVie may be unable to fund its expansion, successfully develop or enhance products, or respond to competitive pressures, any of which could negatively affect...

  • Page 31
    ... statements and accounting records of Abbott. Accordingly, the financial information included in this Annual Report on Form 10-K does not necessarily reflect the financial condition, results of operations or cash flows that AbbVie would have achieved as a separate, publicly traded company during the...

  • Page 32
    ...of operations and financial condition; • Generally, AbbVie's working capital requirements and capital for its general corporate purposes, including acquisitions, research and development and capital expenditures, were historically satisfied as part of the corporate-wide cash management policies of...

  • Page 33
    ... or long-term agreements terminate, AbbVie may not be able to operate its business effectively and its profitability may decline. AbbVie is in the process of creating its own, or engaging third parties to provide, systems and services to replace many of the systems and services Abbott currently...

  • Page 34
    ..., including transition services agreements, a tax sharing agreement, international commercial operations agreements, finished goods supply agreements, contract manufacturing agreements, an employee matters agreement, a special products master agreement, an information technology agreement, and...

  • Page 35
    ...'s directors, officers and employees, acquisitions, or other purposes. AbbVie's employees will have options to purchase shares of its common stock as a result of conversion of their Abbott stock options (in whole or in part) to AbbVie stock options. AbbVie anticipates its compensation committee will...

  • Page 36
    ... any business combination with that corporation, including by merger, consolidation or acquisitions of additional shares, for a three-year period following the date on which that person or its affiliates becomes the holder of more than 15 percent of the corporation's outstanding voting stock. AbbVie...

  • Page 37
    ... of Financial Condition and Results of Operations.'' AbbVie does not undertake any obligation to update the forward-looking statements included in this Annual Report on Form 10-K to reflect events or circumstances after the date hereof, unless AbbVie is required by applicable securities law to do...

  • Page 38
    ... should not have a material adverse effect on AbbVie's financial position, cash flows, or results of operations. Several cases are pending against AbbVie that generally allege Abbott and numerous other pharmaceutical companies reported false pricing information in connection with certain drugs...

  • Page 39
    ... remaining claims of the private plaintiffs. As previously reported, Abbott was seeking to enforce its patent rights relating to fenofibrate tablets (a drug AbbVie sells under the trademark TriCor↧). In a case filed in the United States District Court for the District of New Jersey in August 2011...

  • Page 40
    ... rights relating to niacin extended release tablets (a drug AbbVie sells in the U.S. under the trademark Niaspan↧). In a case filed in the United States District Court for the District of Delaware in February 2010, AbbVie alleges that Sun Pharmaceutical Industries Ltd.'s and Sun Pharma Global FZE...

  • Page 41
    ...Gonzalez is AbbVie's Chairman and Chief Executive Officer. He served as Abbott's Executive Vice President, Pharmaceutical Products Group from 2010 to 2012, and was responsible for Abbott's worldwide pharmaceutical business, including commercial operations, research and development, and manufacturing...

  • Page 42
    ... Talent Acquisition from 2006 to 2007. Mr. Richmond joined Abbott in 2006. Dr. Saleki-Gerhardt is AbbVie's Senior Vice President, Operations. She served as Abbott's Vice President, Pharmaceuticals Manufacturing and Supply from 2011 to 2012, and as Divisional Vice President, Quality Assurance, Global...

  • Page 43
    ... of such dividends. AbbVie Inc. is an Illinois High Impact Business (HIB) and is located in a federal Foreign Trade Sub-Zone (Sub-Zone 22S). Dividends may be eligible for a subtraction from base income for Illinois income tax purposes. If you have questions, please contact your tax advisor. 37

  • Page 44
    ... the years ended December 31 (in millions, except per share data) 2012 2011 2010 2009 2008 Combined statement of earnings data Net sales Net earnings Basic and diluted earnings per common share Basic and diluted average shares outstanding(a) Combined balance sheet data Total assets Long-term debt...

  • Page 45
    ...'' section below for further information. AbbVie's products include a broad line of adult and pediatric pharmaceuticals manufactured, marketed, and sold worldwide and are generally sold directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies, and...

  • Page 46
    ...To successfully execute its long-term strategy, AbbVie will focus on expanding HUMIRA sales, advancing the pipeline, expanding its presence in emerging markets and managing its product portfolio to maximize value. AbbVie expects to continue to drive strong HUMIRA sales growth in several ways. AbbVie...

  • Page 47
    ... ABT-267, a NS5A inhibitor. Renal Disease AbbVie's renal care pipeline includes atrasentan, for the treatment of diabetic chronic kidney disease (CKD). A Phase IIb study of atrasentan in patients with diabetic kidney disease, which began in June 2011, has been completed, with results to be presented...

  • Page 48
    ...in endometriosis began in mid-2012 and a Phase IIa study for uterine fibroids was initiated in November 2011. Immunology AbbVie is developing several additional indications for HUMIRA and has a number of next-generation programs underway to address immune-mediated conditions, including the following...

  • Page 49
    ... significant delays and the high rate of failure inherent in the research and development of new pharmaceutical products, it is not possible to accurately estimate the total cost to complete all projects currently in development. However, AbbVie plans to continue to manage its portfolio of projects...

  • Page 50
    ... Abbott corporate functions, including senior management, legal, human resources, finance, information technology, and quality assurance. These expenses have been allocated to AbbVie based on direct usage or benefit where identifiable, with the remainder allocated on a pro rata basis of revenues...

  • Page 51
    ... details the sales of key products. Percent change At actual At constant currency currency rates rates 2012 2011 2012 2011 years ended December 31 (in millions) 2012 2011 2010 HUMIRA United States International Total AndroGel United States TriCor/TRILIPIX United States Kaletra United States...

