☒ |
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
☐ |
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Israel
|
Not Applicable
|
|
(State or other jurisdiction of
incorporation or organization)
|
(I.R.S. Employer
Identification No.)
|
Title of each class
|
Trading Symbol(s)
|
Name of each exchange on which registered
|
||
American Depositary Shares, each representing one Ordinary Share
|
TEVA
|
New York Stock Exchange
|
Large accelerated filer
|
☒
|
Accelerated filer
|
☐
|
|||
Non-accelerated
filer
|
☐
|
Smaller reporting company
|
☐
|
|||
|
|
Emerging growth company
|
☐
|
|
|
|
|
Page
|
|
|
|
|
1
|
|
|||
|
|
1
|
|
|||
|
|
|
|
|
||
PART I
|
|
|
|
|
||
Item 1.
|
|
|
|
2
|
|
|
Item 1A.
|
|
|
|
25
|
|
|
Item 1B.
|
|
|
|
50
|
|
|
Item 2.
|
|
|
|
50
|
|
|
Item 3.
|
|
|
|
51
|
|
|
Item 4.
|
|
|
|
51
|
|
|
|
|
|
|
|
||
PART II
|
|
|
|
|
||
Item 5.
|
|
|
|
51
|
|
|
Item 6.
|
|
|
|
54
|
|
|
Item 7.
|
|
|
|
56
|
|
|
Item 7A.
|
|
|
|
92
|
|
|
Item 8.
|
|
|
|
96
|
|
|
Item 9.
|
|
|
|
184
|
|
|
Item 9A.
|
|
|
|
184
|
|
|
Item 9B.
|
|
|
|
185
|
|
|
|
|
|
|
|
||
PART III
|
|
|
|
|
||
Item 10.
|
|
|
|
185
|
|
|
Item 11.
|
|
|
|
185
|
|
|
Item 12.
|
|
|
|
185
|
|
|
Item 13.
|
|
|
|
185
|
|
|
Item 14.
|
|
|
|
185
|
|
|
|
|
|
|
|
||
PART IV
|
|
|
|
|
||
Item 15.
|
|
|
|
186
|
|
|
Item 16.
|
|
|
|
191
|
|
• |
our ability to successfully compete in the marketplace, including: that we are substantially dependent on our generic products; consolidation of our customer base and commercial alliances among our customers; the increase in the number of competitors targeting generic opportunities and seeking U.S. market exclusivity for generic versions of significant products; competition for our specialty products, especially COPAXONE
®
, our leading medicine, which faces competition from existing and potential additional generic versions, competing glatiramer acetate products and orally-administered alternatives; the uncertainty of commercial success of AJOVY
®
or AUSTEDO
®
; competition from companies with greater resources and capabilities; delays in launches of new products and our ability to achieve expected results from investments in our product pipeline; ability to develop and commercialize biopharmaceutical products; efforts of pharmaceutical companies to limit the use of generics, including through legislation and regulations and the effectiveness of our patents and other measures to protect our intellectual property rights;
|
• | our substantial indebtedness, which may limit our ability to incur additional indebtedness, engage in additional transactions or make new investments, may result in a further downgrade of our credit ratings; and our inability to raise debt or borrow funds in amounts or on terms that are favorable to us; |
• | our business and operations in general, including: implementation of our restructuring plan announced in December 2017; our ability to attract, hire and retain highly skilled personnel; our ability to develop and commercialize additional pharmaceutical products; compliance with anti-corruption, sanctions and trade control laws; manufacturing or quality control problems; interruptions in our supply chain; disruptions of information technology systems; breaches of our data security; variations in intellectual property laws; challenges associated with conducting business globally, including adverse effects of political or economic instability, major hostilities or terrorism; significant sales to a limited number of customers; our ability to successfully bid for suitable acquisition targets or licensing opportunities, or to consummate and integrate acquisitions; our prospects and opportunities for growth if we sell assets and potential difficulties related to the operation of our new global enterprise resource planning (ERP) system; |
• | compliance, regulatory and litigation matters, including: increased legal and regulatory action in connection with public concern over the abuse of opioid medications in the U.S. and our ability to reach a final resolution of the remaining opioid-related litigation; costs and delays resulting from the extensive governmental regulation to which we are subject; the effects of reforms in healthcare regulation and reductions in pharmaceutical pricing, reimbursement and coverage; governmental investigations into S&M practices; potential liability for patent infringement; product liability claims; increased government scrutiny of our patent settlement agreements; failure to comply with complex Medicare and Medicaid reporting and payment obligations; and environmental risks; |
• | other financial and economic risks, including: our exposure to currency fluctuations and restrictions as well as credit risks; potential impairments of our intangible assets; potential significant increases in tax liabilities; and the effect on our overall effective tax rate of the termination or expiration of governmental programs or tax benefits, or of a change in our business; |
• |
TRUXIMA
®
(rituximab). It was approved by the FDA in November 2018 for the treatment of adult patients in three indications: (i) relapsed or refractory,
low-grade
or follicular, CD20-positive,
B-cell
Non–Hodgkin’s Lymphoma (NHL) as a single agent, (ii) previously untreated follicular, CD20-positive,
B-cell
NHL in combination with first line chemotherapy and, in patients achieving a complete or partial response to a rituximab product in combination with chemotherapy, as single-agent maintenance therapy, and (iii)
non-progressing
(including stable disease),
low-grade,
CD20-positive,
B-cell
NHL as a single agent after first-line cyclophosphamide, vincristine, and prednisone (CVP) chemotherapy. In May 2019, the FDA approved TRUXIMA for two additional indications, thus matching all of the reference product’s oncology indications for NHL and CLL. The two additional oncology indications are: (i) previously untreated diffuse large
B-cell,
CD20-positive NHL in combination with (cyclophosphamide, doxorubicin, vincristine, and prednisone) (CHOP) or other anthracycline-based chemotherapy regimens and (ii) previously untreated and previously treated CD20-positive Chronic Lymphocytic Leukemia (CLL) in combination with fludarabine and cyclophosphamide (FC). In December 2019, the FDA further approved TRUXIMA for the treatment of (i) Rheumatoid Arthritis (RA) in combination with methotrexate in adult patients with
moderately-to
severely-active RA who have inadequate response to one or more TNF antagonist therapies and (ii) Granulomatosis with Polyangiitis (GPA) (Wegener’s Granulomatosis) and Microscopic Polyangiitis (MPA) in adult patients in combination with glucocorticoids.
|
• |
We entered into an exclusive partnership with Celltrion, Inc. (“Celltrion”) in October 2016 to commercialize
TRUXIMA
in the United States and Canada.
|
• | TRUXIMA, our first oncology biosimilar product in the United States, launched in November 2019 and is the first rituximab biosimilar to be approved in the United States. |
• | We reached an agreement with Genentech, Inc. (“Genentech”) to settle U.S. patent litigation regarding TRUXIMA. Under the terms of the settlement agreement, TRUXIMA became available in the United States with the approved oncology indications on November 11, 2019. In addition, we have a license from Genentech to expand the TRUXIMA label to include the RA and GPA/MPA indications in the second quarter of 2020. |
• |
HERZUMA
®
(trastuzumab). HERZUMA was initially approved by the FDA in December 2018, with additional indications approved in May 2019, so that HERZUMA’s label now matches all of the reference product’s indications: (i) adjuvant treatment of HER2 overexpressing node positive or node negative (ER/PR negative or with one high risk feature) breast cancer, as part of a treatment regimen consisting of doxorubicin, cyclophosphamide, and either paclitaxel or docetaxel, as part of a treatment regimen with docetaxel and carboplatin, or as a single agent following multi-modality anthracycline based therapy, and (ii) in combination with paclitaxel for first-line treatment of HER2-overexpressing metastatic breast cancer, or as a single agent for treatment of HER2-overexpressing breast cancer in patients who have received one or more chemotherapy regimens for metastatic disease, and (iii) in combination with cisplatin and capecitabine or
5-fluorouracil,
for the treatment of patients with HER2 overexpressing metastatic gastric or gastroesophageal junction adenocarcinoma who have not received prior treatment for metastatic disease.
|
• | We entered into an exclusive partnership with Celltrion in October 2016 to commercialize HERZUMA in the United States and Canada. |
• | We reached an agreement with Genentech to settle U.S. patent litigation regarding HERZUMA. Under the terms of the settlement agreement, HERZUMA is expected to be available in the United States in the first quarter of 2020. |
• |
COPAXONE
|
• | COPAXONE is believed to have a unique mechanism of action that works with the immune system, unlike many therapies that are believed to rely on general immune suppression or cell sequestration to exert their effect. COPAXONE provides a proven mix of efficacy, safety and tolerability. |
• | The FDA approved generic versions of COPAXONE 40 mg/mL in October 2017 and February 2018 and a second generic version of COPAXONE 20 mg/mL in October 2017 in the United States. Hybrid versions of COPAXONE 20 mg/mL and 40 mg/mL were also approved in the European Union. |
• | COPAXONE 40 mg/mL is protected by one European patent expiring in 2030. This patent is being challenged in various European jurisdictions. In October 2017, the U.K. High Court found this patent invalid and our application for permission to appeal this decision was rejected. The patent was upheld by the Opposition Division of the European Patent Office in April 2019. A hearing for an appeal in this case has been set for June 2020. |
• |
The market for MS treatments continues to develop, particularly with the approval of generic versions of COPAXONE discussed above, as well as additional generic versions expected to be approved in the future. Oral treatments for MS, such as Tecfidera
®
, Gilenya
®
and Aubagio
®
, continue to present significant and increasing competition. COPAXONE also continues to face competition from existing injectable products, as well as from monoclonal antibodies, such as Ocrevus
®
.
|
• |
AJOVY
|
• | AJOVY was granted a marketing authorization in the European Union by the EMA in a centralized process in April 2019. We commenced launching AJOVY in certain European markets in May 2019 and are moving forward with plans to launch in other European countries. |
• | During 2019, we received marketing authorizations for AJOVY in Israel and Australia and we continue to move forward with submissions in various other countries in our International Markets segment. |
• | On May 12, 2017, we entered into a license and collaboration agreement with Otsuka Pharmaceutical Co., Ltd. (“Otsuka”) providing Otsuka with an exclusive license to conduct phase 2 and 3 clinical trials for AJOVY in Japan and, once approved, to commercialize the product in Japan. Results for these trials were received in January 2020, indicating that primary and secondary endpoints were achieved and that no clinically significant adverse events were observed in subjects. |
• | On January 27, 2020, the FDA approved an auto-injector device for AJOVY in the U.S. We have also received approval from the EMA for AJOVY’s auto-injector submission in the EU. |
• | AJOVY is also in clinical development to evaluate safety and efficacy in the treatment of post traumatic headache and fibromyalgia. |
• | AJOVY is protected by patents expiring in 2026 in Europe and in 2027 in the United States. Applications for patent term extensions have been submitted in various markets around the world. An additional patent relating to the use of AJOVY in the treatment of migraine is issued in the United States and will expire in 2035. This patent is also pending in other countries. AJOVY will also be protected by regulatory exclusivity of 12 years from marketing approval in the United States and 10 years from marketing approval in Europe. |
• | We have filed a lawsuit in the U.S. District Court for the District of Massachusetts alleging that Eli Lilly & Co.’s (“Lilly”) marketing and sale of its galcanezumab product for the treatment of migraine infringes nine Teva patents. Lilly has also submitted IPR (inter partes review) petitions to the Patent Trial and Appeal Board, challenging the validity of the nine patents asserted against it in the litigation. The litigation in the district court has been stayed pending resolution of the IPR petitions. The patent office hearing concerning the first six IPRs was held on November 22, 2019 and the hearing concerning the remaining three IPRs was held on January 8, 2020. On February 18, 2020, the Patent Trial and Appeal Board issued decisions on the first six IPRs, finding the six patents invalid as being obvious. We are currently reviewing the possibility of appealing these decisions. In addition, we have entered into separate agreements with Alder Biopharmaceuticals, Inc. (“Alder”) and Lilly, resolving the |
European Patent Office oppositions that they have filed against our AJOVY patents. The settlement agreement with Lilly also resolved Lilly’s action to revoke the patent protecting AJOVY in the United Kingdom. |
• |
AUSTEDO
|
• | AUSTEDO was approved by the FDA and launched in April 2017 in the United States for the treatment of chorea associated with Huntington disease. In August 2017, the FDA approved AUSTEDO for the treatment of tardive dyskinesia (“TD”) in adults in the United States and we launched AUSTEDO for the treatment of TD in September 2017. TD is a debilitating, often irreversible movement disorder caused by certain medications used to treat mental health or gastrointestinal conditions. |
• | During 2019, we submitted requests for marketing authorizations for AUSTEDO in certain countries in our International Markets segment. We continue to move forward with additional submissions in various other countries around the world. |
• | In September 2017, we entered into a partnership agreement with Nuvelution Pharma, Inc (“Nuvelution”) for the development of AUSTEDO for the treatment of Tourette syndrome in pediatric patients in the United States. In February 2020, we received results for these clinical trials, which found that the clinical trials failed to meet their primary endpoints. No new safety signals were identified in these studies. |
• | AUSTEDO is protected in the United States by five Orange Book patents expiring between 2031 and 2033 and in Europe by two patents expiring in 2029. |
• |
BENDEKA
B-cell
non-Hodgkin’s
lymphoma (“NHL”) that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen. BENDEKA, which was launched in the United States in January 2016, is a liquid,
low-volume
(50 mL) and short-time
10-minute
infusion formulation of bendamustine hydrochloride that we licensed from Eagle Pharmaceuticals, Inc. (“Eagle”). In April 2019, we signed an amendment to the license agreement with Eagle extending the royalty term applicable to the United States to the full period for which we sell BENDEKA and increasing the royalty rate. In consideration, Eagle agreed to assume a portion of BENDEKA-related patent litigation expenses.
|
• |
Eagle launched a
ready-to-dilute
bendamustine hydrochloride in June 2018, which competes directly with BENDEKA. Other competitors to BENDEKA include combination therapies such as
R-CHOP
(a combination of cyclophosphamide, vincristine, doxorubicin and prednisone in combination with rituximab) and
CVP-R
(a combination of cyclophosphamide, vincristine and prednisolone in combination with rituximab) for the treatment of NHL, as well as a combination of fludarabine, doxorubicin and rituximab for the treatment of CLL and newer targeted oral therapies, such as ibrutinib, idelilisib and venetoclax.
|
• |
There are 15 patents listed in the U.S. Orange Book for BENDEKA with expiry dates between 2026 and 2031. Teva and Eagle received notices of Abbreviated New Drug Application (“ANDA”) filings by Slayback Pharmaceuticals, Fresenius Kabi, Apotex, Mylan, and Lupin Pharmaceuticals, Inc. (“Lupin”) for generic versions of BENDEKA, which all contained Paragraph IV challenges against one or more of the BENDEKA patents. In response, Teva and Eagle filed patent infringement lawsuits against each of the ANDA filers in the U.S. District Court for the District of Delaware, four of which are pending a decision by the court, which could come as early as the first half of 2020. The respective
30-month
stays, automatically triggered by the patent infringement lawsuits, began expiring in January 2020. The asserted patents expire in 2031. Additionally, Teva and Eagle received a notification from early 2018 that Hospira, Inc. (“Hospira”) filed a 505(b)(2) new drug application (“NDA”) referencing BENDEKA. In July 2018, Teva and Eagle filed suit against Hospira in the U.S. District Court for the District of Delaware. Hospira’s
30-month
stay expires in December 2020. On December 16, 2019, the Delaware District Court dismissed the case against Hospira on all but one of the asserted patents, which expires in 2031. Trial against Hospira on that patent is scheduled to begin on November 15, 2021.
|
• | We have U.S. Orange Book patents for TREANDA expiring between 2026 and 2031. One 505(b)(2) NDA was filed for a liquid version of bendamustine and 21 ANDAs were filed for generic versions of the lyophilized form of TREANDA. We have reached final settlements with all 22 filers, providing for the launch of generic versions of TREANDA prior to patent expiration. |
• | In July 2018, Eagle prevailed in its suit against the FDA to obtain seven years of orphan drug exclusivity in the United States for BENDEKA. The FDA has appealed the district court’s decision, but barring a reversal of the decision by the appellate court, drug applications referencing BENDEKA, TREANDA or any other bendamustine product will not be approved by the FDA until the orphan drug exclusivity expires in December 2022. If the decision is reversed, generic versions of TREANDA may be launched immediately. |
• |
A breath-actuated inhaler (“BAI”) recently approved in the United States for use with QVAR as QVAR RediHaler
®
; and
|
• | Spiromax (EU) or RespiClick (U.S.), a novel inhalation-driven multi-dose dry powder inhaler (“MDPI”). |
• |
The ProAir line of products includes ProAir hydrofluoroalkane (“HFA”), ProAir RespiClick
®
and ProAir Digihaler
®
, which are sold only in the United States.
