AbbVie 2012 Annual Report Download - page 175

Special Products Master Agreement
AbbVie and Abbott entered into a special products master agreement that specifies which assets
and liabilities of the following pharmaceutical products, referred to as the ‘‘Special Products,’’ are being
transferred to AbbVie or retained by Abbott as part of the Separation: AndroGel, Creon, Niaspan,
Synthroid, Simcor, TriCor/Trilipix, Biaxin, Marinol, Advicor, Mavik, Tarka, Teveten, Depakote, and
Luvox. The special products master agreement generally governs Abbott’s and AbbVie’s respective
rights, responsibilities and obligations with respect to the development, manufacturing, marketing,
distribution, promotion, and sale of the Special Products. AbbVie has rights to AndroGel, Creon,
Niaspan, Synthroid, TriCor/Trilipix, Biaxin, Marinol, Mavik, Tarka, Teveten, and Depakote only in the
United States. AbbVie has rights to Simcor and Advicor worldwide, except Canada. In addition,
AbbVie has rights to Luvox only in Japan.
The special products master agreement is expected to remain in effect on a Special Product by
Special Product basis for as long as both companies are commercializing the same Special Product and
can be terminated only by an agreement in writing signed by each of Abbott and AbbVie. In addition,
if Abbott or AbbVie notifies the other party that it has discontinued all commercialization activities
with respect to a Special Product, certain of Abbott’s and AbbVie’s obligations under the special
products master agreement will expire with respect to such Special Product. Each party is responsible,
at its own cost and expense, for commercializing the Special Products in the territories granted to it
under the agreement, including establishing conditions of sale, pricing, and booking sales.
Tax Sharing Agreement
AbbVie and Abbott entered into a tax sharing agreement that generally governs Abbott’s and
AbbVie’s respective rights, responsibilities and obligations with respect to taxes for any tax period
ending on or before the distribution date, as well as tax periods beginning before and ending after the
distribution date. Abbott generally is liable for all pre-distribution U.S. federal income taxes, foreign
income taxes and certain non-income taxes attributable to AbbVie’s business. AbbVie generally is liable
for all other taxes attributable to its business. In addition, the tax sharing agreement addresses the
allocation of liability for taxes that are incurred as a result of restructuring activities undertaken to
effectuate the distribution. The tax sharing agreement also provides that AbbVie is liable for taxes
incurred by Abbott that may arise if AbbVie takes, or fails to take, as the case may be, certain actions
that may result in the distribution failing to meet the requirements of a tax-free distribution under
Internal Revenue Code Section 355.
Employee Matters Agreement
AbbVie and Abbott entered into an employee matters agreement to allocate liabilities and
responsibilities relating to employment matters, employee compensation and benefits plans and
programs and other related matters. The employee matters agreement governs Abbott’s and AbbVie’s
compensation and employee benefit obligations with respect to the current and former employees and
non-employee directors of each company.
Abbott generally is responsible for liabilities associated with employees who continue service with
Abbott following the distribution date and liabilities associated with former employees whose last
employment was not with the AbbVie business, and AbbVie generally is responsible for liabilities
associated with employees who transfer to AbbVie and liabilities associated with former employees
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, subject to changes in the ordinary course of
business or as required by law.
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