  • Page 52
    ...an agreement relating to AbbVie's niacin products acquired with the Kos Pharmaceuticals acquisition, Niaspan may become subject to generic competition in September 2013. The decline in Kaletra revenues was primarily due to lower market share in various countries due to the impact of competition. The...

  • Page 53
    ... for new and existing products, including continued spending for HUMIRA, and in 2012 and 2011, the impact of the pharmaceutical fee imposed by U.S. health care reform legislation. Research and Development and Acquired In-Process Research and Development Percent change 2012 2011 years ended December...

  • Page 54
    ... expense on outstanding debt and bridge facility fees related to the separation from Abbott, partially offset by interest income. In November 2012, AbbVie issued $14.7 billion of long-term debt with maturities ranging from three to 30 years. AbbVie entered into interest rate swaps with various...

  • Page 55
    ... company. These costs will include the cost of various corporate headquarters functions, incremental information technology-related costs, and incremental costs to operate a stand-alone back office infrastructure outside the United States. In order to establish these stand-alone functions, AbbVie...

  • Page 56
    ..., the company announced a $1.5 billion stock repurchase program, which was effective immediately. Purchases of AbbVie shares may be made from time to time at management's discretion. The plan has no time limit and can be discontinued at any time. A dividend of $0.40 per share was paid on February...

  • Page 57
    ... the new credit facility are not material. There were no amounts outstanding on the credit facility on December 31, 2012. Access to Capital The company intends to fund short-term and long-term financial obligations as they mature through cash on hand, future cash flows from operations or by issuing...

  • Page 58
    ... in the normal course of business. (c) Excludes pension and other post-employment benefits and related deferred compensation cash outflows. Timing of funding is uncertain and dependent on future movements in interest rates and investment returns, changes in laws and regulations, and other variables...

  • Page 59
    ... Pharmacy benefit manager rebates arise from contractual agreements with private health care plans that seek to reduce costs by negotiating discounts with pharmaceuticals manufacturers. Under wholesaler chargeback programs, the wholesaler charges AbbVie back for the difference between the price paid...

  • Page 60
    ... AbbVie's historical returns are low, and because sales return terms and other sales terms have remained relatively unchanged for several periods. Pension and Post-Employment Benefits AbbVie employees participate in various pension and post-employment health care plans sponsored by Abbott. In AbbVie...

  • Page 61
    ... based on current market rates on high-quality, fixedincome investments at December 31 each year. The expected long-term rate of return is based on the asset allocation, historical performance and the current view of expected future returns. The health care cost trend rate is selected by reviewing...

  • Page 62
    ... a negative effect on AbbVie's gross profit margin in future years. In 2011, AbbVie began recording the annual fee imposed by health care reform legislation on companies that sell branded prescription drugs to specified government programs. The amount of the annual fee, which totaled approximately...

  • Page 63
    ... AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The company is exposed to risk that its earnings, cash flows and equity could be adversely impacted by changes in foreign exchange rates and interest rates. Certain derivative instruments are used when available on a cost-effective basis to hedge the...

  • Page 64
    ... to be a reasonably possible near-term change in share prices. Non-Publicly Traded Equity Securities AbbVie holds equity securities from strategic technology acquisitions that are not traded on public stock exchanges. The carrying value of these investments was approximately $72 million and $171...

  • Page 65
    ... Combined Statements of Earnings ...Combined Statements of Comprehensive Income ...Combined Statements of Cash Flows ...Combined Balance Sheets ...Combined Statements of Parent Company Equity ...Notes to Combined Financial Statements ...Report of Independent Registered Public Accounting Firm...

  • Page 66
    AbbVie Inc. and Subsidiaries Combined Statements of Earnings years ended December 31 (in millions, except per share data) 2012 2011 2010 Net sales Cost of products sold Selling, general and administrative Research and development Acquired in-process research and development Total operating costs ...

  • Page 67
    AbbVie Inc. and Subsidiaries Combined Statements of Comprehensive Income years ended December 31 (in millions) 2012 2011 2010 Net earnings Foreign currency translation gain (loss) adjustments Pension and post-employment benefits, net of tax benefit of $(24) in 2012, $(12) in 2011 and $(2) in 2010 ...

  • Page 68
    ... short-term borrowings Other Net transactions with Abbott Laboratories, excluding noncash items Cash flows from financing activities Effect of exchange rate changes on cash and equivalents Net increase in cash and equivalents Cash and equivalents, beginning of year Cash and equivalents, end of year...

  • Page 69
    AbbVie Inc. and Subsidiaries Combined Balance Sheets as of December 31 (in millions) 2012 2011 Assets Current assets Cash and equivalents Short-term investments Accounts receivable Due from Abbott Laboratories Inventories Deferred income taxes Prepaid expenses and other Total current assets ...

  • Page 70
    AbbVie Inc. and Subsidiaries Combined Statements of Parent Company Equity Net parent company investment Accumulated other comprehensive income years ended December 31 (in millions) Total Balance at January 1, 2010 Net earnings Net transactions with Abbott Laboratories Other comprehensive loss ...

  • Page 71
    ... of record as of the close of business on December 12, 2012, received one share of AbbVie common stock for every one share of Abbott's common stock held as of the record date. AbbVie's common stock began trading ''regular-way'' under the ticker symbol ''ABBV'' on the New York Stock Exchange on...

  • Page 72
    ... Benefits AbbVie records annual expenses relating to its pension benefit and other post-employment plans based on calculations which include various actuarial assumptions, including discount rates, assumed asset rates of return, compensation increases, turnover rates and health care cost trend rates...

