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ÉTATS-UNIS

SECURITES ET COMITE

WASHINGTON, D.C. 20549

10-Q

(Mark One)

x

RAPPORT ANNUEL, LE CHANGEMENT DES VALEURS MOBILIÈRES EN 1934 13.

Fin de trimestre 31 mars 2019

OU

o

RAPPORT TRANSITOIRE SECTION 1934 VALEURS MOBILIÈRES MODIFICATION SECTION 13 OU 15 (d) t

Pour la période de transition à

Numéro de dossier de la Commission: 001-35565

abbvieimage1a25.jpg

AbbVie Inc.

(Nom exact du titulaire tel que spécifié dans la charte)

Delaware

32-0375147

(Juridiction de l'Etat ou autre entrée ou organisation)

(Numéro d'identification d'employeur I.R.S.)

1 North Waukegan Road

North Chicago, Illinois 60064

téléphone: (847) 932-7900

Vérifiez si le déclarant (1) a soumis tous les rapports soumis en vertu des articles 13 ou 15 de la Securities Exchange Act de 1934 pour les 12 derniers mois (ou pour une période plus courte pour laquelle le déclarant était obligé) ces rapports), et (2) ont été soumis à ces obligations de déclaration au cours des 90 derniers jours. oui x pas ¨

Cochez la case pour indiquer si le déclarant a soumis électroniquement (ou pendant une période plus courte, le déclarant a soumis) l'un des fichiers de données interactifs soumis en vertu de l'article 405 du règlement ST (n ° 3232.405 du présent chapitre) . oui x pas ¨

Vérifiez que le déclarant est un grand déposant accéléré, un déposant accéléré, un déposant non accéléré, une petite société déclarante ou une société en croissance émergente. Voir les définitions de "High Accelerated Filer", "Accelerated Filer", "Small Reporting Company" et "Emerging Growth Company" dans Exchange Act 12b-2. Par règlement.

Filtre accéléré x

Filer accéléré ¨

Filtre non accéléré ¨

Petite entreprise déclarante ¨

Société de croissance émergente ¨

Si vous êtes une société en croissance émergente, cochez la case si le déclarant a décidé de ne pas utiliser la période de transition prolongée pour se conformer aux normes de comptabilité financière nouvelles ou révisées, conformément à la section 13 (a) de la loi intitulée Exchange Act. ¨

Cochez la case correspondant à la société écran d’enregistrement (sous Exchange Act 12b-2). oui ¨ pas x

Titres inscrits en vertu de l’alinéa 12 b) de la Loi:

Titre de chaque classe

Symbole commercial

Le nom de chaque échange sur lequel vous êtes inscrit

Actions ordinaires, valeur nominale 0,01 USD / action

ABBV

Bourse de New York

Bourse de Chicago

Comme ça 26 avril 2019, AbbVie Inc. 1478332177 parts de marché0,01 valeur nominale.


AbbVie Inc. et ses sociétés affiliées

Table des matières

Formulaire 2019-Q | abbvieimage2a12.gif

1


PARTIE I INFORMATION FINANCIÈRE

Lot 1. ÉTATS FINANCIERS ET INFORMATIONS SUPPLÉMENTAIRES

AbbVie Inc. et ses sociétés affiliées

Compte de résultat consolidé condensé (non audité)

Trois mois terminés
31 mars

(Millions, excluant une action)

2019

2018

Revenu net

$

7828

$

7934

Le prix des produits vendus

1694

1927

Ventes, générales et administratives

1680

1791

Recherche et développement

1289

1244

Acquisition continue de recherche et développement

155

69

Total coûts d'exploitation et coûts

4818

5031

Résultat d'exploitation

3010

2903

Frais d'intérêts nets

325

251

Perte nette de change

6

8

Autres charges (produits) nettes

135

(153

)

Bénéfice avant impôt sur le revenu

2544

2797

Charge d'impôt

88

14

Revenu net

$

2456

$

2783

partager des données

Résultat de base par action

$

1,65

$

1,74

Résultat dilué par action

$

1,65

$

1,74

Moyenne pondérée des actions émises

1480

1591

Nombre moyen pondéré d’actions diluées émises

1483

1596

Les notes annexes font partie intégrante des présents états financiers consolidés résumés.

Formulaire 2019-Q | abbvieimage2a12.gif

2


AbbVie Inc. et ses sociétés affiliées
États consolidés du résultat global condensés (non audités)

Trois mois terminés
31 mars

(en millions)

2019

2018

Revenu net

$

2456

$

2783

Pour les trimestres clos les 31 mars 2019 et 31 mars 2018, les écarts de conversion, la charge fiscale (escompte) ont diminué de EUR 1 au 31 mars 2019 pour trois mois.

(103

)

189

Couverture d'investissement nette, déduction faite de la charge (avantage) d'impôt de 19 $ pour le trimestre clos le 31 mars 2019 et le 31 mars 2018, à l'exclusion de 19 $.

65

(104

)

Retraites et avantages postérieurs à l'emploi, excluant la charge (le bénéfice) d'impôt, 6 000 HUF pour le trimestre clos le 31 mars 2019 et 9 $ pour le trimestre clos le 31 mars 2018

25

22

Activités de sécurité négociables du trimestre se terminant le 31 mars 2019 et le 31 mars 2018, à l'exclusion de la charge (du bénéfice) d'impôt, pour les trois mois suivants:

7

(7

)

Activités de couverture de flux de trésorerie (7 $), excluant la charge (avantage) fiscale, pour le trimestre clos le 31 mars 2019 et pour le trimestre clos le 31 mars 2018 (1)

(30

)

(3

)

Autre résultat étendu (perte)

(36

)

97

Résultat étendu

$

2420

$

2880

Les notes annexes font partie intégrante des présents états financiers consolidés résumés.

Formulaire 2019-Q | abbvieimage2a12.gif

3


AbbVie Inc. et ses sociétés affiliées
Soldes consolidés condensés

(Excluant les millions d'actions)

31 mars
2019

31 décembre
2018

(Non vérifié)

moyens

actif à court terme

Trésorerie et équivalents

$

4897

$

7289

Investissements à court terme

331

772

Réclamations nettes

5680

5384

réserves

1702

1605

Frais payés d'avance et autres frais

1803

1895

Total des actifs courants

14413

16945

investissements

1477

1420

Propriété et équipement, net

2860

2883

Immobilisations incorporelles nettes

20846

21233

bonne volonté

15606

15663

Autres outils

1567

1208

Tous les appareils

$

56 769

$

59 352

Obligations et capital

Passif à court terme

Prêts à court terme

$

499

$

3699

Échéance courte de la dette à long terme et des obligations en matière de crédit-bail

1579

1609

Passifs obligatoires et différés

11826

11931

Total du passif à court terme

13904

17239

Dette à long terme et dettes de crédit-bail

35066

35002

Impôts différés

1116

1067

Autres passifs à long terme

14509

14490

Engagements et urgences

Capitaux propres (déficit)

Action ordinaire, USD 0,01, 4 000 000 000 d’actions, 1 778 885 882 actions, émises le 31 mars 2019 et 1 776 510 871 actions au 31 décembre 2018.

18

18

Actions propres du Trésor, 302 648 065 actions au 31 mars 2019 et 297 686 473 au 31 décembre 2018

(24 502

)

(24 108

)

Capital versé supplémentaire

14940

14756

profit

4234

3368

Autre perte globale

(2516

)

(2480

)

Capitaux propres (déficit)

(7826

)

(8446

)

Total ressources et équité

$

56 769

$

59 352

Les notes annexes font partie intégrante des présents états financiers consolidés résumés.

Formulaire 2019-Q | abbvieimage2a12.gif

4


AbbVie Inc. et ses sociétés affiliées
Comptes de capitaux propres consolidés condensés (non audités)

(En millions)

Actions émises

actions ordinaires

trésorerie

Capital versé supplémentaire

profit

Autre perte globale

plein

Bilan au 31 décembre 2017

1592

$

18

$

(11 923

)

$

14270

$

5459

$

(2727

)

$

5097

Adopter de nouvelles normes comptables

(1733

)

(1733

)

Revenu net

2783

2783

Autres revenus globaux sans impôts

97

97

Dividendes déclarés

(1532

)

(1532

)

Achat de bons du trésor

(12

)

(1431

)

(1431

)

Régimes de rémunération à base d’actions et autres

7

23

249

272

Solde au 31 mars 2018

1587

$

18

$

(13 331

)

$

14519

$

4977

$

(2630

)

$

3553

Bilan au 31 décembre 2018

1479

$

18

$

(24 108

)

$

14756

$

3368

$

(2480

)

$

(8446

)

Revenu net

2456

2456

Autres éléments du résultat global sans impôt

(36

)

(36

)

Dividendes déclarés

(1590

)

(1590

)

Achat de bons du trésor

(5

)

(419

)

(419

)

Régimes de rémunération à base d’actions et autres

4

25

184

209

Bilan au 31 mars 2019

1478

$

18

$

(24 502

)

$

14940

$

4234

$

(2516

)

$

(7826

)

Les notes annexes font partie intégrante des présents états financiers consolidés résumés.

Formulaire 2019-Q | abbvieimage2a12.gif

5


AbbVie Inc. et ses sociétés affiliées
Comptes de trésorerie consolidés condensés (non audités)

Trois mois terminés
31 mars

(Millions) (entre parenthèses pour dépenser de l'argent)

2019

2018

Flux de trésorerie provenant des activités opérationnelles

Revenu net

$

2456

$

2783

Coordonnez le revenu net et les flux de trésorerie nets des entreprises:

dépréciation

118

115

Amortissement des immobilisations incorporelles

385

330

Variation de la juste valeur du passif de la contrepartie éventuelle

169

(148

)

Rémunération à base d'actions

189

191

Coûts préliminaires et jalons pour la collaboration

195

101

Autre, net

(33

)

101

Variations des actifs et passifs d’exploitation:

créances

(316

)

(681

)

réserves

(128

)

(71

)

Frais payés d'avance et autres actifs

(112

)

(267

)

Passifs et autres passifs

94

191

Flux de trésorerie provenant des activités opérationnelles

3017

2645

Flux de trésorerie provenant d'activités d'investissement

Achats et investissements

(320

)

(372

)

Acquisition de biens immobiliers et d'équipement

(107

)

(119

)

Achat de titres de placement

(194

)

(267

)

Vente et maturité des titres de placement

594

311

Flux de trésorerie provenant d'activités d'investissement

(27

)

(447

)

Flux de trésorerie provenant d'activités de financement

Variation nette des emprunts de papier commercial

(200

)

(33

)

Remboursement d'autres emprunts à court terme

(3000

)

Remboursement de la dette à long terme et des obligations locatives

(7

)

Dividendes payés

(1588

)

(1137

)

Achat de bons du trésor

(620

)

(1431

)

Exercice des stock-options

4

62

Autre, net

21

37

Flux de trésorerie provenant d'activités de financement

(5383

)

(2509

)

L'effet des variations de taux de change sur la trésorerie et les équivalents

1

15

Variation nette en trésorerie et équivalents

(2392

)

(296

)

Trésorerie et équivalents en début de période

7289

9303

Trésorerie et équivalents en fin de période

$

4897

$

9007

Les notes annexes font partie intégrante des présents états financiers consolidés résumés.

Formulaire 2019-Q | abbvieimage2a12.gif

6


AbbVie Inc. et ses sociétés affiliées

Notes aux états financiers consolidés résumés (non audités)

Note 1 La base de la présentation

La base de la performance historique

Les états financiers consolidés résumés condensés non audités d'AbbVie Inc. (AbbVie ou la Société) ont été préparés conformément aux règles et réglementations de la US Securities and Exchange Commission. Par conséquent, la divulgation de certaines informations et notes de bas de page généralement incluses dans les états financiers annuels préparés conformément aux principes comptables généralement reconnus des États-Unis (US GAAP) n'est pas fournie. Ces états financiers consolidés résumés intermédiaires non audités doivent être lus dans le contexte des états financiers consolidés audités de la société et des états financiers annuels de la société présentés sur le formulaire 10-K. 31 décembre 2018.

De l’avis de la direction, ces états financiers incluent tous les ajustements usuels et récurrents nécessaires pour présenter fidèlement la situation financière et les performances de la société. Le résultat net et le résultat net de toute période intermédiaire n'indiquent pas nécessairement des résultats futurs ou annuels. Certains transferts ont été effectués pour se conformer aux états financiers consolidés résumés intermédiaires intermédiaires de la période en cours.

Annonces récentes

Annonces comptables récentes

ASU no 2016-02

En février 2016, le Financial Accounting Standards Board (FASB) 2016-02. Contrats de location (Thème 842). La norme décrit un modèle complet de comptabilisation des loyers qui écrase les directives précédentes en matière de location et oblige les bailleurs à comptabiliser les obligations locatives et les droits d'utilisation aux termes de contrats de location d'une durée supérieure à 12 mois. Le guide modifie le concept de crédit-bail et étend les obligations de publicité pour les contrats de location. AbbVie a adopté la norme au premier trimestre de 2019 en utilisant la méthode rétrospective modifiée. Les résultats pour les périodes de reporting ouvertes après le 31 décembre 2018 ont été présentés conformément à la norme, tandis que les résultats des périodes précédentes n'ont pas été retraités et continuent d'être présentés conformément à la comptabilité d'AbbVie. Le 1er janvier 2019, l'effet cumulé de l'application initiale de la nouvelle norme de location est comptabilisé en tant qu'ajustement du bilan consolidé condensé d'ouverture.

La société a choisi un ensemble de mesures pratiques pour les contrats de location commencés avant le 1er janvier 2019 et n'a pas réévalué les conclusions suivantes: i. Les contrats expirés ou existants sont des contrats de location; (ii) la classification des baux en retard ou existants; et iii. capitaliser les coûts directs initiaux des baux existants.

Selon la nouvelle norme, le 1er janvier 2019, la société a présenté un ajustement de l'impact cumulatif de son bilan consolidé condensé, principalement dans le cadre du règlement des passifs et des droits d'exploitation liés aux contrats de location simple. L’ajustement du bilan consolidé condensé comprend: (i) une 405 millions de dollars lever à d'autres actifs; (ii) un 115 millions de dollars augmentation des passifs et des charges à payer; et (iii) un 290 millions de dollars soulever d’autres passifs à long terme. L’autre effet cumulatif du bilan consolidé condensé est non significatif.

L'adoption de la norme n'a pas eu d'impact significatif sur le compte de résultat consolidé consolidé d'AbbVie Trois mois terminés le 31 mars 2019.

ASU no 2018-02

Février 2018 FASB 2018-02. Compte de résultat – Compte de résultat global (Thème 220): Reclassement de certains effets fiscaux provenant des autres éléments du résultat global collectés qui permet le transfert du cumul des autres éléments du résultat global au cumul des effets d’impôt différé résultant de l’adoption de la loi sur l’imposition et l’emploi (ci-après dénommée la loi) en décembre 2017. AbbVie a adopté la norme au premier trimestre de 2019. Au moment de l'adoption, la société a choisi de ne pas classer les effets de la loi liés à l'impôt sur le revenu de l'AOCI aux bénéfices courus. Par conséquent, l’adoption de la norme n’a pas eu d’incidence sur les états financiers consolidés d’AbbVie.

Formulaire 2019-Q | abbvieimage2a12.gif

7


Les états comptables récents n'ont pas encore été adoptés

ASU no 2016-13

En juin 2016, le FASB a publié l'ASU 2016-13. Instruments financiers – Pertes de crédit (Thème 326). La norme modifie le mode de calcul des pertes de crédit pour la plupart des instruments financiers et de certains autres actifs. Pour les créances commerciales et autres créances, les titres détenus jusqu'à l'échéance, les prêts et autres instruments financiers, la norme impose un nouveau modèle prospectif de «pertes de crédit attendues», qui aboutit généralement à la comptabilisation passée des provisions pour pertes. Dans le cas de titres négociables avec des pertes non réalisées, la norme exige que les avantages soient comptabilisés au lieu de réduire le coût amorti des investissements. En outre, la norme exige de nouvelles informations à fournir et sera effective pour AbbVie à partir du premier trimestre de 2020. À quelques exceptions près, les ajustements devraient être appliqués en appliquant une approche rétrospective modifiée en tenant compte des ajustements par effet cumulatif compte tenu des bénéfices non distribués. le début de l'exercice. AbbVie évalue actuellement l’impact des lignes directrices sur les états financiers consolidés.

Note 2 Informations financières complémentaires
Intérêts débiteurs, nets

Trois mois terminés
31 mars

(en millions)

2019

2018

frais d'intérêts

$

387

$

309

revenus d'intérêts

(62

)

(58

)

Frais d'intérêts nets

$

325

$

251

réserves

(en millions)

31 mars 2019

31 décembre 2018

tout fait

$

583

$

473

Travaux en cours

880

862

matières premières

239

270

réserves

$

1702

$

1605

Immobilier et équipement

(en millions)

31 mars 2019

31 décembre 2018

Immobilier et équipement, brut

$

8370

$

8396

Amortissement cumulé

(5510

)

(5513

)

Propriété et équipement, net

$

2860

$

2883

L’amortissement a été 118 millions de dollars la Trois mois terminés le 31 mars 2019 et 115 millions de dollars la Trois mois clos le 31 mars 2018.

Note 3 Résultat par action

AbbVie fournit certaines actions limitées (UAR) pouvant être qualifiées de titres de participation. En raison de la présence de titres de participation, AbbVie calcule le bénéfice par action (EPS) en utilisant une action propre ou une méthode à deux niveaux. Dans toutes les périodes présentées, la méthode des deux classes est plus mince.

Formulaire 2019-Q | abbvieimage2a12.gif

8


Le tableau suivant résume l’effet de la méthode à deux classes:

Trois mois terminés
31 mars

(en millions sauf une partage de données)

2019

2018

EPS de base

Revenu net

$

2456

$

2783

Bénéfice attribué aux titres participants

12

12

Bénéfice disponible pour les coactionnaires

$

2444

$

2771

Moyenne pondérée des actions émises

1480

1591

Résultat de base par action

$

1,65

$

1,74

EPS dilué

Revenu net

$

2456

$

2783

Bénéfice attribué aux titres participants

12

12

Bénéfice disponible pour les coactionnaires

$

2444

$

2771

Nombre moyen pondéré d’actions ordinaires

1480

1591

Effet des titres à dilution

3

5

Nombre moyen pondéré d’actions diluées émises

1483

1596

Résultat dilué par action

$

1,65

$

1,74

Les actions émises sur la base de régimes de rémunération à base d'actions ont été exclues du calcul du résultat par action, car elles auraient un effet antidumping. Le nombre d'actions exclues était insignifiant pour toutes les périodes présentées.

Note 4 Licences, acquisitions et autres accords

Montant dépensé en acquisitions et investissements 320 millions de dollars la Trois mois terminés le 31 mars 2019 et 372 millions de dollars la Trois mois clos le 31 mars 2018. AbbVie a acquis des bourses de recherche et développement (IPR & D) continues 155 millions de dollars la Trois mois terminés le 31 mars 2019 et 69 millions de dollars la Trois mois clos le 31 mars 2018.

Note 5 Travailler avec Janssen Biotech, Inc.

En décembre 2011, Pharmacyclics, une filiale à 100% d'AbbVie, a signé un accord de collaboration et de licence pour le développement en commun de Janssen Biotech, Inc. et de ses filiales (Janssen), la société pharmaceutique Janssen de Johnson & Johnson. et IMBRUVICA, un nouvel inhibiteur covalent sélectif, actif par voie orale, la tyrosine kinase de Bruton (BTK) et certains composés structurellement associés à IMBRUVICA, pour l'oncologie et d'autres indications, à l'exception de toutes les maladies à médiation immunitaire et inflammatoire; et toutes les maladies psychiatriques ou psychologiques aux États-Unis et hors des États-Unis.

La collaboration fournit à Janssen une licence exclusive lui permettant d’échanger IMBRUVICA en dehors des États-Unis et uniquement avec AbbVie aux États-Unis. Les deux parties sont responsables du développement, de la production et de la distribution des produits créés à la suite de la coopération. La collaboration n'a pas de délai ni de date d'expiration spécifique et permet de futures étapes pour le développement, la réglementation et l'approbation. 200 millions de dollars de AbbVie. La coopération comprend également un système de partage des coûts pour les activités de coopération connexes. Sauf dans certains cas, Janssen est approximativement responsable 60% les coûts de développement de la coopération et AbbVie sont responsables du reste 40% les coûts de la coopération au développement.

Aux États-Unis, les deux parties ont le droit exclusif de commercialiser les produits; Cependant, AbbVie est le principal consommateur des ventes aux utilisateurs finaux. AbbVie et Janssen partagent les bénéfices avant impôt et les pertes liées à la distribution de produits. vente

Formulaire 2019-Q | abbvieimage2a12.gif

9


IMBRUVICA est incluse dans les revenus nets d’AbbVie. La participation aux bénéfices de Janssen est incluse dans le coût des produits vendus par AbbVie. Les autres frais engagés dans le cadre de la collaboration sont déduits de vos propres frais en déduisant la participation de Janssen.

En plus des États-Unis, Janssen est responsable de la commercialisation et des droits exclusifs d’IMBRUVICA. AbbVie et Janssen partagent les bénéfices avant impôt et les pertes liées à la distribution de produits. La part des bénéfices d’AbbVie est comprise dans les revenus nets d’AbbVie. Les autres frais engagés dans le cadre de la collaboration sont déduits de vos propres frais en déduisant la participation de Janssen.

Le tableau suivant montre la relation de partage des bénéfices et des coûts entre Janssen et AbbVie:

Trois mois terminés
31 mars

(En millions)

2019

2018

États-Unis – Part des bénéfices de Janssen (incluse dans le coût des biens vendus)

$

386

$

276

International – Partie du bénéfice d'AbbVie (incluse dans les revenus nets)

193

138

Global – Autres coûts pour AbbVie (inclus dans les lignes appropriées)

72

71

AbbVie a reçu une réclamation de Janssen, qui était nette des créances nettes 218 millions de dollars à 31 mars 2019 et 177 millions de dollars à 31 décembre 2018. AbbVie est payable à Janssen en tant que passif et passif 373 millions de dollars à 31 mars 2019 et 376 millions de dollars à 31 décembre 2018.

