AbbVie 2012 Annual Report Download - page 144

multiplying the number of shares granted by the average of the high and low market prices of an
Abbott common share on the award’s date of grant.
(2) In accordance with the Securities and Exchange Commission’s rules, the amounts in this column
represent the aggregate grant date fair value of the awards in accordance with Financial
Accounting Standards Board ASC Topic 718. These amounts include the grant date fair values of
$34,169, $28,799, and $4,393 attributable to replacement stock options issued in 2012 to
L. J. Schumacher, W. J. Chase, and C. Alban, respectively, with respect to original option grants
made before 2005. Except for outstanding options that have a replacement option feature, options
granted after 2004 do not include a replacement option feature. When the exercise price of an
option with a replacement option feature is paid (or, in the case of a non-qualified stock option,
when the option exercise price or the withholding taxes resulting 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 the number of
shares required to exercise the related option and the exercise price of the replacement option.
The replacement option is exercisable in full six months after the date of grant, and has a term
expiring on the expiration date of the original option. Other terms and conditions of the
replacement option award are the same in all material respects as those applicable to the original
grant.
(3) These amounts were determined as of the option grant date using a Black-Scholes stock option
valuation model. These amounts are being reported solely for the purpose of comparative
disclosure in accordance with the Securities and Exchange Commission rules. There is no certainty
that the amount determined using a Black-Scholes stock option valuation model would be the
value at which employee stock options would be traded for cash. For options, other than the
replacement options, the assumptions are the same as those described in Note 8 entitled
‘‘Incentive Stock Program’’ of Abbott’s Notes to Consolidated Financial Statements included under
Item 8, ‘‘Financial Statements and Supplementary Data’’ in Abbott’s 2012 Annual Report on SEC
Form 10-K. For replacement options, the model used the following assumptions: expected volatility
of 14%, dividend yield ranging between 2.4% and 2.6%; risk-free interest of 0.2%, and an option
life equal to 60% of the option’s remaining life.
(4) This compensation is earned as a performance-based incentive bonus pursuant to the 1998 Abbott
Laboratories Performance Incentive Plan for Mr. Gonzalez, Ms. Schumacher, Mr. Alban, and
Dr. Leonard, and the 1986 Abbott Laboratories Management Incentive Plan for Mr. Chase.
Additional information regarding these plans can be found in the section of this proxy captioned
‘‘Compensation Discussion and Analysis—How Executive Pay Decisions Are Made—Annual
Bonus.’’
(5) Except as provided below, the plan amounts shown below are reported in this column.
For Mr. Gonzalez and Ms. Schumacher, the amounts shown alongside the officer’s name are for
2012, 2011, and 2010, respectively. For Mr. Gonzalez, the 2012 amounts under the Abbott
Laboratories Annuity Retirement Plan and the Abbott Laboratories Supplemental Pension Plan
are excluded from this column in accordance with SEC rules. For Messrs. Chase and Alban and
Dr. Leonard, the amounts shown are for 2012 and 2011.
Abbott Laboratories Annuity Retirement Plan
R. A. Gonzalez: $(426,732) / $33,248 / $3,001; L. J. Schumacher: $129,541 / $85,875 / $37,903;
W. J. Chase: $96,217 / $77,342; C. Alban: $204,199 / $101,829; and J. M. Leonard: $175,844 /
$106,953.
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