  • Page 73
    ... plans. The funded status of these plans have been recorded in the combined balance sheets for AbbVie at December 31, 2012. Refer to Note 9 for information regarding AbbVie's pension and post-employment plans. Income Taxes Income taxes on earnings reflect the annual effective rates, including...

  • Page 74
    ... Inventories are valued at the lower of cost (first-in, first-out basis) or market. Cost includes material and conversion costs. Inventories, net, consist of the following. as of December 31 (in millions) 2012 2011 Finished goods Work-in-process Materials Inventories, net Property and Equipment as...

  • Page 75
    ... for product liability claims are recorded as assets, on an undiscounted basis, when it is probable that a recovery will be realized. Business Combinations Results of operations of acquired companies are included in AbbVie's results of operations as of the respective acquisition dates. Assets...

  • Page 76
    ...These costs include initial payments incurred prior to regulatory approval in connection with research and development collaboration agreements that provide rights to develop, manufacture, market and/or sell pharmaceutical products. The fair value of IPR&D projects acquired in a business combination...

  • Page 77
    ... date, Abbott shareholders of record as of the close of business on December 12, 2012 received one share of AbbVie common stock for every one share of Abbott's common stock held as of the record date. Basic and diluted earnings per common share and the average number of common shares outstanding...

  • Page 78
    ... sales of the acquired operations were approximately $1.1 billion in 2010. Had the Solvay acquisition taken place on January 1, 2010, combined net sales and net earnings would not have been significantly different from reported amounts. The acquisition was funded with cash and short-term investments...

  • Page 79
    ... joint research and development and commercialization of new products. AbbVie generally receives certain licensing rights under these arrangements. These collaborations often require upfront payments and may include additional milestone, research and development cost sharing, royalty or profit share...

  • Page 80
    ... for chronic kidney disease. Reata and AbbVie will closely examine the data from this study to determine whether there is an appropriate path forward for the development of bardoxolone methyl in chronic kidney disease or other indications. In the fourth quarter of 2012, AbbVie recorded a charge...

  • Page 81
    ... Plans In 2012 and prior years, AbbVie management approved plans to realign its worldwide manufacturing operations and selected domestic and international commercial and R&D operations in order to reduce costs. In 2012, AbbVie recorded a charge of approximately $177 million for employee severance...

  • Page 82
    .... Solvay Plans In 2010, AbbVie management approved restructuring plans primarily related to the acquisition of Solvay. This plan streamlined operations, improved efficiencies and reduced costs in certain Solvay sites and functions as well as in certain AbbVie and Solvay commercial organizations in...

  • Page 83
    ...the company to pay taxes, maintenance, insurance and other operating costs of the leased property. AbbVie also leases office space on a short-term basis typically under cancelable operating leases. The company has capital lease obligations principally for automobiles. As of December 31, 2012, annual...

  • Page 84
    ... foreign currency exchange rate and interest rate risks related to its business operations. The company's hedging policy attempts to manage these risks to an acceptable level based on the company's judgment of the appropriate trade-off between risk, opportunity and costs. The company uses derivative...

  • Page 85
    ...Designated as cash flow hedges $(11) $ (2) $ 75 Not designated as hedges n/a n/a n/a Interest rate swaps designated as fair value hedges n/a n/a n/a $ 24 $18 $45 Cost of products sold (23) 30 30 Net foreign exchange (gain) loss (81) - - Interest expense, net The loss of $81 million related to fair...

  • Page 86
    ...-for-sale equity securities consist of investments for which the fair value is determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company are valued using publicized spot...

  • Page 87
    ... 31, 2012. Basis of fair value measurement Quoted prices in active Significant markets for other Significant identical observable unobservable assets inputs inputs (Level 1) (Level 2) (Level 3) (in millions) Fair value at December 31, 2012 Assets Investments Total assets Liabilities Short-term...

  • Page 88
    ... no asset or liability was recorded by AbbVie in the historical balance sheets through December 31, 2012 to recognize the funded status of these plans. Abbott made voluntary contributions to its defined benefit pension funds that AbbVie accounts for as multiemployer plans totaling $310 million, $289...

  • Page 89
    ... return on plans assets Company contributions Assumption of plan assets Benefits paid End of period Funded status at December 31 Amounts recognized in combined balance sheets Other assets Current liabilities Long-term liabilities Net liability at December 31 Actuarial losses, net Prior service cost...

  • Page 90
    ... and $3 million for other post-employment plans. Net Periodic Benefit Cost years ended December 31 (in millions) 2012 2011 2010 Service cost Interest cost Expected return on plans assets Amortization of actuarial losses and prior service costs Net periodic pension benefit cost $ 21 $ 18 $ 15 38 32...

  • Page 91
    ...Periodic Benefit Cost 2012 2011 2010 Discount rate Expected long-term rate of return on plan assets Expected rate of change in compensation Pension Plan Assets 5.1% 8.5% 4.2% 5.0% 8.5% 4.1% 5.4% 8.5% 3.7% (in millions) Balance at December 31, 2012 Basis of fair value measurement Quoted prices...

  • Page 92
    ... Actual return on plan assets on hand at year end Purchases, sales and settlements, net December 31 $27 - 3 3 $33 $22 3 (1) 3 $27 The investment mix of equity securities, fixed income and other asset allocation strategies is based upon achieving a desired return, balancing higher return, more...

  • Page 93
    ...payments funded from company assets as well as paid from the plans. Other AbbVie employees also participate in the Abbott Laboratories Stock Retirement Plan, which is Abbott's principal defined contribution plan. AbbVie recorded expense of $67 million, $68 million and $65 million for the years ended...