Note 6 Goodwill et immobilisations incorporelles

bonne volonté

Le tableau ci-dessous récapitule les variations de la valeur comptable de l’écart d’acquisition:

(en millions)

Bilan au 31 décembre 2018

$

15663

Ajustements de conversion de change

(57

)

Solde au 31 mars 2019

$

15606

La société estime la dépréciation de l’écart d’acquisition au troisième trimestre ou plus tôt s’il existe des indicateurs de dépréciation. Comme ça 31 mars 2019, il était là pas dépréciation accumulée du goodwill.

Immobilisations incorporelles nettes

Le tableau ci-dessous résume les actifs incorporels:

31 mars 2019

31 décembre 2018

(en millions)

brut
transport
somme

accumulé
amortissement

net
transport
somme

brut
transport
somme

accumulé
amortissement

net
transport
somme

Actifs incorporels de la vie déterminée

Droits de produit avancés

$

15865

$

(5857

)

$

10008

$

15872

$

(5614

)

$

10258

licence accords

7865

(1947

)

5918

7865

(1810

)

6055

Montant des immobilisations incorporelles à durée indéterminée

23730

(7804

)

15926

23737

(7424

)

16313

Recherche et développement indéfinis

4920

4920

4920

4920

Total des actifs incorporels nets

$

28650

$

(7804

)

$

20846

$

28 657

$

(7424

)

$

21233

Immobilisations incorporelles indéfinies

Les actifs incorporels indéfinis représentent les droits de propriété intellectuelle acquis et liés à des produits qui n'ont pas encore reçu l'approbation réglementaire. Immobilisations incorporelles à durée indéterminée 31 mars 2019 et 31 décembre 2018 liées aux acquisitions de Boehringer en 2016

Formulaire 2019-Q | abbvieimage2a12.gif

10


Composés d'Ingelheim et Stemcentrx. Au troisième trimestre ou dans le cas d'indicateurs de dépréciation antérieurs, la société effectue un test de dépréciation antérieur des actifs incorporels à durée indéterminée. pas des immobilisations incorporelles à durée de vie indéterminée ont été comptabilisées pour dépréciation Trois mois terminés les 31 mars 2019 et 31 mars 2018.

Au quatrième trimestre de 2018, la société a comptabilisé une perte de valeur 5,1 milliards de dollars à la suite de la décision de mettre fin à la participation à l'essai TAHOE dans le cadre de l'IPR & D acquise lors de l'acquisition de Stemcentrx en 2016. AbbVie continue d'évaluer les informations à mesure qu'elles deviennent disponibles pour les programmes de développement clinique liés à Stemcentrx et surveille les informations restantes. 1,0 milliard de dollars dommages supplémentaires aux appareils IPR et D.

Immobilisations incorporelles à durée de vie définie

C'était une dépense d'amortissement 385 millions de dollars la Trois mois terminés le 31 mars 2019 et 330 millions de dollars la Trois mois clos le 31 mars 2018. Les coûts d'amortissement sont inclus dans le coût des produits vendus dans l'état consolidé condensé du résultat global. pas le coût de la dépréciation des actifs incorporels avec une espérance de vie marquée était t Trois mois terminés les 31 mars 2019 et 31 mars 2018.

Note 7 Plans de restructuration

AbbVie a fixé les frais de restructuration 167 millions de dollars la Trois mois terminés le 31 mars 2019 et 22 millions de dollars la Trois mois clos le 31 mars 2018. A. T Trois mois terminés le 31 mars 2019 principalement des coûts liés aux indemnités de départ.

Le tableau ci-dessous résume l’activité de trésorerie dans la réserve de restructuration Trois mois terminés le 31 mars 2019:

(en millions)

Solde accumulé au 31 décembre 2018

$

99

Coûts de restructuration

154

Paiements et autres ajustements

(44

)

Solde accumulé au 31 mars 2019

$

209

Le portefeuille locatif d’AbbVie comprend principalement des biens immobiliers, des véhicules et des équipements. Contrats de location à court terme qui expirent 12 mois vagy kevesebbet nem számolnak el a mérlegben. A 2019-es vagy későbbi időpontban kezdődő vagy módosított lízingek esetében az AbbVie nem különíti el a lízingösszetevőket a nem lízingelt komponensektől.

A társaság a lízingköltségek jelenértéke alapján a lízingidőszak alatt nyilvántartja a lízingkötelezettségeket. Az AbbVie általában növekvő hitelkamatlábot használ a lízingkötelezettségeinek levonására, mivel a lízingben szereplő ráta jellemzően nem könnyen meghatározható. Bizonyos bérleti szerződések magukban foglalják a vállalat irányítása alatt álló megújítási lehetőségeket. Az AbbVie opcionális megújítási időszakokat foglal magában a lízingidőszakban csak akkor, ha ésszerűen biztos, hogy az AbbVie gyakorolja az opciót.

A változó bérleti díjak közé tartoznak a bérbeadóknak az adók, karbantartási, biztosítási és egyéb működési költségek, valamint az index vagy árfolyam alapján kiigazított kifizetések. A társaság bérleti szerződése nem tartalmaz jelentős maradványérték-garanciát vagy korlátozó szövetséget.

2019-es forma-Q | abbvieimage2a12.gif

11


Az alábbi táblázat összefoglalja a rövidített konszolidált mérlegben szereplő működési és pénzügyi lízingek összegét és helyét:

(Millió)

Mérlegfelirat

Március 31-én
2019

eszközök

Üzemeltetési

Egyéb eszközök

$

405

Pénzügy

Ingatlan és berendezés, nettó

28

A lízing összes eszköze

$

433

Kötelezettségek

Üzemeltetési

Jelenlegi

Kötelező és elhatárolt kötelezettségek

$

110

befektetett

Egyéb hosszú lejáratú kötelezettségek

307

Pénzügy

Jelenlegi

A hosszú lejáratú adósság- és pénzügyi lízingkötelezettségek rövid lejárata

10

befektetett

Hosszú lejáratú adósság és pénzügyi lízing kötelezettségek

23

Teljes lízingkötelezettség

$

450

Az alábbi táblázat összefoglalja a rövidített konszolidált eredménykimutatásban elszámolt bérleti költségeket:

Három hónap véget ért
Március 31.

(Millió)

2019

Működési lízing költség

$

32

Pénzügyi lízing költség

A felhasználási jogokra vonatkozó eszközök amortizációja

2

A bérleti kötelezettségek kamatai

Rövid lejáratú bérleti költségek

6

Változó bérleti költség

15

Teljes bérleti költség

$

55

A szublízis bevétele elhanyagolható volt három hónap, 2019. március 31-én véget ért.

Az alábbi táblázat bemutatja a működési és pénzügyi lízingek súlyozott átlagos lízingperiódusát és súlyozott átlagos diszkontrátáját:

Három hónap véget ért
Március 31.

2019

Súlyozott átlagos lízingidő (években)

Üzemeltetési

6

Pénzügy

3

Weighted-average discount rate

Operating

4.0

%

Finance

4.5

%

2019 Form 10-Q | abbvieimage2a12.gif

12


The following table presents supplementary cash flow information regarding the company's operating and finance leases:

Három hónap véget ért
Március 31.

(in millions)

2019

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases

$

26

Operating cash flows from finance leases

Financing cash flows from finance leases

2

Right-of-use assets obtained in exchange for new finance lease liabilities

Right-of-use assets obtained in exchange for new operating lease liabilities

8

The following table summarizes the future maturities of AbbVie's operating and finance lease liabilities as of March 31, 2019:

(in millions)

Operating

lízing

Finance

lízing

Teljes (a)(b)

2019

$

93

$

10

$

103

2020

117

11

128

2021

97

10

107

2022

52

2

54

2023

34

1

35

Thereafter

78

78

Total lease payments

471

34

505

Less: Interest

54

1

55

Present value of lease liabilities

$

417

$

33

$

450

(a) Total lease payments exclude approximately $350 million of contractual minimum lease payments for leases executed but not yet commenced. These leases will commence between years 2019 et 2020 with lease terms of approximately 11 years.

(b) Lease payments recognized as part of lease liabilities for optional renewal periods are insignificant.

Note 9 Financial Instruments and Fair Value Measures

Risk Management Policy

See Note 10 to the company's Annual Report on Form 10-K for the year ended December 31, 2018 for a summary of AbbVie's risk management policy and use of derivative instruments.

Instruments financiers

Various AbbVie foreign subsidiaries enter into foreign currency forward exchange contracts to manage exposures to changes in foreign exchange rates for anticipated intercompany transactions denominated in a currency other than the functional currency of the local entity. These contracts, with notional amounts totaling $802 million à March 31, 2019 et $1.4 billion à December 31, 2018, are designated as cash flow hedges and are recorded at fair value. The durations of these forward exchange contracts were generally less than 18 months. Accumulated gains and losses as of March 31, 2019 will be reclassified from AOCI and included in cost of products sold at the time the products are sold, generally not exceeding six months from the date of settlement.

The company also enters into foreign currency forward exchange contracts to manage its exposure to foreign currency denominated trade payables and receivables and intercompany loans. These contracts are not designated as hedges and are recorded at fair value. Resulting gains or losses are reflected in net foreign exchange loss in the consolidated statements of earnings and are generally offset by losses or gains on the foreign currency exposure being managed. These contracts had notional amounts totaling $9.9 billion à March 31, 2019 et $8.6 billion à December 31, 2018.

2019 Form 10-Q | abbvieimage2a12.gif

13


The company also uses foreign currency forward exchange contracts or foreign currency denominated debt to hedge its net investments in certain foreign subsidiaries and affiliates. The company designated €3.6 billion aggregate principal amount of senior Euro notes as net investment hedges at March 31, 2019 et December 31, 2018. Realized and unrealized gains and losses from these hedges are included in AOCI.

AbbVie is a party to interest rate hedge contracts designated as fair value hedges with notional amounts totaling $10.8 billion à March 31, 2019 et December 31, 2018. The effect of the hedge contracts is to change a fixed-rate interest obligation to a floating rate for that portion of the debt. AbbVie records the contracts at fair value and adjusts the carrying amount of the fixed-rate debt by an offsetting amount.

No amounts are excluded from the assessment of effectiveness for cash flow hedges, net investment hedges or fair value hedges.

The following table summarizes the amounts and location of AbbVie’s derivative instruments on the condensed consolidated balance sheets:

Fair value –
Derivatives in asset position

Fair value –
Derivatives in liability position

(in millions)

Balance sheet caption

Március 31.
2019

2018. december 31.

Balance sheet caption

Március 31.
2019

2018. december 31.

Foreign currency forward exchange contracts

Designated as cash flow hedges

Prepaid expenses and

más

$

69

$

113

Kötelező és elhatárolt kötelezettségek

$

$

Not designated as hedges

Prepaid expenses and

más

42

19

Kötelező és elhatárolt kötelezettségek

47

26

Interest rate swaps designated as fair value hedges

Other assets

Egyéb hosszú lejáratú kötelezettségek

354

466

Total derivatives

$

111

$

132

$

401

$

492

While certain derivatives are subject to netting arrangements with the company’s counterparties, the company does not offset derivative assets and liabilities within the condensed consolidated balance sheets.

The following table presents the pre-tax amounts of gains (losses) from derivative instruments recognized in other comprehensive income (loss):

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Foreign currency forward exchange contracts designated as cash flow hedges

$

3

$

(48

)

Assuming market rates remain constant through contract maturities, the company expects to transfer pre-tax gains of $126 million into cost of products sold for foreign currency cash flow hedges during the next 12 months.

Related to AbbVie’s non-derivative, foreign currency denominated debt designated as net investment hedges, the company recognized a pre-tax gain in other comprehensive income (loss) of $84 million la three months ended March 31, 2019 and recognized a pre-tax loss in other comprehensive income (loss) of $134 million la three months ended March 31, 2018.

2019 Form 10-Q | abbvieimage2a12.gif

14


The following table summarizes the pre-tax amounts and location of derivative instrument net gains (losses) recognized in the condensed consolidated statements of earnings, including the net gains (losses) reclassified out of AOCI into net earnings. See Note 11 for the amount of net gains (losses) reclassified out of AOCI.

Három hónap véget ért
Március 31.

(in millions)

Statement of earnings caption

2019

2018

Foreign currency forward exchange contracts

Designated as cash flow hedges

Cost of products sold

$

40

$

(44

)

Not designated as hedges

Net foreign exchange loss

15

(59

)

Interest rate swaps designated as fair value hedges

Interest expense, net

112

(184

)

Debt designated as hedged item in fair value hedges

Interest expense, net

(112

)

184

Fair Value Measures

The fair value hierarchy consists of the following three levels:

Level 1 – Valuations based on unadjusted quoted prices in active markets for identical assets that the company has the ability to access;

Level 2 – Valuations based on quoted prices for similar instruments in active markets, quoted prices for identical or similar instruments in markets that are not active and model-based valuations in which all significant inputs are observable in the market; et

Level 3 – Valuations using significant inputs that are unobservable in the market and include the use of judgment by the company’s management about the assumptions market participants would use in pricing the asset or liability.

The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of March 31, 2019:

Basis of fair value measurement

(in millions)

Teljes

Quoted prices in active markets for

identical assets
(Level 1)

Significant other

megfigyelhető
bemenetek
(Level 2)

Significant
megfigyelhető
bemenetek
(Level 3)

Assets

Cash and equivalents

$

4,897

$

1,264

$

3,633

$

Time deposits

68

68

Debt securities

1,611

1,611

Equity securities

52

52

Foreign currency contracts

111

111

Total assets

$

6,739

$

1,316

$

5,423

$

Liabilities

Interest rate hedges

$

354

$

$

354

$

Foreign currency contracts

47

47

Contingent consideration

4,652

4,652

Total liabilities

$

5,053

$

$

401

$

4,652

2019 Form 10-Q | abbvieimage2a12.gif

15


The following table summarizes the bases used to measure certain assets and liabilities carried at fair value on a recurring basis on the condensed consolidated balance sheet as of December 31, 2018:

Basis of fair value measurement

(in millions)

Teljes

Quoted prices in active markets for

identical assets
(Level 1)

Significant other

megfigyelhető
bemenetek
(Level 2)

Significant
megfigyelhető
bemenetek
(Level 3)

Assets

Cash and equivalents

$

7,289

$

1,209

$

6,080

$

Time deposits

568

568

Debt securities

1,536

1,536

Equity securities

4

4

Foreign currency contracts

132

132

Total assets

$

9,529

$

1,213

$

8,316

$

Liabilities

Interest rate hedges

$

466

$

$

466

$

Foreign currency contracts

26

26

Contingent consideration

4,483

4,483

Total liabilities

$

4,975

$

$

492

$

4,483

The fair values of time deposits approximate their amortized cost due to the short maturities of these instruments. The fair values of available-for-sale debt securities were determined based on prices obtained from commercial pricing services. Equity securities consist of investments for which the fair values were determined by using the published market price per unit multiplied by the number of units held, without consideration of transaction costs. The derivatives entered into by the company were valued using published spot curves for interest rate hedges and published forward curves for foreign currency contracts. The fair value measurements of the contingent consideration liabilities were determined based on significant unobservable inputs, including the discount rate, estimated probabilities and timing of achieving specified development, regulatory and commercial milestones and the estimated amount of future sales of the acquired products still in development. Changes to the fair value of the contingent consideration liabilities can result from changes to one or a number of inputs, including discount rates, the probabilities of achieving the milestones, the time required to achieve the milestones and estimated future sales. Significant judgment is employed in determining the appropriateness of these inputs. Changes to the inputs described above could have a material impact on the company's financial position and results of operations in any given period. Nál nél March 31, 2019, un 50 basis point increase/decrease in the assumed discount rate would have decreased/increased the value of the contingent consideration liabilities by approximately $170 million. Additionally, at March 31, 2019, un öt percentage point increase/decrease in the assumed probability of success across all potential indications would have increased/decreased the value of the contingent consideration liabilities by approximately $410 million.

There have been no transfers of assets or liabilities between the fair value measurement levels. The following table presents the changes in fair value of contingent consideration liabilities which are measured using Level 3 inputs:

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Beginning balance

$

4,483

$

4,534

Change in fair value recognized in net earnings

169

(148

)

Ending balance

$

4,652

$

4,386

The change in fair value recognized in net earnings is recorded in other (income) expense, net in the condensed consolidated statements of earnings. AbbVie expects the fair value of its contingent consideration liabilities to increase in the second quarter of 2019 as a result of the April 2019 regulatory approvals of SKYRIZI (risankizumab) for the treatment of moderate to severe plaque psoriasis. The company is in the process of evaluating the impact of the regulatory approvals on the fair value, which includes an increase in the probabilities of success assumptions.

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16


Certain financial instruments are carried at historical cost or some basis other than fair value. The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of March 31, 2019 are shown in the table below:

Basis of fair value measurement

(in millions)

Book value

Approximate fair value

Quoted prices

in active markets for

identical assets
(Level 1)

Significant
más

megfigyelhető
bemenetek
(Level 2)

Significant
megfigyelhető
bemenetek
(Level 3)

Liabilities

Short-term borrowings

$

499

$

499

$

$

499

$

Current portion of long-term debt and finance lease obligations, excluding fair value hedges

1,579

1,586

1,576

10

Long-term debt and finance lease obligations, excluding fair value hedges

35,420

35,362

35,339

23

Total liabilities

$

37,498

$

37,447

$

36,915

$

532

$

The book values, approximate fair values and bases used to measure the approximate fair values of certain financial instruments as of December 31, 2018 are shown in the table below:

Basis of fair value measurement

(in millions)

Book value

Approximate fair value

Quoted prices

in active markets for

identical assets
(Level 1)

Significant
más

megfigyelhető
bemenetek
(Level 2)

Significant
megfigyelhető
bemenetek
(Level 3)

Liabilities

Short-term borrowings

$

3,699

$

3,693

$

$

3,693

$

Current portion of long-term debt and finance lease obligations, excluding fair value hedges

1,609

1,617

1,609

8

Long-term debt and finance lease obligations, excluding fair value hedges

35,468

34,052

34,024

28

Total liabilities

$

40,776

$

39,362

$

35,633

$

3,729

$

AbbVie also holds investments in equity securities that do not have readily determinable fair values. The company records these investments at cost and remeasures them to fair value based on certain observable price changes or impairment events as they occur. The carrying amount of these investments was $77 million que March 31, 2019 et $84 million que December 31, 2018. pas significant cumulative upward or downward adjustments have been recorded for these investments as of March 31, 2019.

Available-for-sale Securities

Substantially all of the company’s investments in debt securities were classified as available-for-sale with changes in fair value recognized in other comprehensive income. Debt securities classified as short-term were $263 million que March 31, 2019 et $204 million que December 31, 2018. Long-term debt securities mature primarily within five years. Estimated fair values of available-for-sale debt securities were generally determined based on prices obtained from commercial pricing services.

The following table summarizes available-for-sale securities by type as of March 31, 2019:

Amortized cost

Gross unrealized

Fair value

(in millions)

Gains

Losses

Asset backed securities

$

425

$

$

(2

)

$

423

Corporate debt securities

1,069

3

(4

)

1,068

Other debt securities

120

120

Teljes

$

1,614

$

3

$

(6

)

$

1,611

2019 Form 10-Q | abbvieimage2a12.gif

17


The following table summarizes available-for-sale securities by type as of December 31, 2018:

Amortized cost

Gross unrealized

Fair value

(in millions)

Gains

Losses

Asset backed securities

$

423

$

$

(2

)

$

421

Corporate debt securities

1,042

1

(9

)

1,034

Other debt securities

81

81

Teljes

$

1,546

$

1

$

(11

)

$

1,536

AbbVie had pas other-than-temporary impairments as of March 31, 2019. Net realized gains and losses were jelentéktelen la three months ended March 31, 2019 et 2018.

Concentrations of Risk

Of total net accounts receivable, három U.S. wholesalers accounted for 63% que March 31, 2019 et December 31, 2018, and substantially all of AbbVie’s net revenues in the United States were to these három wholesalers.

HUMIRA (adalimumab) is AbbVie’s single largest product and accounted for approximately 57% of AbbVie’s total net revenues for the three months ended March 31, 2019 et 59% la three months ended March 31, 2018.

Debt and Credit Facilities

Short-Term Borrowings

Short-term borrowings included commercial paper borrowings of $499 million que March 31, 2019 et $699 million que December 31, 2018. The weighted-average interest rate on commercial paper borrowings was 2.8% la three months ended March 31, 2019 et 1.8% la three months ended March 31, 2018.

In March 2019, AbbVie repaid its $3.0 billion 364-day term loan credit agreement that was scheduled to mature in June 2019.

Note 10 Post-Employment Benefits

The following table summarizes net periodic benefit cost relating to the company’s defined benefit and other post-employment plans:

Defined
benefit plans

Other post-
employment plans

Három hónap véget ért
Március 31.

Három hónap véget ért
Március 31.

(in millions)

2019

2018

2019

2018

Service cost

$

67

$

72

$

6

$

8

Interest cost

64

57

6

8

Expected return on plan assets

(119

)

(111

)

Amortization of actuarial losses and prior service cost (credit)

26

37

(1

)

4

Net periodic benefit cost

$

38

$

55

$

11

$

20

The components of net periodic benefit cost other than service cost are included in other (income) expense, net in the condensed consolidated statements of earnings.

2019 Form 10-Q | abbvieimage2a12.gif

18


Note 11 Equity

Stock-Based Compensation

Stock-based compensation expense is principally related to awards issued pursuant to the AbbVie 2013 Incentive Stock Program and is summarized as follows:

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Cost of products sold

$

15

$

4

Research and development

72

72

Selling, general and administrative

102

115

Pre-tax compensation expense

189

191

Tax benefit

33

29

After-tax compensation expense

$

156

$

162

Stock Options

During the three months ended March 31, 2019, primarily in connection with the company's annual grant, AbbVie granted 1.0 million stock options with a weighted-average grant-date fair value of $12.54. As of March 31, 2019. $10 million of unrecognized compensation cost related to stock options is expected to be recognized as expense over approximately the next két év.