|
• |
ProAir HFA
®
|
• |
ProAir Digihaler
built-in
sensors which connects to a companion mobile application and provides inhaler use information to people with asthma and COPD. ProAir Digihaler was approved by the FDA on December 21, 2018 for the treatment or prevention of bronchospasm in patients aged four years and older with reversible obstructive airway disease and for prevention of exercise-induced bronchospasm (EIB) in patients aged four years and older. Commercial availability of ProAir Digihaler is planned for 2020 through targeted launch activities.
|
• |
ProAir RespiClick
dry-powder,
short-acting beta-agonist inhaler for the treatment or prevention of bronchospasm with reversible obstructive airway disease and for the prevention of exercise-induced bronchospasm in patients four years of age and older. ProAir RespiClick was approved by the FDA for use in adults and adolescents aged 12 years and older in March 2015 and its label was expanded for use by children 4 to 11 years of age in April 2016.
|
• |
Three major brands compete with ProAir HFA and ProAir RespiClick in the United States in the short-acting beta agonist market: Ventolin
®
HFA (albuterol), Proventil
®
HFA (albuterol) and Xopenex
®
HFA (levalbuterol). In addition, an authorized generic version Ventolin
®
HFA (albuterol) was approved in January 2019.
|
• |
QVAR
|
• |
Four major brands compete with QVAR in the mono inhaled corticosteroid segment: Flixotide/Flovent
®
(fluticasone), Pulmicort Flexhaler
®
(budesonide), Asmanex
®
(mometasone) and Alvesco
®
(ciclesonide).
|
• |
QVAR RediHaler
|
• |
CINQAIR/CINQAERO
interleukin-5
antagonist monoclonal antibody for
add-on
maintenance treatment of adult patients with severe asthma and with an eosinophilic phenotype, received FDA, EMA and Health Canada approval in 2016. This biologic treatment became commercially available to patients in the United States in April 2016, in certain European countries in November 2016 and in Canada in 2017.
|
• |
Major brands competing with CINQAIR/CINQAERO in the United States, Europe and Canada in the
interleukin-5
market are Nucala
®
(mepolizumab) and Fasenra
®
(benralizumab).
|
• |
AirDuo RespiClick
|
• |
AirDuo RespiClick and its authorized generic have the same active ingredients as Advair
®
but are delivered via Teva’s breath-activated, MDPI, RespiClick, which is used with other approved medicines in our respiratory product portfolio
|
• |
ArmonAir RespiClick
®
Diskus.
|
• |
AirDuo Digihaler
built-in
sensors which connects to a companion mobile application and provides inhaler use information to people with asthma. AirDuo Digihaler was approved by the FDA on July 12, 2019 for treatment of asthma in patients aged 12 years and older who are uncontrolled on an ICS or whose disease severity clearly warrants the use of an ICS/LABA combination. Commercial availability of AirDuo Digihaler is planned for 2020 through targeted launch activities.
|
• |
BRALTUS
®
inhaler, was launched in Europe in August 2016.
|
Product
|
Potential
Indication(s)
|
Route of
Administration
|
Development Phase
(date entered phase 3) |
Comments
|
||||
CNS, Neurology and
Neuropsychiatry
|
|
|
|
|
||||
AUSTEDO (deutetrabenazine)
|
Tourette syndrome
|
Oral
|
3 (December 2017)
|
Teva and Nuvelution entered into a partnership agreement on September 19, 2017 to develop AUSTEDO for the treatment of tics associated with
|
Product
|
Potential
Indication(s)
|
Route of
Administration
|
Development Phase
(date entered phase 3) |
Comments
|
||||
|
|
|
|
Tourette syndrome in pediatric patients in the United States. In February 2020, we received results for these clinical trials, which found that the clinical trials failed to meet their primary endpoints. No new safety signals were identified in these studies.
|
||||
|
Dyskinesia in cerebral palsy
|
Oral
|
3 (September 2019)
|
|
||||
TV-46000
(risperidone LAI)
|
Schizophrenia
|
Subcutaneous
|
3 (April 2018)
|
|
||||
Migraine and Pain
|
|
|
|
|
||||
fremanezumab (anti CGRP)
|
Post traumatic
headache
|
Subcutaneous
|
2
|
|
||||
|
fibromyalgia
|
Subcutaneous
|
2
|
|
||||
fasinumab
|
Osteoarthritis pain
|
Subcutaneous
|
3 (March 2016)
|
Developed in collaboration with Regeneron Pharmaceuticals, Inc. (“Regeneron”).
In August 2018, Regeneron and Teva announced positive topline phase 3 results in patients with chronic pain from osteoarthritis of the knee or hip with the remaining low dose 1mg every month (1mg4W) and 1mg every two months (1mg8W).
Fasinumab is protected by patents expiring in 2028 and will also be protected by regulatory exclusivity of 12 years from marketing approval in the United States
|
Product
|
Potential
Indication(s)
|
Route of
Administration
|
Development Phase
(date entered phase 3) |
Comments
|
||||
|
|
|
|
and 10 years from marketing approval in Europe.
|
||||
Respiratory
|
|
|
|
|
||||
ProAir
e-RespiClick
™
|
Bronchospasm and exercise induced bronchitis
|
Oral inhalation
|
Approved by FDA
(December 2018)
|
|
||||
AirDuo Digihaler
|
Treatment of asthma in patients aged 12 years and older
|
Oral inhalation
|
Approved by FDA (July 2019)
|
|
||||
ArmonAir DigiHaler
|
Treatment of asthma in patients aged 12 years and older
|
Oral inhalation
|
Under regulatory review
|
|
||||
GoResp
®
DigiHaler / DuoResp DigiHaler
|
Treatment of asthma in patients aged 12 years and older and COPD
|
Oral inhalation
|
Under regulatory review
|
|
||||
Oncology
|
|
|
|
|
||||
HERZUMA
|
(biosimilar to
Herceptin
®
US)
|
|
Approved by
FDA (December 2018) Approved in Canada (September 2019)
|
|
• | CINQAIR/CINQAERO for severe asthma with eosinophilia; |
• | Fremanezumab (anti CGRP) for episodic cluster headache; and |
• | Fasinumab for chronic lower back pain has been put on hold. |
• | global R&D facilities that enable us to have a broad global generic pipeline and product line, as well as a focused pipeline of specialty products; |
• | pharmaceutical manufacturing facilities approved by the FDA, EMA and other regulatory authorities located around the world, which offer a broad range of production technologies and the ability to concentrate production in order to achieve high quality and economies of scale; |
• | API manufacturing capabilities that offer a stable, high-quality supply of key APIs, vertically integrated with our pharmaceutical operations; and |
• | high-volume, technologically advanced distribution facilities that allow us to deliver new products to our customers quickly and efficiently, providing a cost-effective, safe and reliable supply. |
• | continued the implementation of our global EHS management system, which promotes proactive compliance with applicable EHS requirements, establishes EHS standards throughout our global operations and helps drive continuous improvement in our EHS performance; |
• | provided EHS regulatory monitoring tools in all countries where we have significant operations; and |
• |
proactively evaluated EHS compliance through self-evaluation and an internal audit program, addressing
non-conformities
through appropriate corrective and preventative action.
|
|
December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
United States
|
6,390
|
7,056
|
8,807
|
|||||||||
Europe
|
18,780
|
19,236
|
22,352
|
|||||||||
International Markets (excluding Israel)
|
10,908
|
11,351
|
14,387
|
|||||||||
Israel
|
3,961
|
4,893
|
6,245
|
|||||||||
Total
|
40,039
|
42,535
|
51,792
|
ITEM 1A.
|
RISK FACTORS
|
• | AJOVY, which was launched in the United States in September 2018, faces strong competition from two products that were introduced into the market around the same time and are competing for market share in the same space, as well as from other emerging competing therapies. Also, our auto-injector for AJOVY was just approved by the FDA in January 2020. Until we begin marketing AJOVY with the auto-injector, we are at a competitive disadvantage in our ability to sell and market this product. |
• | Our future success also depends on our ability to maximize the growth and commercial success of AUSTEDO. If our revenues derived from AUSTEDO do not increase as expected, this would have an adverse effect on our results of operations. |
• | pursuing new patents for existing products which may be granted just before the expiration of earlier patents, which could extend patent protection for additional years or otherwise delay the launch of generic competitors; |
• | selling the brand product as their own generic equivalent (an authorized generic), either by the brand company directly, through an affiliate or by a marketing partner; |
• | using the Citizen Petition process to request amendments to FDA standards or otherwise delay generic drug approvals; |
• | seeking changes to U.S. Pharmacopeia, an organization which publishes industry recognized compendia of drug standards; |
• | attempting to use the legislative and regulatory process to have drugs reclassified or rescheduled; |
• | attaching patent extension amendments to unrelated federal legislation; and |
• | entering into agreements with pharmacy benefit management companies that have the effect of blocking the dispensing of generic products. |
• | making it more difficult for us to satisfy our obligations; |
• | limiting our ability to borrow additional funds and increasing the cost of any such borrowing; |
• | increasing our vulnerability to, and reducing our flexibility to respond to, general adverse economic and industry conditions; |
• | limiting our flexibility in planning for, or reacting to, changes in our business and the industry in which we operate; |
• | placing us at a competitive disadvantage as compared to our competitors, to the extent that they are not as highly leveraged; and |
• | restricting us from pursuing certain business opportunities. |
• | substantial optimization of the generics portfolio globally, and most specifically in the United States, through a more tailored approach to the portfolio with increased focus on profitability; |
• | closure or divestment of a significant number of manufacturing plants in the United States, Europe, Israel and International Markets; |
• | closure or divestment of a significant number of R&D facilities, headquarters and other office locations across all geographies; and |
• | a thorough review of all R&D programs across the Company to prioritize core projects and immediately terminate others. |
• |
Following an inspection of our manufacturing plant in Davie, Florida, the FDA issued a Form
FDA-483
and in October 2018 notified us that the inspection of the site was classified as “official action indicated” (OAI). On February 5, 2019, we received a warning letter from the FDA that contained four additional enumerated concerns related to production, quality control and investigations at this site. We have been working diligently to address the FDA’s concerns in a manner consistent with cGMP requirements as quickly and as thoroughly as possible. An FDA follow up inspection occurred in January 2020, resulting in some follow up findings. If we are unable to remediate the findings to the FDA’s satisfaction, we may face additional consequences. These would potentially include delays in FDA approval for future products from the site, financial implications due to loss of revenues, impairments, inventory write offs, customer penalties, idle capacity charges, costs of additional remediation and possible FDA enforcement action. We expect to generate approximately $230 million in revenues from this site in 2020, assuming remediation or enforcement does not cause
|
any unscheduled slowdown or stoppage at the facility or prevent approvals of new products from the site. |
• | We announced the voluntary recall of valsartan and certain combination valsartan medicines in various countries due to the detection of trace amounts of an unexpected nitrosamine impurity in the API provided by our third party supplier in July 2018. Since July 2018, we have been actively engaged with regulatory agencies around the world in reviewing our sartan and other products to determine whether a previously unknown nitrosamine impurity called NDMA and/or other nitrosamine related impurities are present in specific products. Where necessary, we initiated additional voluntary recalls. The aggregate direct impact of this recall on our 2018 and 2019 financial statements was $54 million, primarily related to inventory write-downs and returns. As a result of this loss, we initiated negotiations with Zhejiang Huahai Pharmaceutical Co., Ltd. (“Huahai”), and in December 2019 we reached a settlement with Huahai resolving our claims related to certain sartan API supplied by Huahai to us. Under the settlement agreement, Huahai agreed to compensate Teva for some of the direct losses suffered by Teva and provide Teva prospective cost reductions for API. The settlement does not release Huahai from liability for our future purchases of API, or for any losses we may incur as a result of third party personal injury or product liability claims relating to the sartan API at issue. Although we are permitted to seek indemnification from Huahai for the claims described above, as litigation is inherently uncertain it is possible that we may face challenges when enforcing a judgment against Huahai in China. In addition, multiple lawsuits have been filed in connection with this matter. These may lead to additional customer penalties, impairments, and litigation costs. We expect additional expenses and loss of revenues and profits in connection with this matter going forward. |
• | Appropriate opportunities to enable us to execute our business strategy may not exist, or we may fail to identify them. |
• | Competition in the pharmaceutical industry for target companies and development programs has intensified and has resulted in decreased availability of, or increased prices for, suitable transactions. We may not be able to pursue relevant transactions due to financial capacity constraints. |
• | We may not be able to obtain necessary regulatory approvals, including those of competition authorities, and as a result, or for other reasons, we may fail to consummate an announced acquisition. |
• | The negotiation of transactions may divert management’s attention from our existing business operations, resulting in the loss of key customers and/or personnel and exposing us to unanticipated liabilities. |
• | We may fail to integrate acquisitions successfully in accordance with our business strategy or achieve expected synergies and other results. Integrating the operations of multiple new businesses with that of our own is a complex, costly and time-consuming process, which requires significant management attention and resources. The integration process may disrupt the businesses and, if implemented ineffectively, would preclude realization of the full benefits expected by us. |
• | We may not be able to retain experienced management and skilled employees from the businesses we acquire and, if we cannot retain such personnel, we may not be able to attract new skilled employees and experienced management to replace them. |
• | We may purchase a company that has excessive known or unknown contingent liabilities, including, among others, patent infringement or product liability claims, or that otherwise has significant regulatory or other issues not revealed as part of our due diligence. |
• | some government programs may be discontinued, or the applicable tax rates may increase; |
• | we may be unable to meet the requirements for continuing to qualify for some programs and the restructuring plan may lead to the loss of certain tax benefits we currently receive; |
• | these programs and tax benefits may be unavailable at their current levels; |
• | upon expiration of a particular benefit, we may not be eligible to participate in a new program or qualify for a new tax benefit that would offset the loss of the expiring tax benefit; or |
• | we may be required to refund previously recognized tax benefits if we are found to be in violation of the stipulated conditions. |
Business Segment
|
Number of
Facilities |
|
Square Feet
(in thousands)
|
|
||||
North America
|
19
|
4,442
|
||||||
Europe
|
34
|
12,605
|
||||||
International Markets
|
37
|
8,226
|
||||||
Worldwide Total Manufacturing and R&D Facilities
|
90
|
25,273
|
* |
$100 invested on December 31, 2014 in stock or index—including reinvestment of dividends. Indexes calculated on
month-end
basis
|
|
For the year ended December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(U.S. dollars in millions, except share and per share amounts)
|
|||||||||||||||||||
Income Statement Data:
(a)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||
Net revenues
(b)
|
16,887
|
18,271
|
21,853
|
21,464
|
19,303
|
|||||||||||||||
Cost of sales
(b)
|
9,351
|
9,975
|
11,237
|
9,811
|
8,183
|
|||||||||||||||
Gross profit
|
7,537
|
8,296
|
10,615
|
11,653
|
11,120
|
|||||||||||||||
Research and development expenses
|
1,010
|
1,213
|
1,778
|
2,077
|
1,525
|
|||||||||||||||
Selling and marketing expenses
|
2,614
|
2,916
|
3,395
|
3,583
|
3,242
|
|||||||||||||||
General and administrative expenses
|
1,192
|
1,298
|
1,451
|
1,390
|
1,360
|
|||||||||||||||
Intangible assets impairment
|
1,639
|
1,991
|
3,238
|
589
|
265
|
|||||||||||||||
Goodwill impairment
|
—
|
3,027
|
17,100
|
900
|
—
|
|||||||||||||||
Other asset impairments, restructuring and other items
|
423
|
987
|
1,836
|
830
|
911
|
|||||||||||||||
Legal settlements and loss contingencies
|
1,178
|
(1,208
|
) |
500
|
899
|
631
|
||||||||||||||
Other Income
|
(76
|
) |
(291
|
) |
(1,199
|
) |
(769
|
) |
(166
|
) | ||||||||||
Operating income (loss)
|
(443
|
) |
(1,637
|
) |
(17,484
|
) |
2,154
|
3,352
|
||||||||||||
Financial expenses—net
|
822
|
959
|
895
|
1,330
|
1,000
|
|||||||||||||||
Income (loss) before income taxes
|
(1,265
|
) |
(2,596
|
) |
(18,379
|
) |
824
|
2,352
|
||||||||||||
Income taxes (benefit)
|
(278
|
) |
(195
|
) |
(1,933
|
) |
521
|
634
|
||||||||||||
Share in (profits) losses of associated companies—net
|
13
|
71
|
3
|
(8
|
) |
121
|
||||||||||||||
Net income (loss)
|
(1,000
|
) |
(2,472
|
) |
(16,449
|
) |
311
|
1,597
|
||||||||||||
Net income (loss) attributable to
non-controlling
interests
|
(2
|
) |
(322
|
) |
(184
|
) |
(18
|
) |
9
|
|||||||||||
Net income (loss) attributable to Teva
|
(999
|
) |
(2,150
|
) |
(16,265
|
) |
329
|
1,588
|
||||||||||||
Accrued dividends on preferred shares
|
—
|
249
|
260
|
261
|
15
|
|||||||||||||||
Net income (loss) attributable to ordinary shareholders
|
(999
|
) |
(2,399
|
) |
(16,525
|
) |
68
|
1,573
|
||||||||||||
Earnings (loss) per share attributable to ordinary shareholders:
|
|
|
|
|
|
|||||||||||||||
Basic ($)
|
(0.91
|
) |
(2.35
|
) |
(16.26
|
) |
0.07
|
1.84
|
||||||||||||
Diluted ($)
|
(0.91
|
) |
(2.35
|
) |
(16.26
|
) |
0.07
|
1.82
|
||||||||||||
Weighted average number of shares (in millions):
|
|
|
|
|
|
|||||||||||||||
Basic
|
1,091
|
1,021
|
1,016
|
955
|
855
|
|||||||||||||||
Diluted
|
1,091
|
1,021
|
1,016
|
961
|
864
|
|||||||||||||||
Dividends per ordinary share
|
—
|
—
|
$ |
0.51
|
$ |
1.36
|
$ |
1.36
|
(a) | For a discussion of items that affected the comparability of results for the years 2019, 2018 and 2017, refer to “Item 7—Management’s Discussion and Analysis of Financial Condition and Results of Operations.” |
(b) | The data presented for prior periods (including the years 2015 and 2016) have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b to our consolidated financial statements for additional information. |
|
As at December 31,
|
|||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2016
|
|
2015
|
|
||||||||||
|
(U.S. dollars in millions)
|
|||||||||||||||||||
Financial assets (cash, cash equivalents and investment in securities)
|
2,033
|
1,846
|
1,060
|
1,949
|
8,404
|
|||||||||||||||
Identifiable intangible assets, net
|
11,232
|
14,005
|
17,640
|
21,487
|
7,675
|
|||||||||||||||
Goodwill
|
24,846
|
24,917
|
28,414
|
44,409
|
19,025
|
|||||||||||||||
Working capital (operating assets minus liabilities)
|
74
|
(186
|
) |
(384
|
) |
303
|
32
|
|||||||||||||
Total assets
|
57,470
|
60,683
|
70,615
|
93,057
|
54,233
|
|||||||||||||||
Short-term debt, including current maturities
|
2,345
|
2,216
|
3,646
|
3,276
|
1,585
|
|||||||||||||||
Long-term debt, net of current maturities
|
24,562
|
26,700
|
28,829
|
32,524
|
8,358
|
|||||||||||||||
Total debt
|
26,908
|
28,916
|
32,475
|
35,800
|
9,943
|
|||||||||||||||
Total equity
|
15,063
|
15,794
|
18,745
|
34,993
|
29,927
|
• | Our revenues in 2019 were $16,887 million, a decrease of 8% in U.S. dollar, or 5% in local currency terms, compared to 2018, mainly due to generic competition to COPAXONE, a decline in revenues from our U.S. generics business, BENDEKA/TREANDA and Japan, partially offset by higher revenues from AUSTEDO, AJOVY and QVAR in the United States. The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b to our consolidated financial statements for additional information. |
• |
Our North America segment generated revenues of $8,542 million and profit of $2,252 million in 2019. Revenues decreased by 8%, mainly due to a decline in revenues from COPAXONE, our U.S. generics business and certain other specialty products, partially offset by higher revenues from AUSTEDO, our Anda business and AJOVY. Profit decreased by 21%, mainly due to lower revenues from COPAXONE and
non-recurrence
of other income, partially offset by cost reductions and efficiency measures as part of the restructuring plan.