  • Page 94
    ... is paid with the common shares held by the employee, a replacement option is granted for the number of shares used to make that payment. The closing price of the common share on the business day before the exercise is used to determine the number of shares required to exercise the related option...

  • Page 95
    ... based on the number of shares granted and the quoted price of the common stock on the date of grant. The following table summarizes RSAs and RSUs balances and activity under Abbott's Incentive Stock Programs for AbbVie employees. (share units in thousands) Share units Weighted average grant...

  • Page 96
    ...2011 on certain products manufactured in Puerto Rico. The tax is levied on gross inventory purchases from entities in Puerto Rico and is included in cost of products sold in the combined statements of earnings. The majority of the tax is creditable for U.S. income tax purposes. In 2012 and 2011, the...

  • Page 97
    ... and New York University on a patent they claimed AbbVie's HUMIRA infringed. This decision concludes the case. The U.S. Department of Justice, through the U.S. Attorney for the Western District of Virginia, and various state Attorneys General investigated AbbVie's sales and marketing activities...

  • Page 98
    ..., employee compensation and benefits, travel and meeting services, public and investor relations, real estate services, internal audit, telecommunications, information technology, corporate income tax and selected legal services. Some of these services will be provided to AbbVie on a temporary basis...

  • Page 99
    ...business segment-pharmaceutical products. Substantially all of AbbVie's U.S. sales are to three wholesalers. Outside the United States, products are sold primarily to health care providers or through distributors, depending on the market served. Net sales of key products were as follows. years ended...

  • Page 100
    ... Net sales Gross margin Net earnings Basic and diluted earnings per share Second Quarter Net sales Gross margin Net earnings Basic and diluted earnings per share Third Quarter Net sales Gross margin Net earnings Basic and diluted earnings per share Fourth Quarter Net sales Gross margin Net earnings...

  • Page 101
    ...related combined statements of earnings, comprehensive income, statement of parent company equity and cash flows for each of the three years in the period ended December 31, 2012. These combined financial statements are the responsibility of the Company's management. Our responsibility is to express...

  • Page 102
    ...'s Board of Directors approved the dismissal of Deloitte & Touche LLP (Deloitte) as AbbVie's independent registered public accountant, effective as of the date of Deloitte's completion of the audit services for the fiscal year ending December 31, 2012 and the filing of AbbVie's 2012 Annual Report on...

  • Page 103
    ...future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures. ITEM 9B. None. OTHER INFORMATION 97

  • Page 104
    ...have any outstanding shares issued under a company equity compensation plan as of December 31, 2012. (b) Information Concerning Security Ownership. Incorporated herein by reference is the material under the heading ''Ownership of Securities-Security Ownership of Executive Officers and Directors'' in...

  • Page 105
    ...: See Item 8, ''Financial Statements and Supplementary Data,'' on page 59 hereof, for a list of financial statements. (2) Financial Statement Schedules: All schedules omitted are inapplicable or the information required is shown in the combined financial statements or notes thereto. (3) Exhibits...

  • Page 106
    ..., this report has been signed below by the following persons on behalf of AbbVie Inc. on March 15, 2013 in the capacities indicated below. /s/ RICHARD A. GONZALEZ Richard A. Gonzalez Chairman of the Board and Chief Executive Officer (Principal Executive Officer) /s/ WILLIAM J. CHASE William J. Chase...

  • Page 107
    ...'s Registration Statement on Form 10 filed on November 16, 2012). *Registration Rights Agreement dated November 8, 2012 by and among AbbVie Inc., Abbott Laboratories, Morgan Stanley & Co. LLC, Barclays Capital Inc., J.P. Morgan Securities LLC and Merrill Lynch, Pierce, Fenner & Smith Incorporated...

  • Page 108
    ... Performance Incentive Plan.** AbbVie Deferred Compensation Plan.** AbbVie Non-Employee Directors' Fee Plan.** AbbVie Supplemental Pension Plan.** AbbVie Supplemental Savings Plan.** *Purchase Agreement dated November 5, 2012 between AbbVie Inc., Abbott Laboratories, as guarantor, and Morgan Stanley...

  • Page 109
    ... number 001-35565. Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto. AbbVie will furnish copies of any of the above exhibits to a shareholder upon written request to the Secretary, AbbVie Inc., 1 North Waukegan Road, North Chicago, Illinois...

  • Page 110
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  • Page 111
    ... vote on executive compensation (Item 4 on the proxy card). The close of business on March 8, 2013, has been fixed as the record date for determining the stockholders entitled to receive notice of and to vote at the Annual Meeting. AbbVie's 2013 Proxy Statement and 2012 Annual Report to Stockholders...

  • Page 112

  • Page 113
    ......Executive Compensation ...Compensation Discussion and Analysis ...Compensation Committee Report ...Summary Compensation Table ...2012 Grants of Plan-Based Awards ...2012 Outstanding Equity Awards at Fiscal Year-End ...2012 Option Exercises and Stock Vested ...Pension Benefits ...2012 Nonqualified...

  • Page 114

  • Page 115
    .... INFORMATION ABOUT THE ANNUAL MEETING Who Can Vote Stockholders of record at the close of business on March 8, 2013 will be entitled to notice of and to vote at the Annual Meeting. As of March 8, 2013, AbbVie had 1,582,985,989 outstanding shares of common stock, which are AbbVie's only outstanding...

  • Page 116
    ... approval of executive compensation, FOR management's recommendation to hold a vote to approve executive compensation annually, and FOR the approval of the AbbVie 2013 Incentive Stock Program. The board of directors is not aware of any other issue which may properly be brought before the meeting. If...