RSUs and Performance Shares

During the three months ended March 31, 2019, primarily in connection with the company's annual grant, AbbVie granted 5.2 million RSUs and performance shares with a weighted-average grant-date fair value of $79.07. As of March 31, 2019. $489 million of unrecognized compensation cost related to RSUs and performance shares is expected to be recognized as expense over approximately the next két év.

Cash Dividends

The following table summarizes quarterly cash dividends declared during 2019 et 2018:

2019

2018

Date Declared

Payment Date

Dividend Per Share

Date Declared

Payment Date

Dividend Per Share

02/21/19

05/15/19

$

1.07

11/02/18

02/15/19

$

1.07

09/07/18

11/15/18

$

0.96

06/14/18

08/15/18

$

0.96

02/15/18

05/15/18

$

0.96

2019 Form 10-Q | abbvieimage2a12.gif

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Stock Repurchase Program

The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management's discretion. The program has no time limit and can be discontinued at any time. Shares repurchased under these programs are recorded at acquisition cost, including related expenses, and are available for general corporate purposes.

AbbVie repurchased 4 million shares for $300 million au cours de three months ended March 31, 2019 et 11 million shares for $1.3 billion au cours de three months ended March 31, 2018. AbbVie's remaining stock repurchase authorization was approximately $4.0 billion que March 31, 2019.

Accumulated Other Comprehensive Loss

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2019:

(in millions)

Foreign
valuta
fordítás
kiigazítások

Net investment hedging activities

Pension

and post-
foglalkoztatás
avantages

Marketable

security activities

Cash flow hedging
tevékenységek

Teljes

Balance as of December 31, 2018

$

(830

)

$

(65

)

$

(1,722

)

$

(10

)

$

147

$

(2,480

)

Other comprehensive income (loss) before reclassifications

(103

)

65

5

7

5

(21

)

Net losses (gains) reclassified from accumulated other comprehensive loss

20

(35

)

(15

)

Net current-period other comprehensive income (loss)

(103

)

65

25

7

(30

)

(36

)

Balance as of March 31, 2019

$

(933

)

$

$

(1,697

)

$

(3

)

$

117

$

(2,516

)

Other comprehensive loss for the three months ended March 31, 2019 included foreign currency translation adjustments totaling a loss of $103 million, which was principally due to the weakening of the Euro in the three months ended March 31, 2019 on the translation of the company’s assets denominated in the Euro.

The following table summarizes the changes in each component of accumulated other comprehensive loss, net of tax, for the three months ended March 31, 2018:

(in millions)

Foreign
valuta
fordítás
kiigazítások

Net investment hedging activities

Pension

and post-
foglalkoztatás
avantages

Marketable

security activities

Cash flow hedging
tevékenységek

Teljes

Balance as of December 31, 2017

$

(439

)

$

(203

)

$

(1,919

)

$

$

(166

)

$

(2,727

)

Other comprehensive income (loss) before reclassifications

189

(104

)

(11

)

(7

)

(45

)

22

Net losses reclassified from accumulated other comprehensive loss

33

42

75

Net current-period other comprehensive income (loss)

189

(104

)

22

(7

)

(3

)

97

Balance as of March 31, 2018

$

(250

)

$

(307

)

$

(1,897

)

$

(7

)

$

(169

)

$

(2,630

)

Other comprehensive income for the three months ended March 31, 2018 included foreign currency translation adjustments totaling a gain of $189 million, which was principally due to the impact of the improvement in the Euro in the three months ended March 31, 2018 on the translation of the company’s assets denominated in the Euro.

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20


The following table presents the impact on AbbVie’s condensed consolidated statements of earnings for significant amounts reclassified out of each component of accumulated other comprehensive loss:

Három hónap véget ért
Március 31.

(in millions) (brackets denote gains)

2019

2018

Pension and post-employment benefits

Amortization of actuarial losses and other(A)

$

25

$

41

Tax benefit

(5

)

(8

)

Total reclassifications, net of tax

$

20

$

33

Cash flow hedging activities

Losses (gains) on designated cash flow hedges(B)

$

(40

)

$

44

Tax expense (benefit)

5

(2

)

Total reclassifications, net of tax

$

(35

)

$

42

(a) Amounts are included in the computation of net periodic benefit cost (see Note 10).

(b) Amounts are included in cost of products sold (see Note 9).

Note 12 Income Taxes

The effective tax rate was 3% la three months ended March 31, 2019 et 1% la three months ended March 31, 2018. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions and business development activities. la növekedés in the effective tax rate for the three months ended March 31, 2019 over the prior year was principally due to the beneficial impact of the timing of provisions of the loi related to earnings from certain foreign subsidiaries in prior year. Additionally, the 2019 effective tax rate reflected the favorable resolution of various tax positions and lower excess tax benefits from stock-based compensation compared to the prior year.

Due to the potential for resolution of federal, state and foreign examinations and the expiration of various statutes of limitations, it is reasonably possible that the company’s gross unrecognized tax benefits balance may change within the next Tizenkét hónap by up to $311 million.

Note 13 Legal Proceedings and Contingencies

AbbVie is subject to contingencies, such as various claims, legal proceedings and investigations regarding product liability, intellectual property, commercial, securities and other matters that arise in the normal course of business. Loss contingency provisions are recorded for probable losses at management’s best estimate of a loss, or when a best estimate cannot be made, a minimum loss contingency amount within a probable range is recorded. The recorded accrual balance for litigation was approximately $345 million que March 31, 2019 et $350 million que December 31, 2018. Initiation of new legal proceedings or a change in the status of existing proceedings may result in a change in the estimated loss accrued by AbbVie. While it is not feasible to predict the outcome of all proceedings and exposures with certainty, management believes that their ultimate disposition should not have a material adverse effect on AbbVie’s consolidated financial position, results of operations or cash flows.

Subject to certain exceptions specified in the separation agreement by and between Abbott and AbbVie, AbbVie assumed the liability for, and control of, all pending and threatened legal matters related to its business, including liabilities for any claims or legal proceedings related to products that had been part of its business, but were discontinued prior to the distribution, as well as assumed or retained liabilities, and will indemnify Abbott for any liability arising out of or resulting from such assumed legal matters.

Several pending lawsuits filed against Unimed Pharmaceuticals, Inc., Solvay Pharmaceuticals, Inc. (a company Abbott acquired in February 2010 and now known as AbbVie Products LLC) and others are consolidated for pre-trial purposes in the United States District Court for the Northern District of Georgia under the Multi-District Litigation (MDL) Rules as In re: AndroGel Antitrust Litigation, MDL No. 2084. These cases, brought by private plaintiffs and the Federal Trade Commission (FTC), generally allege Solvay's

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21


patent litigation involving AndroGel was sham litigation and the 2006 patent litigation settlement agreements and related agreements with három generic companies violate federal antitrust laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. These cases include: (a) négy individual plaintiff lawsuits; (B) három purported class actions; and (c) Federal Trade Commission v. Actavis, Inc. et al. Following the district court's dismissal of all plaintiffs' claims, appellate proceedings led to the reinstatement of the claims regarding the patent litigation settlements, which are proceeding in the district court. In July 2018, the court denied the private plaintiffs' motion for class certification. In February 2019, AbbVie and the FTC reached a settlement that applies certain conditions on future patent settlements involving former Solvay products, as part of which the FTC’s claims were dismissed with prejudice. In April 2019, AbbVie settled with the plaintiffs in three of the individual lawsuits, which will be dismissed with prejudice.

Lawsuits are pending against AbbVie and others generally alleging that the 2005 patent litigation settlement involving Niaspan entered into between Kos Pharmaceuticals, Inc. (a company acquired by Abbott in 2006 and presently a subsidiary of AbbVie) and a generic company violates federal and state antitrust laws and state unfair and deceptive trade practices and unjust enrichment laws. Plaintiffs generally seek monetary damages and/or injunctive relief and attorneys' fees. The lawsuits, including a putative end-payer class action filed in December 2018, consist of négy individual plaintiff lawsuits and három consolidated purported class actions: un brought by Niaspan direct purchasers and két brought by Niaspan end-payers. The cases are pending in the United States District Court for the Eastern District of Pennsylvania for coordinated or consolidated pre-trial proceedings under the MDL Rules as In re: Niaspan Antitrust Litigation, MDL No. 2460. In October 2016, the Orange County, California District Attorney’s Office filed a lawsuit on behalf of the State of California regarding the Niaspan patent litigation settlement in Orange County Superior Court, asserting a claim under the unfair competition provision of the California Business and Professions Code seeking injunctive relief, restitution, civil penalties and attorneys’ fees. In May 2018, the California Court of Appeals ruled that the District Attorney’s Office may not bring monetary claims beyond the scope of Orange County.

In September 2014, the FTC filed a lawsuit against AbbVie and others in the United States District Court for the Eastern District of Pennsylvania, alleging that the 2011 patent litigation with két generic companies regarding AndroGel was sham litigation and the settlements of that litigation violated federal antitrust law. In May 2015, the court dismissed the FTC’s settlement-related claim. In June 2018, following a bench trial, the court found for the FTC on its sham litigation claim and ordered a disgorgement remedy of $448 million, plus prejudgment interest. The court denied the FTC’s request for injunctive relief. AbbVie is appealing the court’s liability and disgorgement rulings and, based on an assessment of the merits of that appeal, pas liability has been accrued for this matter. The FTC is also appealing aspects of the court’s trial ruling and the dismissal of its settlement-related claim. In July and August 2018, several direct AndroGel purchasers brought két individual and un class action cases in the United States District Court for the Eastern District of Pennsylvania alleging sham litigation based on the court’s trial ruling in the FTC’s case. In April 2019, AbbVie settled with the plaintiffs in the két individual cases. The remaining private plaintiff case is stayed pending the appeals in the FTC’s case.

In March 2015, the State of Louisiana filed a lawsuit, State of Louisiana v. Fournier Industrie et Sante, et al., against AbbVie, Abbott and affiliated Abbott entities in Louisiana state court. Plaintiff alleges that patent applications and patent litigation filed and other alleged conduct from the early 2000's and before related to the drug TriCor violated Louisiana State antitrust and unfair trade practices laws. The lawsuit seeks monetary damages and attorneys' fees. In April 2019, the Louisiana Supreme Court denied the plaintiff’s petition seeking to appeal the August 2018 dismissal of this lawsuit by the Louisiana Court of Appeal.

In January and February 2019, two shareholder derivative lawsuits, Brown v. Gonzalez, et al., et Elfers v. Gonzalez, et al., were filed in the United States District Court for the Northern District of Illinois, alleging that certain AbbVie directors and officers breached their fiduciary duties in connection with HUMIRA patient and reimbursement support services and other services and items of value, as alleged in the State of California case discussed below.

In March and April 2019, 10 putative class action lawsuits were filed in the United States District Court for the Northern District of Illinois by indirect HUMIRA purchasers, alleging that AbbVie’s settlements with biosimilar manufacturers and AbbVie’s HUMIRA patent portfolio violate state and federal antitrust laws.

In November 2014, a putative class action lawsuit, Medical Mutual of Ohio v. AbbVie Inc., et al., was filed against several manufacturers of testosterone replacement therapies (TRTs), including AbbVie, in the United States District Court for the Northern District of Illinois on behalf of all insurance companies, health benefit providers, and other third party payers who paid for TRTs, including AndroGel. The claims asserted include violations of the federal RICO Act and state consumer fraud and deceptive trade practices laws. The complaint seeks monetary damages and injunctive relief. In July 2018, the court denied the plaintiff’s motion for class certification. In February 2019, the court granted the defendants’ summary judgment motion.

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In September 2018, the Commissioner of the California Department of Insurance intervened in a qui tam lawsuit, State of California and Lazaro Suarez v. AbbVie Inc., et al., brought under the California Insurance Frauds Prevention Act, in California Superior Court for Alameda County. The Department of Insurance’s complaint alleges that, through patient and reimbursement support services and other services and items of value provided in connection with HUMIRA, AbbVie caused the submission of fraudulent commercial insurance claims for HUMIRA in violation of the California statute. The complaint seeks injunctive relief, an assessment of up to three times the amount of the claims at issue, and civil penalties. In addition, két federal securities lawsuits were filed in September (Pippins v. AbbVie Inc., et al., in the United States District Court for the Central District of California) and October (Holwill v. AbbVie Inc., et al., in the United States District Court for the Northern District of Illinois) against AbbVie, its chief executive officer and then-chief financial officer, alleging that reasons stated for HUMIRA sales growth in financial filings between 2013 and 2017 were misleading because they omitted the conduct alleged in the Department of Insurance’s complaint. In November 2018, the Pippins case was voluntarily dismissed.

In November 2014, öt individuals filed a putative class action lawsuit, Rubinstein, et al. v Gonzalez, et al., on behalf of purchasers and sellers of certain Shire plc (Shire) securities between June 20 and October 14, 2014, against AbbVie and its chief executive officer in the United States District Court for the Northern District of Illinois alleging that the defendants made and/or are responsible for material misstatements in violation of federal securities laws in connection with AbbVie's proposed transaction with Shire. In April 2019, the parties reached an agreement in principle to settle this lawsuit.

In June 2016, a lawsuit, Elliott Associates, L.P., et al. v. AbbVie Inc., was filed by öt investment funds against AbbVie in the Cook County, Illinois Circuit Court alleging that AbbVie made misrepresentations and omissions in connection with its proposed transaction with Shire. Similar lawsuits were filed between July 2017 and October 2018 against AbbVie and in some instances its chief executive officer in the same court by additional investment funds. Plaintiffs seek compensatory and punitive damages.

In May 2017, a shareholder derivative lawsuit, Ellis v. Gonzalez, et al., was filed in Delaware Chancery Court, alleging that AbbVie's directors breached their fiduciary duties in connection with statements made regarding the Shire transaction. The lawsuit sought unspecified compensatory damages for AbbVie, among other relief. In July 2018, the court dismissed this case with prejudice. In March 2019, the Delaware Supreme Court affirmed that dismissal.

Product liability cases were filed in which plaintiffs generally allege that AbbVie and other manufacturers of TRTs did not adequately warn about risks of certain injuries, primarily heart attacks, strokes and blood clots. Approximately 3,900 claims against AbbVie are consolidated for pre-trial purposes in the United States District Court for the Northern District of Illinois under the MDL Rules as In re: Testosterone Replacement Therapy Products Liability Litigation, MDL No. 2545. Approximately 200 claims against AbbVie are pending in various state courts. Plaintiffs generally seek compensatory and punitive damages. In November 2018, AbbVie entered into a Master Settlement Agreement with the Plaintiffs’ Steering Committee in the MDL encompassing existing claims in all courts. All proceedings in pending cases are effectively stayed during the settlement administration process.

Product liability cases are pending in which plaintiffs generally allege that AbbVie did not adequately warn about risk of certain injuries, primarily various birth defects, arising from use of Depakote. Approximately 170 cases are pending in the United States District Court for the Southern District of Illinois, and approximately négy others are pending in various state courts. Plaintiffs generally seek compensatory and punitive damages. Over ninety percent of these pending cases, plus other unfiled claims, are subject to confidential settlement agreements and are expected to be dismissed with prejudice.

Beginning in May 2016, the Patent Trial & Appeal Board of the U.S. Patent & Trademark Office (PTO) instituted öt inter partes review proceedings brought by Coherus Biosciences and Boehringer Ingelheim related to három AbbVie patents covering methods of treatment of rheumatoid arthritis using adalimumab. In these proceedings, the PTO reviewed the validity of the patents and issued decisions of invalidity in May, June and July of 2017. AbbVie’s appeal of the decisions is pending in the Court of Appeals for the Federal Circuit.

In March 2017, AbbVie filed a lawsuit, AbbVie Inc. v. Novartis Vaccines and Diagnostics, Inc. and Grifols Worldwide Operations Ltd., in the United States District Court for the Northern District of California against Novartis Vaccines and Grifols Worldwide seeking a declaratory judgment that tizenegy HCV-related patents licensed to AbbVie in 2002 are invalid.

AbbVie is seeking to enforce certain patent rights related to adalimumab (a drug AbbVie sells under the trademark HUMIRA®). In a case filed in United States District Court for the District of Delaware in August 2017, AbbVie alleges that Boehringer Ingelheim International GmbH’s, Boehringer Ingelheim Pharmaceutical, Inc.’s, and Boehringer Ingelheim Fremont, Inc.’s proposed biosimilar adalimumab product infringes certain AbbVie patents. AbbVie seeks declaratory and injunctive relief.

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23


Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib capsules (a drug Pharmacyclics sells under the trademark IMBRUVICA®). In February 2018, cases were filed in the United States District Court for the District of Delaware against the following defendants: Fresenius Kabi USA, LLC, Fresenius Kabi USA, Inc., and Fresenius Kabi Oncology Limited; Sun Pharma Global FZE and Sun Pharmaceutical Industries Ltd.; Cipla Limited and Cipla USA Inc.; and Zydus Worldwide DMCC, Cadila Healthcare Limited, Sandoz Inc., and Lek Pharmaceuticals D.D. In each case, Pharmacyclics alleges the defendant’s proposed generic ibrutinib product infringes certain Pharmacyclics patents and seeks declaratory and injunctive relief. Janssen Biotech, Inc. which is in a global collaboration with Pharmacyclics concerning the development and marketing of IMBRUVICA, is the co-plaintiff in these suits.

Pharmacyclics LLC, a wholly owned subsidiary of AbbVie, is seeking to enforce its patent rights relating to ibrutinib tablets (a drug Pharmacyclics sells under the trademark IMBRUVICA®). In a case filed in the United States District Court for the District of Delaware in March 2019, Pharmacyclics alleges that Alvogen Pine Brook LLC’s and Natco Pharma Ltd.’s proposed generic ibrutinib tablet product infringes certain Pharmacyclics patents. Pharmacyclics seeks declaratory and injunctive relief. Janssen Biotech, Inc. which is in a global collaboration with Pharmacyclics concerning the development and marketing of IMBRUVICA, is the co-plaintiff in this suit.

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Note 14 Segment Information

AbbVie operates in un business segment—pharmaceutical products. The following table details AbbVie’s worldwide net revenues:

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Immunology

HUMIRA

États-Unis

$

3,215

$

3,003

international

1,231

1,706

Teljes

$

4,446

$

4,709

Hematologic Oncology

IMBRUVICA

États-Unis

$

829

$

624

Collaboration revenues

193

138

Teljes

$

1,022

$

762

VENCLEXTA

États-Unis

$

105

$

41

international

46

18

Teljes

$

151

$

59

HCV

MAVYRET

États-Unis

$

403

$

340

international

387

508

Teljes

$

790

$

848

VIEKIRA

États-Unis

$

$

3

international

25

68

Teljes

$

25

$

71

Other Key Products

Creon

États-Unis

$

227

$

209

Lupron

États-Unis

$

191

$

177

international

38

42

Teljes

$

229

$

219

Synthroid

États-Unis

$

182

$

182

Synagis

international

$

287

$

321

Duodopa

États-Unis

$

22

$

18

international

89

85

Teljes

$

111

$

103

Sevoflurane

États-Unis

$

17

$

17

international

75

89

Teljes

$

92

$

106

Kaletra

États-Unis

$

13

$

13

international

65

60

Teljes

$

78

$

73

AndroGel

États-Unis

$

74

$

130

All other

$

114

$

142

Total net revenues

$

7,828

$

7,934

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25


ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following is a discussion and analysis of the financial condition of AbbVie Inc. (AbbVie or the company) as of March 31, 2019 et December 31, 2018 and the results of operations for the three months ended March 31, 2019 et 2018. This commentary should be read in conjunction with the condensed consolidated financial statements and accompanying notes appearing in Item 1, “Financial Statements and Supplementary Data.”

EXECUTIVE OVERVIEW

Company Overview

AbbVie is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories (Abbott). AbbVie uses its expertise, dedicated people and unique approach to innovation to develop and market advanced therapies that address some of the world’s most complex and serious diseases. AbbVie’s products are focused on treating conditions such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis; pain associated with endometriosis; as well as other serious health conditions. AbbVie also has a pipeline of promising new medicines in clinical development across such important medical specialties as immunology, oncology and neuroscience, with additional targeted investment in cystic fibrosis and women’s health.

AbbVie’s products are generally sold worldwide directly to wholesalers, distributors, government agencies, health care facilities, specialty pharmacies and independent retailers from AbbVie-owned distribution centers and public warehouses. In the United States, AbbVie distributes pharmaceutical products principally through independent wholesale distributors, with some sales directly to pharmacies and patients. Outside the United States, products are sold primarily to customers or through distributors, depending on the market served. Certain products are co-marketed or co-promoted with other companies. AbbVie has approximately 30,000 employees. AbbVie operates in one business segment—pharmaceutical products.

2019 Strategic Objectives

AbbVie's mission is to be an innovation-driven, patient-focused specialty biopharmaceutical company capable of achieving top-tier financial performance through outstanding execution and a consistent stream of innovative new medicines. AbbVie intends to continue to advance its mission in a number of ways, including: (i) growing revenues by diversifying revenue streams, driving late-stage pipeline assets to the market and ensuring strong commercial execution of new product launches; (ii) continued investment and expansion in its pipeline in support of opportunities in immunology, oncology and neuroscience, with additional targeted investment in cystic fibrosis and women's health as well as continued investment in key on-market products; (iii) expanding operating margins; and (iv) returning cash to shareholders via dividends and share repurchases. In addition, AbbVie anticipates several regulatory submissions and key data readouts from key clinical trials in the next twelve months.

Financial Results

The company's financial performance for the three months ended March 31, 2019 included delivering worldwide net revenues of $7.8 billion, operating earnings of $3.0 billion, diluted earnings per share of $1.65 and cash flows from operations of $3.0 billion. Worldwide net revenues decreased by 1.3% and increased 0.4% on a constant currency basis, primarily driven by revenue growth related to IMBRUVICA and VENCLEXTA as well as the continued strength of U.S. HUMIRA revenues, offset by international HUMIRA biosimilar competition.

