AbbVie 2012 Annual Report Download - page 157

distribution period, he will receive an average annual payment of $127,698 over the distribution period.
In addition, the following one-time deposits 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 eligible to retire,
and were therefore eligible to receive the pension benefits described above. If the termination of
employment had been due to disability, then the following named executive officers also would have
received, in addition to Abbott’s standard disability benefits, a monthly long-term disability benefit in
the amount of $52,917 for L. J. Schumacher; $20,833 for W. J. Chase; $28,125 for C. Alban; and
$21,483 for J. M. Leonard. This long-term disability benefit would continue for up to 18 months
following termination of employment. It ends if the officer retires, recovers, dies or ceases to meet
eligibility criteria.
In addition, if the named executive officer’s employment had terminated due to death or disability,
the officer’s unvested stock options and restricted stock would have vested on December 31, 2012 with
values as set forth below in the subsection of this proxy statement captioned ‘‘—Accelerated Vesting of
Equity Awards.’’
Potential Payments Upon Change in Control
Prior to the Separation, Abbott had change in control arrangements with key members of its
management team, in the form of change in control agreements for Abbott officers and a change in
control plan for certain other management personnel. In connection with the Separation, AbbVie
assumed the change in control agreements between Abbott and the officers transferring to AbbVie.
The agreements with Mr. Gonzalez, Ms. Schumacher, Messrs. Chase and Alban, and Dr. Leonard are
described below.
Each change in control agreement continues in effect until December 31, 2014, and can be
renewed for successive two-year terms upon notice prior to the expiration date. If notice of
non-renewal is given, the agreement will expire on the later of the scheduled expiration date and the
one-year anniversary of the date of such notice. If no notice is given, the agreement will expire on the
one-year anniversary of the scheduled expiration date. Each agreement also automatically extends for
two years following any change in control (see below) that occurs while the agreement is in effect.
The agreements provide that if the officer is terminated other than for cause or permanent
disability or if the officer elects to terminate employment for good reason (see below) within two years
following a change in control, the officer is entitled to receive a lump sum payment equal to three
times the officer’s annual salary and annual incentive (‘‘bonus’’) award (assuming for this purpose that
all target performance goals have been achieved or, if higher, based on the average bonus for the last
three years), plus any unpaid bonus owing for any completed performance period and the pro rata
bonus for any current bonus period (based on the highest of the bonus assuming achievement of target
performance, the average bonus for the past three years or, in the case of the unpaid bonus for any
completed performance period, the actual bonus earned). If the officer is terminated other than for
cause or permanent disability or if the officer elects to terminate employment for good reason during a
potential change in control (see below), the officer is entitled to receive a lump sum payment of the
annual salary and bonus payments described above, except that the amount of the bonus to which the
officer is entitled will be based on the actual achievement of the applicable performance goals. If the
potential change in control becomes a ‘‘change in control event’’ (within the meaning of Internal
Revenue Code Section 409A), the officer will be entitled to receive the difference between the bonus
amounts the officer received upon termination during the potential change in control and the bonus
amounts that would have been received had such amounts instead been based on the higher of the
officer’s target bonus or the average bonus paid to the officer in the preceding three years.
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