  • Page 117
    ... Laboratories (''Abbott'') of 100% of the outstanding common stock of AbbVie to Abbott's shareholders (the ''Separation''). Each Abbott shareholder of record as of the close of business on December 12, 2012 (the ''Record Date'') received one share of AbbVie common stock for each Abbott common share...

  • Page 118
    ... non-votes. For more information on the director majority vote standard, see AbbVie's By-Laws as listed as an exhibit to AbbVie's 2012 Annual Report on SEC Form 10-K. Class I-Directors Whose Terms Expire in 2013 William H.L. Burnside Age 61 Retired Senior Vice President and Director at the Boston...

  • Page 119
    ...-2010, and Abbott Laboratories, 1998-2011. As a former executive of a major international corporation, Mr. Roberts has a strong record of valuable business, leadership, operational, and management experience which he brings to the board. 17JAN201314194544 Class II-Directors Whose Terms Expire in...

  • Page 120
    ... 2009 prior to becoming the chairman of the board. As chairman and chief executive officer of Northern Trust Corporation and The Northern Trust Company, Mr. Waddell possesses broad financial services experience with a strong record of leadership in a highly regulated industry. 17JAN201314192826 6

  • Page 121
    ...and chief executive officer of AbbVie. He served as Abbott's executive vice president of the pharmaceutical products group from July 2010 to December 2012, and was responsible for Abbott's worldwide pharmaceutical business, including commercial operations, research and development, and manufacturing...

  • Page 122
    ..., president, and chief executive officer of UAL Corporation and United Air Lines, vice chairman of Chevron Texaco and as interim chairman of Dynegy, Inc., Mr. Tilton acquired strong management experience overseeing complex multinational businesses operating in highly regulated industries, as well as...

  • Page 123
    ...Abbott, AbbVie's former parent. AbbVie encourages its board members to attend the annual stockholder meeting. AbbVie did not hold an annual stockholder meeting in 2012. The board has determined that each of the following directors is independent in accordance with the New York Stock Exchange listing...

  • Page 124
    ...non-employee director compensation matters. Aon Hewitt, and its principal, report directly to the chair of the committee. The principal meets regularly, and as needed, with the committee in executive sessions, has direct access to the chair during and between meetings, and performs no other services...

  • Page 125
    ... relating to executive compensation. Separately, Abbott management engaged Aon Hewitt to perform and paid approximately $6 million for unrelated services, including actuarial work, pension design and administration, insurance, and general consulting. The Abbott compensation committee was informed...

  • Page 126
    ... the board or board committees. AbbVie's non-employee directors are compensated for their service under the AbbVie Non-Employee Directors' Fee Plan and the AbbVie 2013 Incentive Stock Program. The following table sets forth a summary of the non-employee directors' 2012 compensation paid by Abbott in...

  • Page 127
    ... under the Incentive Stock Program. No restricted stock units were outstanding as of December 31, 2012. (3) No options were outstanding as of December 31, 2012. (4) The totals in this column include reportable interest credited under the AbbVie Non-Employee Directors' Fee Plan during the year. No...

  • Page 128
    ... most highly paid executive officers (the ''named executive officers''), and by all directors and executive officers of AbbVie as a group. It also reflects the number of stock equivalent units and restricted stock units held by non-employee directors under the AbbVie Non-Employee Directors' Fee Plan...

  • Page 129
    ... in relation to Abbott stock as of December 31, 2012 prior to the Separation. BlackRock, Inc. reported it had sole voting and investment power with respect to these shares. Shares Beneficially Owned Percent of Class Name and Address of Beneficial Owner BlackRock, Inc...40 East 52nd Street New York...

  • Page 130
    ... Gonzalez, Chairman of the Board and Chief Executive Officer; Laura J. Schumacher, Executive Vice President, Business Development, External Affairs and General Counsel; William J. Chase, Executive Vice President, Chief Financial Officer; Carlos Alban, Executive Vice President, Commercial Operations...

  • Page 131
    ...Annual Bonus AbbVie's annual bonus (short-term incentive) program is based on the Abbott incentive structure and aligned with competitive market rates, based on peer company comparisons. This incentive structure is intended to align executives' interests directly with the annual operating strategies...

  • Page 132
    shares and units, subject to vesting requirements, under the Incentive Stock Program. AbbVie is asking that stockholders approve this plan at the 2013 annual stockholders meeting (see Item 5 on the proxy card). Benefits As with all AbbVie employees, named executive officers are provided certain ...

  • Page 133
    ..., the job he or she is performing or assuming, internal equity and the Company's operating budget. In this sense, base pay is performance-based as well as aligned with the individual's relative performance and contributions. Annual Bonus In 2012, AbbVie's named executive officers participated in...

  • Page 134
    ... stockholders, that the long-term incentive awards for named executive officers should be in the form of 25 percent stock options and 75 percent performance-vested shares. In 2012, Abbott's annual grant was dated and the grant price set on February 17. Abbott's historical practice for setting...

  • Page 135
    ... 2013, AbbVie's policy with respect to its annual equity award for all eligible employees, including the named executive officers, is to grant the award and set the grant price at the same time each year, at the Committee's regularly scheduled February meeting. These meeting dates generally are the...

  • Page 136
    ... Sales of $23,903MM Achieve Pharmaceutical Products Group Adjusted Operating Margin of $8,214MM Achieve Pharmaceutical Products Group Plan Gross Margin of 70.8% A. B. Adjusted Diluted EPS of $5.07 Achieved-$24,384MM C. Achieved-$8,787MM D. Achieved-72.3% Laura J. Schumacher . . William...