Diluted earnings per share was $1.65 la three months ended March 31, 2019 and included the following after-tax costs: (i) $318 million related to the amortization of intangible assets; (ii) $171 million for the change in fair value of contingent consideration liabilities; (iii) $155 million for acquired in-process research and development (IPR&D); (iv) $133 million of restructuring charges; and (v) $40 million for milestone payments. These costs were partially offset by an after-tax benefit of $89 million due to the favorable resolution of various tax positions. Additionally, financial results reflected continued funding to support all stages of AbbVie’s emerging pipeline assets and continued investment in AbbVie’s on-market brands.

In addition to these financial results, AbbVie continued to advance and augment its pipeline as further described below under the heading “Research and Development.”

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26


Research and Development

Research and innovation are the cornerstones of AbbVie’s business as a global biopharmaceutical company. AbbVie’s long-term success depends to a great extent on its ability to continue to discover and develop innovative pharmaceutical products and acquire or collaborate on compounds currently in development by other biotechnology or pharmaceutical companies.

AbbVie’s pipeline currently includes approximately 60 compounds or indications in clinical development individually or under collaboration or license agreements and is focused on such important medical specialties as immunology, oncology and neuroscience along with targeted investments in cystic fibrosis and women’s health. Of these programs, more than 30 are in mid- and late-stage development.

The following sections summarize transitions of significant programs from Phase 2 development to Phase 3 development as well as developments in significant Phase 3 and registration programs. AbbVie expects multiple Phase 2 programs to transition into Phase 3 programs in the next twelve months.

Significant Programs and Developments

Immunology

Upadacitinib

In February 2019, the U.S. Food and Drug Administration (FDA) accepted for priority review AbbVie's New Drug Application (NDA) for upadacitinib, an investigational oral JAK1-selective inhibitor, for the treatment of adult patients with moderate to severe rheumatoid arthritis (RA).

In February 2019, AbbVie initiated a Phase 3 clinical trial to evaluate the efficacy and safety of upadacitinib in subjects with giant cell arteritis.

SKYRIZI

In March 2019, AbbVie initiated two Phase 3 clinical trials to evaluate the efficacy and safety of risankizumab, an investigational interleukin-23 (IL-23) inhibitor, in subjects with psoriatic arthritis.

In April 2019, the FDA approved SKYRIZI (risankizumab) for the treatment of moderate to severe plaque psoriasis in adults who are candidates for systemic therapy or phototherapy.

In April 2019, the European Commission granted marketing authorization for SKYRIZI for the treatment of moderate to severe plaque psoriasis in adult patients who are candidates for systemic therapy.

Oncology

IMBRUVICA

In January 2019, the FDA approved IMBRUVICA, in combination with GAZYVA, for adult patients with previously untreated chronic lymphocytic leukemia (CLL)/small lymphocytic lymphoma (SLL).

VENCLEXTA

In February 2019, the FDA granted a fifth breakthrough therapy designation to VENCLEXTA, for use in combination with obinutuzumab as a fixed duration investigational combination, for untreated adult patients with CLL. This designation coincides with the completion of the supplemental New Drug Application (sNDA) submission to the FDA in previously-untreated CLL patients. In March, the sNDA was granted priority review by the FDA.

In March 2019, AbbVie announced that the FDA placed a partial clinical hold on all clinical trials evaluating VENCLEXTA for the investigational treatment of multiple myeloma. The partial clinical hold follows a review of data from the ongoing Phase 3 BELLINI trial, a study in relapsed/refractory multiple myeloma, in which a higher proportion of deaths was observed in the VENCLEXTA arm compared to the control arm of the trial. This action does not impact any of the approved indications for VENCLEXTA, such as CLL or acute myeloid leukemia (AML), and is limited to investigational clinical trials in multiple myeloma.

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27


Neuroscience

In May 2019, AbbVie initiated a Phase 3 clinical trial to evaluate the safety and tolerability of ABBV-951, a subcutaneous levodopa/carbidopa delivery system, in subjects with Parkinson's disease.

For a more comprehensive discussion of AbbVie’s products and pipeline, see the company’s Annual Report on Form 10-K for the year ended December 31, 2018.

RESULTS OF OPERATIONS

Net Revenues

The comparisons presented at constant currency rates reflect comparative local currency net revenues at the prior year’s foreign exchange rates. This measure provides information on the change in net revenues assuming that foreign currency exchange rates had not changed between the prior and current periods. AbbVie believes that the non-GAAP measure of change in net revenues at constant currency rates, when used in conjunction with the GAAP measure of change in net revenues at actual currency rates, may provide a more complete understanding of the company’s operations and can facilitate analysis of the company’s results of operations, particularly in evaluating performance from one period to another.

Három hónap véget ért
Március 31.

Percent change

At actual
currency rates

At constant
currency rates

(dollars in millions)

2019

2018

États-Unis

$

5,270

$

4,790

10.0

%

10.0

%

international

2,558

3,144

(18.6

)%

(14.2

)%

Net revenues

$

7,828

$

7,934

(1.3

)%

0.4

%

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28


The following table details AbbVie’s worldwide net revenues:

Három hónap véget ért
Március 31.

Percent change

At actual
currency rates

At constant
currency rates

(dollars in millions)

2019

2018

Immunology

HUMIRA

États-Unis

$

3,215

$

3,003

7.1

%

7.1

%

international

1,231

1,706

(27.9

)%

(23.0

)%

Teljes

$

4,446

$

4,709

(5.6

)%

(3.8

)%

Hematologic Oncology

IMBRUVICA

États-Unis

$

829

$

624

32.8

%

32.8

%

Collaboration revenues

193

138

39.6

%

39.6

%

Teljes

$

1,022

$

762

34.0

%

34.0

%

VENCLEXTA

États-Unis

$

105

$

41

>100.0%

>100.0%

international

46

18

>100.0%

>100.0%

Teljes

$

151

$

59

>100.0%

>100.0%

HCV

MAVYRET

États-Unis

$

403

$

340

18.3

%

18.3

%

international

387

508

(23.8

)%

(20.4

)%

Teljes

$

790

$

848

(6.9

)%

(4.9

)%

VIEKIRA

États-Unis

$

$

3

(100.0

)%

(100.0

)%

international

25

68

(62.9

)%

(58.5

)%

Teljes

$

25

$

71

(64.7

)%

(60.4

)%

Other Key Products

Creon

États-Unis

$

227

$

209

8.6

%

8.6

%

Lupron

États-Unis

$

191

$

177

7.4

%

7.4

%

international

38

42

(9.0

)%

(1.4

)%

Teljes

$

229

$

219

4.2

%

5.7

%

Synthroid

États-Unis

$

182

$

182

0.3

%

0.3

%

Synagis

international

$

287

$

321

(10.8

)%

(7.0

)%

Duodopa

États-Unis

$

22

$

18

28.5

%

28.5

%

international

89

85

4.2

%

11.6

%

Teljes

$

111

$

103

8.3

%

14.4

%

Sevoflurane

États-Unis

$

17

$

17

(0.6

)%

(0.6

)%

international

75

89

(16.2

)%

(10.1

)%

Teljes

$

92

$

106

(13.6

)%

(8.5

)%

Kaletra

États-Unis

$

13

$

13

3.4

%

3.4

%

international

65

60

7.7

%

12.6

%

Teljes

$

78

$

73

6.9

%

10.9

%

AndroGel

États-Unis

$

74

$

130

(42.9

)%

(42.9

)%

All other

$

114

$

142

(19.5

)%

(17.2

)%

Total net revenues

$

7,828

$

7,934

(1.3

)%

0.4

%

2019 Form 10-Q | abbvieimage2a12.gif

29


The following discussion and analysis of AbbVie’s net revenues by product is presented on a constant currency basis.

Global HUMIRA sales decreased 4% la three months ended March 31, 2019 primarily as a result of direct biosimilar competition in certain international markets, partially offset by market growth across therapeutic categories. In the United States, HUMIRA sales increased 7% la three months ended March 31, 2019 driven by market growth across all indications. Internationally, HUMIRA sales decreased 23% la three months ended March 31, 2019 primarily driven by direct biosimilar competition in certain international markets following the expiration of the European Union composition of matter patent for adalimumab in October 2018. Biosimilar competition for HUMIRA is not expected in the United States until 2023. AbbVie continues to pursue strategies intended to further differentiate HUMIRA from competing products and add to the sustainability of HUMIRA.

Net revenues for IMBRUVICA represent product sales in the United States and collaboration revenues outside of the United States related to AbbVie’s 50% share of IMBRUVICA profit. AbbVie's global IMBRUVICA revenues increased 34% la three months ended March 31, 2019 as a result of continued penetration of IMBRUVICA for patients with CLL as well as favorable pricing.

Net revenues for VENCLEXTA increased by more than 100% for the three months ended March 31, 2019 primarily due to market share gains following additional regulatory approvals of VENCLEXTA for the treatment of patients with relapsed/refractory CLL and AML in 2018.

Global MAVYRET sales decreased by 5% la three months ended March 31, 2019 primarily as a result of declining markets and pricing in certain international geographies, partially offset by positive share dynamics in the U.S. and international markets.

Net revenues for Creon increased 9% la three months ended March 31, 2019 primarily driven by continued market growth and higher market share. Creon maintains market leadership in the pancreatic enzyme market.

Net revenues for Duodopa increased 14% la three months ended March 31, 2019 primarily driven by increased market penetration.

Bruttó árrés

Három hónap véget ért
Március 31.

(dollars in millions)

2019

2018

% change

Gross margin

$

6,134

$

6,007

2

%

as a % of net revenues

78

%

76

%

Gross margin as a percentage of net revenues augmentation la three months ended March 31, 2019 compared to the prior year. Gross margin percentage for the three months ended March 31, 2019 was favorably impacted primarily by the expiration of HUMIRA royalties.

Selling, General and Administrative

Három hónap véget ért
Március 31.

(dollars in millions)

2019

2018

% change

Selling, general and administrative

$

1,680

$

1,791

(6

)%

as a % of net revenues

21

%

23

%

Selling, general and administrative (SG&A) expenses as a percentage of net revenues csökkent la three months ended March 31, 2019 compared to the prior year. SG&A expense percentage for the three months ended March 31, 2019 was favorably impacted by lower litigation reserve charges that decreased by $108 million as well as lower administrative costs. SG&A expense percentage was unfavorably impacted by restructuring charges for the three months ended March 31, 2019.

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30


Research and Development and Acquired In-Process Research and Development

Három hónap véget ért
Március 31.

(dollars in millions)

2019

2018

% change

Research and development

$

1289

$

1,244

4

%

as a % of net revenues

16

%

16

%

Acquired in-process research and development

$

155

$

69

>100%

Research and Development (R&D) expenses for the three months ended March 31, 2019 augmentation compared to the prior year principally due to restructuring charges and increased funding to support the company's emerging early and mid-stage pipeline assets, partially offset by the favorable impact of foreign exchange.

Acquired IPR&D expenses reflect upfront payments related to various collaborations. There were pas individually significant transactions during the three months ended March 31, 2019 et 2018.

Other Non-Operating Expenses

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Kamatköltség

$

387

$

309

Interest income

(62

)

(58

)

Interest expense, net

$

325

$

251

Net foreign exchange loss

$

6

$

8

Other (income) expense, net

135

(153

)

Interest expense, net augmentation la three months ended March 31, 2019 compared to the prior year primarily due to the unfavorable impact of higher interest rates on the company's debt obligations and a higher average outstanding debt balance.

Other (income) expense, net included a $169 million charge related to changes in fair value of contingent consideration liabilities for the three months ended March 31, 2019 compared to a benefit of $148 million la three months ended March 31, 2018. The fair value of contingent consideration liabilities is impacted by the passage of time and multiple other inputs, including the probability of success of achieving regulatory/commercial milestones, discount rates, the estimated amount of future sales of the acquired products still in development and other market-based factors. For the three months ended March 31, 2019, the change in fair value represented the effect of lower interest rates and the passage of time. For the three months ended March 31, 2018, the change in fair value represented the effect of rising interest rates partially offset by the passage of time. AbbVie expects the fair value of its contingent consideration liabilities to increase in the second quarter of 2019 as a result of the April 2019 regulatory approvals of SKYRIZI for the treatment of moderate to severe plaque psoriasis. The company is in the process of evaluating the impact of the regulatory approvals on the fair value, which includes an increase in the probabilities of success assumptions.

Income Tax Expense

The effective tax rate was 3% la three months ended March 31, 2019 et 1% la three months ended March 31, 2018. The effective tax rate in each period differed from the U.S. statutory tax rate of 21% principally due to the benefit from foreign operations which reflects the impact of lower income tax rates in locations outside the United States, tax incentives in Puerto Rico and other foreign tax jurisdictions and business development activities. la növekedés in the effective tax rate for the three months ended March 31, 2019 over the prior year was principally due to the beneficial impact of the timing of provisions of the Tax Cuts and Jobs Act (the Act) related to earnings from certain foreign subsidiaries in prior year. Additionally, the 2019 effective tax rate reflected the favorable resolution of various tax positions and lower excess tax benefits from stock-based compensation compared to the prior year.

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31


FINANCIAL POSITION, LIQUIDITY AND CAPITAL RESOURCES

Három hónap véget ért
Március 31.

(in millions)

2019

2018

Cash flows provided by (used in):

Operating activities

$

3,017

$

2,645

Investing activities

(27

)

(447

)

Financing activities

(5,383

)

(2,509

)

Operating cash flows for the three months ended March 31, 2019 increased from the prior year due to improved results of operations resulting from an improvement in operating earnings and the timing of working capital cash flows. Operating cash flows also reflected AbbVie’s contributions to its defined benefit plans of $182 million la three months ended March 31, 2019 et $203 million la three months ended March 31, 2018.

Investing cash flows for the three months ended March 31, 2019 included net sales and maturities of investment securities totaling $400 million, payments made for acquisitions and investments of $320 million and capital expenditures of $107 million. Investing cash flows for the three months ended March 31, 2018 included payments made for acquisitions and investments of $372 million, capital expenditures of $119 million and net sales and maturities of investment securities totaling $44 million.

Financing cash flows for the three months ended March 31, 2019 included the repayment of AbbVie's $3.0 billion 364-day term loan credit agreement that was scheduled to mature in June 2019.

The company made cash dividend payments of $1.6 billion la three months ended March 31, 2019 et $1.1 billion la three months ended March 31, 2018. The increase in cash dividend payments was driven by an increase in the quarterly dividend rate. Tovább February 21, 2019, the board of directors declared a quarterly cash dividend of $1.07 per share for stockholders of record at the close of business on April 15, 2019, payable on May 15, 2019. The timing, declaration, amount of and payment of any dividends by AbbVie in the future is within the discretion of its board of directors and will depend upon many factors, including AbbVie’s financial condition, earnings, capital requirements of its operating subsidiaries, covenants associated with certain of AbbVie’s debt service obligations, legal requirements, regulatory constraints, industry practice, ability to access capital markets and other factors deemed relevant by its board of directors.

The company's stock repurchase authorization permits purchases of AbbVie shares from time to time in open-market or private transactions at management's discretion. The program has no time limit and can be discontinued at any time. AbbVie repurchased 4 million shares for $300 million au cours de three months ended March 31, 2019 et 11 million shares for $1.3 billion au cours de three months ended March 31, 2018. AbbVie cash-settled $201 million of its December 2018 open-market purchases in January 2019.

During the three months ended March 31, 2019 et 2018, the company issued and redeemed commercial paper. The balance of commercial paper outstanding was $499 million que March 31, 2019 et $699 million que December 31, 2018. AbbVie may issue additional commercial paper or retire commercial paper to meet liquidity requirements as needed.

Credit Risk

AbbVie monitors economic conditions, the creditworthiness of customers and government regulations and funding, both domestically and abroad. AbbVie regularly communicates with its customers regarding the status of receivable balances, including their payment plans and obtains positive confirmation of the validity of the receivables. AbbVie establishes an allowance against accounts receivable when it is probable they will not be collected. AbbVie may also utilize factoring arrangements to mitigate credit risk, although the receivables included in such arrangements have historically not been a significant amount of total outstanding receivables.

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32


Credit Facility, Access to Capital and Credit Ratings

Credit Facility

AbbVie currently has a $3.0 billion five-year revolving credit facility which matures in August 2023. The revolving credit facility enables the company to borrow funds on an unsecured basis at variable interest rates and contains various covenants. Nál nél March 31, 2019, the company was in compliance with all its credit facility covenants. Commitment fees under the credit facility were insignificant. pas amounts were outstanding under the credit facility as of March 31, 2019 et December 31, 2018.

Access to Capital

The company intends to fund short-term and long-term financial obligations as they mature through cash on hand, future cash flows from operations or by issuing additional debt. The company’s ability to generate cash flows from operations, issue debt or enter into financing arrangements on acceptable terms could be adversely affected if there is a material decline in the demand for the company’s products or in the solvency of its customers or suppliers, deterioration in the company’s key financial ratios or credit ratings or other material unfavorable changes in business conditions. At the current time, the company believes it has sufficient financial flexibility to issue debt, enter into other financing arrangements and attract long-term capital on acceptable terms to support the company’s growth objectives.

Credit Ratings

There were pas changes in the company’s credit ratings during the three months ended March 31, 2019. Unfavorable changes to the ratings may have an adverse impact on future financing arrangements; however, they would not affect the company’s ability to draw on its credit facility and would not result in an acceleration of scheduled maturities of any of the company’s outstanding debt.

CRITICAL ACCOUNTING POLICIES

A summary of the company’s significant accounting policies is included in Note 2, “Summary of Significant Accounting Policies” in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2018. Significant changes in the company’s application of its critical accounting policies include the adoption of a new accounting standard that establishes a new lease accounting framework. See Notes 1 and 8 to the condensed consolidated financial statements for additional information.

FORWARD-LOOKING STATEMENTS

Some statements in this quarterly report on Form 10-Q may be forward-looking statements for purposes of the Private Securities Litigation Reform Act of 1995. The words “believe,” “expect,” “anticipate,” “project,” and similar expressions, among others, generally identify forward-looking statements. AbbVie cautions that these forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially from those indicated in the forward-looking statements. Such risks and uncertainties include, but are not limited to, challenges to intellectual property, competition from other products, difficulties inherent in the research and development process, adverse litigation or government action, and changes to laws and regulations applicable to our industry. Additional information about the economic, competitive, governmental, technological and other factors that may affect AbbVie’s operations is set forth in Item 1A, “Risk Factors,” in AbbVie’s Annual Report on Form 10-K for the year ended December 31, 2018, which has been filed with the Securities and Exchange Commission. AbbVie notes these factors for investors as permitted by the Private Securities Litigation Reform Act of 1995. AbbVie undertakes no obligation to release publicly any revisions to forward-looking statements as a result of subsequent events or developments, except as required by law.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

For a discussion of the company's market risk, see Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in AbbVie's Annual Report on Form 10-K for the year ended December 31, 2018.

2019 Form 10-Q | abbvieimage2a12.gif

33


ITEM 4. CONTROLS AND PROCEDURES

DISCLOSURE CONTROLS AND PROCEDURES

Evaluation of disclosure controls and procedures. The Chief Executive Officer, Richard A. Gonzalez, and the Chief Financial Officer, Robert A. Michael, evaluated the effectiveness of AbbVie’s disclosure controls and procedures as of the end of the period covered by this report, and concluded that AbbVie’s disclosure controls and procedures were effective to ensure that information AbbVie is required to disclose in the reports that it files or submits with the Securities and Exchange Commission under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and to ensure that information required to be disclosed by AbbVie in the reports that it files or submits under the Exchange Act is accumulated and communicated to AbbVie’s management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

INTERNAL CONTROL OVER FINANCIAL REPORTING

Changes in internal control over financial reporting. There were no changes in AbbVie’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that have materially affected, or are reasonably likely to materially affect, AbbVie’s internal control over financial reporting during the quarter ended March 31, 2019.

Inherent Limitations on Effectiveness of Controls. AbbVie’s management, including its Chief Executive Officer and its Chief Financial Officer, do not expect that AbbVie’s disclosure controls or internal control over financial reporting will prevent or detect all errors and all fraud. A control system, no matter how well designed and operated, can provide only reasonable, not absolute, assurance that the control system’s objectives will be met. The design of a control system must reflect the fact that there are resource constraints, and the benefits of controls must be considered relative to their costs. Further, because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that misstatements due to error or fraud will not occur or that all control issues and instances of fraud, if any, have been detected. These inherent limitations include the realities that judgments in decision-making can be faulty and that breakdowns can occur because of simple error or mistake. Controls can also be circumvented by the individual acts of some persons, by collusion of two or more people, or by management override of the controls.

The design of any system of controls is based in part on certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions. Projections of any evaluation of controls effectiveness to future periods are subject to risks. Over time, controls may become inadequate because of changes in conditions or deterioration in the degree of compliance with policies or procedures.

2019 Form 10-Q | abbvieimage2a12.gif

34


PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

Information pertaining to legal proceedings is provided in Note 13 to the condensed consolidated financial statements and is incorporated by reference herein.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(c) Issuer Purchases of Equity Securities

Period

(a) Total
Number of
Shares

(or Units)
Purchased

(b) Average
Price Paid
per Share
(or Unit)

(c) Total Number
of Shares (or
Units) Purchased
as Part of Publicly
Announced Plans
or Programs

(d) Maximum
Number (or
Approximate
Dollar Value) of
Shares (or Units)
that May Yet Be
Purchased Under
the Plans or
Programs

January 1, 2019 – January 31, 2019

2,748,105

(1)

$78.71

(1)

2,746,958

$4,033,821,066

February 1, 2019 – February 28, 2019

1,046,709

(1)

$80.16

(1)

1,045,340

$3,950,021,071

March 1, 2019 – March 31, 2019

42,743

(1)

$80.55

(1)

$3,950,021,071

Teljes

3,837,557

(1)

$79.13

(1)

3,792,298

$3,950,021,071

premier

In addition to AbbVie shares repurchased on the open market under a publicly announced program, if any, these shares also included the shares purchased on the open market for the benefit of participants in the AbbVie Employee Stock Purchase Plan – 1,147 in January; 1,369 in February; and 42,743 in March.

