AbbVie 2013 Annual Report Download - page 165

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, 2013, immediately followed by one of the
covered circumstances described above, Mr. Gonzalez, Ms. Schumacher, and Messrs. Chase, Alban and
Richmond would have been entitled to receive the following payments and benefits under the change
in control agreements:
• Mr. Gonzalez: Cash termination payments—$13,500,000; Additional Supplemental Pension Plan
benefits—$9,675,893; Welfare and fringe benefits—$37,131.
• Ms. Schumacher: Cash termination payments—$4,232,414; Additional Supplemental Pension
Plan benefits—$1,118,022; Welfare and fringe benefits—$53,668.
• Mr. Chase: Cash termination payments—$4,858,500; Additional Supplemental Pension Plan
benefits—$753,488; Welfare and fringe benefits—$59,982.
• Mr. Alban: Cash termination payments—$4,366,500; Additional Supplemental Pension Plan
benefits—$2,066,620; Welfare and fringe benefits—$64,980.
• Mr. Richmond: Cash termination payments—$3,106,500; Additional Supplemental Pension Plan
benefits—$198,184; Welfare and fringe benefits—$64,385.
The amounts shown for Ms. Schumacher’s cash termination payments and additional supplemental
pension plan benefits reflect reductions that 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-based 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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