  • Page 137
    ...to increase pipeline probability of success and internal rate of return; achieve separation into an independent publicly-traded pharmaceutical company by the end of 2012; meet key talent attraction and retention targets; create and implement organizational design of new Strategic Projects Office and...

  • Page 138
    ... long-term incentives, including a 79,800 share stock option grant and a 44,200 share performance-vesting restricted stock award. Effective December 1, 2012, related to her appointment as Executive Vice President, Business Development, External Affairs and General Counsel of AbbVie, Ms. Schumacher...

  • Page 139
    ... to work at Abbott in 2009. Upon his return to Abbott, Mr. Gonzalez did not become an active participant in any of Abbott's employee benefits plans. Instead, he continued to receive previously earned Abbott retiree benefits, including pension and retiree healthcare benefits through December 31, 2012...

  • Page 140
    ... determine the Supplemental Pension Plan benefit, and therefore exhausts the trust balance, the Supplemental Pension Plan benefit will be paid to the officer by AbbVie. Deferred Compensation Officers of the Company, like all U.S. employees, are eligible to defer a portion of their annual base salary...

  • Page 141
    ... Planning Named executive officers are eligible for up to $10,000 of annual costs associated with estate planning advice, tax preparation and general financial planning fees. If an officer chooses to utilize this benefit, fees for services received up to the annual allocation are paid by the Company...

  • Page 142
    ... responsible for reviewing, approving and overseeing AbbVie's compensation plans and practices, and works with management and the Committee's independent compensation consultant to establish AbbVie's executive compensation philosophy and programs. The Committee has reviewed and discussed the...

  • Page 143
    ... Group Laura J. Schumacher ...2012 Executive Vice President, 2011 General Counsel, and 2010 Corporate Secretary William J. Chase ...2012 Vice President, Licensing 2011 and Acquisitions Carlos Alban ...2012 Senior Vice President, 2011 Proprietary Pharmaceutical Products, Global Commercial Operations...

  • Page 144
    ... on exercise of that option are paid) with Abbott common shares held by the named executive officer, a replacement option may be granted for the number of shares used to make that payment. Abbott uses the closing price of an Abbott common share on the business day before the exercise to determine...

  • Page 145
    ... J. Chase: $13,526 / $12,458; C. Alban: $42,667 / $33,977; and J. M. Leonard: $90,813 / $82,639. Each of the named executive officers' awards under the 1998 Abbott Laboratories Performance Incentive Plan or the 1986 Abbott Laboratories Management Incentive Plan is paid in cash to the named executive...

  • Page 146
    ...- Generally.'' (7) Bonus paid to Mr. Gonzalez in 2010 upon his appointment as Executive Vice President, Pharmaceutical Products Group. (8) Bonus paid in recognition of performance related to the business separation. 2012 GRANTS OF PLAN-BASED AWARDS Estimated Future Payouts Under Non-Equity Incentive...

  • Page 147
    ... Incentive Plan and Mr. Chase participated in the 1986 Abbott Laboratories Management Incentive Plan, both of which are annual, non-equity incentive plans. The annual cash incentive award earned by the named executive officer in 2012 under the applicable plan is shown in the Summary Compensation...

  • Page 148
    ... on exercise of that option are paid) with Abbott common shares held by the named executive officer, a replacement option may be granted for the number of shares used to make that payment. Abbott uses the closing price of an Abbott common share on the business day before the exercise to determine...

  • Page 149
    ... OUTSTANDING EQUITY AWARDS AT FISCAL YEAR-END The following tables summarize the outstanding equity awards held by the named executive officers at year-end. Option Awards(1) Stock Awards Equity Incentive Plan Awards: Market Number of Value of Unearned Shares or Shares, Units Units of or Other Stock...

  • Page 150
    ... Awards Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#) Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($) Name Number of Number of Number of Securities Securities Shares or...

  • Page 151
    ... vesting date and AbbVie achieving a minimum return on equity target for the period 2013 through 2015. (e) The table above does not reflect stock options to purchase 320,367 shares of Abbott common stock, which were transferred in a transaction exempt from Section 16 of the Securities Exchange Act...

  • Page 152
    ... to purchase 213,752 shares of Abbott common stock, which were transferred in a transaction exempt from Section 16 of the Securities Exchange Act of 1934 under Rule 16a-12. PENSION BENEFITS During 2012, the named executive officers participated in two Abbott-sponsored defined benefit pension plans...

  • Page 153
    ... non-equity incentive plan compensation). The Annuity Retirement Plan covers earnings up to the limit imposed by Internal Revenue Code Section 401(a)(17) and provides for a maximum of 35 years of benefit service. Participants become fully vested in their pension benefit upon the completion of five...

  • Page 154
    ... years of payments under Abbott's non-equity incentive plans. • The Annuity Retirement Plan does not include amounts deferred or payments received under the Abbott Laboratories Deferred Compensation Plan in its calculation of a participant's final average earnings. To preserve the pension benefits...

  • Page 155
    Pension Benefits Table Present Number of Value of Payments Years Accumulated During Credited Benefit Last Fiscal Year Service (#) ($)(1) ($) Name Plan Name (3) R. A. Gonzalez ...Abbott Laboratories Annuity Retirement Plan Abbott Laboratories Supplemental Pension Plan 27 27 22 22 24 24 26 26 21 ...

  • Page 156
    ... and the deferral account is credited with investment returns based on the performance of the fund(s) selected. During 2012, the weighted average rate of return credited to accounts was 16.4 percent for Ms. Schumacher and 14.4 percent for Mr. Chase. The plan provides for cash distributions in either...