These shares do not include the shares surrendered to AbbVie to satisfy minimum tax withholding obligations in connection with the vesting or exercise of stock-based awards.

2019 Form 10-Q | abbvieimage2a12.gif

35


ITEM 6. EXHIBITS

Exhibits 32.1 and 32.2 are furnished herewith and should not be deemed to be “filed” under the Securities Exchange Act of 1934.

_______________________________________________________________________________

* Denotes management contract or compensatory plan or arrangement required to be filed as an exhibit hereto.

2019 Form 10-Q | abbvieimage2a12.gif

36


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

ABBVIE INC.

par:

/s/ Robert A. Michael

Robert A. Michael

Senior Vice President,

Chief Financial Officer

Date: May 3, 2019

2019 Form 10-Q | abbvieimage2a12.gif

37

ABBVIE INC.

PERFORMANCE-VESTED RESTRICTED STOCK UNIT AGREEMENT

On this «Grant_Day» day of «Grant_Month», 2019 (the “Grant Date”), AbbVie Inc. (the “Company”) hereby grants to «First Name» «MI» «Last Name» (the “Employee”) a Performance-Vested Restricted Stock Unit Award (the “Díj”) of «NoShares12345» restricted stock units (the “Units”). The actual number of shares of Company common stock (the “Shares”) that may be issued under this Award will be determined in accordance with this Agreement by reference to the number of Units set forth above.

The Award is granted under the Program and is subject to the provisions of the Program, the Program prospectus, the Program administrative rules, applicable Company policies, and the terms and conditions set forth in this Agreement. In the event of any inconsistency among the provisions of this Agreement, the provisions of the Program, the Program prospectus, and the Program administrative rules, the provisions of the Program shall control.

The terms and conditions of the Award are as follows:

premier

Definitions. To the extent not defined herein, capitalized terms shall have the same meaning as in the Program.

(A) Agreement: This Performance-Vested Restricted Stock Unit Agreement.

(B)

Cause: Unless otherwise defined in the Employee’s Change in Control Agreement, cause shall mean the following, as determined by the Company in its sole discretion:

(i)

material breach by the Employee of the terms and conditions of the Employee’s employment, including, but not limited to:

(A)

material breach by the Employee of the Code of Business Conduct;

(B)

material breach by the Employee of the Employee’s Employee Agreement or employment contract, if any;

(C)

commission by the Employee of an act of fraud, embezzlement or theft in connection with the Employee’s duties or in the course of the Employee’s employment;

(D)

wrongful disclosure by the Employee of secret processes or confidential information of the Company or any of its Subsidiaries; ou

(E)

failure by the Employee to substantially perform the duties of the Employee’s employment (other than any such failure resulting from the Employee’s Disability); ou

(ii)

to the extent permitted by applicable law, engagement by the Employee, directly or indirectly, for the benefit of the Employee or others, in any activity, employment or business which is competitive with the Company or any of its Subsidiaries.

(c)

Change in Control Agreement: An agreement regarding Change in Control in effect between the Company (or the Surviving Entity) and the Employee.

(d)

Code of Business Conduct: The Company’s Code of Business Conduct, as amended from time to time.

Performance-Vested Restricted Stock Unit Agreement (2019)


(e)

Controlled Group: AbbVie Inc. and any corporation, partnership and proprietorship under common control (as defined under the aggregation rules of Code Section 414 (b), (c), or (m)) with AbbVie Inc.

(f)

Adat: Certain personal information about the Employee held by the Company and the Subsidiary that employs the Employee (if applicable), including (but not limited to) the Employee’s name, home address and telephone number, email address, date of birth, social security, passport or other identification number, salary, nationality, job title, any Shares held in the Company, details of all Awards or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s favor, for the purpose of managing and administering the Program.

(g)

Disability: Sickness or accidental bodily injury, directly and independently of all other causes, that disables the Employee so that the Employee is completely prevented from performing all the duties of his or her occupation or employment.

(h)

Employee Agreement: The Employee Agreement entered into by and between the Company or a Subsidiary and the Employee as it may be amended from time to time.

(i)

Employee’s Representative: The Employee’s jogi guardian or other legal representative.

(j)

Good Reason: Unless otherwise defined in the Employee’s Change in Control Agreement, good reason shall mean the occurrence of any of the following circumstances without the Employee’s express written consent:

(i)

a significant adverse change in the nature, scope or status of the Employee’s position, authorities or duties from those in effect immediately prior to the Change in Control, including, without limitation, if the Employee was, immediately prior to the Change in Control, an officer of a public company, the Employee ceasing to be an officer of a public company;

(ii)

the failure by the Company or a Subsidiary to pay the Employee any portion of the Employee’s current compensation, or to pay the Employee any portion of any installment of deferred compensation under any deferred compensation program of the Company, within seven days of the date such compensation is due;

(iii)

a reduction in the Employee’s annual base salary (or a material change in the frequency of payment) as in effect immediately prior to the Change in Control as the same may be increased from time to time;

(iv)

the failure by the Company or a Subsidiary to award the Employee an annual bonus in any year which is at least equal to the annual bonus awarded to the Employee under the annual bonus plan of the Company or Subsidiary for the year immediately preceding the year of the Change in Control;

(v)

the failure by the Company to award the Employee equity-based incentive compensation (such as stock options, shares of restricted stock, restricted stock units, or other equity-based compensation) on a periodic basis consistent with the Company’s practices with respect to timing, value and terms prior to the Change in Control;

(vi)

the failure by the Company or a Subsidiary to continue to provide the Employee with the welfare benefits, fringe benefits and perquisites enjoyed by the Employee immediately prior to the Change in Control under any of the Company’s or Subsidiary’s plans or policies, including, but not limited to, those plans and policies providing pension, life insurance, medical, health and accident, disability and vacation;

2

Performance-Vested Restricted Stock Unit Agreement (2019)


(vii)

the relocation of the Employee’s base office to a location that is more than 35 miles from the Employee’s base office immediately prior to the Change in Control; ou

(viii)

the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement as contemplated in Section 5.

(k)

Performance Determination Date: The date on which the Committee determines whether or to what extent the Performance Vesting Requirements have been achieved.

(l)

Performance Period: The period(s) specified in the attached Schedule, over which achievement of the Performance Vesting Requirements is to be measured.

(m)

Performance-Vested Shares: The maximum number of Shares the Employee may receive under this Award based on the extent to which the Performance Vesting Requirements are achieved. In no event will the number of Performance-Vested Shares exceed 150% of the number of Units set forth in the first paragraph of this Agreement.

(n)

Performance Vesting Requirements: The performance goals described in the attached Schedule, which must be achieved for Units to vest and the corresponding Shares to be delivered under this Award.

(o)

Program: The AbbVie 2013 Incentive Stock Program.

(i)

Except as provided under (ii) or (iii) below, Retirement means either of the following:

age 55 with 10 years of service; ou

age 65 with at least three years of service.

(ii)

For Employees who (A) are not covered by (iii) below and (B) transferred to the Company directly from Abbott Laboratories either as a result of the Company’s spin-off from Abbott Laboratories or during the period from January 1, 2013 through June 30, 2015 with the consent of each company’s head of human resources and were hired into the Abbott Laboratories controlled group prior to January 1, 2004, Retirement means any of the following:

age 50 with 10 years of service;

age 65 with at least three years of service; ou

age 55 with an age and service combination of 70 points, where each year of age is one point and each year of service is one point.

(iii)

For participants in the AbbVie Pension Plan for Former BASF and Former Solvay Employees, Retirement means either of the following:

age 55 with 10 years of service; ou

age 65 with at least three years of service.

(iv)

For purposes of calculating service under this Section 1(p), except as otherwise provided by the Committee or its delegate: (A) service is earned only if performed for a member of the Controlled Group while that Controlled Group member is a part of the Controlled Group; and (B) for Employees who transferred to the Company directly from Abbott Laboratories during the period from January 1, 2013 through June 30, 2015 either as a result of the

3

Performance-Vested Restricted Stock Unit Agreement (2019)


Company’s spin-off from Abbott Laboratories or with the consent of each company’s head of human resources, service includes service with Abbott Laboratories that is counted for benefit calculation purposes under the AbbVie Pension Plan, the AbbVie Pension Plan for Former BASF and Former Solvay Employees, or another Company-sponsored pension plan, as applicable.

(q)

Termination: A severance of employment for any reason (including Retirement) from the Company and all Subsidiaries. Any Termination shall be effective on the last day the Employee performs services for or on behalf of the Company or its Subsidiary, and employment shall not be extended by any statutory or common law notice of termination period.

deuxième

Delivery Dates and Shareholder Rights. The delivery dates for Shares issuable with respect to the Units are the respective dates on which the Shares are distributable to the Employee if the Restrictions lapse pursuant to Section 4 below (each a “Delivery Date”). Prior to the Delivery Date(s):

(A)

the Employee shall not be treated as a shareholder as to any Shares issuable under the Agreement, and shall have only a contractual right to receive Shares, unsecured by any assets of the Company or its Subsidiaries;

(B)

the Employee shall not be permitted to vote any Shares issuable under the Agreement; et

(c)

the Employee’s right to receive such Shares will be subject to the adjustment provisions relating to mergers, reorganizations, and similar events set forth in the Program.

Subject to the requirements of local law, if any dividend or other distribution is declared and paid on Shares (other than dividends or distributions of securities of the Company which may be issued with respect to its Shares by virtue of any stock split, combination, stock dividend or recapitalization) while any of the Units remain subject to this Award (meaning that any of the Shares into which Units would be converted are not otherwise issued and outstanding for purposes of the entitlement to the dividend or distribution), then a book account will be maintained for the Employee and credited with a phantom dividend that is equivalent to the actual dividend or distribution that would have been paid on the total number of Performance-Vested Shares that may be distributed under this Award if that number of Shares had been issued and outstanding and entitled to the dividend or distribution. As any Units vest under this Award, the phantom dividends credited to the book account that are attributable to the Shares issuable with respect to such Units will vest and be distributed to the Employee (in the form in which the actual dividend or distribution was paid to shareholders or in such other form as the Administrator deems appropriate under the circumstances) concurrently with the issuance of the Shares resulting from the Unit vesting. Any such distribution is subject to the Company’s collection of withholding taxes applicable to the distribution.

If fewer than all of the Performance-Vested Shares are earned as a result of the application of the vesting requirements or the forfeiture provisions of this Agreement or the Program, then the phantom dividends attributable to the unearned Shares will be cancelled and the Employee will cease to have any right or entitlement to receive any distribution or other amount with respect to such cancelled phantom dividends.

No phantom dividends will be paid or payable to or for the benefit of the Employee with respect to dividends or distributions for which the record date occurs on or after the applicable Delivery Date, the date the Employee has forfeited the Units or, in some cases due to applicable law, the date the Restrictions on the Units have lapsed. For purposes of compliance with the requirements of Code Section 409A, to the extent applicable, the specified date for payment of any phantom dividend to which the Employee is entitled under

4

Performance-Vested Restricted Stock Unit Agreement (2019)


this Section 2 is the calendar year in which the corresponding Shares vest and are distributed to the Employee. The Employee has no right to determine the year in which phantom dividends will be paid.

troisième

Restrictions. The Units (encompassing all of the Performance-Vested Shares) are subject to the forfeiture provisions in Sections 6 and 7 below. Shares are not earned and may not be sold, exchanged, assigned, transferred, pledged or otherwise disposed of (collectively, the “Restrictions”) until an event or combination of events described in subsections 4(a), (b), (c) or (d) or Section 5 occurs.

4

Lapse of Restrictions. The number of Shares that become issuable under this Award, as set forth in this Section 4 and subject to the provisions of Sections 5, 6 and 7 below, will be calculated based on the extent to which the Performance Vesting Requirements described in the attached Schedule are achieved. The Committee may equitably adjust the Performance Vesting Requirements described in the attached Schedule in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be unusual in nature or infrequent in occurrence or related to the acquisition or disposal of a business or assets or related to a change in accounting principles.

(A)

Performance. If the Employee remains employed with the Company or its Subsidiaries as of the applicable vesting date specified below and has not experienced a Termination that triggers forfeiture, then:

(i)

the Restrictions on up to one-third of the total number of Units may lapse on «VESTING DATE 1», as determined in accordance with the Schedule;

(ii)

the Restrictions on up to an additional one-third of the total number of Units may lapse on «VESTING DATE 2», as determined in accordance with the Schedule; et

(iii)

the Restrictions on up to an additional one-third of the total number of Units may lapse on «VESTING DATE 3», as determined in accordance with the Schedule.

(B)

Retirement. The Restrictions will continue to apply in the event of the Employee’s Termination due to Retirement, but may lapse thereafter in accordance with the provisions of subsection 4(a) above, in which case any Units not previously settled on a Delivery Date will be settled in the form of Shares on the Delivery Date(s) set forth in subsection 4(a) above occurring after the date of such Termination due to Retirement.

(c)

Death. The Restrictions will lapse on the date of the Employee’s Termination due to death, and any Units not previously settled on a Delivery Date will be settled (for the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution) in the form of Shares as soon as administratively possible after, and effective as of, the date of Termination due to death. The extent to which the Restrictions lapse, and the number of Shares to be delivered as a result, will be determined as follows:

(i)

For any Performance Period that has begun but has not been completed as of the date of Termination due to death, the number of Shares to be delivered with respect to the applicable Award tranche will be determined based on the greater of (A) performance through the date of Termination measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before the date of Termination, and (B) the target vesting level for the applicable Award tranche.

5

Performance-Vested Restricted Stock Unit Agreement (2019)


(ii)

For any Performance Period that has not yet begun as of the date of Termination due to death, the number of Shares to be delivered will be determined using the target vesting level for the applicable Award tranche(s).

(d)

Disability. The Restrictions will lapse on the date of the Employee’s Termination due to Disability, and any Units not previously settled on a Delivery Date will be settled in the form of Shares as soon as administratively possible after, and effective as of, the date of Termination due to Disability. The extent to which the Restrictions lapse, and the number of Shares to be delivered as a result, will be determined as follows:

(i)

For any Performance Period that has begun but has not been completed as of the date of Termination due to Disability, the number of Shares to be delivered with respect to the applicable Award tranche will be determined based on the greater of (A) performance through the date of Termination measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before the date of Termination, and (B) the target vesting level for the applicable Award tranche.

(ii)

For any Performance Period that has not yet begun as of the date of Termination due to Disability, the number of Shares to be delivered will be determined using the target vesting level for the applicable Award tranche(s).

5

Change in Control. In the event of a Change in Control, the entity surviving such Change in Control or the ultimate parent thereof (referred to herein as the “Surviving Entity”) may assume, convert or replace this Award with an award of at least equal value and terms and conditions not less favorable than the terms and conditions provided in this Agreement, in which case the new award will vest according to the terms of the applicable award agreement. If the Surviving Entity does not assume, convert or replace this Award, the Restrictions will lapse on the date of the Change in Control, as described below.

If the Surviving Entity does assume, convert or replace this Award, then in the event the Employee’s Termination (a) occurs within the time period beginning six months immediately before a Change in Control and ending two years immediately following such Change in Control, and (b) was initiated by the Company (or the Surviving Entity) for a reason other than Cause or was initiated by the Employee for Good Reason, the Restrictions will lapse on the later of the date of the Change in Control and the date of the Employee’s Termination (referred to herein as the “Applicable Lapse Date”).

The extent to which the Restrictions lapse, and the number of Shares to be delivered as a result, will be determined as follows:

(i)

For any Performance Period that has begun but has not been completed as of the Applicable Lapse Date, the number of Shares to be delivered with respect to the applicable Award tranche will be determined based on the greatest of: (A) performance through the date of the Change in Control measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before the date of the Change in Control; (B) performance through the date of the Termination measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before the date of the Termination; and (C) the target vesting level for the applicable Award tranche.

(ii)

For any Performance Period that has not yet begun as of the Applicable Lapse Date, the number of Shares to be delivered will be determined using the target vesting level for the applicable Award tranche(s).

6

Performance-Vested Restricted Stock Unit Agreement (2019)


The provisions of this Section 5 supersede Section 13(a)(iii), (iv) and (v) of the Program.

6

Effect of Certain Bad Acts. Any Units not previously settled will be cancelled and forfeited immediately if the Employee engages in activity that constitutes Cause, as determined in the sole opinion and discretion of the Committee or its delegate, whether or not the Employee experiences a Termination or remains employed with the Company or a Subsidiary.

7

Forfeiture of Units. In the event of the Employee’s Termination for any reason other than those set forth in subsection 4(b), (c) or (d) or Section 5, any Units with respect to which Restrictions have not lapsed as of the date of Termination will be forfeited without consideration to the Employee or the Employee’s Representative. In the event that the Employee is terminated by the Company other than for Cause and in a situation not covered by Section 5, the Company may, in its sole discretion, cause some or all of the Units to continue to be subject to the Restrictions, provided such Restrictions may lapse thereafter in accordance with the provisions of subsection 4(a), in which case such Units will be settled in the form of Shares on the Delivery Date(s) set forth in subsection 4(a) above as if the Employee had remained employed on such dates. In accepting this Award, the Employee acknowledges that in the event of Termination (whether or not in breach of local labor laws), the Employee’s right to vest in the Units, if any, will cease and will not be extended by any notice period mandated under local law (e.g., active employment does not include a period of “garden leave” or similar period pursuant to local law) and that the Company shall have the exclusive discretion to determine when Termination occurs.

8

Withholding Taxes. To the extent permitted under applicable law and by the Company, the Employee may satisfy any U.S. or non-U.S. federal, state, local or other applicable taxes arising from the grant of the Award, the lapse of Restrictions or the delivery of Shares pursuant to this Agreement by:

(A)

tendering a cash payment;

(B)

having the Company withhold Shares from the Shares to be delivered to satisfy the applicable withholding tax;

(c)

tendering Shares received in connection with the Award back to the Company; ou

(d)

delivering other previously acquired Shares having a Fair Market Value approximately equal to the amount to be withheld.

The Company shall have the right and is hereby authorized to withhold from the Shares deliverable to the Employee pursuant to this Agreement or (to the extent permitted by applicable law, including without limitation Code Section 409A) from any other compensation or other amount owing to the Employee, such amount as may be necessary in the opinion of the Company to satisfy all such taxes, requirements and withholding obligations. If the Company withholds for tax purposes from the Shares otherwise to be delivered to the Employee, the Employee is deemed to have been issued the full number of Shares underlying the Award, subject to the Restrictions set forth in this Agreement.

Notwithstanding the foregoing, if the Employee is subject to Section 16(b) of the Exchange Act, the Company will withhold using the method described in subsection 8(b) above unless the use of such withholding method is problematic under applicable laws or has materially adverse accounting consequences, in which case the Committee shall determine which of the other methods described in this Section 8 or in the Program shall be used to satisfy the applicable withholding obligations.

7

Performance-Vested Restricted Stock Unit Agreement (2019)


9

No Right to Continued Employment. This Agreement and the Employee’s participation in the Program do not and shall not be interpreted to:

(A)

form an employment contract or relationship with the Company or its Subsidiaries;

(B)

confer upon the Employee any right to continue in the employ of the Company or any of its Subsidiaries; ou

(c)

interfere with the ability of the Company or its Subsidiaries to terminate the Employee’s employment at any time.

10.

Nature of Grant. In accepting this Award, the Employee acknowledges and agrees that:

(A)

the Program is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(B)

this Award is a one-time benefit and does not create any contractual or other right to receive future grants of Units, benefits in lieu of Units, or other Program Benefits in the future, even if Units have been granted repeatedly in the past;

(c)

all decisions with respect to future Unit grants, if any, and their terms and conditions, will be made by the Company, in its sole discretion;

(d)

nothing contained in this Agreement is intended to create or enlarge any other contractual obligations between the Company and the Employee;

(e)

the Employee is voluntarily participating in the Program;

(f)

the Units and Shares subject to the Units are:

(i)

extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or its Subsidiaries, and are outside the scope of the Employee’s employment contract, if any;

(ii)

not intended to replace any pension rights or compensation;

(iii)

not part of the Employee’s normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as compensation for, or relating in any way to, past services for the Company or any of its Subsidiaries;

(g)

the future value of the Shares underlying the Units is unknown and cannot be predicted with certainty;

(h)

in consideration of the Award, no claim or entitlement to compensation or damages shall arise from the Units resulting from Termination (for any reason whatsoever) and the Employee irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if any such claim is found by a court of competent jurisdiction to have arisen, then, by signing or electronically accepting this Agreement, the Employee shall be deemed irrevocably to have waived the Employee’s entitlement to pursue such claim;

(i)

the Units and the Benefits under the Program, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability; et

8

Performance-Vested Restricted Stock Unit Agreement (2019)


(j)

neither the Company nor any of its Subsidiaries shall be liable for any change in value of the Units, the amount realized upon settlement of the Units or the amount realized upon a subsequent sale of any Shares acquired upon settlement of the Units, resulting from any fluctuation of the United States Dollar/local currency foreign exchange rate.

(A)

Pursuant to applicable personal data protection laws, the collection, processing and transfer of the Employee’s personal Data is necessary for the Company’s administration of the Program and the Employee’s participation in the Program. The Employee’s denial and/or objection to the collection, processing and transfer of personal Data may affect his or her ability to participate in the Program. As such (where required under applicable law), the Employee:

(i)

voluntarily acknowledges, consents and agrees to the collection, use, processing and transfer of personal Data as described herein; et

(ii)

authorizes Data recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Employee’s participation in the Program, including any requisite transfer of such Data as may be required for the administration of the Program and/or the subsequent holding of Shares on the Employee’s behalf to a broker or other third party with whom the Employee may elect to deposit any Shares acquired pursuant to the Program.

