AbbVie 2014 Annual Report Download - page 166

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For purposes of the agreements, the term ‘‘change in control’’ includes the following events: any person
becoming the beneficial owner of AbbVie securities representing 20 percent or more of the outstanding voting power
(not including an acquisition directly from AbbVie and its affiliates); a change in the majority of the members of the
board of directors whose appointment was approved by a vote of at least two-thirds of the incumbent directors; and the
consummation of certain mergers or similar corporate transactions involving AbbVie. A ‘‘potential change in control’’
under the agreements includes, among other things, AbbVie’s entry into an agreement that would result in a change in
control. Finally, the term ‘‘good reason’’ includes: a significant adverse change in the employee’s position, duties, or
authority; the company’s failure to pay the employee’s compensation or a reduction in the employee’s base pay or
benefits; or the relocation of the company’s principal executive offices to a location that is more than 35 miles from the
location of the offices at the time of the change in control.
If a change in control had occurred on December 31, 2014, immediately followed by one of the covered
circumstances described above, Mr. Gonzalez, Dr. Severino, Mr. Alban, Ms. Schumacher, and Mr. Chase would have been
entitled to receive the following payments and benefits under the change in control agreements:
• Mr. Gonzalez: cash termination payments—$13,950,000; additional Supplemental Pension Plan benefits—
$8,394,858; welfare and fringe benefits—$72,535.
• Dr. Severino: cash termination payments—$5,323,500; welfare and fringe benefits—$72,254.
• Mr. Alban: cash termination payments—$5,355,000; additional Supplemental Pension Plan benefits—
$4,242,486; welfare and fringe benefits—$72,842.
• Ms. Schumacher: cash termination payments—$5,057,547; additional Supplemental Pension Plan benefits—
$1,477,581; welfare and fringe benefits—$59,465.
• Mr. Chase: cash termination payments—$5,827,500; additional Supplemental Pension Plan benefits—
$1,055,192; welfare and fringe benefits—$73,123.
The amounts shown for Ms. Schumacher’s cash termination payments and additional supplemental pension plan
benefits reflect reductions of $1,472,453 and $430,183, respectively, which would have applied under cutback provisions
in the agreement as described above.
Equity Awards
Under the AbbVie 2013 Incentive Stock Program, any outstanding unvested stock options and restricted stock or
unit awards granted prior to February 2013 (including awards converted into adjusted awards based on Abbott common
shares and AbbVie common stock in connection with the Separation) vest upon a change in control, including
performance-vested restricted shares, which are deemed earned in full. This program, which was approved by AbbVie’s
stockholders, covers approximately 6,500 participants, including a broad group of management and professional staff. In
addition, unvested equity awards converted into adjusted awards based on Abbott common shares in connection with
the Separation would vest in full upon a change in control of Abbott.
Beginning with awards granted in February 2013, upon a change in control the surviving company may assume,
convert or replace the awards on an equivalent basis. If the surviving company does not do so, the vesting of the awards
is accelerated. If the surviving company does assume, convert or replace the awards on an equivalent basis, then
accelerated vesting of the awards is limited to circumstances in which, during the period from six months before through
two years after a change in control, the grantee’s employment is terminated without cause or the grantee resigns for
good reason. The terms ‘‘cause’’ and ‘‘good reason’’ have the same definitions as in the change in control agreements.
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