  • Page 157
    ...would have been made under the Abbott Laboratories Supplemental Pension Plan for each of the following named executive officers, respectively: L. J. Schumacher, $565,860; W. J. Chase, $144,376; C. Alban, $2,014,030; and J. M. Leonard, $752,564. As of December 31, 2012, Mr. Alban and Dr. Leonard were...

  • Page 158
    ... for Messrs. Gonzalez, Chase and Alban, Ms. Schumacher and Dr. Leonard, as well as for certain other AbbVie officers. Accelerated Vesting of Equity Awards Under the Abbott Laboratories Incentive Stock Programs, all outstanding stock options, restricted stock and restricted stock units granted prior...

  • Page 159
    ...by the number of unvested stock options held by the named executive officer. The value of restricted shares shown is determined by multiplying the number of restricted shares that would vest as of December 31, 2012 and the closing price of an Abbott common share on December 31, 2012. RATIFICATION OF...

  • Page 160
    Deloitte as AbbVie's independent registered public accountant, effective as of the date of Deloitte's completion of the audit services for the fiscal year ending December 31, 2012 and the filing of the company's 2012 Annual Report on Securities and Exchange Commission Form 10-K. The report of ...

  • Page 161
    ...with proposed acquisitions and divestitures, audits of certain employee benefit plans' financial statements, and, in 2012, audits and audit related services in connection with the separation of AbbVie from Abbott, including associated filings with the Securities and Exchange Commission. (3) Tax fees...

  • Page 162
    ... Directors. In this context, the Audit Committee has reviewed and discussed the audited financial statements contained in the 2012 Annual Report on Form 10-K with AbbVie's management and its independent registered public accounting firm. AbbVie's Annual Report on Form 10-K for the fiscal year ended...

  • Page 163
    ... executives named in the Summary Compensation Table to qualify for the performance-based exception from the deductibility limitation of Internal Revenue Code Section 162(m). The Program, as required by Section 162(m), sets the following maximums on the number of shares of AbbVie common stock subject...

  • Page 164
    ... consistent with applicable law and Securities and Exchange Commission rules, and except that the chief executive officer may grant Benefits under the Program to eligible persons other than directors and executive officers of AbbVie, which grants shall be reported to the Committee. To the extent...

  • Page 165
    ... it is terminated earlier by the board of directors. Adjustments The Program provides for equitable adjustment by the Committee in the event of certain corporate events such as a stock split, special dividend (in cash, shares or other property), merger, spin-off, or similar occurrence affecting...

  • Page 166
    ... compensation for their services to AbbVie or one of its subsidiaries. Restricted stock awards and restricted stock units awarded under the Program will be subject to such terms and conditions as the Committee determines are appropriate including, without limitation, restrictions on the sale...

  • Page 167
    ...be made on the date the person is elected as a director, and each award shall cover a number of common shares with a fair market value on the award date closest to the sum of an amount equal to six times the monthly fee under the terms of the Non-Employee Directors' Fee Plan on the date of the award...

  • Page 168
    ...or termination of the Program may materially and adversely modify the holder's rights under the express terms and conditions of an outstanding Benefit. Program Benefits Future awards of Benefits under the Program will be determined by the Committee and may vary from year to year and from participant...

  • Page 169
    ...at the time shares of common stock are transferred or cash is paid to the grantee with respect to such award. The Board of Directors recommends that you vote FOR approval of the AbbVie 2013 Incentive Stock Program. PROCEDURES FOR APPROVAL OF RELATED PERSON TRANSACTIONS It is AbbVie's policy that the...

  • Page 170
    ... which are listed as exhibits to AbbVie's 2012 Annual Report on SEC Form 10-K. When used in this section, ''distribution date'' refers to the date on which Abbott distributed AbbVie's common stock to the holders of Abbott common shares. In addition to these agreements, Abbott and AbbVie entered into...

  • Page 171
    .... On the distribution date, Abbott distributed to its shareholders that held Abbott common shares as of the record date all of the issued and outstanding shares of AbbVie's common stock on a pro rata basis. Shareholders received cash in lieu of any fractional shares. Claims In general, each party to...

  • Page 172
    ..., fully paid, and royalty-free licenses to certain patents to make, have made, use, sell, have sold, offer for sale, or import products. These licenses are generally limited to a field of use consistent with the licensee's business, and generally are worldwide, except where related to products that...

  • Page 173
    ..., discover, research, develop, import, export, manufacture, market, distribute, promote or sell any anti-TNF antibody, JAK inhibitor or IL-12 inhibitor. Transition Committee AbbVie and Abbott established a transition committee that consists of an equal number of members from AbbVie and Abbott. The...

  • Page 174
    ... which AbbVie and Abbott and their respective subsidiaries will provide various services to each other on an interim, transitional basis. The services to be provided in the United States include information technology, accounts payable, payroll, and other financial functions, as well as engineering...

  • Page 175
    ... whose last employment was with the AbbVie business. AbbVie employees generally became eligible to participate in AbbVie benefit plans as of the distribution date. Abbott and AbbVie have agreed to continue benefit programs in the United States (including Puerto Rico) through December 31, 2013...

  • Page 176
    ... credit each employee with his or her service with Abbott prior to the distribution for all purposes under the AbbVie benefit plans, so long as such crediting does not result in a duplication of benefits. Retirement and Deferred Compensation Programs AbbVie has established a defined benefit pension...

  • Page 177
    ... granted under Abbott's equity compensation programs (whether held by Abbott or AbbVie employees or other participants) into adjusted awards based on both Abbott common shares and AbbVie common stock. For purposes of adjusted award vesting, continued employment or service with Abbott or AbbVie, as...

  • Page 178
    .... In addition, AbbVie entered into finished goods supply agreements and contract manufacturing agreements with Abbott to manufacture Special Products and certain other pharmaceutical products for Abbott. These manufacturing and supply agreements have a term of up to five years. Either party may...