|
• | Our Europe segment generated revenues of $4,795 million and profit of $1,318 million in 2019. Revenues decreased by 8%, or 2% in local currency terms, mainly due to a decline in COPAXONE |
revenues due to competing glatiramer acetate products, lower sales of respiratory products in the United Kingdom and lower revenues from our oncology products due to competing biopharmaceutical products, partially offset by new generic product launches. Profit increased by 4%, mainly due to cost reductions and efficiency measures as part of the restructuring plan. |
• | Our International Markets segment generated revenues of $2,246 million and profit of $464 million in 2019. Revenues decreased by 7%, or 3% in local currency terms, mainly due to lower sales in Japan and certain discontinued activities in Israel. Profit decreased by 7%, mainly due to lower revenues in Japan, partially offset by higher sales in other markets and lower S&M and G&A expenses. The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b to our consolidated financial statements for additional information. |
• | Impairment of identifiable intangible assets were $1,639 million and $1,991 million in the years ended December 31, 2019 and 2018, respectively. See note 6 to our consolidated financial statements. |
• | No goodwill impairment charges were recorded in 2019, compared to a goodwill impairment charge of $3,027 million in 2018. |
• | We recorded expenses of $423 million for other asset impairments, restructuring and other items in 2019, compared to expenses of $987 million in 2018. See note 15 to our consolidated financial statements. |
• | In 2019, we recorded an expense of $1,178 million in legal settlements and loss contingencies, compared to an income of $1,208 million in 2018. The expense in 2019 was mainly related to an estimated settlement provision recorded in connection with the remaining opioid cases. See note 12 to our consolidated financial statements. |
• | Operating loss was $443 million in 2019, compared to an operating loss of $1,637 million in 2018, mainly due to higher impairment charges recorded in 2018. |
• | Financial expenses were $822 million in 2019, compared to $959 million in 2018. Financial expenses in 2019 and 2018 were mainly comprised of interest expenses of $881 million and $920 million, respectively. |
• |
In 2019, we recognized a tax benefit of $278 million, or 22%, on a
pre-tax
loss of $1,265 million. In 2018, we recognized a tax benefit of $195 million, or 8%, on a
pre-tax
loss of $2,596 million. Our tax rate for 2018 was lower than in 2019, due to
one-time
legal settlements and divestments that had a low corresponding tax effect.
|
• | Exchange rate movements during 2019, in comparison with 2018, negatively impacted revenues by $402 million and operating income by $135 million. |
• | As of December 31, 2019, our debt was $26,908 million, compared to $28,916 million as of December 31, 2018. This decrease was mainly due to senior notes repaid at maturity or prepaid with cash generated during the year. |
• | Cash flow generated from operating activities was $748 million in 2019, a decrease of $1,698 million, or 69%, compared to 2018. This decrease was mainly due to the working capital adjustment with Allergan and the Rimsa settlement in 2018 and lower profit in our North America segment. |
• | During 2019, we generated free cash flow of $2,053 million, which we define as comprising $748 million in cash flow generated from operating activities, $1,487 million in beneficial interest collected in exchange for securitized trade receivables and $343 million in proceeds from sale of property, plant and equipment and intangible assets, partially offset by $525 million in cash used for capital investments. |
|
Percentage of Net Revenues
Year Ended December 31, |
Percentage Change Comparison
|
||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019-2018
|
|
2018-2017
|
|
||||||||||
|
%
|
|
%
|
|
%
|
|
%
|
|
%
|
|
||||||||||
Net revenues
|
100.0
|
100.0
|
100.0
|
(8
|
) |
(16
|
) | |||||||||||||
Gross profit
|
44.6
|
45.4
|
48.6
|
(9
|
) |
(22
|
) | |||||||||||||
Research and development expenses
|
6.0
|
6.6
|
8.1
|
(17
|
) |
(32
|
) | |||||||||||||
Selling and marketing expenses
|
15.5
|
16.0
|
15.5
|
(10
|
) |
(14
|
) | |||||||||||||
General and administrative expenses
|
7.1
|
7.1
|
6.6
|
(8
|
) |
(11
|
) | |||||||||||||
Intangible assets impairments
|
9.7
|
10.9
|
14.8
|
(18
|
) |
(39
|
) | |||||||||||||
Goodwill impairment
|
*
|
16.6
|
78.3
|
(100
|
) |
(82
|
) | |||||||||||||
Other asset impairments, restructuring and other items
|
2.5
|
5.4
|
8.4
|
(57
|
) |
(46
|
) | |||||||||||||
Legal settlements and loss contingencies
|
7.0
|
(6.6
|
) |
2.3
|
n/a
|
n/a
|
||||||||||||||
Other Income
|
(0.5
|
) |
(1.6
|
) |
(5.5
|
) |
(74
|
) |
(76
|
) | ||||||||||
Operating (loss) income
|
(2.6
|
) |
(9.0
|
) |
(80.0
|
) |
(73
|
) |
(91
|
) | ||||||||||
Financial expenses—net
|
4.9
|
5.2
|
4.1
|
(14
|
) |
7
|
||||||||||||||
Income (loss) before income taxes
|
(7.5
|
) |
(14.2
|
) |
(84.2
|
) |
(51
|
) |
(86
|
) | ||||||||||
Income taxes (benefit)
|
(1.6
|
) |
(1.1
|
) |
(8.8
|
) |
42
|
(90
|
) | |||||||||||
Share in (profits) losses of associated companies—net
|
0.1
|
0.4
|
*
|
(81
|
) |
2,267
|
||||||||||||||
Net income (loss) attributable to
non-controlling
interests
|
*
|
(1.8
|
) |
*
|
(99
|
) |
922
|
|||||||||||||
Net income (loss) attributable to Teva
|
(5.9
|
) |
(11.8
|
) |
(74.4
|
) |
(54
|
) |
(87
|
) |
* | Represents an amount less than 0.5%. |
|
Year ended December 31,
|
|||||||||||||||||||||||
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
(U.S. $ in millions / % of Segment Revenues)
|
|||||||||||||||||||||||
Revenues
|
$ |
8,542
|
100
|
% | $ |
9,297
|
100.0
|
% | $ |
12,141
|
100
|
% | ||||||||||||
Gross profit
|
4,350
|
50.9
|
% |
4,979
|
53.6
|
% |
7,322
|
60.3
|
% | |||||||||||||||
R&D expenses
|
652
|
7.6
|
% |
713
|
7.7
|
% |
969
|
8.0
|
% | |||||||||||||||
S&M expenses
|
1,021
|
12.0
|
% |
1,154
|
12.4
|
% |
1,288
|
10.6
|
% | |||||||||||||||
G&A expenses
|
439
|
5.1
|
% |
484
|
5.2
|
% |
533
|
4.4
|
% | |||||||||||||||
Other (income) expense
|
(14
|
) |
§
|
(209
|
) |
(2.2
|
%) |
(92
|
) |
(0.8
|
%) | |||||||||||||
Segment profit*
|
$ |
2,252
|
26.4
|
% | $ |
2,837
|
30.5
|
% | $ |
4,624
|
38.1
|
% | ||||||||||||
* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
|
Year ended December 31,
|
Percentage
Change
2018-2019
|
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||||
|
(U.S. $ in millions)
|
|
|
|||||||||||||
Generic products
|
$ |
3,963
|
$ |
4,056
|
$ |
5,203
|
(2
|
%) | ||||||||
COPAXONE
|
1,017
|
1,759
|
3,116
|
(42
|
%) | |||||||||||
BENDEKA/TREANDA
|
496
|
642
|
656
|
(23
|
%) | |||||||||||
ProAir*
|
274
|
397
|
501
|
(31
|
%) | |||||||||||
QVAR
|
250
|
182
|
313
|
38
|
% | |||||||||||
AJOVY
|
93
|
3
|
—
|
N/A
|
||||||||||||
AUSTEDO
|
412
|
204
|
24
|
102
|
% | |||||||||||
Anda
|
1,492
|
1,347
|
1,153
|
11
|
% | |||||||||||
Other
|
546
|
708
|
1,175
|
(23
|
%) | |||||||||||
Total
|
$ |
8,542
|
$ |
9,297
|
$ |
12,141
|
|
|||||||||
* | Does not include revenues from the ProAir authorized generic, which are included under generic products. |
Product Name
|
Brand
Name |
|
Launch
Date |
|
Total Annual U.S.
Branded Sales at Time of Launch (U.S. $ in millions (IQVIA))
(1)
|
|
||||||
Vardenafil hydrochloride tablets, 2.5 mg, 5 mg, 10 mg & 20 mg
|
Levitra
®
|
January
|
$ |
88
|
||||||||
Albuterol sulfate HFA inhalation aerosol with dose counter, 90 mcg
(2)
|
ProAir
®
|
January
|
$ |
1,497
|
||||||||
Vigabatrin tablets, USP, 500 mg
|
Sabril
®
|
February
|
$ |
183
|
||||||||
ALYQ
TM
(tadalafil tablets), USP, 20 mg
|
Adcirca
®
|
February
|
$ |
475
|
||||||||
Ketoconazole cream, 2%
(3)
|
Nizoral
®
|
February
|
$ |
92
|
||||||||
Clindamycin phosphate and benzoyl peroxide gel, 1.2%/2.5%
|
Acanya
®
|
February
|
$ |
21
|
||||||||
Minocycline hydrochloride extended-release tablets, USP, 80 mg & 105 mg
|
Solodyn
®
ER
|
February
|
$ |
173
|
||||||||
Diclofenac epolamine topical patch, 1.3%
|
Flector
®
|
March
|
$ |
123
|
||||||||
Cyclobenzaprine hydrochloride extended-release capsules, 15 mg & 30 mg
(2)
|
Amrix
®
|
March
|
$ |
50
|
||||||||
Deferasirox tablets, 125 mg, 250 mg & 500 mg
|
Exjade
®
|
March
|
$ |
134
|
||||||||
Methylergonovine maleate tablets, USP, .2 mg
|
Methergine
®
|
March
|
$ |
62
|
||||||||
Docosanol cream, 10%
|
Abreva
®
|
March
|
$ |
88
|
||||||||
Fluoxetine tablets, USP 20 mg
|
—
|
April
|
$ |
56
|
||||||||
Testosterone gel, metered 1.62% CIII
|
AndroGel
®
1.62% [CIII]
|
April
|
$ |
755
|
||||||||
Solifenacin succinate tablets, 5 mg & 10 mg
|
Vesicare
®
|
April
|
$ |
946
|
||||||||
Ambrisentan tablets, 5 mg & 10 mg
|
Letairis
®
|
May
|
$ |
254
|
Product Name
|
Brand
Name |
|
Launch
Date |
|
Total Annual U.S.
Branded Sales at Time of Launch (U.S. $ in millions (IQVIA))
(1)
|
|
||||||
Erlotinib tablets, 100 mg & 150 mg
|
Tarceva
®
|
May
|
$ |
188
|
||||||||
Mesalamine delayed-release capsules, 400 mg
|
Delzicol
®
|
May
|
$ |
130
|
||||||||
Ranolazine extended-release tablets, 500 mg & 1000 mg
|
Ranexa
®
|
May
|
$ |
950
|
||||||||
Aspirin and extended-release dipyridamole capsules, 25 mg/200 mg
(3)
|
Aggrenox
®
|
June
|
$ |
168
|
||||||||
Desmopressin acetate injection, USP, 4 mcg/mL
(3)
|
DDAVP
®
|
June
|
$ |
58
|
||||||||
Albendazole tablets, USP, 200 mg
|
Albenza
®
|
June
|
$ |
85
|
||||||||
Bosentan tablets, 62.5 mg & 125 mg
|
Tracleer
®
|
June
|
$ |
84
|
||||||||
Doxylamine succinate and pyridoxine hydrochloride delayed-release tablets, 10 mg/10 mg
|
Diclegis
®
|
June
|
$ |
151
|
||||||||
Penicillamine capsules, USP, 250 mg
|
Cuprimine
®
|
June
|
$ |
130
|
||||||||
1% Sodium hyaluronate injection
|
(4)
|
June
|
—
|
|||||||||
Oseltamivir phosphate for oral suspension, 6 mg/mL
|
Tamiflu
®
|
July
|
$ |
281
|
||||||||
Icatibant injection, 30 mg/3 mL
|
Firazyr
®
|
July
|
$ |
304
|
||||||||
Pregabalin capsules, 25 mg, 50 mg, 75 mg, 100 mg, 150 mg, 200 mg, 225 mg & 300 mg
|
Lyrica
®
|
July
|
$ |
5,456
|
||||||||
Ramelteon tablets, 8 mg
|
Rozerem
®
|
July
|
$ |
91
|
||||||||
Bisoprolol fumarate and hydrochlorothiazide tablets, 2.5 mg/6.25 mg, 5 mg/6.25 mg & 10 mg/6.25 mg
(2)
|
Ziac
®
|
August
|
$ |
42
|
||||||||
Doxycycline hyclate delayed-release tablets, USP, 50 mg & 200 mg
|
Doryx
®
|
August
|
$ |
20
|
||||||||
Mycophenolic acid delayed-release tablets, USP, 180 mg & 360 mg
|
Myfortic
®
DR
|
August
|
$ |
180
|
||||||||
Epinephrine injection, USP (auto-injector), 0.15 mg/0.3 mL
|
EpiPen Jr
®
|
August
|
$ |
201
|
||||||||
Minocycline hydrochloride extended-release tablets, USP, 55 mg
|
Solodyn
®
ER
|
August
|
$ |
44
|
||||||||
Fulvestrant Injection, 250 mg/5 mL (50 mg/mL)
|
(5)
|
August
|
—
|
|||||||||
Triamcinolone acetonide injectable suspension, USP, 40 mg/mL (40 mg), 40 mg/mL (200 mg) & 40 mg/mL (400 mg)
|
Kenalog
®
-40
|
August
|
$ |
135
|
||||||||
Acyclovir cream, 5%
(6)
|
Zovirax
®
|
August
|
$ |
97
|
||||||||
Fosaprepitant for injection, 150 mg/Vial
|
(5)
|
September
|
—
|
|||||||||
Treprostinil injection, 1 mg/mL (20 mg), 2.5 mg/mL (50 mg), 5 mg/mL (100 mg) & 10 mg/mL (200 mg)
|
Remodulin
®
|
September
|
$
|
3
|
||||||||
Ivermectin cream, 1%
|
Soolantra
®
|
October
|
$
|
206
|
||||||||
TRUXIMA, 100 mg/10 mL & 500 mg/50 mL
|
Rituxan
®
(7)
|
November
|
$ |
4,378
|
||||||||
Deferasirox tablets, 90 mg & 360 mg
|
Jadenu
®
|
November
|
$ |
390
|
(1) |
The figures presented are for the twelve months ended in the calendar quarter immediately prior to our launch or
re-launch.