(B)

Data may be provided by the Employee or collected, where lawful, from third parties, and the Company and the Subsidiary that employs the Employee (if applicable) will process the Data for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Program. Data processing will take place through electronic and non-electronic means according to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Employee’s country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Program and for the Employee’s participation in the Program.

(c)

The Company and the Subsidiary that employs the Employee (if applicable) will transfer Data as necessary for the purpose of implementation, administration and management of the Employee’s participation in the Program, and the Company and the Subsidiary that employs the Employee (if applicable) may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Program. These recipients may be located throughout the world.

(d)

The Employee may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to:

(i)

obtain confirmation as to the existence of the Data;

(ii)

verify the content, origin and accuracy of the Data;

(iii)

request the integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data; et

9

Performance-Vested Restricted Stock Unit Agreement (2019)


(iv)

oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Program and the Employee’s participation in the Program.

The Employee may seek to exercise these rights by contacting his or her local human resources manager.

(e)

Upon request of the Company or the Subsidiary that employs the Employee, the Employee agrees to provide an executed data privacy consent form (or any other agreement or consent that may be required by the Company and/or the Subsidiary that employs the Employee) to the Company and/or the Subsidiary that employs the Employee that the Company and/or the Subsidiary that employs the Employee may deem necessary to obtain from the Employee for the purpose of administering his or her participation in the Program in compliance with the data privacy laws in the Employee’s country, either now or in the future. The Employee understands and agrees that he or she will not be able to participate in the Program if the Employee fails to provide any such requested consent or agreement.

12

Form of Payment. The Company may, in its sole discretion, settle the Employee’s Units in the form of a cash payment to the extent settlement in Shares: (a) is prohibited under local law; (b) would require the Employee, the Company and/or its Subsidiaries to obtain the approval of any governmental and/or regulatory body in the Employee’s country; (c) would result in adverse tax consequences for the Employee or the Company; or (d) is administratively burdensome. Alternatively, the Company may, in its sole discretion, settle the Employee’s Units in the form of Shares but require the Employee to sell such Shares immediately or within a specified period of time following the Employee’s Termination (in which case, this Agreement shall give the Company the authority to issue sales instructions on the Employee’s behalf).

13

Private Placement. This Award is not intended to be a public offering of securities in the Employee’s country. The Company has not submitted any registration statement, prospectus or other filings with the local securities authorities (unless otherwise required under local law), and this Award is not subject to the supervision of the local securities authorities.

14

Exchange Controls. As a condition to this Award, the Employee agrees to comply with any applicable foreign exchange rules and regulations.

15

Compliance with Applicable Laws and Regulations.

(A)

The Company shall not be required to issue or deliver any Shares pursuant to this Agreement pending compliance with all applicable federal and state securities and other laws (including any registration requirements or tax withholding requirements) and compliance with the rules and practices of any stock exchange upon which the Company’s Shares are listed.

(B)

Regardless of any action the Company or its Subsidiaries take with respect to any or all income tax, social insurance, payroll tax, payment on account or other tax-related items related to the Employee’s participation in the Program and legally applicable to the Employee or deemed by the Company or its Subsidiaries to be an appropriate charge to the Employee even if technically due by the Company or its Subsidiaries (“Tax-Related Items”), the Employee acknowledges that the ultimate liability for all Tax-Related Items is and remains the Employee’s responsibility and may exceed the amount actually withheld by the Company or its Subsidiaries, if any. The Employee further acknowledges

10

Performance-Vested Restricted Stock Unit Agreement (2019)


that the Company and/or its Subsidiaries: (i) make no representations or undertakings regarding the treatment of any Tax-Related Items in connection with any aspect of the Units, including, but not limited to, the grant, lapse of Restrictions or settlement of the Units, the issuance of Shares upon payment of the Units, the subsequent sale of Shares acquired pursuant to such issuance and the receipt of any dividends and/or Dividend Equivalents; and (ii) do not commit to and are under no obligation to structure the terms of the grant or any aspect of the Units to reduce or eliminate the Employee’s liability for Tax-Related Items or achieve any particular tax result. If the Employee has become subject to tax in more than one jurisdiction between the date of grant and the date of any relevant taxable event, the Employee acknowledges that the Company and/or its Subsidiaries may be required to withhold or account for Tax-Related Items in more than one jurisdiction. If the Employee relocates to another country, the Company may establish special or alternative terms and conditions as necessary or advisable to comply with local laws, rules or regulations, to facilitate the operation and administration of the Award and the Program and/or to accommodate the Employee’s relocation.

(c)

The Employee acknowledges that, depending on the Employee’s or the broker’s country of residence or where the Shares are listed, the Employee may be subject to insider trading restrictions and/or market abuse laws which may affect his or her ability to accept, acquire, sell or otherwise dispose of Shares, rights to Shares (e.g., Units) or rights linked to the value of Shares during such times the Employee is considered to have “inside information” regarding the Company as defined in the laws or regulations in his or her country. Local insider trading laws and regulations may prohibit the cancellation or amendment of orders the Employee placed before he or she possessed inside information. Furthermore, the Employee could be prohibited from (i) disclosing the inside information to any third party (other than on a “need to know” basis) and (ii) “tipping” third parties or causing them otherwise to buy or sell securities. The Employee understands that third parties may include fellow employees. Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable Company insider trading policy. The Employee acknowledges that it is the Employee’s responsibility to comply with any restrictions and the Employee is advised to speak to his or her personal legal advisor on this matter.

16

Code Section 409A. Payments made pursuant to this Agreement are intended to be exempt from or otherwise to comply with the provisions of Code Section 409A to the extent applicable. The Program and this Agreement shall be administered and interpreted in a manner consistent with this intent. If the Company determines that any payments under this Agreement are subject to Code Section 409A and this Agreement fails to comply with that section’s requirements, the Company may, at the Company’s sole discretion, and without the Employee’s consent, amend this Agreement to cause it to comply with Code Section 409A or otherwise be exempt from Code Section 409A.

To the extent required to avoid accelerated taxation and/or tax penalties under Code Section 409A and applicable guidance issued thereunder, the Employee shall not be deemed to have had a Termination unless the Employee has incurred a “separation from service” as defined in Treasury Regulation §1.409A-1(h), and amounts that would otherwise be payable pursuant to this Agreement during the six-month period immediately following the Employee’s Termination (including Retirement) shall instead be paid on the first business day after the date that is six months following the Employee’s Termination (or upon the Employee’s death, if earlier). For purposes of Code Section 409A, to the extent applicable: (a) all payments provided hereunder shall be treated as a right to a series of separate payments and each separately identified amount

11

Performance-Vested Restricted Stock Unit Agreement (2019)


to which the Employee is entitled under this Agreement shall be treated as a separate payment; (b) except as otherwise provided in Section 13(a) of the Program, upon the lapse of Restrictions pursuant to Section 5 of this Agreement, any Units not previously settled on a Delivery Date shall be settled as soon as administratively possible after, and effective as of, the date of the Change in Control or the date of the Employee’s Termination (as applicable); (c) the term “as soon as administratively possible” means a period of time that is within 60 days after the Termination, Disability or Change in Control (as applicable); and (d) the date of the Employee’s Disability shall be determined by the Company in its sole discretion.

Although this Agreement and the payments provided hereunder are intended to be exempt from or to otherwise comply with the requirements of Code Section 409A, the Company does not represent or warrant that this Agreement or the payments provided hereunder will comply with Code Section 409A or any other provision of federal, state, local, or non-United States law. None of the Company, its Subsidiaries, or their respective directors, officers, employees or advisors shall be liable to the Employee (or any other individual claiming a benefit through the Employee) for any tax, interest, or penalties the Employee may owe as a result of compensation paid under this Agreement, and the Company and its Subsidiaries shall have no obligation to indemnify or otherwise protect the Employee from the obligation to pay any taxes pursuant to Code Section 409A.

17

No Advice Regarding Grant. The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding the Award, the Employee’s participation in the Program or the Employee’s acquisition or sale of the underlying Shares. The Employee is hereby advised to consult with the Employee’s own personal tax, legal and financial advisors regarding participation in the Program before taking any action related to the Program.

18

Imposition of Other Requirements. The Company reserves the right to impose other requirements on the Employee’s participation in the Program, on the Units and on any Shares acquired under the Program, to the extent the Company or any Subsidiary determines it is necessary or advisable to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Units and the Program, and to require the Employee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing. The Employee agrees to take any and all actions, and consents to any and all actions taken by the Company and its Subsidiaries, as may be required to allow the Company and its Subsidiaries to comply with local laws, rules and regulations in the Employee’s country. In addition, the Employee agrees to take any and all actions as may be required to comply with the Employee’s personal obligations under local laws, rules and regulations in the Employee’s country.

19

Determinations. Each decision, determination, interpretation or other action made or taken pursuant to the provisions of this Agreement by the Company, the Committee or any delegate of the Committee shall be final, conclusive and binding for all purposes and upon all persons, including, without limitation, the Company, the Employee, the Employee’s Representative, and the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution.

20

Electronic Delivery. The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Program by electronic means. The Employee hereby consents to receive such documents by electronic delivery and agrees to participate in the Program through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.

12

Performance-Vested Restricted Stock Unit Agreement (2019)


21

Addendum. This Award shall be subject to any special terms and conditions set forth in any Addendum to this Agreement for the Employee’s country or jurisdiction. Moreover, if the Employee relocates to one of the countries or jurisdictions included in the Addendum, the special terms and conditions for such country or jurisdiction will apply to the Employee, to the extent the Company determines that the application of such terms and conditions is necessary or advisable in order to comply with local laws, rules and/or regulations or facilitate the operation and administration of the Units and the Program (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate the Employee’s relocation). The Addendum constitutes part of this Agreement.

22

Severability. The invalidity or unenforceability of any provision of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, and each other provision of this Agreement shall be severable and enforceable to the extent permitted by law. To the extent a court or tribunal of competent jurisdiction determines that any provision of this Agreement is invalid or unenforceable, in whole or in part, the Company, in its sole discretion, shall have the power and authority to revise or strike such provision to the minimum extent necessary to make it valid and enforceable to the full extent permitted under local law.

23

Entire Agreement. This Agreement and the Program constitute the entire agreement between the Employee and the Company regarding the Award and supersede all prior and contemporaneous agreements and understandings, oral or written, between the parties regarding the Award. Except as expressly set forth herein, this Agreement (and any provision of this Agreement) may not be modified, changed or clarified by the parties, except in a writing specifying the modification, change or clarification signed by a duly authorized Company officer.

24

Succession. This Agreement shall be binding upon and operate for the benefit of the Company and its successors and assigns, and the Employee, the Employee’s Representative, and the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution.

25

Language. If the Employee has received this Agreement or any other document related to the Program translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.

26

Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Delaware without giving effect to any state’s conflict of laws principles.

*    *    *

IN WITNESS WHEREOF, the parties have caused this Agreement to be signed on their behalf.

ABBVIE INC.

By

Title

13

Performance-Vested Restricted Stock Unit Agreement (2019)


EMPLOYEE

par: SIGNED BY ELECTRONIC SIGNATURE

BY ELECTRONICALLY ACCEPTING THE AWARD, THE EMPLOYEE AGREES THAT (1) SUCH ACCEPTANCE CONSTITUTES THE EMPLOYEE’S ELECTRONIC SIGNATURE IN EXECUTION OF THIS AGREEMENT; (2) THE EMPLOYEE AGREES TO BE BOUND BY THE PROVISIONS OF THE PROGRAM, THE AGREEMENT AND THE ADDENDUM; (3) THE EMPLOYEE HAS REVIEWED THE PROGRAM, THE AGREEMENT AND THE ADDENDUM IN THEIR ENTIRETY, HAS HAD AN OPPORTUNITY TO OBTAIN THE ADVICE OF COUNSEL PRIOR TO ACCEPTING THE AWARD AND FULLY UNDERSTANDS ALL OF THE PROVISIONS OF THE PROGRAM, THE AGREEMENT AND THE ADDENDUM; (4) THE EMPLOYEE HAS BEEN PROVIDED WITH A COPY OR ELECTRONIC ACCESS TO A COPY OF THE U.S. PROSPECTUS FOR THE PROGRAM; AND (5) THE EMPLOYEE HEREBY AGREES TO ACCEPT AS BINDING, CONCLUSIVE AND FINAL ALL DECISIONS OR INTERPRETATIONS OF THE COMMITTEE OR ITS DULY AUTHORIZED DELEGATE ON ANY QUESTIONS ARISING UNDER THE PROGRAM, THE AGREEMENT AND THE ADDENDUM.

14

Performance-Vested Restricted Stock Unit Agreement (2019)


SCHEDULE

PERFORMANCE PERIODS AND PERFORMANCE VESTING REQUIREMENTS

Any capitalized term used but not defined in this Schedule has the meaning set forth in the Agreement or the Program. This Schedule is subject to, and is to be interpreted in combination with, all of the terms and conditions of the Agreement and the Program.

Award Tranches and Performance Periods

The Award is subject to vesting in one-third increments over three years with each vesting tranche tied to the Company’s return on equity (“ROE”) performance for the applicable year (2019, 2020 or 2021), as described in the Agreement and the Performance Vesting Requirements section below. The vesting tranches and corresponding Performance Periods are as follows:

Vesting Tranche

Units Subject to Vesting

Performance Period

Tranche 1

1/3 of Units

January 1-December 31, 2019

Tranche 2

1/3 of Units

January 1-December 31, 2020

Tranche 3

1/3 of Units

January 1-December 31, 2021

Performance Vesting Requirements

The vesting for each tranche will be determined based on the Company’s ROE for the applicable Performance Period relative to the ROE for that period of the companies (other than the Company) that were constituents of either the S&P Pharmaceutical, Biotech, and Life Science Index or the NYSE Arca Pharmaceutical Index on January 1, 2019 and on the last day of the applicable Performance Period (the “Index Companies”).

Within sixty-five (65) days after the end of each Performance Period, the Committee will determine the Company’s relative ROE percentile rank for the applicable Performance Period. For purposes of determining Performance Period ROE results, ROE means non-GAAP (or equivalent) ROE measured using the annual results disclosed in each company’s earnings release issued most recently prior to the Performance Determination Date. If an Index Company has not issued its annual earnings release prior to the Performance Determination Date, then its results shall be based on the most currently available four quarters of financial information.

The Company’s relative ROE percentile rank for the applicable Performance Period determines the vesting percentage for the Units covered by the applicable tranche, such that:

a.

A ranking at or above the 90th percentile results in vesting at 150% of target level;

b.

A ranking from the 75th percentile up to the 90th percentile results in vesting at target level;

c.

A ranking from the 50th percentile up to the 75th percentile results in vesting at 50% of target level; et

d.

A ranking below the 50th percentile results in 0% vesting.

The vesting percentage derived from the ranking determination will be multiplied by the number of Units covered by the applicable tranche, yielding the number of Shares deliverable under the Agreement as a result of the application of the Performance Vesting Requirements for the applicable Performance Period.

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Performance-Vested Restricted Stock Unit Agreement (2019)


ADDENDUM

In addition to the terms and conditions set forth in the Agreement, the Award is subject to the following terms and conditions. If the Employee is employed in a country or jurisdiction identified in this Addendum, the additional terms and conditions for such country or jurisdiction will apply. If the Employee relocates to one of the countries or jurisdictions identified in this Addendum, the special terms and conditions for such country or jurisdiction will apply to the Employee, to the extent the Company determines, in its sole discretion, that the application of such terms and conditions is necessary or advisable to comply with local laws, rules and/or regulations or to facilitate the operation and administration of the Units and the Program (or the Company may establish alternative terms and conditions as may be necessary or advisable to accommodate the Employee’s relocation).

All defined terms contained in this Addendum shall have the same meaning as set forth in the Program.

EUROPEAN UNION (“EU”) / EUROPEAN ECONOMIC AREA (“EEA”)

Data Privacy. The following provision replaces Section 11 of the Agreement in its entirety:

Pursuant to applicable personal data protection laws, the Employee is hereby notified of the following in relation to the Employee’s Personal Data (defined below) and the collection, processing and transfer in electronic or other form of such Personal Data in relation to the administration of the Program. The collection, processing and transfer of Personal Data is necessary for the legitimate purpose of the administration of the Program by the Company and the Subsidiary that employs the Employee and the Employee’s participation in the Program, and the Employee’s denial and/or objection to the collection, processing and transfer of Personal Data may affect his or her participation in the Program. As such, by participating in the Program, the Employee acknowledges the collection, use, processing and transfer of Personal Data as described herein.

The Employee understands that the Company and the Subsidiary that employs the Employee may hold certain personally identifiable information about the Employee, specifically his or her name, home address, email address and telephone number, date of birth, social security, passport or other identification number (resident registration number), salary, nationality, job title, any Shares or directorships held in the Company or its Subsidiaries, details of all entitlements to Shares (or cash) granted, awarded, canceled, vested, unvested or outstanding in the Employee’s favor, for the purpose of managing and administering the Program (“Personal Data”). The Personal Data may be provided by the Employee or collected, where lawful, from third parties. The Company or the Subsidiary that employs the Employee each act as controllers of the Personal Data and will process the Personal Data in this context for the exclusive legitimate purpose of implementing, administering and managing the Employee’s participation in the Program and meeting related legal obligations associated with these actions.

The processing will take place through electronic and non-electronic means according to logics and procedures correlated to the purposes for which the Personal Data was collected and with confidentiality and security provisions as set forth by applicable laws and regulations. Personal Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Program and other aspects of the employment relationship and for the Employee’s participation in the Program.

The Company and the Subsidiary that employs the Employee will transfer Personal Data amongst themselves and their affiliates as necessary for the purpose of implementation, administration and management of the Employee’s participation in the Program, and the Company and the Subsidiary that employs the Employee may each further transfer Personal Data to third parties assisting the Company or the Subsidiary that employs the Employer in the implementation, administration and management of the Program, including E*TRADE Financial Corporate Services Inc. and its affiliates (“E*TRADE”) or any successor or other third party that the Company, the Subsidiary that employs the Employee or E*TRADE (or its successor) may engage to assist with the administration of the Program from time to time. These recipients may be located in the EEA, or elsewhere throughout the world, such as the United States. By participating in the Program, the Employee understand that these recipients may receive, possess, use, retain and transfer the Personal Data, in electronic or other form, for purposes of implementing, administering and managing the Employee’s participation in the Program, including any requisite transfer of such Personal Data as may be required

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Performance-Vested Restricted Stock Unit Agreement (2019)


for the administration of the Program and/or the subsequent holding of Shares on the Employee’s behalf to a broker or other third party with whom the Employee may elect to deposit any Shares acquired pursuant to the Program. The Employee further understands that he or she may request a list with the names and addresses of any potential recipients of Personal Data by contacting the Employee’s local Human Resources manager or AbbVie’s Human Resources Department. When transferring Personal Data to these potential recipients, the Company and the Subsidiary that employs the Employee may provide appropriate safeguards in accordance with EU Standard Contractual Clauses, or other legally binding and permissible arrangements. The Employee may request a copy of such safeguards from the Employee’s local Human Resources manager or AbbVie’s Human Resources Department.

To the extent provided by law, the Employee may, at any time, have the right to request: access to Personal Data, rectification of Personal Data, erasure of Personal Data, restriction of processing of Personal Data, and portability of Personal Data. The Employee may also have the right to object, on grounds related to a particular situation, to the processing of Personal Data, in any case without cost, by contacting in writing the Employee’s local Human Resources manager or AbbVie’s Human Resources Department. The Employee understands, however, that the only consequence of refusing to provide Personal Data is that the Company may not be able to grant the Units or other equity awards or administer or maintain such awards.

When the Company and the Subsidiary that employs the Employee no longer need to use Personal Data for the purposes above or do not need to retain it for compliance with any legal or regulatory purpose, each will take reasonable steps to remove Personal Data from their systems and/or records containing the Personal Data and/or take steps to properly anonymize it so that the Employee can no longer be identified from it.

ALGERIA

Settlement in Cash. Notwithstanding Section 4 of the Agreement or any other provision in the Agreement to the contrary, pursuant to Section 12 of the Agreement, the Units will be settled in the form of a cash payment, except as otherwise determined by the Company.

AUSTRALIA

premier Breach of Law. Notwithstanding anything to the contrary in the Agreement or the Program, the Employee will not be entitled to, and shall not claim any benefit (including without limitation a legal right) under the Program if the provision of such benefit would give rise to a breach of Part 2D.2 of the Corporations Act 2001 (Cth), any other provision of that Act, or any other applicable statute, rule or regulation which limits or restricts the giving of such benefits.

deuxième Australian Offer Document. In addition to the Agreement and the Program, the Employee must review the Australian Offer Document for additional important information pertaining to the Award. This document can be accessed via the E*TRADE website at https://us.etrade.com/stock-plans. By accepting the Award, the Employee acknowledges and confirms that the Employee has reviewed the Australian Offer Document.

troisième Tax Information. The Program is a program to which Subdivision 83A-C of the Income Tax Assessment Act 1997 (Cth) (the “loi”) applies (subject to the conditions in that Act).

BAHRAIN

Securities Notification. This Agreement does not constitute advertising or an offering of securities in Bahrain, nor does it constitute an allotment of securities in Bahrain. Any Shares issued pursuant to the Units under the Program shall be deposited into a brokerage account in the United States. In no event will Shares be issued or delivered in Bahrain. The issuance of Shares pursuant to the Units described herein has not and will not be registered in Bahrain and hence, the Shares described herein may not be admitted or used for offering, placement or public circulation in Bahrain. Accordingly, the Employee may not make any public advertising or announcements regarding the Units or Shares in Bahrain, promote these Shares to legal entities or individuals in Bahrain, or sell Shares directly to other legal entities or individuals in Bahrain. The Employee acknowledges and agrees that Shares may only be sold outside of Bahrain and on a stock exchange on which AbbVie is traded.

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Performance-Vested Restricted Stock Unit Agreement (2019)


BRAZIL

Labor Law Acknowledgment. The Employee agrees, for all legal purposes, (i) the Benefits provided under the Agreement and the Program are the result of commercial transactions unrelated to the Employee’s employment; (ii) the Agreement and the Program are not a part of the terms and conditions of the Employee’s employment; and (iii) the income from the Units, if any, is not part of the Employee’s remuneration from employment.