  • Page 179
    ... OWNERSHIP REPORTING COMPLIANCE AbbVie believes that during 2012 its officers and directors complied with all filing requirements under Section 16(a) of the Securities Exchange Act of 1934. OTHER MATTERS The Board of Directors knows of no other business to be transacted at the 2013 Annual Meeting of...

  • Page 180
    ...By-Laws. To be timely, written notice either to directly nominate persons for director or to bring business properly before the Annual Meeting must be received at AbbVie's principal executive offices not less than ninety days and not more than one hundred twenty days prior to the anniversary date of...

  • Page 181
    ... us at Investor Relations, AbbVie Inc., 1 North Waukegan Road, North Chicago, Illinois 60064. Stockholders who currently receive multiple copies of the proxy statement at their address and would like to request ''householding'' of their communications should contact their broker or bank. General It...

  • Page 182
    ...of the AbbVie 2013 Incentive Stock Program is to (i) attract and retain outstanding directors, officers, and other employees of AbbVie Inc. (the ''Company'') and its Subsidiaries, and to furnish incentives to such persons by providing opportunities to acquire shares of the Company's common stock, or...

  • Page 183
    ... options granted under an Abbott Stock Program that include a replacement option feature, and, solely for purposes of receiving Benefits under Section 11 and Section 12, Non-Employee Directors of the Company. The Committee's designation of a person to receive a Benefit in any year shall not require...

  • Page 184
    ... Benefit Agreement. The Committee shall determine the exercise price for each Share purchasable under an option, but in no event shall the exercise price per Share be less than the Fair Market Value of a Share on the option's date of grant. The exercise price shall be paid in full at the time...

  • Page 185
    ... Abbott Stock Program provide for the grant of replacement options if all or any portion of the exercise price or taxes incurred in connection with the exercise of the original option are paid by delivery of other Shares (or, in the case of payment of taxes, by withholding of Shares). The Committee...

  • Page 186
    ... in no event later than two and one-half months following the end of the calendar year in which such Restricted Stock Unit vests), subject to Section 13, that number of Shares equal to the number of Restricted Stock Units that have vested (or the cash equivalent thereof in the case of a cash-settled...

  • Page 187
    ... Committee, which shall be based on one or more of the following criteria: earnings per share, return on equity, return on assets, return on net assets, return on investment, total stockholder return, net operating income, cash flow, increase in revenue, economic value added, increase in share price...

  • Page 188
    ... or more officers of the Company. In this regard and to the extent permitted under applicable law, the Committee hereby delegates its authority and responsibilities under this Section 10 to the Senior Vice President, Human Resources. 11. NONQUALIFIED STOCK OPTIONS TO NON-EMPLOYEE DIRECTORS. Each Non...

  • Page 189
    ...-Employee Directors who hold replacement options granted under an Abbott Stock Program shall also receive Replacement Options consistent with the provisions of Section 6(b). 12. RESTRICTED STOCK UNITS TO NON-EMPLOYEE DIRECTORS. Each year, on the date of the annual stockholders meeting, each person...

  • Page 190
    ... on the Effective Date, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose...

  • Page 191
    ... of Shares; and ''Subsidiary'' shall mean any corporation, partnership, joint venture or business trust, 50% or more of the control of which is owned, directly or indirectly, by the Company. (c) In the event that, in connection with a Change in Control, outstanding options under the Program are...

  • Page 192
    ... in the Program or such Benefit Agreement or other agreement or to interfere with or limit in any way the right of the Company or any such Subsidiary to terminate such Grantee's employment or service. (d) Sale of Subsidiary. For all purposes hereunder, except as otherwise provided by the Committee...

  • Page 193
    ... amendment or termination of the Program may materially and adversely modify any person's rights under the express terms and conditions of an outstanding Benefit without such person's written consent. (g) Duration of Program. Unless earlier terminated by the Board pursuant to the provisions of the...

  • Page 194
    ... awards granted under the Abbott Stock Programs and converted into awards denominated with respect to Shares, as described in the Employee Matters Agreement, as well as any Replacement Options granted subsequent to the Effective Date. (c) ''Benefit'' means a grant under the Program of any of the...

  • Page 195
    ... an incentive stock option within the meaning of Code Section 422. (s) ''option'' means a contractual right granted to a Grantee under the Program to purchase Shares at a specified price. (t) ''optionee'' means a person who, as a Non-Employee Director of the Company or an employee of the Company or...

  • Page 196
    ... Goals. (aa) ''Restricted Stock Unit'' means a contractual right to receive a number of Shares or an amount of cash equal to the value of that number of Shares corresponding to the number of units granted to a Grantee, without payment, as compensation for services to the Company or its Subsidiaries...

  • Page 197
    ... Phone Number ( ) Name Address City State Zip Code Phone Number ( ) If you plan to attend the meeting, please complete the Reservation Form and send it to AbbVie Inc., Annual Meeting Ticket Requests, AP34, 1 North Waukegan Road, North Chicago, Illinois 60064. Due to space limitations, Reservation...

  • Page 198

  • Page 199
    ... Road North Chicago, IL 60064 847. 932. 7900 www.abbvie.com Investor Relations Dept. ZZ05, AP34 www.abbvieinvestor.com Stockholder Services Dept. 312, AP6D Corporate Secretary Dept, V364, AP34 Stock Listing The ticker for AbbVie's common stock is ABBV. The principal market for AbbVie common stock is...

  • Page 200
    1 North Waukegan Road, North Chicago, IL 60064 U.S.A. 1.847. 932.7900 www.abbvie.com