|
(2) | Authorized generic of a Teva specialty product. |
(3) |
Products were
re-launched.
|
(4) | Approved via 515(d)(1)(B)(ii) regulatory pathway for medical devices; not equivalent to a brand product. |
(5) | Approved via 505(b)(2) regulatory pathway; not equivalent to a brand product. |
(6) | Authorized generic. |
(7) | Biosimilar. |
Generic Name
|
Brand Name
|
|
Total U.S. Annual Branded
Market (U.S. $ in millions (IQVIA))* |
|
||||
Dapagliflozin tablets, 5 mg
|
Farxiga
®
|
$ |
1,688
|
|||||
Deferasirox Oral Tablets 180 mg
|
Jadenu
®
|
$ |
55
|
|||||
Efinaconazole Topical Solution
|
Jublia
®
|
$ |
231
|
|||||
Enzalutamide capsules, 40 mg
|
Xtandi
®
|
$ |
999
|
|||||
Everolimus tablets, 2.5 mg, 5 mg, 7.5 mg & 10 mg
|
Afinitor
®
|
$ |
770
|
|||||
Icatibant injection, 30 mg/3 mL
|
Firazyr
®
|
$ |
318
|
|||||
Ivermectin lotion, 0.5%
|
Sklice
®
|
$ |
81
|
|||||
Sildenafil, 10 mg/mL
|
Revatio
®
|
$ |
189
|
|||||
Sorafenib tablets, 200 mg
|
Nexavar
®
|
$ |
55
|
* | For the twelve months ended in the calendar quarter immediately prior to the receipt of tentative approval. |
|
Year ended December 31,
|
|||||||||||||||||||||||
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
(U.S. $ in millions / % of Segment Revenues)
|
|||||||||||||||||||||||
Revenues
|
$ |
4,795
|
100
|
% | $ |
5,186
|
100
|
% | $ |
5,466
|
100
|
% | ||||||||||||
Gross profit
|
2,704
|
56.4
|
% |
2,884
|
55.6
|
% |
2,887
|
52.8
|
% | |||||||||||||||
R&D expenses
|
262
|
5.5
|
% |
283
|
5.5
|
% |
390
|
7.1
|
% | |||||||||||||||
S&M expenses
|
890
|
18.6
|
% |
1,003
|
19.3
|
% |
1,130
|
20.7
|
% | |||||||||||||||
G&A expenses
|
239
|
5.0
|
% |
325
|
6.3
|
% |
354
|
6.5
|
% | |||||||||||||||
Other (income) expense
|
(5
|
) |
§
|
—
|
§
|
(16
|
) |
§
|
||||||||||||||||
Segment profit*
|
$ |
1,318
|
27.5
|
% | $ |
1,273
|
24.5
|
% | $ |
1,029
|
18.8
|
% | ||||||||||||
* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
|
Year ended December 31,
|
Percentage
Change
2018-2019
|
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||||
|
(U.S. $ in millions)
|
|
|
|||||||||||||
Generic products
|
$ |
3,470
|
$ |
3,593
|
$ |
3,471
|
(3
|
%) | ||||||||
COPAXONE
|
432
|
535
|
595
|
(19
|
%) | |||||||||||
Respiratory products
|
354
|
402
|
368
|
(12
|
%) | |||||||||||
Other
|
539
|
656
|
1,033
|
(18
|
%) | |||||||||||
Total
|
$ |
4,795
|
$ |
5,186
|
$ |
5,466
|
(8
|
%) | ||||||||
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
(U.S. $ in millions / % of Segment Revenues)
|
|||||||||||||||||||||||
Revenues
|
$ |
2,246
|
100
|
% | $ |
2,422
|
100
|
% | $ |
2,863
|
100
|
% | ||||||||||||
Gross profit
|
1,167
|
51.9
|
% |
1,254
|
51.8
|
% |
1,433
|
50.1
|
% | |||||||||||||||
R&D expenses
|
88
|
3.9
|
% |
96
|
4.0
|
% |
154
|
5.4
|
% | |||||||||||||||
S&M expenses
|
481
|
21.4
|
% |
518
|
21.4
|
% |
672
|
23.5
|
% | |||||||||||||||
G&A expenses
|
138
|
6.1
|
% |
153
|
6.3
|
% |
189
|
6.6
|
% | |||||||||||||||
Other (income) expense
|
(3
|
) |
§
|
(11
|
) |
§
|
(8
|
) |
§
|
|||||||||||||||
Segment profit*
|
$ |
464
|
20.6
|
% | $ |
498
|
20.6
|
% | $ |
426
|
14.9
|
% | ||||||||||||
* | Segment profit does not include amortization and certain other items. |
§ | Represents an amount less than 0.5%. |
|
Year ended December 31,
|
Percentage
Change
2018-2019
|
|
|||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||||||
|
(U.S. $ in millions)
|
|
|
|||||||||||||
Generic products
|
$ |
1,893
|
$ |
2,022
|
$ |
2,370
|
(6
|
%) | ||||||||
COPAXONE
|
63
|
72
|
91
|
(13
|
%) | |||||||||||
Distribution
|
20
|
19
|
17
|
6
|
% | |||||||||||
Other
|
271
|
309
|
385
|
(12
|
%) | |||||||||||
Total
|
$ |
2,246
|
$ |
2,422
|
$ |
2,863
|
(7
|
%) | ||||||||
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
North America profit
|
$ |
2,252
|
$ |
2,837
|
$ |
4,624
|
||||||
Europe profit
|
1,318
|
1,273
|
1,029
|
|||||||||
International Markets profit
|
464
|
498
|
426
|
|||||||||
Total reportable segments profit
|
4,034
|
4,608
|
6,079
|
|||||||||
Profit (loss) of other activities
|
108
|
115
|
(6
|
) | ||||||||
Total segments profit
|
4,142
|
4,723
|
6,073
|
|||||||||
Amounts not allocated to segments:
|
|
|
|
|||||||||
Amortization
|
1,113
|
1,166
|
1,444
|
|||||||||
Other asset impairments, restructuring and other items
|
423
|
987
|
1,836
|
|||||||||
Goodwill impairment
|
—
|
3,027
|
17,100
|
|||||||||
Intangible asset impairments
|
1,639
|
1,991
|
3,238
|
|||||||||
Gain on divestitures, net of divestitures related costs
|
(50
|
) |
(66
|
) |
(1,083
|
) | ||||||
Inventory Step-up
|
—
|
—
|
67
|
|||||||||
Other R&D expenses
|
(15
|
) |
83
|
221
|
||||||||
Costs related to regulatory actions taken in facilities
|
45
|
14
|
47
|
|||||||||
Legal settlements and loss contingencies
|
1,178
|
(1,208
|
) |
500
|
||||||||
Other unallocated amounts
|
252
|
366
|
187
|
|||||||||
Consolidated operating income (loss)
|
(443
|
) |
(1,637
|
) |
(17,484
|
) | ||||||
Financial expenses, net
|
822
|
959
|
895
|
|||||||||
Consolidated income (loss) before income taxes
|
$ |
(1,265
|
) | $ |
(2,596
|
) | $ |
(18,379
|
) | |||
• | $300 million of our $2.0 billion 1.7% senior notes due in July 2019 |
• |
€
90 million of our
€
1.75 billion 0.38% senior notes due in July 2020
|
• |
our management and Board of Directors use the
non-GAAP
measures to evaluate our operational performance, to compare against work plans and budgets, and ultimately to evaluate the performance of management;
|
• |
our annual budgets are prepared on a
non-GAAP
basis; and
|
• |
senior management’s annual compensation is derived, in part, using these
non-GAAP
measures. While qualitative factors and judgment also affect annual bonuses, the principal quantitative element in the determination of such bonuses is performance targets tied to the work plan, which is based on the
non-GAAP
presentation set forth below.
|
• | amortization of purchased intangible assets; |
• | legal settlements and/or loss contingencies, due to the difficulty in predicting their timing and scope; |
• | impairments of long-lived assets, including intangibles, property, plant and equipment and goodwill; |
• | restructuring expenses, including severance, retention costs, contract cancellation costs and certain accelerated depreciation expenses primarily related to the rationalization of our plants or to certain other strategic activities, such as the realignment of R&D focus or other similar activities; |
• |
acquisition- or divestment- related items, including changes in contingent consideration, integration costs, banker and other professional fees, inventory
step-up
and
in-process
R&D acquired in development arrangements;
|
• | expenses related to our equity compensation; |
• |
significant
one-time
financing costs and devaluation losses;
|
• | deconsolidation charges; |
• | material tax and other awards or settlement amounts, both paid and received; |
• | other exceptional items that we believe are sufficiently large that their exclusion is important to facilitate an understanding of trends in our financial results, such as impacts due to changes in accounting, significant costs for remediation of plants, such as inventory write-offs or related consulting costs, or other unusual events; and |
• | corresponding tax effects of the foregoing items. |
|
Year Ended December 31, 2019
(U.S. $ and shares in millions, except per share amounts)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||
|
GAAP
|
Excluded for non GAAP measurement
|
Non
GAAP |
|||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Amortization
of purchased intangible assets |
Legal
settlements and loss contingencies |
Impairment
of long- lived assets |
Other
R&D expenses |
Restructuring
costs |
Costs
related to regulatory actions taken in facilities |
Equity
compensation |
Contingent
consideration |
Gain on
sale of business |
Other
non GAAP items |
Other
items |
|
|||||||||||||||||||||||||||||||||||||||
COGS
|
9,351
|
973
|
|
|
|
|
45
|
26
|
|
|
121
|
|
8,185
|
|||||||||||||||||||||||||||||||||||||||
R&D
|
1,010
|
|
|
|
(15
|
) |
|
|
20
|
|
|
1
|
|
1,004
|
||||||||||||||||||||||||||||||||||||||
S&M
|
2,614
|
139
|
|
|
|
|
|
35
|
|
|
1
|
|
2,438
|
|||||||||||||||||||||||||||||||||||||||
G&A
|
1,192
|
|
|
|
|
|
|
42
|
|
|
5
|
|
1,145
|
|||||||||||||||||||||||||||||||||||||||
Other income
|
(76
|
) |
|
|
|
|
|
|
|
|
(50
|
) |
|
|
(27
|
) | ||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies
|
1,178
|
|
1,178
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items
|
423
|
|
|
139
|
|
199
|
|
|
59
|
|
26
|
|
—
|
|||||||||||||||||||||||||||||||||||||||
Intangible assets impairment
|
1,639
|
|
|
1,639
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||
Financial expenses
|
822
|
|
|
|
|
|
|
|
|
|
|
(3
|
) |
824
|
||||||||||||||||||||||||||||||||||||||
Corresponding tax effect
|
(278
|
) |
|
|
|
|
|
|
|
|
|
|
(875
|
) |
597
|
|||||||||||||||||||||||||||||||||||||
Share in losses of associated companies – net
|
13
|
|
|
|
|
|
|
|
|
|
|
—
|
13
|
|||||||||||||||||||||||||||||||||||||||
Net income attributable to
non-controlling
interests
|
(2
|
) |
|
|
|
|
|
|
|
|
|
|
(82
|
) |
80
|
|||||||||||||||||||||||||||||||||||||
Total reconciled items
|
|
1,113
|
1,178
|
1,778
|
(15
|
) |
199
|
45
|
123
|
59
|
(50
|
) |
155
|
(959
|
) |
|
||||||||||||||||||||||||||||||||||||
EPS—Basic
|
(0.91
|
) |
|
|
|
|
|
|
|
|
|
|
3.32
|
2.41
|
||||||||||||||||||||||||||||||||||||||
EPS—Diluted
|
(0.91
|
) |
|
|
|
|
|
|
|
|
|
|
3.32
|
2.40
|
|
Year ended December 31, 2018
(U.S. $ and shares in millions, except per share amounts)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
GAAP
|
Excluded for non GAAP measurement
|
Non
GAAP |
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Amortization
of purchased intangible assets |
Goodwill
impairment |
Legal
settlements and loss contingencies |
Impairment
of long- lived assets |
Other
R&D expenses |
Acquisition
integration and related expenses |
Restructuring
costs |
Costs
related to regulatory actions taken in facilities |
Equity
compensation |
Contingent
consideration |
Gain on
sale of business |
Other
non GAAP items |
Other
items |
|
|||||||||||||||||||||||||||||||||||||||||||||
COGS*
|
9,975
|
1,004
|
|
|
|
|
|
|
14
|
28
|
|
|
204
|
|
8,725
|
|||||||||||||||||||||||||||||||||||||||||||||
R&D
|
1,213
|
|
|
|
|
83
|
|
|
|
26
|
|
|
2
|
|
1,102
|
|||||||||||||||||||||||||||||||||||||||||||||
S&M
|
2,916
|
162
|
|
|
|
|
|
|
|
43
|
|
|
(7
|
) |
|
2,718
|
||||||||||||||||||||||||||||||||||||||||||||
G&A
|
1,298
|
|
|
|
|
|
|
|
|
55
|
|
|
15
|
|
1,228
|
|||||||||||||||||||||||||||||||||||||||||||||
Other income
|
(291
|
) |
|
|
|
|
|
|
|
|
|
|
(66
|
) |
|
|
(225
|
) | ||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies
|
(1,208
|
) |
|
|
(1,208
|
) |
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items
|
987
|
|
|
|
500
|
|
13
|
488
|
|
|
57
|
|
(71
|
) |
|
—
|
||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment
|
1,991
|
|
|
|
1,991
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment
|
3,027
|
|
3,027
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Financial expenses
|
959
|
|
|
|
|
|
|
|
|
|
|
|
|
66
|
893
|
|||||||||||||||||||||||||||||||||||||||||||||
Corresponding tax effect
|
(195
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
(714
|
) |
519
|
|||||||||||||||||||||||||||||||||||||||||||
Share in losses of associated companies – net
|
71
|
|
|
|
|
|
|
|
|
|
|
|
|
103
|
(32
|
) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to
non-controlling
interests
|
(322
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
(431
|
) |
109
|
|||||||||||||||||||||||||||||||||||||||||||
Total reconciled items
|
|
1,166
|
3,027
|
(1,208
|
) |
2,491
|
83
|
13
|
488
|
14
|
152
|
57
|
(66
|
) |
143
|
(976
|
) |
|
||||||||||||||||||||||||||||||||||||||||||
EPS—Basic
|
(2.35
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
5.27
|
2.92
|
||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted
|
(2.35
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
5.27
|
2.92
|
* | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b to our consolidated financial statements for additional information. |
|
Year ended December 31, 2017
U.S. $ and shares in millions (except per share amounts)
|
|||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
GAAP
|
Excluded for non GAAP measurement
|
|
Non
GAAP |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
Amortization
of purchased intangible assets |
Goodwill
impairment |
Legal
settlements and loss contingencies |
Impairment
of long- lived assets |
Other
R&D expenses |
Inventory
step-up
|
Acquisition,
integration and related expenses |
Restructuring
costs |
Costs
related to regulatory actions taken in facilities |
Equity
compensation |
Contingent
consideration |
Other
non GAAP items |
Other
items |
|
|||||||||||||||||||||||||||||||||||||||||||||
COGS*
|
11,237
|
1,235
|
|
|
|
|
67
|
|
|
47
|
23
|
|
47
|
|
9,818
|
|||||||||||||||||||||||||||||||||||||||||||||
R&D
|
1,778
|
|
|
|
|
221
|
|
|
|
|
22
|
|
20
|
|
1,515
|
|||||||||||||||||||||||||||||||||||||||||||||
S&M
|
3,395
|
209
|
|
|
|
|
|
|
|
|
38
|
|
(1
|
) |
|
3,149
|
||||||||||||||||||||||||||||||||||||||||||||
G&A
|
1,451
|
|
|
|
|
|
|
|
|
|
46
|
|
(8
|
) |
|
1,413
|
||||||||||||||||||||||||||||||||||||||||||||
Other income
|
(1,199
|
) |
|
|
|
|
|
|
|
|
|
|
|
(1,083
|
) |
|
(116
|
) | ||||||||||||||||||||||||||||||||||||||||||
Legal settlements and loss contingencies
|
500
|
|
|
500
|
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Other asset impairments, restructuring and other items
|
1,836
|
|
|
|
544
|
|
|
105
|
535
|
|
|
154
|
498