CANADA

premier Settlement in Shares. Notwithstanding anything to the contrary in the Agreement, Addendum or the Program, the Employee’s Award shall be settled only in Shares (and may not be settled in cash).

deuxième Resale Restriction. The Employee is permitted to sell Shares acquired upon settlement of the Units through the designated broker appointed under the Program, provided the resale of Shares acquired under the Program takes place outside of Canada through the facilities of the stock exchange on which the Shares are listed. The Shares are currently listed on the New York Stock Exchange.

troisième English Language. The parties to the Agreement acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties reconnaissent avoir exigé la rédaction en anglais de la présente convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaires intentées, directement ou indirectement, relativement à ou suite à la présente convention.

4 Data Privacy. The following provision supplements Section 11 of the Agreement:

The Employee hereby authorizes the Company and the Company’s representatives to discuss with and obtain all relevant information from all personnel, professional or not, involved in the administration and operations of the Program. The Employee further authorizes the Company and any of its Subsidiaries to disclose and discuss the Program with their advisors. The Employee further authorizes the Company and any of its Subsidiaries to record such information and to keep such information in the Employee’s employee file.

CHILE

Private Placement. The following provision shall replace Section 13 of the Agreement:

The grant of the Units hereunder is not intended to be a public offering of securities in Chile but instead is intended to be a private placement.

a)

The starting date of the offer will be the Grant Date (as defined in the Agreement), and this offer conforms to General Ruling no. 336 of the Chilean Commission for the Financial Market;

b)

The offer deals with securities not registered in the registry of securities or in the registry of foreign securities of the Chilean Commission for the Financial Market, and therefore such securities are not subject to its oversight;

c)

The issuer is not obligated to provide public information in Chile regarding the foreign securities, as such securities are not registered with the Chilean Commission for the Financial Market; et

d)

The foreign securities shall not be subject to public offering as long as they are not registered with the corresponding registry of securities in Chile.

a)

La fecha de inicio de la oferta será el de la fecha de otorgamiento (o “Grant Date”, según este término se define en el documento denominado “Agreement”) y esta oferta se acoge a la norma de Carácter General n° 336 de la Comisión para el Mercado Financiero Chilena;

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Performance-Vested Restricted Stock Unit Agreement (2019)


b)

La oferta versa sobre valores no inscritos en el registro de valores o en el registro de valores extranjeros que lleva la Comisión para el Mercado Financiero Chilena, por lo que tales valores no están sujetos a la fiscalización de ésta;

c)

Por tratar de valores no inscritos no existe la obligación por parte del emisor de entregar en chile información pública respecto de esos valores; y

d)

Esos valores no podrán ser objeto de oferta pública mientras no sean inscritos en el registro de valores correspondiente.

CHINA

Foreign Exchange Control Laws. The following provisions shall govern the Employee’s participation in the Program if the Employee is a national of the People’s Republic of China (“Chine”) resident in mainland China, or if determined to be necessary or appropriate by the Company in its sole discretion:

The Employee agrees to hold the Shares received upon settlement of the Units with the Company’s designated broker. Upon a Termination, the Employee shall be required to sell all Shares issued pursuant to the Units within 180 days (or such shorter period as may be required by the State Administration of Foreign Exchange or the Company) of the Termination date and repatriate the sales proceeds to China in the manner designated by the Company. For purposes of the foregoing, the Company shall establish procedures for effectuating the forced sale of the Shares (including procedures whereby the Company may issue sale instructions on behalf of the Employee), and the Employee hereby agrees to comply with such procedures and take any and all actions as the Company determines, in its sole discretion, are necessary or advisable for purposes of complying with local laws, rules and regulations in China.

The Employee understands and agrees that the repatriation of dividends and sales proceeds may need to be effected through a special exchange control account established by the Company or its Subsidiaries, and the Employee hereby consents and agrees that dividends issued on Shares and sales proceeds from the sale of Shares acquired under the Program may be transferred to such account by the Company on the Employee’s behalf prior to being delivered to the Employee. Dividends and/or sales proceeds may be paid to the Employee in U.S. dollars or local currency at the Company’s discretion. If dividends and/or sales proceeds are paid to the Employee in U.S. dollars, the Employee understands that the Employee will be required to set up a U.S. dollar bank account in China so that the dividends or proceeds may be deposited into this account. If dividends and/or sales proceeds are paid to the Employee in local currency, the Employee acknowledges that the Company is under no obligation to secure any particular exchange conversion rate and that the Company may face delays in converting the dividends and/or proceeds to local currency due to exchange control restrictions. The Employee agrees to bear any currency fluctuation risk between the time dividends are issued or Shares are sold and the net proceeds are converted into local currency and distributed to the Employee. The Employee further agrees to comply with any other requirements that may be imposed by the Company or its Subsidiaries in China in the future in order to facilitate compliance with exchange control requirements in China. The Employee acknowledges and agrees that the processes and requirements set forth herein shall continue to apply following the Employee’s Termination.

Neither the Company nor any of its Subsidiaries shall be liable for any costs, fees, lost interest or dividends or other losses the Employee may incur or suffer resulting from the enforcement of the terms of this Addendum or otherwise from the Company’s operation and enforcement of the Program, the Agreement and the Units in accordance with Chinese law including, without limitation, any applicable State Administration of Foreign Exchange rules, regulations and requirements.

DENMARK

The Act on Stock Options. Notwithstanding any provisions in the Agreement to the contrary, the treatment of the Units upon the Employee’s Termination shall be governed by the Danish Act on the Use of Rights to Purchase or Subscribe for Shares etc. in Employment Relationships (the “Stock Option Act”) as in effect at the time of the Employee’s Termination (as determined by the Company, in its discretion, in consultation with legal counsel). The Employee

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Performance-Vested Restricted Stock Unit Agreement (2019)


acknowledges having received an “Employer Information Statement” in Danish, which is provided to comply with the Stock Option Act.

FINLAND

Withholding of Tax-Related Items. Notwithstanding Section 8 of the Agreement, if the Employee is a local national of Finland, any Tax-Related Items shall be withheld only in cash from the Employee’s regular salary/wages or other amounts payable to the Employee in cash, or such other withholding methods as may be permitted under the Program and allowed under local law.

FRANCE

premier Nature of the Award. The Units are not granted under the French specific regime provided by Articles L225-197-1 and seq. of the French commercial code.

deuxième English Language. The parties to the Agreement acknowledge that it is their express wish that the Agreement, as well as all documents, notices and legal proceedings entered into, given or instituted pursuant hereto or relating directly or indirectly hereto, be drawn up in English. Les parties reconnaissent avoir exigé la rédaction en anglais de la présente convention, ainsi que de tous documents exécutés, avis donnés et procédures judiciaires intentées, directement ou indirectement, relativement à ou suite à la présente convention.

HONG KONG

premier Settlement in Shares. Notwithstanding anything to the contrary in the Agreement, Addendum or the Program, the Award shall be settled only in Shares (and may not be settled in cash).

deuxième Lapse of Restrictions. If, for any reason, Shares are issued to the Employee within six months of the Grant Date, the Employee agrees that he or she will not sell or otherwise dispose of any such Shares prior to the six-month anniversary of the Grant Date.

troisième IMPORTANT NOTICE. WARNING: The contents of the Agreement, the Addendum, the Program, and all other materials pertaining to the Units and/or the Program have not been reviewed by any regulatory authority in Hong Kong. The Employee is hereby advised to exercise caution in relation to the offer thereunder. If the Employee has any doubts about any of the contents of the aforesaid materials, the Employee should obtain independent professional advice.

4 Wages. The Units and Shares subject to the Units do not form part of the Employee’s wages for the purposes of calculating any statutory or contractual payments under Hong Kong law.

ISRAEL

Trustee Arrangement. The Employee agrees to hold the Shares received upon settlement of the Units with the Company’s designated broker. The Employee understands and agrees that upon the Employee’s sale of Shares, unless otherwise determined by the Company, (a) the repatriation of sales proceeds shall be effected through a trustee in Israel engaged by the Company (the “Trustee”), (b) the Trustee will withhold the requisite tax and other mandatory withholding (e.g., National Insurance payments) from the sales proceeds and (c) the Trustee will transfer the remaining sale proceeds (net of the requisite tax and other mandatory withholding) to the Employee. The Employee acknowledges and agrees that the process and requirements set forth herein shall continue to apply following the Employee’s Termination.

MEXICO

premier Commercial Relationship. The Employee expressly acknowledges that the Employee’s participation in the Program and the Company’s grant of the Award does not constitute an employment relationship between the Employee and the Company. The Employee has been granted the Award as a consequence of the commercial relationship between the Company and the Subsidiary in Mexico that employs the Employee, and the Company’s

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Performance-Vested Restricted Stock Unit Agreement (2019)


Subsidiary in Mexico is the Employee’s sole employer. Based on the foregoing: (a) the Employee expressly acknowledges that the Program and the benefits derived from participation in the Program do not establish any rights between the Employee and the Subsidiary in Mexico that employs the Employee; (b) the Program and the benefits derived from participation in the Program are not part of the employment conditions and/or benefits provided by the Subsidiary in Mexico that employs the Employee; and (c) any modifications or amendments of the Program or benefits granted thereunder by the Company, or a termination of the Program by the Company, shall not constitute a change or impairment of the terms and conditions of the Employee’s employment with the Subsidiary in Mexico that employs the Employee.

deuxième Extraordinary Item of Compensation. The Employee expressly recognizes and acknowledges that the Employee’s participation in the Program is a result of the discretionary and unilateral decision of the Company, as well as the Employee’s free and voluntary decision to participate in the Program in accordance with the terms and conditions of the Program, the Agreement and this Addendum. As such, the Employee acknowledges and agrees that the Company, in its sole discretion, may amend and/or discontinue the Employee’s participation in the Program at any time and without any liability. The value of the Units is an extraordinary item of compensation outside the scope of the Employee’s employment contract, if any. The Units are not part of the Employee’s regular or expected compensation for purposes of calculating any severance, resignation, redundancy, end of service payments, bonuses, long-service awards, pension or retirement benefits, or any similar payments, which are the exclusive obligations of the Company’s Subsidiary in Mexico that employs the Employee.

MOROCCO

Settlement in Cash. Notwithstanding Section 4 of the Agreement or any other provision in the Agreement to the contrary, pursuant to Section 12 of the Agreement, the Units will be settled in the form of a cash payment, except as otherwise determined by the Company.

NETHERLANDS

Waiver of Termination Rights. The Employee waives any and all rights to compensation or damages as a result of a Termination, insofar as those rights result or may result from: (a) the loss or diminution in value of such rights or entitlements under the Program; or (b) the Employee ceasing to have rights, or ceasing to be entitled to any Awards under the Program as a result of such Termination.

NEW ZEALAND

Securities Law Notice. The following securities notification applies for an offer of Units on or after December 1, 2016:

Figyelem

This is an offer of Units which, upon vesting and settlement in accordance with the terms of the Program and the Agreement, will be converted into Shares. Shares give you a stake in the ownership of AbbVie Inc. You may receive a return if dividends are paid.

If AbbVie Inc. runs into financial difficulties and is wound up, you will be paid only after all creditors and holders of preference shares have been paid. You may lose some or all of your investment.

New Zealand law normally requires people who offer financial products to give information to investors before they invest. This information is designed to help investors make an informed decision. The usual rules do not apply to this offer because it is made under an employee share purchase scheme. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

Ask questions, read all documents carefully, and seek independent financial advice before committing.

Prior to the vesting and settlement of the Units, you will not have any rights of ownership (e.g., voting rights) with respect to the underlying Shares.

No interest in any Units may be transferred (legally or beneficially), assigned, mortgaged, charged or encumbered.

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Performance-Vested Restricted Stock Unit Agreement (2019)


The Shares are quoted on the New York Stock Exchange. This means that if you acquire Shares under the Program, you may be able to sell them on the New York Stock Exchange if there are interested buyers. You may get less than you invested. The price will depend on the demand for the Shares.

You also are hereby notified that the documents listed below are available for review on sites at the web addresses listed below:

premier

AbbVie Inc.’s most recent Annual Report (Form 10-K): https://investors.abbvie.com/sec-filings.

deuxième

AbbVie Inc.’s most recent published financial statements (Form 10-Q or 10-K) and the auditor’s report on those financial statements:

https://investors.abbvie.com/sec-filings.

troisième

The AbbVie 2013 Incentive Stock Program: This document can be accessed in the library section of the E*TRADE website at https://us.etrade.com/stock-plans.

4

AbbVie 2013 Incentive Stock Program Prospectus: This document can be accessed in the library section of the E*TRADE website at https://us.etrade.com/stock-plans.

Copies of the documents listed above will be sent to you free of charge on written request to: Director, Equity Programs, AbbVie Inc., Dept. V58G, Bldg. AP34-2, 1 North Waukegan Road, North Chicago, IL 60064, USA.

ROMANIA

premier Termination. A Termination shall include the situation where the Employee’s employment contract is terminated by operation of law on the date the Employee reaches the standard retirement age and has completed the minimum contribution record for receipt of state retirement pension or the relevant authorities award the Employee an early-retirement pension of any type.

deuxième English Language. The Employee hereby expressly agrees that this Agreement, the Program as well as all documents, notices and proceedings entered into, relating directly or indirectly hereto, be drawn up or communicated only in the English language. Angajatul consimte în mod expres prin prezentul ca acest Contract, Programul precum şi orice alte documente, notificări, înştiinţări legate direct sau indirect de acest Contract să fie redactate sau efectuate doar în limba engleză.

RUSSIA

premier Sale or Transfer of Shares. Notwithstanding anything to the contrary in the Program or the Agreement, the Employee shall not be permitted to sell or otherwise dispose of the Shares acquired pursuant to the Award in Russia. The Employee may sell the Shares only through a broker established and operating outside Russia.

deuxième Repatriation Requirements. The Employee agrees to promptly repatriate proceeds resulting from the sale of Shares acquired under the Program to a foreign currency account at an authorized bank in Russia if legally required at the time Shares are sold and to comply with all applicable local foreign exchange rules and regulations. Neither the Company nor any of its Subsidiaries shall be liable for any fines or penalties resulting from the Employee’s failure to comply with applicable laws.

SINGAPORE

Qualifying Person Exemption. The grant of the Award under the Program is being made pursuant to the “Qualifying Person” exemption under section 273(1)(f) of the Securities and Futures Act (Chapter 289, 2006 Ed.) (the “SFA”). The Program has not been and will not be lodged or registered as a prospectus with the Monetary Authority of Singapore and is not regulated by any financial supervisory authority pursuant to any legislation in Singapore. Accordingly, statutory liability under the SFA in relation to the content of prospectuses would not apply. The Employee should note that, as a result, the Award is subject to section 257 of the SFA and the Employee will not be able to make: (a) any subsequent sale of the Shares underlying the Award in Singapore; or (b) any offer of such subsequent sale of the

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Performance-Vested Restricted Stock Unit Agreement (2019)


Shares subject to the Award in Singapore, unless such sale or offer is made pursuant to the exemptions under Part XIII Division 1 Subdivision (4) (other than section 280) of the SFA.

SOUTH AFRICA

premier Exchange Control Obligations. The Employee is solely responsible for complying with applicable exchange control regulations and rulings (the “Exchange Control Regulations”) in South Africa. As the Exchange Control Regulations change frequently and without notice, the Employee should consult the Employee’s legal advisor prior to the acquisition or sale of Shares under the Program to ensure compliance with current Exchange Control Regulations. Neither the Company nor any of its Subsidiaries shall be liable for any fines or penalties resulting from the Employee’s failure to comply with applicable laws, rules or regulations.

deuxième Securities Law Notice. In compliance with South African securities laws, the Employee acknowledges that the documents listed below are available for review at the web addresses listed below:

a.

AbbVie Inc.’s most recent Annual Report (Form 10-K): https://investors.abbvie.com/sec-filings.

b.

AbbVie 2013 Incentive Stock Program Prospectus: This document can be accessed in the library section of the E*TRADE website at https://us.etrade.com/stock-plans.

The Employee understands that a copy of the above documents will be sent to the Employee free of charge on written request to: Director, Equity Programs, AbbVie Inc., Dept. V58G, Bldg. AP34-2, 1 North Waukegan Road, North Chicago, IL 60064, USA.

The Employee is advised to carefully read the materials provided before making a decision whether to participate in the Program and to contact the Employee’s tax advisor for specific information concerning the Employee’s personal tax situation with regard to Program participation.

SPAIN

premier Acknowledgement of Discretionary Nature of the Program; No Vested Rights

By accepting the Award, the Employee consents to participation in the Program and acknowledges receipt of a copy of the Program.

The Employee understands that the Company has unilaterally, gratuitously and in its sole discretion granted Units under the Program to individuals who may be employees of the Company or its Subsidiaries throughout the world. The decision is a limited decision that is entered into upon the express assumption and condition that any grant will not economically or otherwise bind the Company or any of its Subsidiaries on an ongoing basis. Consequently, the Employee understands that the Units are granted on the assumption and condition that the Units and the Shares acquired upon settlement of the Units shall not become a part of any employment contract (either with the Company or any of its Subsidiaries) and shall not be considered a mandatory benefit, salary for any purposes (including severance compensation) or any other right whatsoever. In addition, the Employee understands that this grant would not be made to the Employee but for the assumptions and conditions referenced above; thus, the Employee acknowledges and freely accepts that should any or all of the assumptions be mistaken or should any of the conditions not be met for any reason the Award shall be null and void.

The Employee understands and agrees that, as a condition of the Award, unless otherwise provided in Section 4 of the Agreement, any unvested Units as of the date the Employee ceases active employment will be forfeited without entitlement to the underlying Shares or to any amount of indemnification in the event of Termination. The Employee acknowledges that the Employee has read and specifically accepts the conditions referred to in the Agreement regarding the impact of a Termination on the Units.

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Performance-Vested Restricted Stock Unit Agreement (2019)


deuxième Termination for Cause. Notwithstanding anything to the contrary in the Program or the Agreement, “Cause” shall be as defined as set forth in the Agreement, regardless of whether the Termination is considered a fair termination (i.e., “despido procedente”) under Spanish legislation.

TUNISIA

Settlement in Cash. Notwithstanding Section 4 of the Agreement or any other provision in the Agreement to the contrary, pursuant to Section 12 of the Agreement, the Units will be settled in the form of a cash payment, except as otherwise determined by the Company.

UKRAINE

Settlement in Cash. Notwithstanding Section 4 of the Agreement or any other provision in the Agreement to the contrary, pursuant to Section 12 of the Agreement, the Units will be settled in the form of a cash payment, except as otherwise determined by the Company.

UNITED KINGDOM

premier Withholding Taxes. Without limitation to Section 8 of the Agreement, the Employee hereby agrees that the Employee is liable for all Tax-Related Items and hereby covenants to pay all such Tax-Related Items, as and when requested by the Company or (if different) the Subsidiary that employs the Employee or by Her Majesty’s Revenue & Customs (“HMRC”) (or any other tax authority or any other relevant authority). The Employee also hereby agrees to indemnify and keep indemnified the Company and (if different) the Subsidiary that employs the Employee against any Tax-Related Items that they are required to pay or withhold on the Employee’s behalf or have paid or will pay on the Employee’s behalf to HMRC (or any other tax authority or any other relevant authority).

Notwithstanding the foregoing, if the Employee is a director or executive officer (as within the meaning of Section 13(k) of the U.S. Securities Exchange Act of 1934, as amended), the terms of the immediately foregoing provision will not apply. In the event that the Employee is a director or executive officer and income tax due is not collected from or paid by the Employee by within 90 days after the U.K. tax year in which an event giving rise to the indemnification described above occurs, the amount of any uncollected tax may constitute a benefit to the Employee on which additional income tax and national insurance contributions may be payable. The Employee acknowledges that the Employee ultimately will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company or the Subsidiary that employs the Employee (as applicable) for the value of any employee national insurance contributions due on this additional benefit, which the Company and/or the Subsidiary that employs the Employee may recover from the Employee at any time thereafter by any of the means referred to in Section 8 of the Agreement.

deuxième Exclusion of Claim. The Employee acknowledges and agrees that the Employee will have no entitlement to compensation or damages insofar as such entitlement arises or may arise from the Employee’s ceasing to have rights under or to be entitled to the Units, whether or not as a result of Termination (whether the Termination is in breach of contract or otherwise), or from the loss or diminution in value of the Units. Upon the grant of the Award, the Employee shall be deemed to have waived irrevocably any such entitlement.

VIETNAM

Settlement in Cash. Notwithstanding Section 4 of the Agreement or any other provision in the Agreement to the contrary, pursuant to Section 12 of the Agreement, the Units will be settled in the form of a cash payment, except as otherwise determined by the Company.

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Performance-Vested Restricted Stock Unit Agreement (2019)

ABBVIE INC.

PERFORMANCE SHARE AWARD AGREEMENT

On this «Grant_Day» day of «Grant_Month», 2019 (the “Grant Date”), AbbVie Inc. (the “Company”) hereby grants to «First Name» «MI» «Last Name» (the “Employee”) a Performance Share Award (the “Díj”) of «NoShares12345» performance share units (the “Units”). The actual number of shares of Company common stock (the “Shares”) that may be issued under this Award will be determined in accordance with this Agreement by reference to the number of Units set forth above.

The Award is granted under the Program and is subject to the provisions of the Program, the Program prospectus, the Program administrative rules, applicable Company policies, and the terms and conditions set forth in this Agreement. In the event of any inconsistency among the provisions of this Agreement, the provisions of the Program, the Program prospectus, and the Program administrative rules, the provisions of the Program shall control.

The terms and conditions of the Award are as follows:

premier

Definitions. To the extent not defined herein, capitalized terms shall have the same meaning as in the Program.

(A) Agreement: This Performance Share Award Agreement.

