AbbVie 2014 Annual Report Download - page 165

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Mr. Gonzalez; $60,000 for Dr. Severino; $65,000 for Mr. Alban; $74,500 for Ms. Schumacher; and $74,500 for Mr. Chase.
This long-term disability benefit would continue for up to 18 months following termination of employment. It ends if the
NEO retires, recovers, dies or ceases to meet eligibility criteria.
If the NEO’s employment had terminated due to death or disability, his or her unvested stock options and
restricted stock or unit awards would have vested on December 31, 2014 with values as set forth below in the
subsection of this proxy statement captioned ‘‘Equity Awards.’’
Potential Payments upon Change in Control
In connection with the Separation from Abbott, AbbVie assumed the change in control agreements between
Abbott and the officers transferring to AbbVie. AbbVie issued a similar change in control agreement to Dr. Severino when
he joined the company in 2014. The agreements with Mr. Gonzalez, Dr. Severino, Mr. Alban, Ms. Schumacher, and
Mr. Chase are described below.
Each change in control agreement continues in effect until December 31, 2016, 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 employee is terminated other than for cause or permanent disability or if
the employee elects to terminate employment for good reason (see below) within two years following a change in
control, he or she is entitled to receive a lump sum payment equal to three times his or her 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 employee is terminated other than for cause or permanent
disability or if the employee elects to terminate employment for good reason during a potential change in control (see
below), he or she 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 employee 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 employee 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 employee’s target bonus or the
average bonus paid to the employee in the preceding three years.
Bonus payments include payments made under the Performance Incentive Plan. The employee also will receive
up to two years of additional employee benefits (including welfare benefits, outplacement services and tax and financial
counseling) and the value of three more years of pension accruals. If change in control-related payments and benefits
become subject to the excise tax imposed under Internal Revenue Code Section 4999, payments under the agreement
will be reduced to prevent application of the excise tax if such a reduction would leave the employee in a better after-
tax position than if the payments were not reduced and the tax applied. The agreements also limit the conduct for
which awards under AbbVie’s incentive stock programs can be terminated and generally permit options to remain
exercisable for the remainder of their term. The compensation committee’s independent compensation consultant has
confirmed that the level of payments provided under the agreements is consistent with current market practice.
2015 Proxy Statement 45
EXECUTIVE COMPENSATION