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Intangible assets impairment
|
3,238
|
|
|
|
3,238
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Goodwill impairment
|
17,100
|
|
17,100
|
|
|
|
|
|
|
|
|
|
|
|
—
|
|||||||||||||||||||||||||||||||||||||||||||||
Financial expenses
|
895
|
|
|
|
|
|
|
|
|
|
|
|
|
(13
|
) |
908
|
||||||||||||||||||||||||||||||||||||||||||||
Corresponding tax effect
|
(1,933
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
(2,721
|
) |
788
|
|||||||||||||||||||||||||||||||||||||||||||
Share in losses of associated companies – net
|
3
|
|
|
|
|
|
|
|
|
|
|
|
|
47
|
(44
|
) | ||||||||||||||||||||||||||||||||||||||||||||
Net income attributable to
non-controlling
interests
|
(184
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
(270
|
) |
86
|
|||||||||||||||||||||||||||||||||||||||||||
Total reconciled items
|
|
1,444
|
17,100
|
500
|
3,782
|
221
|
67
|
105
|
535
|
47
|
129
|
154
|
(527
|
) |
(2,957
|
) |
|
|||||||||||||||||||||||||||||||||||||||||||
EPS—Basic
|
(16.26
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
20.27
|
4.01
|
||||||||||||||||||||||||||||||||||||||||||||
EPS—Diluted
|
(16.26
|
) |
|
|
|
|
|
|
|
|
|
|
|
|
20.27
|
4.01
|
* | The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b to our consolidated financial statements for additional information. |
• | Success of our specialty products AJOVY, AUSTEDO and our biosimiliar products; |
• | execution of our global operations optimization plan, which may affect our business and operations, and the risk of incurring additional restructuring expenses; |
• | ability to successfully execute key generic launches in a timely manner; |
• |
our high debt levels and
non-investment
grade credit rating will have a negative effect on our ability to borrow additional funds and may increase the cost of any such borrowing;
|
• | a decrease in sales of COPAXONE following the launches of generic versions to the product, and the possibility of additional generic competition in the future; |
• | a decrease in sales of other specialty products due to potential loss of exclusivity or generic competition; |
• | we expect continued competition for our generic products where multiple similar generic products have been launched, resulting in pricing pressure in the generics markets. We do, however, also see certain generic segments in which opportunities exist to grow our business, our portfolio of new drug applications and our portfolio of approved complex products; and |
• | continued impact of currency fluctuations on revenues and net income, as well as on various balance sheet line items. |
|
Payments Due by Period
|
|||||||||||||||||||
|
Total
|
|
Less than
1 year |
|
1-3
years
|
|
3-5
years
|
|
More than
5 years |
|
||||||||||
|
(U.S. $ in millions)
|
|||||||||||||||||||
Long-term debt obligations, including expected interest*
|
$ |
34,043
|
$ |
2,737
|
$ |
6,310
|
$ |
8,723
|
$ |
16,274
|
||||||||||
Purchase obligations (including purchase orders)
|
1,876
|
1,624
|
248
|
4
|
—
|
|||||||||||||||
Total
|
$ |
35,919
|
$ |
4,361
|
$ |
6,558
|
$ |
8,727
|
$ |
16,274
|
||||||||||
* | Long-term debt obligations mainly include senior notes and convertible senior debentures as disclosed in note 9 to our consolidated financial statements. |
• | Revenue Recognition and SR&A |
• | Income Taxes |
• | Contingencies |
• | Inventories |
• | Goodwill |
• | Identifiable Intangible Assets |
• | Restructuring Costs |
• | A projection or forecast that indicates losses or reduced profits associated with an asset. This could result, for example, from a change in the competitive landscape modifying our assumptions about market share or pricing prospectively, a government reimbursement program that results in an inability to sustain projected product revenues and profitability, or lack of acceptance of a product by patients, physicians or payers limiting our projected growth. |
• | A significant adverse change in legal factors or in the business climate that could affect the value of the asset. For example, a successful challenge of our patent rights by a competitor would likely result in generic competition earlier than expected. And conversely, a lost challenge of patent rights in connection with our generic file would likely result in delayed entry. |
• | A significant adverse change in the extent or manner in which an asset is used. For example, restrictions imposed by the FDA or other regulatory authorities could affect our ability to manufacture or sell a product. |
• | For IPR&D projects, this could result from, among other things, a change in outlook affecting assumptions around competition or timing of entry such as approval success or the related timing of approval, clinical trial data results, other delays in the projected launch dates or additional expenditures required to commercialize the product. |
Currency (sold)
|
Cross
Currency
(bought)
|
|
Net Notional Value
|
Fair Value
|
2019 Weighted
Average Cross Currency Prices or Strike Prices |
|
||||||||||||||||||
2019
|
|
2018
|
|
2019
|
|
2018
|
|
|||||||||||||||||
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Forward:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
EUR
|
USD
|
503
|
147
|
(6
|
) |
2
|
1.12
|
|||||||||||||||||
EUR
|
GBP
|
445
|
416
|
12
|
(3
|
) |
0.88
|
|||||||||||||||||
CHF
|
USD
|
384
|
274
|
(5
|
) |
(1
|
) |
0.98
|
||||||||||||||||
JPY
|
USD
|
302
|
283
|
2
|
(5
|
) |
107.71
|
|||||||||||||||||
EUR
|
PLN
|
216
|
115
|
4
|
1
|
4.33
|
||||||||||||||||||
USD
|
RUB
|
205
|
*
|
(5
|
) |
*
|
64.78
|
|||||||||||||||||
USD
|
INR
|
192
|
70
|
—
|
2
|
72.69
|
||||||||||||||||||
NIS
|
USD
|
131
|
66
|
(1
|
) |
—
|
3.48
|
|||||||||||||||||
PLN
|
USD
|
105
|
*
|
(2
|
) |
*
|
3.85
|
|||||||||||||||||
CAD
|
USD
|
101
|
*
|
—
|
*
|
1.31
|
||||||||||||||||||
EUR
|
CAD
|
96
|
140
|
—
|
(4
|
) |
1.47
|
|||||||||||||||||
RUB
|
EUR
|
92
|
*
|
(2
|
) |
—
|
71.51
|
|||||||||||||||||
MXN
|
USD
|
68
|
*
|
(2
|
) |
—
|
19.49
|
|||||||||||||||||
USD
|
GBP
|
*
|
60
|
*
|
—
|
*
|
||||||||||||||||||
CHF
|
EUR
|
*
|
53
|
*
|
(1
|
) |
*
|
|||||||||||||||||
Options:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||
EUR
|
USD
|
381
|
*
|
(2
|
) |
*
|
1.10
|
|||||||||||||||||
JPY
|
USD
|
139
|
77
|
—
|
—
|
109.72
|
||||||||||||||||||
EUR
|
GBP
|
131
|
*
|
—
|
*
|
0.84
|
||||||||||||||||||
CHF
|
USD
|
85
|
99
|
(1
|
) |
—
|
0.99
|
|||||||||||||||||
GBP
|
USD
|
63
|
*
|
(1
|
) |
*
|
1.26
|
* | Represents Net Notional Value of less than $50 million. |
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Cross currency swap—cash flow hedge
|
$ |
—
|
$ |
588
|
||||
Interest rate swap—fair value hedge
|
$ |
—
|
$ |
500
|
Currency
|
Total
Amount |
|
Interest Rate
Ranges |
2020
|
|
2021
|
|
2022
|
|
2023
|
|
2024
|
|
2025 &
thereafter |
|
|||||||||||||||||||||
|
(U.S. dollars in millions)
|
|||||||||||||||||||||||||||||||||||
Fixed Rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
USD
|
16,404
|
1.70
|
% |
7.13
|
% |
700
|
2,092
|
856
|
2,995
|
1,250
|
8,512
|
|||||||||||||||||||||||||
Euro
|
9,368
|
0.38
|
% |
6.00
|
% |
1,131
|
587
|
784
|
1,451
|
1,673
|
3,743
|
|||||||||||||||||||||||||
CHF
|
723
|
0.50
|
% |
1.00
|
% |
—
|
—
|
361
|
—
|
—
|
362
|
|||||||||||||||||||||||||
USD convertible debentures*
|
514
|
0.25
|
% |
0.25
|
% |
514
|
—
|
—
|
—
|
—
|
—
|
|||||||||||||||||||||||||
Floating Rate:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Others
|
1
|
1.00
|
% |
2.00
|
% |
—
|
—
|
—
|
—
|
|
1
|
|||||||||||||||||||||||||
Total:
|
27,010
|
|
|
$ |
2,345
|
$ |
2,679
|
$ |
2,001
|
$ |
4,446
|
$ |
2,923
|
$ |
12,618
|
|||||||||||||||||||||
Less debt issuance costs
|
(103
|
) |
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
Total:
|
$ |
26,908
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||
* | Classified under short-term debt. |
|
Page
|
|
||
97
|
||||
Consolidated Financial Statements:
|
|
|||
101
|
||||
Statements of income (loss)
|
102
|
|||
103
|
||||
104
|
||||
105
|
||||
107
|
/s/ Kesselman & Kesselman
|
Kesselman & Kesselman
|
Certified Public Accountants (Isr.)
|
A member of PricewaterhouseCoopers International Limited
|
Tel-Aviv,
Israel
|
February 21, 2020
|
|
December 31,
|
|
December 31,
|
|
||||
|
2019
|
|
2018
|
|
||||
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
||
Current assets:
|
|
|
|
|
|
|
||
Cash and cash equivalents
|
$ |
1,975
|
$ |
1,782
|
||||
Accounts
receivables
|
5,676
|
5,822
|
||||||
Inventories
|
4,422
|
4,731
|
||||||
Prepaid expenses
|
870
|
899
|
||||||
Other current assets
|
434
|
468
|
||||||
Assets held for sale
|
87
|
92
|
||||||
Total current assets
|
13,464
|
13,794
|
||||||
Deferred income taxes
|
386
|
368
|
||||||
Other
non-current
assets
|
591
|
731
|
||||||
Property, plant and equipment, net
|
6,436
|
6,868
|
||||||
Operating lease right-of-use assets
|
|
|
514
|
|
|
|
—
|
|
Identifiable intangible assets, net
|
11,232
|
14,005
|
||||||
Goodwill
|
24,846
|
24,917
|
||||||
Total assets
|
$ |
57,470
|
$ |
60,683
|
||||
LIABILITIES AND EQUITY
|
|
|
|
|
|
|
||
Current liabilities:
|
|
|
|
|
|
|
||
Short-term debt
|
|
$
|
2,345
|
|
|
$
|
2,216
|
|
Sales reserves and allowances
|
6,159
|
6,711
|
||||||
Accounts
payables
|
1,718
|
1,853
|
||||||
Employee-related obligations
|
693
|
870
|
||||||
Accrued expenses
|
1,869
|
1,868
|
||||||
Other current liabilities
|
889
|
804
|
||||||
Total current liabilities
|
13,674
|
14,322
|
||||||
Long-term liabilities:
|
|
|
|
|
|
|
||
Deferred income taxes
|
1,096
|
2,140
|
||||||
Other taxes and long-term liabilities
|
2,640
|
1,727
|
||||||
Senior notes and loans
|
24,562
|
26,700
|
||||||
Operating lease liabilities
|
|
|
435
|
|
|
|
—
|
|
|
|
|
|
|
|
|
|
|
Total long-term liabilities
|
28,733
|
30,567
|
||||||
Commitments and contingencies
|
||||||||
Total liabilities
|
42,407
|
44,889
|
||||||
Equity:
|
|
|
|
|
|
|
||
Teva shareholders’ equity:
|
|
|
|
|
|
|
||
Ordinary shares of NIS 0.10 par value per share; December 31, 201
9
and December 31, 201
8
: authorized 2,495 million shares; issued
1,198 million
1,196 million shares,
shares and
|
56
|
56
|
||||||
Additional
paid-in
capital
|
27,312
|
27,210
|
||||||
Accumulated deficit
|
(6,956
|
) |
(5,958
|
) | ||||
Accumulated other comprehensive loss
|
(2,312
|
) |
(2,459
|
) | ||||
Treasury shares as of December 31, 201
9
and December 31, 201
8
: 106 million ordinary shares
|
(4,128
|
) |
(4,142
|
) | ||||
|
13,972
|
14,707
|
||||||
Non-controlling
interests
|
1,091
|
1,087
|
||||||
Total equity
|
15,063
|
15,794
|
||||||
Total liabilities and equity
|
$ |
57,470
|
$ |
60,683
|
||||
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Net revenues
|
$ |
16,887
|
$ |
18,271
|
$ |
21,853
|
||||||
Cost of sales
|
9,351
|
9,975
|
11,237
|
|||||||||
Gross profit
|
7,537
|
8,296
|
10,615
|
|||||||||
Research and development expenses
|
1,010
|
1,213
|
1,778
|
|||||||||
Selling and marketing expenses
|
2,614
|
2,916
|
3,395
|
|||||||||
General and administrative expenses
|
1,192
|
1,298
|
1,451
|
|||||||||
Intangible assets impairments
|
1,639
|
1,991
|
3,238
|
|||||||||
Goodwill impairment
|
—
|
3,027
|
17,100
|
|||||||||
Other asset impairments, restructuring and other items
|
423
|
987
|
1,836
|
|||||||||
Legal settlements and loss contingencies
|
1,178
|
(1,208
|
) |
500
|
||||||||
Other income
|
(76
|
) |
(291
|
) |
(1,199
|
) | ||||||
Operating (loss) income
|
(443
|
) |
(1,637
|
) |
(17,484
|
) | ||||||
Financial expenses—net
|
822
|
959
|
895
|
|||||||||
Income (loss) before income taxes
|
(1,265
|
) |
(2,596
|
) |
(18,379
|
) | ||||||
Income taxes (benefit)
|
(278
|
) |
(195
|
) |
(1,933
|
) | ||||||
Share in (profits) losses of associated companies—net
|
13
|
71
|
3
|
|||||||||
Net income (loss)
|
(1,000
|
) |
(2,472
|
) |
(16,449
|
) | ||||||
Net loss attributable to
non-controlling
interests
|
(2
|
) |
(322
|
) |
(184
|
) | ||||||
Net income (loss) attributable to Teva
|
(999
|
) |
(2,150
|
) |
(16,265
|
) | ||||||
Accrued dividends on preferred shares
|
—
|
249
|
260
|
|||||||||
Net income (loss) attributable to ordinary shareholders
|
$ |
(999
|
) | $ |
(2,399
|
) | $ |
(16,525
|
) | |||
Earnings (loss) per share attributable to ordinary shareholders:
|
|
|
|
|||||||||
Basic
|
$ |
(0.91
|
) | $ |
(2.35
|
) | $ |
(16.26
|
) | |||
Diluted
|
$ |
(0.91
|
) | $ |
(2.35
|
) | $ |
(16.26
|
) | |||
Weighted average number of shares (in millions):
|
|
|
|
|||||||||
Basic
|
1,091
|
1,021
|
1,016
|
|||||||||
Diluted
|
1,091
|
1,021
|
1,016
|
|||||||||
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
Net income (loss)
|
$ |
(1,000
|
) | $ |
(2,472
|
) | $ |
(16,449
|
) | |||
Other comprehensive income (loss), net of tax:
|
|
|
|
|||||||||
Currency translation adjustment*
|
97
|
(713
|
) |
1,516
|
||||||||
Unrealized gain (loss) on derivative financial instruments, net
|
84
|
115
|
(140
|
) | ||||||||
Unrealized gain (loss) on
available-for-sale
securities, net
|
(1
|
) |
—
|
3
|
||||||||
Unrealized gain (loss) on defined benefit plans, net
|
(20
|
) |
13
|
(10
|
) | |||||||
Total other comprehensive income (loss)
|
160
|
(585
|
) |
1,369
|
||||||||
Total comprehensive loss
|
(840
|
) |
(3,057
|
) |
(15,080
|
) | ||||||
Comprehensive income (loss) attributable to non-controlling interests
|
12
|
(296
|
) |
(121
|
) | |||||||
Comprehensive loss attributable to Teva
|
$ |
(852
|
) | $ |
(2,761
|
) | $ |
(14,959
|
) | |||
*
|
In 2017 includes amount that was released from accumulated other comprehensive loss as part of the deconsolidation of the Venezuelan subsidiaries and is included in Venezuela deconsolidation charge under other asset impairment, restructuring and other items.