(B)

Cause: Unless otherwise defined in the Employee’s Change in Control Agreement, cause shall mean the following, as determined by the Company in its sole discretion:

(i)

material breach by the Employee of the terms and conditions of the Employee’s employment, including, but not limited to:

(A)

material breach by the Employee of the Code of Business Conduct;

(B)

material breach by the Employee of the Employee’s Employee Agreement or employment contract, if any;

(C)

commission by the Employee of an act of fraud, embezzlement or theft in connection with the Employee’s duties or in the course of the Employee’s employment;

(D)

wrongful disclosure by the Employee of secret processes or confidential information of the Company or any of its Subsidiaries; ou

(E)

failure by the Employee to substantially perform the duties of the Employee’s employment (other than any such failure resulting from the Employee’s Disability); ou

(ii)

to the extent permitted by applicable law, engagement by the Employee, directly or indirectly, for the benefit of the Employee or others, in any activity, employment or business which is competitive with the Company or any of its Subsidiaries.

(c)

Change in Control Agreement: An agreement regarding Change in Control in effect between the Company (or the Surviving Entity) and the Employee.

(d)

Code of Business Conduct: The Company’s Code of Business Conduct, as amended from time to time.

Performance Share Award (2019)


(e)

Controlled Group: AbbVie Inc. and any corporation, partnership and proprietorship under common control (as defined under the aggregation rules of Code Section 414 (b), (c), or (m)) with AbbVie Inc.

(f)

Adat: Certain personal information about the Employee held by the Company and the Subsidiary that employs the Employee (if applicable), including (but not limited to) the Employee’s name, home address and telephone number, email address, date of birth, social security, passport or other identification number, salary, nationality, job title, any Shares held in the Company, details of all Awards or any other entitlement to Shares awarded, canceled, purchased, vested, unvested or outstanding in the Employee’s favor, for the purpose of managing and administering the Program.

(g)

Disability: Sickness or accidental bodily injury, directly and independently of all other causes, that disables the Employee so that the Employee is completely prevented from performing all the duties of his or her occupation or employment.

(h)

Employee Agreement: The Employee Agreement entered into by and between the Company or a Subsidiary and the Employee as it may be amended from time to time.

(i)

Employee’s Representative: The Employee’s jogi guardian or other legal representative.

(j)

Good Reason: Unless otherwise defined in the Employee’s Change in Control Agreement, good reason shall mean the occurrence of any of the following circumstances without the Employee’s express written consent:

(i)

a significant adverse change in the nature, scope or status of the Employee’s position, authorities or duties from those in effect immediately prior to the Change in Control, including, without limitation, if the Employee was, immediately prior to the Change in Control, an officer of a public company, the Employee ceasing to be an officer of a public company;

(ii)

the failure by the Company or a Subsidiary to pay the Employee any portion of the Employee’s current compensation, or to pay the Employee any portion of any installment of deferred compensation under any deferred compensation program of the Company, within seven days of the date such compensation is due;

(iii)

a reduction in the Employee’s annual base salary (or a material change in the frequency of payment) as in effect immediately prior to the Change in Control as the same may be increased from time to time;

(iv)

the failure by the Company or a Subsidiary to award the Employee an annual bonus in any year which is at least equal to the annual bonus awarded to the Employee under the annual bonus plan of the Company or Subsidiary for the year immediately preceding the year of the Change in Control;

(v)

the failure by the Company to award the Employee equity-based incentive compensation (such as stock options, shares of restricted stock, restricted stock units, or other equity-based compensation) on a periodic basis consistent with the Company’s practices with respect to timing, value and terms prior to the Change in Control;

(vi)

the failure by the Company or a Subsidiary to continue to provide the Employee with the welfare benefits, fringe benefits and perquisites enjoyed by the Employee immediately prior to the Change in Control under any of the Company’s or Subsidiary’s plans or policies, including, but not limited to, those plans and policies providing pension, life insurance, medical, health and accident, disability and vacation;

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(vii)

the relocation of the Employee’s base office to a location that is more than 35 miles from the Employee’s base office immediately prior to the Change in Control; ou

(viii)

the failure of the Company to obtain a satisfactory agreement from any successor to the Company to assume and agree to perform this Agreement as contemplated in Section 5.

(k)

Performance Determination Date: The date on which the Committee determines whether or to what extent the Performance Vesting Requirements have been achieved.

(l)

Performance Period: The period(s) specified in the attached Schedule, over which achievement of the Performance Vesting Requirements is to be measured.

(m)

Performance Shares: The maximum number of Shares the Employee may receive under this Award based on the extent to which the Performance Vesting Requirements are achieved. In no event will the number of Performance Shares exceed 250% of the number of Units set forth in the first paragraph of this Agreement.

(n)

Performance Vesting Requirements: The performance goals described in the attached Schedule, which must be achieved for Units to vest and the corresponding Shares to be delivered under this Award.

(o)

Program: The AbbVie 2013 Incentive Stock Program.

(i)

Except as provided under (ii) or (iii) below, Retirement means either of the following:

age 55 with 10 years of service; ou

age 65 with at least three years of service.

(ii)

For Employees who (A) are not covered by (iii) below and (B) transferred to the Company directly from Abbott Laboratories either as a result of the Company’s spin-off from Abbott Laboratories or during the period from January 1, 2013 through June 30, 2015 with the consent of each company’s head of human resources and were hired into the Abbott Laboratories controlled group prior to January 1, 2004, Retirement means any of the following:

age 50 with 10 years of service;

age 65 with at least three years of service; ou

age 55 with an age and service combination of 70 points, where each year of age is one point and each year of service is one point.

(iii)

For participants in the AbbVie Pension Plan for Former BASF and Former Solvay Employees, Retirement means either of the following:

age 55 with 10 years of service; ou

age 65 with at least three years of service.

(iv)

For purposes of calculating service under this Section 1(p), except as otherwise provided by the Committee or its delegate: (A) service is earned only if performed for a member of the Controlled Group while that Controlled Group member is a part of the Controlled Group; and (B) for Employees who transferred to the Company directly from Abbott Laboratories during the period from January 1, 2013 through June 30, 2015 either as a result of the

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Company’s spin-off from Abbott Laboratories or with the consent of each company’s head of human resources, service includes service with Abbott Laboratories that is counted for benefit calculation purposes under the AbbVie Pension Plan, the AbbVie Pension Plan for Former BASF and Former Solvay Employees, or another Company-sponsored pension plan, as applicable.

(q)

Termination: A severance of employment for any reason (including Retirement) from the Company and all Subsidiaries. Any Termination shall be effective on the last day the Employee performs services for or on behalf of the Company or its Subsidiary, and employment shall not be extended by any statutory or common law notice of termination period.

deuxième

Delivery Dates and Shareholder Rights. The delivery dates for Shares issuable with respect to the Units are the respective dates on which the Shares are distributable to the Employee if the Units vest pursuant to Section 4 below (each a “Delivery Date”). Prior to the Delivery Date(s):

(A)

the Employee shall not be treated as a shareholder as to any Shares issuable under the Agreement, and shall have only a contractual right to receive Shares, unsecured by any assets of the Company or its Subsidiaries;

(B)

the Employee shall not be permitted to vote any Shares issuable under the Agreement; et

(c)

the Employee’s right to receive such Shares will be subject to the adjustment provisions relating to mergers, reorganizations, and similar events set forth in the Program.

Subject to the requirements of local law, if any dividend or other distribution is declared and paid on Shares (other than dividends or distributions of securities of the Company which may be issued with respect to its Shares by virtue of any stock split, combination, stock dividend or recapitalization) while any of the Units remain subject to this Award (meaning that any of the Shares into which Units would be converted are not otherwise issued and outstanding for purposes of the entitlement to the dividend or distribution), then a book account will be maintained for the Employee and credited with a phantom dividend that is equivalent to the actual dividend or distribution that would have been paid on the total number of Performance Shares that may be distributed under this Award if that number of Shares had been issued and outstanding and entitled to the dividend or distribution. As any Units vest under this Award, the phantom dividends credited to the book account that are attributable to the Shares issuable with respect to such Units will vest and be distributed to the Employee (in the form in which the actual dividend or distribution was paid to shareholders or in such other form as the Administrator deems appropriate under the circumstances) concurrently with the issuance of the Shares resulting from the Unit vesting. Any such distribution is subject to the Company’s collection of withholding taxes applicable to the distribution.

If fewer than all of the Performance Shares are earned as a result of the application of the vesting requirements or the forfeiture provisions of this Agreement or the Program, then the phantom dividends attributable to the unearned Shares will be cancelled and the Employee will cease to have any right or entitlement to receive any distribution or other amount with respect to such cancelled phantom dividends.

No phantom dividends will be paid or payable to or for the benefit of the Employee with respect to dividends or distributions for which the record date occurs on or after the date the Employee has forfeited the Units, or the date on which vested Units have been settled in Shares. For purposes of compliance with the requirements of Code Section 409A, to the extent applicable, the specified date for payment of any phantom dividend to which the Employee is entitled under this Section 2 is the calendar year in which the corresponding

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Shares vest and are distributed to the Employee. The Employee has no right to determine the year in which phantom dividends will be paid.

troisième

Restrictions. The Units (encompassing all of the Performance Shares) are subject to the forfeiture provisions in Sections 6 and 7 below. Shares are not earned and may not be sold, exchanged, assigned, transferred, pledged or otherwise disposed of (collectively, the “Restrictions”) until an event or combination of events described in subsections 4(a), (b), (c) or (d) or Section 5 occurs.

4

Vesting. The number of Shares that become issuable under this Award, as set forth in this Section 4 and subject to the provisions of Sections 5, 6 and 7 below, will be calculated based on the extent to which the Performance Vesting Requirements described in the attached Schedule are achieved. The Committee may equitably adjust the Performance Vesting Requirements described in the attached Schedule in recognition of unusual or non-recurring events affecting the Company or any Subsidiary or the financial statements of the Company or any Subsidiary, in response to changes in applicable laws or regulations, or to account for items of gain, loss or expense determined to be unusual in nature or infrequent in occurrence or related to the acquisition or disposal of a business or assets or related to a change in accounting principles.

(A)

Performance. If the Employee remains employed with the Company or its Subsidiaries as of the vesting date and has not experienced a Termination that triggers forfeiture, then the Units may be earned as described in the Schedule. The number of Shares deliverable as a result of Units being earned shall be determined in accordance with the Schedule. The Delivery Date for the Shares to be delivered as a result of Units being earned under this subsection (a) shall be no later than 75 days after the date of the applicable vesting event.

(B)

Retirement. In the event of the Employee’s Termination due to Retirement, the Award will remain in effect and any Units not previously vested may vest as set forth in subsection 4(a) above.

(c)

Death. In the event of the Employee’s Termination due to death, any Units not previously vested will vest and be settled (for the person or persons to whom rights under the Award have passed by will or the laws of descent or distribution) in the form of Shares as soon as administratively possible after, and effective as of, the date of death. The extent to which the Units vest, and the number of Shares to be delivered as a result, will be determined based on the greater of (A) performance through the date of Termination measured against the Performance Vesting Requirements set forth in the Schedule using, as applicable, adjusted earnings per share calculated through the most recent quarterly earnings release preceding or coinciding with the date of Termination and relative Total Shareholder Return (TSR) calculated as of the date of Termination, and (B) the target vesting level for the Award.

(d)

Disability. In the event of the Employee’s Termination due to Disability, any Units not previously vested will vest and be settled in the form of Shares as soon as administratively possible after, and effective as of, the date of Termination due to Disability. The extent to which the Units vest, and the number of Shares to be delivered as a result, will be determined based on the greater of (A) performance through the date of Termination measured against the Performance Vesting Requirements set forth in the Schedule using, as applicable, adjusted earnings per share calculated through the most recent quarterly earnings release preceding or coinciding with the date of Termination and relative TSR calculated as of the date of Termination, and (B) the target vesting level for the Award.

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Performance Share Award (2019)


5

Change in Control. In the event of a Change in Control, the entity surviving such Change in Control or the ultimate parent thereof (referred to herein as the “Surviving Entity”) may assume, convert or replace this Award with an award of at least equal value and terms and conditions not less favorable than the terms and conditions provided in this Agreement, in which case the new award will vest according to the terms of the applicable award agreement. If the Surviving Entity does not assume, convert or replace this Award, the Units will vest on the date of the Change in Control, as described below.

If the Surviving Entity does assume, convert or replace this Award, then in the event the Employee’s Termination (a) occurs within the time period beginning six months immediately before a Change in Control and ending two years immediately following such Change in Control, and (b) was initiated by the Company (or the Surviving Entity) for a reason other than Cause or was initiated by the Employee for Good Reason, the Units will vest on the later of the date of the Change in Control and the date of the Employee’s Termination (referred to herein as the “Applicable Vesting Date”).

The extent to which the Units vest, and the number of Shares to be delivered as a result, will be determined based on the greatest of (A) performance through the date of the Change in Control measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before or on the date of the Change in Control and relative TSR calculated immediately before the Change in Control; (B) performance through the date of the Termination measured against the Performance Vesting Requirements set forth in the Schedule using the most recent earnings information released before or on the date of the Termination and relative TSR calculated as of the date of Termination; and (C) the target vesting level for the Award.

The provisions of this Section 5 supersede Section 13(a)(iii), (iv) and (v) of the Program.

6

Effect of Certain Bad Acts. Any Units not previously settled will be cancelled and forfeited immediately if the Employee engages in activity that constitutes Cause, as determined in the sole opinion and discretion of the Committee or its delegate, whether or not the Employee experiences a Termination or remains employed with the Company or a Subsidiary.

7

Forfeiture of Units. In the event of the Employee’s Termination for any reason other than those set forth in subsections 4(b), (c) or (d) or Section 5, any Units that have not vested as of the date of Termination will be forfeited without consideration to the Employee or the Employee’s Representative. In the event that the Employee is terminated by the Company other than for Cause and in a situation not covered by Section 5, the Company may, in its sole discretion, cause some or all of the Units to remain in effect and subject to vesting in accordance with the provisions of subsection 4(a), in which case such Units will be settled in the form of Shares on the Delivery Date(s) set forth in subsection 4(a) above as if the Employee had remained employed on such dates. In accepting this Award, the Employee acknowledges that in the event of Termination (whether or not in breach of local labor laws), the Employee’s right to vest in the Units, if any, will cease and will not be extended by any notice period mandated under local law (e.g., active employment does not include a period of “garden leave” or similar period pursuant to local law) and that the Company shall have the exclusive discretion to determine when Termination occurs.

8

Withholding Taxes. To the extent permitted under applicable law and by the Company, the Employee may satisfy any U.S. or non-U.S. federal, state, local or other applicable taxes arising from the grant of the Award, the vesting of Units or the delivery of Shares pursuant to this Agreement by:

(A)

tendering a cash payment;

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Performance Share Award (2019)


(B)

having the Company withhold Shares from the Shares to be delivered to satisfy the applicable withholding tax;

(c)

tendering Shares received in connection with the Award back to the Company; ou

(d)

delivering other previously acquired Shares having a Fair Market Value approximately equal to the amount to be withheld.

The Company shall have the right and is hereby authorized to withhold from the Shares deliverable to the Employee pursuant to this Agreement or (to the extent permitted by applicable law, including without limitation Code Section 409A) from any other compensation or other amount owing to the Employee, such amount as may be necessary in the opinion of the Company to satisfy all such taxes, requirements and withholding obligations. If the Company withholds for tax purposes from the Shares otherwise to be delivered to the Employee, the Employee is deemed to have been issued the full number of Shares underlying the Award, subject to the vesting requirements set forth in this Agreement.

Notwithstanding the foregoing, if the Employee is subject to Section 16(b) of the Exchange Act, the Company will withhold using the method described in subsection 8(b) above unless the use of such withholding method is problematic under applicable laws or has materially adverse accounting consequences, in which case the Committee shall determine which of the other methods described in this Section 8 or in the Program shall be used to satisfy the applicable withholding obligations.

9

No Right to Continued Employment. This Agreement and the Employee’s participation in the Program do not and shall not be interpreted to:

(A)

form an employment contract or relationship with the Company or its Subsidiaries;

(B)

confer upon the Employee any right to continue in the employ of the Company or any of its Subsidiaries; ou

(c)

interfere with the ability of the Company or its Subsidiaries to terminate the Employee’s employment at any time.

10.

Nature of Grant. In accepting this Award, the Employee acknowledges and agrees that:

(A)

the Program is established voluntarily by the Company, it is discretionary in nature and it may be modified, amended, suspended or terminated by the Company at any time;

(B)

this Award is a one-time benefit and does not create any contractual or other right to receive future grants of Units, benefits in lieu of Units, or other Program Benefits in the future, even if Units have been granted repeatedly in the past;

(c)

all decisions with respect to future Unit grants, if any, and their terms and conditions, will be made by the Company, in its sole discretion;

(d)

nothing contained in this Agreement is intended to create or enlarge any other contractual obligations between the Company and the Employee;

(e)

the Employee is voluntarily participating in the Program;

(f)

the Units and Shares subject to the Units are:

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Performance Share Award (2019)


(i)

extraordinary items that do not constitute compensation of any kind for services of any kind rendered to the Company or its Subsidiaries, and are outside the scope of the Employee’s employment contract, if any;

(ii)

not intended to replace any pension rights or compensation;

(iii)

not part of the Employee’s normal or expected compensation or salary for any purpose, including, but not limited to, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, holiday pay, bonuses, long-service awards, pension or retirement or welfare benefits, or similar payments and in no event should they be considered as compensation for, or relating in any way to, past services for the Company or any of its Subsidiaries;

(g)

the future value of the Shares underlying the Units is unknown and cannot be predicted with certainty;

(h)

in consideration of the Award, no claim or entitlement to compensation or damages shall arise from the Units resulting from Termination (for any reason whatsoever) and the Employee irrevocably releases the Company and its Subsidiaries from any such claim that may arise; if any such claim is found by a court of competent jurisdiction to have arisen, then, by signing or electronically accepting this Agreement, the Employee shall be deemed irrevocably to have waived the Employee’s entitlement to pursue such claim;

(i)

the Units and the Benefits under the Program, if any, will not automatically transfer to another company in the case of a merger, take-over or transfer of liability; et

(j)

neither the Company nor any of its Subsidiaries shall be liable for any change in value of the Units, the amount realized upon settlement of the Units or the amount realized upon a subsequent sale of any Shares acquired upon settlement of the Units, resulting from any fluctuation of the United States Dollar/local currency foreign exchange rate.

(A)

Pursuant to applicable personal data protection laws, the collection, processing and transfer of the Employee’s personal Data is necessary for the Company’s administration of the Program and the Employee’s participation in the Program. The Employee’s denial and/or objection to the collection, processing and transfer of personal Data may affect his or her ability to participate in the Program. As such (where required under applicable law), the Employee:

(i)

voluntarily acknowledges, consents and agrees to the collection, use, processing and transfer of personal Data as described herein; et

(ii)

authorizes Data recipients to receive, possess, use, retain and transfer the Data, in electronic or other form, for purposes of implementing, administering and managing the Employee’s participation in the Program, including any requisite transfer of such Data as may be required for the administration of the Program and/or the subsequent holding of Shares on the Employee’s behalf to a broker or other third party with whom the Employee may elect to deposit any Shares acquired pursuant to the Program.

(B)

Data may be provided by the Employee or collected, where lawful, from third parties, and the Company and the Subsidiary that employs the Employee (if applicable) will process the Data for the exclusive purpose of implementing, administering and managing the Employee’s participation in the Program. Data processing will take place through electronic and non-electronic means according

8

Performance Share Award (2019)


to logics and procedures strictly correlated to the purposes for which the Data is collected and with confidentiality and security provisions as set forth by applicable laws and regulations in the Employee’s country of residence. Data processing operations will be performed minimizing the use of personal and identification data when such operations are unnecessary for the processing purposes sought. The Data will be accessible within the Company’s organization only by those persons requiring access for purposes of the implementation, administration and operation of the Program and for the Employee’s participation in the Program.

(c)

The Company and the Subsidiary that employs the Employee (if applicable) will transfer Data as necessary for the purpose of implementation, administration and management of the Employee’s participation in the Program, and the Company and the Subsidiary that employs the Employee (if applicable) may further transfer Data to any third parties assisting the Company in the implementation, administration and management of the Program. These recipients may be located throughout the world.

(d)

The Employee may, at any time, exercise his or her rights provided under applicable personal data protection laws, which may include the right to:

(i)

obtain confirmation as to the existence of the Data;

(ii)

verify the content, origin and accuracy of the Data;

(iii)

request the integration, update, amendment, deletion or blockage (for breach of applicable laws) of the Data; et

(iv)

oppose, for legal reasons, the collection, processing or transfer of the Data which is not necessary or required for the implementation, administration and/or operation of the Program and the Employee’s participation in the Program.

The Employee may seek to exercise these rights by contacting his or her local human resources manager.

(e)

Upon request of the Company or the Subsidiary that employs the Employee, the Employee agrees to provide an executed data privacy consent form (or any other agreement or consent that may be required by the Company and/or the Subsidiary that employs the Employee) to the Company and/or the Subsidiary that employs the Employee that the Company and/or the Subsidiary that employs the Employee may deem necessary to obtain from the Employee for the purpose of administering his or her participation in the Program in compliance with the data privacy laws in the Employee’s country, either now or in the future. The Employee understands and agrees that he or she will not be able to participate in the Program if the Employee fails to provide any such requested consent or agreement.

12

Form of Payment. The Company may, in its sole discretion, settle the Employee’s Units in the form of a cash payment to the extent settlement in Shares: (a) is prohibited under local law; (b) would require the Employee, the Company and/or its Subsidiaries to obtain the approval of any governmental and/or regulatory body in the Employee’s country; (c) would result in adverse tax consequences for the Employee or the Company; or (d) is administratively burdensome. Alternatively, the Company may, in its sole discretion, settle the Employee’s Units in the form of Shares but require the Employee to sell such Shares immediately or within a specified period of time following the Employee’s Termination (in which case, this Agreement shall give the Company the authority to issue sales instructions on the Employee’s behalf).

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Performance Share Award (2019)