AbbVie 2012 Annual Report Download - page 169

made, no tax will be payable upon the subsequent lapse or release of the restrictions, and any gain or
loss upon disposition will be a capital gain or loss.
An employee or non-employee director who is granted a restricted stock unit will not be taxed
upon the grant of the award. Upon receipt of a cash payment or a distribution of shares of common
stock pursuant to a restricted stock unit, the employee or non-employee director will realize ordinary
income in an amount equal to any cash received and the fair market value of any common stock
received, and AbbVie will be entitled to an income tax deduction equal to the amount of ordinary
income recognized by the employee or non-employee director.
A recipient of a performance award generally will realize ordinary income 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 nominations and governance committee review, approve, ratify or
disapprove of all transactions in which AbbVie participates and in which any related person has a direct
or indirect material interest if such transaction involves or is expected to involve payments of $120,000
or more in the aggregate per fiscal year. Related person transactions requiring review by the
nominations and governance committee pursuant to this policy are identified in:
• questionnaires annually distributed to AbbVie’s directors and officers;
• certifications submitted annually by AbbVie officers related to their compliance with AbbVie’s
Code of Business Conduct; or
• communications made directly by the related person to the chief financial officer or general
counsel.
In determining whether to approve or ratify a related person transaction, the nominations and
governance committee will consider the following items, among others:
• the related person’s relationship to AbbVie and interest in the transaction;
• the material facts of the transaction, including the aggregate value of such transaction or, in the
case of indebtedness, the amount of principal involved;
• the benefits to AbbVie of the transaction;
• if applicable, the availability of other sources of comparable products or services;
• an assessment of whether the transaction is on terms that are comparable to the terms available
to an unrelated third party or to employees generally;
• whether a transaction has the potential to impair director independence; and
• whether the transaction constitutes a conflict of interest.
This process is included in the nominations and governance committee’s written charter, which is
available on the corporate governance section of AbbVie’s investor relations website at
www.abbvieinvestor.com.
TRANSACTIONS WITH ABBOTT
Abbott was AbbVie’s sole stockholder prior to the distribution of AbbVie common stock to
Abbott’s shareholders of record. In connection with the Separation, AbbVie and Abbott entered into a
separation and distribution agreement and other agreements to effect the separation of the two
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