|
|
Teva shareholders’ equity
|
|
|
|||||||||||||||||||||||||||||||||||||
|
Ordinary shares
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||||||||||||
|
Number of
shares (in millions) |
Stated
value |
MCPS**
|
Additional
paid-in
capital
|
Retained
earnings (accumulated deficit) |
Accumulated
other compre- hensive income (loss) |
Treasury
shares |
Total Teva
share-holders’
equity |
Non-
controlling interests |
Total equity
|
||||||||||||||||||||||||||||||
|
|
(U.S. dollars in millions)
|
|
|||||||||||||||||||||||||||||||||||||
Balance at January 1, 2017
|
1,123
|
54
|
3,620
|
23,409
|
13,607
|
(3,159
|
) |
(4,194
|
) |
33,337
|
1,656
|
34,993
|
||||||||||||||||||||||||||||
Changes during 2017:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Comprehensive income (loss)
|
|
|
|
|
(16,265
|
) |
1,306
|
|
(14,959
|
) |
(121
|
) |
(15,080
|
) | ||||||||||||||||||||||||||
Exercise of options by employees and vested
RSUs |
1
|
*
|
|
(45
|
) |
|
|
45
|
*
|
|
*
|
|||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
|
133
|
|
|
|
133
|
|
133
|
||||||||||||||||||||||||||||||
Dividends to ordinary shareholders
|
|
|
|
|
(901
|
) |
|
|
(901
|
) |
|
(901
|
) | |||||||||||||||||||||||||||
Dividends to preferred shareholders
|
|
|
11
|
(11
|
) |
(249
|
) |
|
|
(249
|
) |
|
(249
|
) | ||||||||||||||||||||||||||
Transactions with
non-controlling
interests
|
|
|
|
|
|
|
|
—
|
(111
|
) |
(111
|
) | ||||||||||||||||||||||||||||
Other
|
|
|
|
(7
|
) |
5
|
|
|
(2
|
) |
(38
|
) |
(40
|
) | ||||||||||||||||||||||||||
Balance at December 31, 2017
|
1,124
|
54
|
3,631
|
23,479
|
(3,803
|
) |
(1,853
|
) |
(4,149
|
) |
17,359
|
1,386
|
18,745
|
|||||||||||||||||||||||||||
Changes during 2018:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Cumulative effect of new accounting
standard**** |
|
|
|
|
(5
|
) |
5
|
|
|
|
—
|
|||||||||||||||||||||||||||||
Comprehensive income (loss)
|
|
|
|
|
(2,150
|
) |
(611
|
) |
|
(2,761
|
) |
(296
|
) |
(3,057
|
) | |||||||||||||||||||||||||
Issuance of Treasury Shares
|
|
*
|
|
(3
|
) |
|
|
7
|
4
|
|
4
|
|||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
|
155
|
|
|
|
155
|
|
155
|
||||||||||||||||||||||||||||||
Issuance of shares***
|
72
|
2
|
(3,880
|
) |
3,826
|
|
|
|
(52
|
) |
|
(52
|
) | |||||||||||||||||||||||||||
Dividends to preferred shareholders
|
|
|
249
|
(249
|
) |
|
|
|
—
|
|
—
|
|||||||||||||||||||||||||||||
Transactions with
non-controlling interests
|
|
|
|
2
|
|
|
|
2
|
(3
|
) |
(1
|
) | ||||||||||||||||||||||||||||
Balance at December 31, 2018
|
1,196
|
56
|
—
|
27,210
|
(5,958
|
) |
(2,459
|
) |
(4,142
|
) |
14,707
|
1,087
|
15,794
|
|||||||||||||||||||||||||||
Changes during 2019:
|
|
|
|
|
|
|
|
|
|
|
||||||||||||||||||||||||||||||
Comprehensive income (loss)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(999
|
)
|
|
|
147
|
|
|
|
|
|
|
|
(852
|
)
|
|
|
12
|
|
|
|
(840
|
)
|
|
Issuance of Shares
|
2
|
*
|
|
|
|
|
|
|
|
*
|
||||||||||||||||||||||||||||||
Issuance of Treasury Shares
|
|
*
|
|
(8
|
) |
|
|
14
|
6
|
|
6
|
|||||||||||||||||||||||||||||
Stock-based compensation expense
|
|
|
|
119
|
|
|
|
119
|
|
119
|
||||||||||||||||||||||||||||||
Transactions with
non-controlling
interests
|
|
|
|
|
|
|
|
|
(8
|
) |
(8
|
) | ||||||||||||||||||||||||||||
Other
|
|
|
|
(8
|
) |
|
|
|
(8
|
) |
|
(8
|
) | |||||||||||||||||||||||||||
Balance at December 31, 2019
|
1,198
|
$ |
56
|
—
|
$ |
27,312
|
$ |
(6,956
|
) | $ |
(2,312
|
) | $ |
(4,128
|
) | $ |
13,972
|
$ |
1,091
|
$ |
15,063
|
|||||||||||||||||||
* | Represents an amount less than 0.5 million. |
**
|
Mandatory convertible preferred shares.
|
***
|
Mainly MCPS conversion.
|
****
|
Following the adoption of ASU
2016-01,
the Company recorded a $ 5 million opening balance reclassification from accumulated other comprehensive income to retained earnings.
|
*
|
In 2019 and 2018, the amounts consist of tax withholding payments made on shares and dividends.
|
|
|
Year ended December 31,
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Supplemental cash flow information:
|
|
|
|
|
|
|
|
|
|
|
|
|
Non-cash
financing and investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
|
Beneficial interest obtained in exchange for securitized trade receivables
|
|
$
|
1,511
|
|
|
$
|
1,716
|
|
|
$
|
1,295
|
|
Conversion of mandatory convertible preferred shares into ordinary shares
|
|
|
—
|
|
|
$
|
3,880
|
|
|
|
—
|
|
Cash paid during the year for:
|
|
|
|
|
|
|
|
|
|
|
|
|
Interest
|
|
$
|
840
|
|
|
$
|
815
|
|
|
$
|
795
|
|
Income taxes, net of refunds
|
|
$
|
552
|
|
|
$
|
420
|
|
|
$
|
106
|
|
|
|
Year ended December 31,
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Other current assets
|
|
$
|
(1,416
|
)
|
|
$
|
(1,437
|
)
|
|
$
|
658
|
|
Trade payables, accrued expenses, employee-related obligations and other current liabilities
|
|
|
643
|
|
|
|
(500
|
)
|
|
|
(3,083
|
)
|
Trade receivables net of sales reserves and allowances
|
|
|
(394
|
)
|
|
|
88
|
|
|
|
514
|
|
Inventories
|
|
|
271
|
|
|
|
26
|
|
|
|
199
|
|
Inventory
step-up
|
|
|
—
|
|
|
|
—
|
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
$
|
(896
|
)
|
|
$
|
(1,823
|
)
|
|
$
|
(1,645
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
a.
|
General:
|
b.
|
Revision of Previously Reported Consolidated Financial Statements
|
|
|
Net revenues
|
|
|
Cost of sales
|
|
||||||||||||||||||
|
|
As reported
|
|
|
Adjustment
|
|
|
As revised
|
|
|
As reported
|
|
|
Adjustment
|
|
|
As revised
|
|
||||||
|
|
(U.S. $ in millions)
|
|
|||||||||||||||||||||
2017
|
|
|
22,385
|
|
|
|
(533
|
)
|
|
|
21,853
|
|
|
|
11,770
|
|
|
|
(533
|
)
|
|
|
11,237
|
|
2018
|
|
|
18,854
|
|
|
|
(583
|
)
|
|
|
18,271
|
|
|
|
10,558
|
|
|
|
(583
|
)
|
|
|
9,975
|
|
c.
|
New accounting pronouncements
|
d
.
|
Acquisitions:
|
e.
|
Collaborative arrangements:
|
f.
|
Equity investments:
|
g.
|
Fair value measurement:
|
h.
|
Investment in debt securities:
|
i.
|
Cash and cash equivalents:
|
j.
|
Accounts receivables:
|
k
|
Concentration of credit risks:
|
l
.
|
Inventories:
|
m.
|
Long-lived assets:
|
|
1.
|
An initial qualitative assessment may be performed to determine whether it is more likely than not that the fair value of the reporting unit is less than its carrying amount.
|
|
2.
|
If the Company concludes it is more likely than not that the fair value of the reporting unit is less than its carrying mount, a quantitative fair value test is performed. An impairment charge for the amount by which the carrying amount exceeds the reporting unit’s fair value is recognized.
|
n.
|
Contingencies:
|
o.
|
Treasury shares:
|
p
.
|
Stock-based compensation:
|
q.
|
Deferred income taxes:
|
|
1.
|
Taxes that would apply in the event of disposal of investments in subsidiaries, as it is generally the Company’s intention to hold these investments, not to realize them. The determination of the amount of related unrecognized deferred tax liability is not practicable.
|
|
2.
|
Amounts of
tax-exempt
income generated from the Company’s current Approved Enterprises and unremitted earnings from foreign subsidiaries retained for reinvestment in the Group. See note 13f.
|
r
.
|
Uncertain tax positions:
|
s.
|
Derivatives and hedging:
|
t
.
|
Revenue recognition:
|
u
.
|
Research and development:
|
v
.
|
Shipping and handling costs:
|
w
.
|
Advertising costs:
|
x
.
|
Restructuring:
|
y.
|
Segment reporting:
|
|
(a)
|
North America segment, which includes the United States and Canada.
|
|
(b)
|
Europe segment, which includes the European Union and certain other European countries.
|
|
(c)
|
International Markets segment, which includes all countries in which Teva operates other than those in the North America and Europe segments.
|
z
.
|
Earnings per share:
|
aa
.
|
Securitization
|
bb
.
|
Divestitures:
|
cc.
|
Debt instruments
|
dd.
|
Leases
|
a.
|
Business acquisitions:
|
b.
|
Assets and Liabilities Held For Sale:
|
|
December 31,
2019 |
|
December 31,
2018 |
|
||||
|
(U.S. $ in millions)
|
|||||||
Property, plant and equipment, net
|
98
|
92
|
||||||
Goodwill
|
—
|
51
|
||||||
Adjustments of assets held for sale to fair value
|
|
(11
|
)
|
|
|
(51
|
)
|
|
Total assets of the disposal group classified as held for sale in the consolidated balance sheets
|
$ |
87
|
$ |
92
|
|
|||
c.
|
Other significant agreements:
|
|
Year ended December 31, 201
9
|
|||||||||||||||||||
|
North
America |
|
Europe
|
|
International
Markets |
|
Other
activities |
|
Total
|
|
||||||||||
|
(U.S.
|
|||||||||||||||||||
Sale of goods
|
6,941
|
4,770
|
2,045
|
754
|
14,510
|
|||||||||||||||
Licensing arrangements
|
109
|
29
|
4
|
5
|
147
|
|||||||||||||||
Distribution
|
1,492
|
2
|
20
|
—
|
1,514
|
|||||||||||||||
Other
|
§
|
(6
|
) |
177
|
545
|
716
|
||||||||||||||
|
$ |
8,542
|
$ |
4,795
|
$ |
2,246
|
$ |
1,304
|
$ |
16,887
|
||||||||||
|
Year ended December 31, 201
8
|
|||||||||||||||||||
|
North
America |
|
Europe
|
|
International
Markets |
|
Other
activities |
|
Total
|
|
||||||||||
|
(U.S.
|
|||||||||||||||||||
Sale
of goods
|
|
|
7,838
|
|
|
|
5,153
|
|
|
|
2,151
|
|
|
|
739
|
|
|
|
15,881
|
|
Licensing arrangements
|
|
|
111
|
|
|
|
23
|
|
|
|
22
|
|
|
|
9
|
|
|
|
165
|
|
Distribution
|
|
|
1,347
|
|
|
|
7
|
|
|
|
19
|
|
|
|
—
|
|
|
|
1,373
|
|
Other
|
|
|
1
|
|
|
|
3
|
|
|
|
230
|
|
|
|
618
|
|
|
|
852
|
|
|
|
$
|
9,297
|
|
|
$
|
5,186
|
|
|
$
|
2,422
|
|
|
$
|
1,366
|
|
|
$
|
18,271
|
|
|
Year ended December 31, 201
7
|
|||||||||||||||||||
|
North
America |
|
Europe
|
|
International
Markets |
|
Other
activities |
|
Total
|
|
||||||||||
|
(U.S.
|
|||||||||||||||||||
Sale of goods
|
|
|
10,706
|
|
|
|
5,244
|
|
|
|
2,558
|
|
|
|
748
|
|
|
|
19,256
|
|
Licensing arrangements
|
|
|
281
|
|
|
|
3
|
|
|
|
38
|
|
|
|
5
|
|
|
|
327
|
|
Distribution
|
|
|
1,153
|
|
|
|
214
|
|
|
|
17
|
|
|
|
—
|
|
|
|
1,384
|
|
Other
|
|
|
1
|
|
|
|
5
|
|
|
|
250
|
|
|
|
630
|
|
|
|
886
|
|
|
|
$
|
12,141
|
|
|
$
|
5,466
|
|
|
$
|
2,863
|
|
|
$
|
1,383
|
|
|
$
|
21,853
|
|
§
|
Represents an amount less than $1 million
.
|
|
Sales Reserves and Allowances
|
|
|
|
||||||||||||||||||||||||||||
|
Reserves
included in Accounts Receivable, net |
|
|
Rebates
|
|
|
Medicaid and
other governmental allowances |
|
|
Chargebacks
|
|
|
Returns
|
|
|
Other
|
|
|
Total
reserves included in Sales Reserves and Allowances |
|
|
Total
|
|
|||||||||
|
(U.S. $ in millions)
|
|||||||||||||||||||||||||||||||
Balance at January 1, 2018
|
|
$
|
196
|
|
|
$
|
3,077
|
|
|
$
|
1,908
|
|
|
$
|
1,849
|
|
|
$
|
780
|
|
|
$
|
267
|
|
|
$
|
7,881
|
|
|
$
|
8,077
|
|
Provisions related to sales made in current year period
|
|
|
514
|
|
|
|
6,572
|
|
|
|
1,284
|
|
|
|
10,206
|
|
|
|
442
|
|
|
|
417
|
|
|
|
18,899
|
|
|
$
|
19,413
|
|
Provisions related to sales made in prior
periods |
|
|
3
|
|
|
|
(14
|
)
|
|
|
24
|
|
|
|
—
|
|
|
|
28
|
|
|
|
(30
|
)
|
|
|
(62
|
)
|
|
$
|
(59
|
)
|
Credits and payments
|
|
|
(538
|
)
|
|
|
(6,596
|
)
|
|
|
(1,850
|
)
|
|
|
(10,519
|
)
|
|
|
(606
|
)
|
|
|
(463
|
)
|
|
|
(19,942
|
)
|
|
$
|
(20,480
|
)
|
Translation differences
|
|
|
—
|
|
|
|
(33
|
)
|
|
|
(5
|
)
|
|
|
(6
|
)
|
|
|
(6
|
)
|
|
|
(15
|
)
|
|
|
(65
|
)
|
|
$
|
(65
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at December 31, 2018
|
$ |
175
|
$
|
3,006
|
$ |
1,361
|
$ |
1,530
|
$ |
638
|
$ |
176
|
$ |
6,711
|
$ |
6,886
|
||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provisions related to sales made in current year
period |
383
|
5,552
|
976
|
9,565
|
281
|
394
|
16,767
|
$ |
17,150
|
|||||||||||||||||||||||
Provisions related to sales made in prior
periods |
—
|
(92
|
) |
(151
|
) |
(17
|
)
|
77
|
(6
|
) |
(189
|
) | $ |
(189
|
) | |||||||||||||||||
Credits and payments
|
(471
|
) |
(5,570
|
) |
(1,076
|
) |
(9,736
|
) |
(360
|
) |
(392
|
) |
(17,134
|
) | $ |
(17,605
|
) | |||||||||||||||
Translation differences
|
—
|
(1
|
)
|
(1
|
) |
1
|
1
|
4
|
4
|
$ |
4
|
|||||||||||||||||||||
Balance at December 31, 201
9
|
$ |
87
|
$
|
2,895
|
$ |
1,109
|
$ |
1,342
|
$ |
637
|
$ |
176
|
$ |
6,159
|
$ |
6,246
|
||||||||||||||||
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Finished products
|
$ |
2,504
|
$ |
2,665
|
||||
Raw and packaging materials
|
1,183
|
1,328
|
||||||
Products in process
|
583
|
590
|
||||||
Materials in transit and payments on account
|
151
|
148
|
||||||
|
$ |
4,422
|
$ |
4,731
|
||||
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Machinery and equipment
|
$ |
5,385
|
$ |
5,658
|
||||
Buildings
|
2,839
|
3,133
|
||||||
Computer equipment and other assets
|
2,131
|
2,089
|
||||||
Assets under construction and payments on account
|
672
|
565
|
||||||
Land
|
323
|
351
|
||||||
|
11,350
|
11,796
|
||||||
Less—accumulated depreciation
|
(4,914
|
) |
(4,928
|
) | ||||
|
$ |
6,436
|
$ |
6,868
|
||||
|
Gross carrying amount
net of impairment |
Accumulated
amortization |
Net carrying amount
|
|||||||||||||||||||||
|
December 31,
|
|||||||||||||||||||||||
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
2019
|
|
2018
|
|
||||||||||||
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Product rights
|
$ |
19,663
|
$ |
20,361
|
$ |
10,640
|
$ |
9,565
|
$ |
9,023
|
$ |
10,796
|
||||||||||||
Trade names
|
600
|
606
|
126
|
91
|
474
|
515
|
||||||||||||||||||
In-process
research and development (IPR&D)
|
1,735
|
2,694
|
—
|
—
|
1,735
|
2,694
|
||||||||||||||||||
Total
|
$ |
21,998
|
$ |
23,661
|
$ |
10,766
|
$ |
9,656
|
$ |
11,232
|
$ |
14,005
|
||||||||||||
1.
|
Identifiable product rights of $
958
million,
mainly
related to: (i)
$
647
million due to updated market assumptions regarding price and volume of
$
certain
products acquired from Actavis Generics and primarily marketed in the United States
,
(ii)
128
million related to
a
decrease in future expected sales
in Japan as a result of
generic competition
,
and
(iii) $123 million related to
the
discontinuation of
certain
products from Actavis
Generics
’ portfolio in several international markets
.
|
2. |
IPR&D assets of $681 million, related to: (i) $497
million related to various generic pipeline products acquired from Actavis Generics
,
due to development progress and changes in other key valuation indications (e.g., market size, competition assumptions, legal landscape, launch date or discount rate) in the United States
,
(ii) $125
million related to lenalidomide (generic equivalent of REVLIMID
®
)
,
due to modified competition assumptions as a result of settlements between the innovator and other generic filers
,
and
(iii) $59 million
related to a change in assumptions concerning the future European market share of a number of pipeline products acquired from Actavis Generics.
|
|
North
America |
|
Europe
|
|
International
Market |
|
Other
|
|
Total
|
|
||||||||||
|
(U.S. $ in millions)
|
|
||||||||||||||||||
Balance as of January 1, 201
8
(1)
|
11,144
|
9,001
|
5,404
|
2,865
|
28,414
|
|||||||||||||||
Changes during the year:
|
|
|
|
|
|
|||||||||||||||
Goodwill
impairment
(2)
|
—
|
—
|
(2,834
|
)
|
(193
|
)
|
(3,027
|
)
|
||||||||||||
Goodwill disposal (3)
|
—
|
(65
|
)
|
(14
|
)
|
—
|
(79
|
)
|
||||||||||||
Goodwill reclassified as assets to held for sale
|
—
|
(3
|
)
|
—
|
(17
|
)
|
(20
|
)
|
||||||||||||
Translation differences
and Other
|
(46
|
)
|
(280
|
)
|
(77
|
)
|
32
|
(371
|
)
|
|||||||||||
Balance as of December 31, 201
8
(1)
|
|
$
|
11,098
|
|
|
$
|
8,653
|
|
|
$
|
2,479
|
|
|
$
|
2,687
|
|
|
$
|
24,917
|
|
Changes during the year:
|
|
|
|
|
|
|||||||||||||||
Goodwill disposal
|
(23
|
)
|
(5
|
) |
—
|
—
|
(28
|
) | ||||||||||||
Translation differences and Other
|
16
|
(112
|
) |
53
|
—
|
(43
|
) | |||||||||||||
Balance as of December 31, 201
9
(1)
|
$ |
11,091
|
$ |
8,536
|
$ |
2,532
|
$ |
2,687
|
$ |
24,846
|
||||||||||
(1) |
Accumulated goodwill impairment as of December 31, 2019, December 31, 2018 and January 1, 2018 was approximately
$21.0 billion, $21.0 billion and $18.0
b
|
(2) |
Goodwill impairment mainly attributable to the International Markets
segment
, Mexico and Medis.
|
(
3
)
|
Mainly due to the divestment of the women’s health business, the sale of Actavis Brazil and other activities. |
|
•
|
In the second quarter of 2019, management noted a difference with regard to sales projections of AJOVY and AUSTEDO in the International Markets reporting unit. Management continues to believe that the majority of analysts do not focus on this market in preparing their financial models and, as a result, have not attributed value to the launch potential in this reporting unit. Accordingly, management’s projections exceed those it believes are being used by analysts, particularly in International Markets. However, if management were to conform to analyst expectations, the International Markets reporting unit’s fair value would approximate its book value. Future impairment charges, if any, reflecting conditions at that time may be materially different.
|
|
•
|
In the second quarter of 2019, management also noted a difference with regard to sales projections of AUSTEDO in the North America reporting unit, resulting in higher fair value as analyzed by management compared to Teva’s market capitalization. Management continues to believe that it has more accurate information based on its knowledge of the market and its growth and therefore no adjustment was incorporated to the fair value.
|
|
•
|
Management continues to believe market concerns regarding the volatility and uncertainty of certain litigation risks, namely from the opioid and price fixing litigations, are impacting its market capitalization. Management believes that these concerns led to an acute reaction, which resulted in a decline in Teva’s share price in the second quarter of 2019, and will continue to impact the Company’s stock price into 2020. However, developments in these cases are expected to clarify the outlook with regards to the opioid litigation, assuming the proposed settlement framework is finalized in 2020. Based upon Teva’s current estimates of fair value, even if management was to adjust the fair value of the North America reporting unit for this uncertainty, the estimated fair value would still exceed its carrying amount.
|
|
Year ended
December 31, 2019 |
|
||
|
|
(U.S. $ in millions)
|
|
|
Operating lease cost:
|
|
|||
Fixed payments and variable payments that depend on an index or rate
|
|
$
|
166
|
|
Variable lease payments not included in the lease liability
|
6
|
|||
Short-term lease cost
|
6
|
|||
Total operating lease cost
|
$ |
178
|
||
|
Year ended
December 31, 2019 |
|
||
|
(U.S. $ in millions)
|
|
||
Cash paid for amounts included in the measurement of lease liabilities:
|
|
|||
Operating cash flows from operating leases
|
|
$
|
169
|
|
|
|
|
|
|
Right-of-use
assets obtained in exchange for lease obligations
(non-cash):
|
|
|||
Operating leases
|
$
|
142
|
|
|
December 31,
2019
|
|
|
|
|
(U.S. $ in millions)
|
|
|
Operating leases:
|
|
|
|
|
Operating lease ROU assets
|
|
$
|
514
|
|
Other current liabilities
|
|
|
118
|
|
Operating lease liabilities
|
|
|
435
|
|
|
|
|
|
|
Total operating lease liabilities
|
|
$
|
553
|
|
|
|
|
|
|
|
December 31,
|
|
|
|
|
2019
|
|
|
Weighted average remaining lease term
|
|
|
|
|
Operating leases
|
|
|
7.5
years
|
|
Weighted average discount rate
|
|
|
|
|
Operating leases
|
|
|
6.0
|
%
|
|
December 31,
|
|
||
|
2019
|
|
||
|
(U.S. $ in millions)
|
|
||
2020
|
|
$
|
146
|
|
2021
|
|
|
117
|
|
2022
|
92
|
|||
2023
|
66
|
|||
2024 and thereafter
|
298
|
|||
Total operating lease payments
|
$ |
719
|
||
Less: imputed interest
|
166
|
|||
Present value of lease liabilities
|
$ |
553
|
|
|
December 31,
|
|
|
|
|
2018
|
|
|
|
|
(U.S. $ in millions)
|
|
|
According to ASC 840:
|
|
|
|
|
2019
|
|
$
|
193
|
|
2020
|
|
|
154
|
|
2021
|
|
|
118
|
|
2022
|
|
|
91
|
|
2023
|
|
|
66
|
|
2024 and thereafter
|
|
|
283
|
|
Total lease payments
|
|
$
|
905
|
|
a.
|
Short-term debt:
|
|
|
|
|
|
December 31,
|
|||||||||||
|
Weighted average
interest rate as of December 31, 201
9
|
|
Maturity
|
|
2019
|
|
2018
|
|
||||||||
|
|
|
|
|
(U.S. $ in millions)
|
|||||||||||
Bank and financial institutions
|
—
|
—
|
—
|
2
|
||||||||||||
Convertible debentures
|
0.25
%
|
2026
|
514
|
514
|
||||||||||||
Current maturities of long-term liabilities
|
1,831
|
1,700
|
||||||||||||||
Total short term debt
|
$ |
2,345
|
$ |
2,216
|
||||||||||||
|
Weighted average
interest 201
9
|
|
Maturity
|
|
December 31,
2019 |
|
December 31,
2018 |
|
||||||||
|
%
|
|
|
|
(U.S. $ in millions)
|
|||||||||||
Senior notes EUR 1,010 million (2)
|
0.38
|
% |
2020
|
$ |
1,131
|
$ |
1,897
|
|||||||||
Senior notes EUR 1,500 million
|
1.13
|
% |
2024
|
1,673
|
1,707
|
|||||||||||
Senior notes EUR 1,300 million
|
1.25
|
% |
2023
|
1,451
|
1,480
|
|||||||||||
Senior notes EUR 900 million
|
4.50
|
% |
2025
|
1,008
|
1,029
|
|||||||||||
Senior notes EUR 750 million
|
1.63
|
% |
2028
|
833
|
850
|
|||||||||||
Senior notes EUR 700 million
|
3.25
|
% |
2022
|
784
|
801
|
|||||||||||
Senior notes EUR 700 million
|
1.88
|
% |
2027
|
782
|
798
|
|||||||||||
Senior notes EUR
1,000
million (4)
|
|
|
6.00
|
%
|
|
|
2025
|
|
|
|
1,120
|
|
|
|
—
|
|
Senior notes USD
1,000
million (5)
|
|
|
7.13
|
%
|
|
|
2025
|
|
|
|
1,000
|
|
|
|
—
|
|
Senior notes USD 3,500 million
|
3.15
|
% |
2026
|
3,494
|
3,493
|
|||||||||||
Senior notes USD 1,475 million (3)
|
2.20
|
% |
2021
|
1,474
|
2,997
|
|||||||||||
Senior notes USD 3,000 million
|
2.80
|
% |
2023
|
2,995
|
2,993
|
|||||||||||
Senior notes USD 1,556 million (1)
|
1.70
|
% |
2019
|
—
|
1,700
|
|||||||||||
Senior notes USD 2,000 million
|
4.10
|
% |
2046
|
1,985
|
1,985
|
|||||||||||
Senior notes USD 1,250 million
|
6.00
|
% |
2024
|
1,250
|
1,250
|
|||||||||||
Senior notes USD 1,250 million
|
6.75
|
% |
2028
|
1,250
|
1,250
|
|||||||||||
Senior notes USD 844 million
|
2.95
|
% |
2022
|
856
|
860
|
|||||||||||
Senior notes USD 789 million
|
6.15
|
% |
2036
|
782
|
782
|
|||||||||||
Senior notes USD 700 million
|
2.25
|
% |
2020
|
700
|
700
|
|||||||||||
Senior notes USD 613 million
|
3.65
|
% |
2021
|
618
|
621
|
|||||||||||
Senior notes USD 588 million
|
3.65
|
% |
2021
|
587
|
587
|
|||||||||||
Senior notes CHF 350 million
|
0.50
|
% |
2022
|
361
|
356
|
|||||||||||
Senior notes CHF 350 million
|
1.00
|
% |
2025
|
362
|
356
|
|||||||||||
Fair value hedge accounting adjustments
|
|
|
—
|
(9
|
) | |||||||||||
Total senior notes
|
26,496
|
28,483
|
||||||||||||||
Other long-term debt
|
1.13
|
% |
2026
|
1
|
12
|
|||||||||||
Less current maturities
|
(1,831
|
) |
(1,700
|
) | ||||||||||||
Derivative instruments
|
—
|
9
|
||||||||||||||
Less debt issuance costs
|
(103
|
) |
(104
|
) | ||||||||||||
Total senior notes and loans
|
$ |
24,562
|
$ |
26,700
|
(1) | During the first six months of 2019, Teva repurchased and canceled approximately $144 million principal amount of its $1,700 million 1.7% senior notes due in July 2019. In July 2019, Teva repaid at maturity $1,556 million of its 1.7% senior notes. |
(2) |
In
December
2019, Teva consummated an early redemption of 650 million Euro of its 1,660 million Euro 0.375% senior notes due in July 2020.
|
(3) | In November 2019, Teva consummated a cash tender offer for its $3,000 million 2.2% senior notes due in July 2021. As a result of the offer, Teva redeemed $1,525 million aggregate principal amount of this senior note. |
(4) |
In November 2019, Teva Pharmaceutical Finance Netherlands II B.V, a Teva finance subsidiary, issued senior notes in an aggregate principal amount of 1,000 million Euro
bearing 6.0% annual interest and due January 2025.
|
(5) |
In November 2019, Teva Pharmaceutical Finance Netherlands III B.V, a Teva finance subsidiary, issued senior notes in an aggregate principal amount of $1,000 million
bearing
7.125% annual interest and due January 2025
.
|
|
|
December 31,
2019 |
|
|
|
|
(U.S. $ in millions)
|
|
|
2021
|
|
$
|
2,679
|
|
2022
|
|
|
2,002
|
|
2023
|
|
|
4,446
|
|
2024
|
|
|
2,923
|
|
2025 and thereafter
|
|
|
13,131
|
|
|
|
|
|
|
|
|
$
|
25,181
|
|
|
|
|
|
|
a.
|
Foreign exchange risk management:
|
b.
|
Interest risk management:
|
c.
|
Derivative instrument disclosure:
|
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Cross-currency swap—cash flow hedge
|
$ |
—
|
$ |
588
|
||||
Interest rate swap—fair value hedge
|
—
|
500
|
||||||
Cross-currency swap—net investment hedge
|
1,000
|
1,000
|
d.
|
Derivative instrument outstanding:
|
|
Fair value
|
|||||||||||||||
|
Designated as hedging
instruments
|
Not designated as hedging
instruments
|
||||||||||||||
|
December 31,
2019
|
|
December 31,
2018
|
|
December 31,
2019
|
|
December 31,
2018
|
|
||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||
Asset derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current assets:
|
|
|
|
|
||||||||||||
Option and forward contracts
|
$ |
—
|
$ |
—
|
$ |
32
|
|
$ |
18
|
|||||||
Other non-current assets:
|
|
|
|
|
||||||||||||
Cross-currency swaps—cash flow hedge
|
—
|
58
|
|
—
|
||||||||||||
Liability derivatives:
|
|
|
|
|
|
|
|
|
|
|
|
|
||||
Other current liabilities:
|
|
|
|
|
||||||||||||
Cross-currency swaps—net investment hedge
|
(22
|
) |
—
|
|
|
|||||||||||
Option and forward contracts
|
—
|
—
|
(41
|
) |
(26
|
) | ||||||||||
Other taxes and long-term liabilities:
|
|
|
|
|
||||||||||||
Cross-currency swaps—net investment hedge
|
—
|
(41
|
) |
—
|
—
|
|||||||||||
Senior notes and loans:
|
|
|
|
|
||||||||||||
Interest rate swaps—fair value hedge
|
—
|
(9
|
) |
—
|
—
|
|
Financial expenses, net
|
Other comprehensive
income |
||||||||||||||||||||||
|
Year ended December 31,
|
Year ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018**
|
|
2017**
|
|
2019
|
|
2018**
|
|
2017**
|
|
||||||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Line items in which effects of hedges are recorded
|
$ |
822
|
$ |
959
|
$ |
895
|
$ |
160
|
$ |
(585
|
) | $ |
1,369
|
|||||||||||
Cross-currency swaps—cash flow hedge (1)
|
(2
|
) |
(2
|
) |
(3
|
) |
(33
|
) |
(35
|
) |
71
|
|||||||||||||
Cross-currency swaps—net investment hedge (2)
|
(29
|
) |
(31
|
) |
(13
|
) |
(22
|
) |
(51
|
) |
97
|
|||||||||||||
Interest rate swaps—fair value hedge (3)
|
2
|
*
|
(4
|
) |
—
|
—
|
—
|
*
|
Represents an amount less than $0.5 million.
|
**
|
Comparative figures are based on prior hedge accounting standard.
|
|
Financial expenses, net
|
Net revenues
|
||||||||||||||||||||||
|
Year ended December 31,
|
Year ended December 31,
|
||||||||||||||||||||||
|
2019
|
|
2018
|
|
2017
|
|
2019
|
|
2018
|
|
2017
|
|
||||||||||||
Reported under
|
(U.S. $ in millions)
|
|||||||||||||||||||||||
Line items in which effects of hedges are recorded
|
$ |
822
|
$ |
959
|
$ |
895
|
$ |
16,887
|
$ |
18,271
|
$ |
21,853
|
||||||||||||
Option and forward contracts (4)
|
(51
|
) |
(12
|
) |
82
|
—
|
—
|
—
|
||||||||||||||||
Option and forward contracts Economic hedge (5)
|
—
|
—
|
—
|
14
|
(4
|
) |
—
|
(1) | With respect to cross-currency swap agreements, Teva recognized gains which mainly reflect the differences between the fixed interest rate and the floating interest rate. In the fourth quarter of 2019, Teva terminated cross-currency swap agreements against its outstanding 3.65% senior notes maturing in November 2021. The settlement of these transactions resulted in cash proceeds of $95 million. The cash flow hedge accounting adjustments of these instruments, which are recorded under senior notes and loans, are amortized under financial expenses-net over the life of the debt as additional interest expense. |
(2) |
In each of the first and second quarters of 2017, Teva entered into a cross currency swap agreement with a notional amount of $500 million maturing in 2020. These cross currency swaps were designated as a net investment hedge of Teva’s foreign subsidiaries euro denominated net assets, in order to reduce the risk of adverse exchange rate fluctuations. With respect to these cross currency swap agreements, Teva recognized gains which mainly reflect the differences between the
float-for-float
interest rates paid
in euros
and received
in U.S. dollar
. No amounts were reclassified from accumulated other comprehensive income into income related to the sale of a subsidiary.
|
(3) |
In the fourth quarter of 2016, Teva entered into an interest rate swap agreement designated as fair value hedge relating to its 2.8% senior notes due 2023 with respect to $500 million notional amount of outstanding debt. With respect to this interest rate swap agreement, Teva recognized a loss which mainly reflects the differences between the fixed interest rate and the floating interest rate. In the third quarter of 2019, Teva terminated this interest rate swap agreement. The settlement of these transactions resulted in
cash proceeds
of $
10
million. The fair value hedge accounting adjustments of
fair value hedge
instruments, which are recorded under senior notes and loans, are amortized under financial
expenses-net
over the life of the debt as additional interest expense.
|
(4) | Teva uses foreign exchange contracts (mainly option and forward contracts) to hedge balance sheet items from currency exposure. These foreign exchange contracts are not designated as hedging instruments for accounting purposes. In connection with these foreign exchange contracts, Teva recognizes gains or losses that offset the revaluation of the balance sheet items also recorded under financial expenses—net. |
(5) |
Teva entered into option and forward contracts designed to limit the exposure of foreign exchange fluctuations on revenues and expenses recorded in euro, the British pound, the Russian ruble and some other currencies during the quarter for which such instruments are purchased. These derivative instruments do not meet the criteria for hedge accounting, however, they are accounted for as economic hedge. These derivative instruments are recognized on the Balance Sheet at their fair value, with changes in the fair value recognized under the same line item in the Statements of Income as the underlying exposure being hedged. The cash flows associated with these derivatives are reflected as cash flows from operating activities in the consolidated Statements of Cash Flows.
|
e.
|
Matured forward starting interest rate swaps and treasury lock agreements:
|
f.
|
Securitization:
|
|
As of and for the year ended
December 31, |
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Sold receivables at the beginning of the year
|
$ |
686
|
$ |
799
|
||||
Proceeds from sale of receivables
|
4,852
|
5,071
|
||||||
Cash collections (remitted to the owner of the receivables)
|
(4,849
|
) |
(5,151
|
) | ||||
Effect of currency exchange rate changes
|
1
|
(33
|
) | |||||
Sold receivables at the end of the year
|
$
|
690
|
$ |
686
|
||||
a.
|
Commitments:
|
b.
|
Contingencies:
|
a.
|
Income (loss) before income taxes:
|
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Parent Company and its Israeli subsidiaries
|
$ |
542
|
$ |
1,022
|
$ |
1,451
|
||||||
Non-Israeli
subsidiaries
|
(1,807
|
) |
(3,618
|
) |
(19,830
|
) | ||||||
|
$ |
(1,265
|
) | $ |
(2,596
|
) | $ |
(18,379
|
) | |||
b.
|
Income taxes:
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Income (
L
oss) before income taxes
|
$ |
(1,265
|
) | $ |
(2,596
|
) | $ |
(18,379
|
) | |||
Statutory tax rate in Israel
|
23.0
|
% |
23.0
|
% |
24.0
|
% | ||||||
Theoretical provision for income taxes
|
$ |
(291
|
) | $ |
(597
|
) | $ |
(4,411
|
) | |||
Increase (decrease) in effective tax rate due to:
|
|
|
|
|||||||||
The Parent Company and its Israeli subsidiaries - Mainly tax benefits arising from reduced tax rates under benefit programs
|
(44
|
) |
(134
|
) |
(253
|
) | ||||||
Non-Israeli
subsidiaries, including impairments (*)
|
(115
|
) |
381
|
3,817
|
||||||||
U.S. Tax Cuts and Jobs Act effect
|
|
97
|
(1,061
|
) | ||||||||
Increase (decrease) in other uncertain tax positions—net
|
172
|
58
|
(25
|
) | ||||||||
Effective consolidated income taxes
|
$ |
(278
|
) | $ |
(195
|
) | $ |
(1,933
|
) | |||
*
|
In 2019,
i
ncome before income taxes includes intangible impairment
s
in
non-Israeli
subsidiaries with a corresponding tax effect. In 2017 and 2018,
i
ncome before income taxes includes goodwill impairment
s
in
non-Israeli
subsidiaries that did not have a corresponding tax effect.
|
c.
|
Deferred income taxes:
|
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Long-term deferred tax assets (liabilities)—net:
|
|
|||||||
Inventory related
|
$ |
144
|
$ |
113
|
||||
Sales reserves and allowances
|
198
|
199
|
||||||
Provision for legal settlements
|
260
|
42
|
||||||
Intangible assets (*)
|
(1,733
|
) |
(2,282
|
) | ||||
Carryforward losses and deductions and credits (**)
|
1,689
|
1,340
|
||||||
Property, plant and equipment
|
(170
|
) |
(167
|
) | ||||
Deferred interest
|
648
|
391
|
||||||
Provisions for employee related obligations
|
106
|
102
|
||||||
Other
|
122
|
123
|
||||||
|
1,264
|
(139
|
) | |||||
Valuation allowance—in respect of carryforward losses and deductions that may not be utilized
(**) |
(1,974
|
) |
(1,633
|
) | ||||
|
$ |
(710
|
) | $ |
(1,772
|
) | ||
* | The decrease in deferred tax liability is mainly due to impairment and amortization. |
** |
The amounts are shown after reduction for unrecognized tax benefits of
$
115
|
Th
ese
amount
s
represent the tax effect of gross carryforward losses and deductions with the following expirations: 2020-2022—$61 million; 2023-
2029—$672 million; 2030 and thereafter—$193 million. The remaining balance—$879 million—can be utilized with no expiration date. |
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Long-term assets—deferred income taxes
|
386
|
368
|
||||||
Long-term liabilities—deferred income taxes
|
(1,096
|
) |
(2,140
|
) | ||||
|
$ |
(710
|
) | $ |
(1,772
|
) | ||
d.
|
Uncertain tax positions:
|
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Balance at the beginning of the year
|
$ |
1,072
|
$ |
1,034
|
$ |
734
|
||||||
Increase related to prior year tax positions, net
|
23
|
76
|
56
|
|||||||||
Increase related to current year tax positions
|
246
|
11
|
26
|
|||||||||
Decrease related to settlements with tax authorities and lapse of applicable statutes of limitations
|
(118
|
) |
(49
|
) |
(56
|
) | ||||||
Liabilities assumed in acquisitions
|
—
|
—
|
273
|
|||||||||
Other
|
—
|
—
|
1
|
|||||||||
Balance at the end of the year
|
$ |
1,223
|
$ |
1,072
|
$ |
1,034
|
||||||
e.
|
Tax assessments:
|
f.
|
Basis of taxation:
|
a. |
Investment of at least 7% of income, or at least NIS
75
million (approximately $
22
million) in R&D activities; and
|
b. | One of the following: |
a. | At least 20% of the workforce (or at least 200 employees) are employed in R&D; |
b. |
A venture capital investment approximately equivalent to at least $
2
million was previously made in the company; or
|
c. | Growth in sales or workforce by an average of 25% over the three years preceding the tax year. |
a.
|
Ordinary shares and ADSs
|
b.
|
Mandatory convertible preferred shares
|
c.
|
Stock-based compensation plans:
|
|
Year ended December 31,
|
|||||||||||||||||||||||
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
Number
(in thousands)
|
|
Weighted
average exercise price |
|
Number
(in thousands)
|
|
Weighted
average exercise price |
|
Number
(in thousands)
|
|
Weighted
average exercise price |
|
||||||||||||
Balance outstanding at begin
n
ing of year
|
48,393
|
$
|
38.62
|
43,121
|
$ |
44.32
|
32,789
|
$ |
50.71
|
|||||||||||||||
Changes during the year:
|
|
|
|
|
|
|
||||||||||||||||||
Granted
|
—
|
—
|
12,401
|
19.12
|
15,467
|
32.08
|
||||||||||||||||||
Exercised
|
(11
|
) |
16.99
|
(84
|
) |
17.01
|
(7
|
) |
17.44
|
|||||||||||||||
Forfeited
|
(8,318
|
) |
42.12
|
(7,040
|
) |
39.38
|
(4,953
|
) |
47.92
|
|||||||||||||||
Expired
|
—
|
—
|
(5
|
) |
50.65
|
(175
|
) |
59.81
|
||||||||||||||||
Balance outstanding at end of year
|
40,064
|
37.90
|
48,393
|
38.62
|
43,121
|
44.32
|
||||||||||||||||||
Balance exercisable at end of year
|
26,601
|
43.41
|
24,086
|
46.89
|
19,129
|
47.94
|
||||||||||||||||||
|
|
Year ended December 31,
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Weighted average fair value
|
|
|
—
|
|
|
$
|
7.4
|
|
|
$
|
5.7
|
|
|
|
Year ended December 31,
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
Dividend yield
|
|
|
—
|
|
|
|
0
|
%
|
|
|
3.7
|
%
|
Expected volatility
|
|
|
—
|
|
|
|
40
|
%
|
|
|
29
|
%
|
Risk-free interest rate
|
|
|
—
|
|
|
|
2.6
|
%
|
|
|
2.1
|
%
|
|
Year ended December 31,
|
|||||||||||||||||||||||
|
2019
|
2018
|
2017
|
|||||||||||||||||||||
|
Number
(in thousands)
|
|
Weighted
average grant date fair value |
|
Number
(in thousands)
|
|
Weighted
average grant date fair value |
|
Number
(in thousands)
|
|
Weighted
average grant date fair value |
|
||||||||||||
Balance outstanding at beginning of year
|
10,403
|
$ |
20.93
|
7,468
|
$ |
27.95
|
4,636
|
$ |
45.15
|
|||||||||||||||
Granted
|
9,303
|
15.36
|
5,900
|
18.80
|
5,461
|
20.10
|
||||||||||||||||||
Vested
|
(2,435
|
) |
30.24
|
(1,638
|
) |
37.30
|
(1,884
|
) |
39.63
|
|||||||||||||||
Forfeited
|
(1,294
|
) |
18.74
|
(1,327
|
) |
32.50
|
(745
|
) |
42.84
|
|||||||||||||||
Balance outstanding at end of year
|
15,977
|
16.49
|
10,403
|
20.93
|
7,468
|
27.95
|
||||||||||||||||||
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Employee stock options
|
$ |
46
|
$ |
74
|
$ |
64
|
||||||
RSUs and PSUs
|
73
|
81
|
69
|
|||||||||
Total stock-based compensation expense
|
119
|
155
|
133
|
|||||||||
Tax effect on stock-based compensation expense
|
14
|
18
|
24
|
|||||||||
Net effect
|
$ |
105
|
$ |
137
|
$ |
109
|
||||||
d.
|
Dividends:
|
e.
|
Accumulated other comprehensive loss:
|
|
Net Unrealized Gains/(Losses)
|
Benefit Plans
|
|
|
|
|||||||||||||||
|
Foreign
currency translation adjustments |
|
Available-
for-
sale securities
|
|
Derivative
financial instruments |
|
Actuarial
gains/(losses)
and prior
service
(costs)/credits |
|
Total
|
|
||||||||||
Balance, January
1, 201
7
|
(2,592
|
) |
(7
|
) |
(479
|
) |
(81
|
) |
(3,159
|
) | ||||||||||
Other comprehensive income/(loss) before reclassifications
|
1,075
|
64
|
(167
|
) |
(3
|
) |
969
|
|||||||||||||
Amounts reclassified to the statements of income
|
378
|
(66
|
) |
27
|
(5
|
) |
334
|
|||||||||||||
Net other comprehensive income/(loss) before tax
|
1,453
|
(2
|
) |
(140
|
) |
(8
|
) |
1,303
|
||||||||||||
Corresponding income tax
|
|
5
|
—
|
(2
|
) |
3
|
||||||||||||||
Net other comprehensive income/(loss) after tax*
|
1,453
|
3
|
(140
|
) |
(10
|
) |
1,306
|
|||||||||||||
Balance, December 31, 2017
|
(1,139
|
) |
(4
|
) |
(619
|
) |
(91
|
) |
(1,853
|
) | ||||||||||
Cumulative effect of new accounting standard
**
|
—
|
5
|
—
|
—
|
5
|
|||||||||||||||
Other comprehensive income/(loss) before reclassifications
|
(739
|
) |
(1
|
) |
87
|
4
|
(649
|
) | ||||||||||||
Amounts reclassified to the statements of income
|
|
1
|
28
|
13
|
42
|
|||||||||||||||
Net other comprehensive income/(loss) before tax
|
(739
|
) |
—
|
115
|
17
|
(607
|
) | |||||||||||||
Corresponding income tax
|
—
|
|
—
|
(4
|
) |
(4
|
) | |||||||||||||
Net other comprehensive income/(loss) after tax*
|
(739
|
) |
—
|
115
|
13
|
(611
|
) | |||||||||||||
Balance, December 31, 2018
|
(1,878
|
) |
1
|
(504
|
) |
(78
|
) |
(2,459
|
) | |||||||||||
Other comprehensive income/(loss) before reclassifications
|
|
|
84
|
|
|
|
(1
|
)
|
|
|
54
|
|
|
|
(11
|
)
|
|
|
126
|
|
Amounts reclassified to the statements of income
|
|
|
|
|
|
|
|
|
|
|
30
|
|
|
|
(10
|
)
|
|
|
20
|
|
Net other comprehensive income/(loss) before tax
|
|
|
84
|
|
|
|
(1
|
)
|
|
|
84
|
|
|
|
(21
|
)
|
|
|
146
|
|
Corresponding income tax
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
1
|
|
|
|
1
|
|
Net other comprehensive income/(loss) after tax*
|
|
|
84
|
|
|
|
(1
|
)
|
|
|
84
|
|
|
|
(20
|
)
|
|
|
147
|
|
Balance, December 31, 2019
|
|
|
(1,794
|
)
|
|
|
—
|
|
|
|
(420
|
)
|
|
|
(98
|
)
|
|
|
(2,312
|
)
|
* |
Amounts do not include foreign currency translation adjustments attributable to
non-controlling
interests of $14 million gain in 201
9
, $26 million
gain
in 201
8
and $63 million loss in 201
7
.
|
** |
Following the adoption of ASU 2016-01, the Company recorded a $5 million opening balance reclassification from accumulated other comprehensive income to retained earnings.
|
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Impairment of long-lived tangible assets
|
$ |
139
|
$ |
500
|
$ |
544
|
||||||
Contingent consideration (see note 2
0
)
|
59
|
57
|
154
|
|||||||||
Acquisition, integration and related costs
|
—
|
13
|
105
|
|||||||||
Restructuring
|
199
|
488
|
535
|
|||||||||
Venezuela deconsolidation charge (see note 1)
|
—
|
—
|
396
|
|||||||||
Other
|
26
|
(71
|
) |
102
|
||||||||
Total
|
$ |
423
|
$ |
987
|
$ |
1,836
|
||||||
(1)
|
Including impairments related to exit and disposal activities
|
|
Year ended December 31,
|
|||||||||||
|
201
9
|
|
201
8
|
|
201
7
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Restructuring
|
|
|
|
|||||||||
|
$ |
159
|
$ |
410
|
$ |
443
|
||||||
|
40
|
78
|
92
|
|||||||||
Total
|
$ |
199
|
$ |
488
|
$ |
535
|
||||||
|
Employee
termination costs |
|
Other
|
|
Total
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Balance as of January 1, 201
8
|
$ |
(294
|
)
|
$ |
(17
|
) | $ |
(311
|
) | |||
Provision
|
(410
|
) |
(78
|
) |
(488
|
) | ||||||
Utilization and other*
|
500
|
66
|
566
|
|||||||||
Balance as of December 31, 201
8
|
$ |
(204
|
) | $ |
(29
|
) | $ |
(233
|
) | |||
Provision
|
(159
|
) |
(40
|
) |
(199
|
) | ||||||
Utilization and other*
|
155
|
62
|
217
|
|||||||||
Balance as of December 31, 201
9
|
$ |
(208
|
) | $ |
(7
|
)
|
$ |
(215
|
) | |||
*
|
Includes adjustments for foreign currency translation.
|
|
Year ended December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Gain on divestitures, net of divestitures related costs (1)
|
$ |
50
|
67
|
1,083
|
||||||||
Section 8 and similar payments (2)
|
5
|
195
|
83
|
|||||||||
Gain
(
on sale of assets
loss)
|
(1
|
) |
9
|
11
|
||||||||
Other, net
|
22
|
20
|
22
|
|||||||||
Total other income
|
$ |
76
|
$ |
291
|
$ |
1,199
|
||||||
(1) |
Mainly related to the divestment of several activities in the International Markets segment.
|
(2) | Section 8 of the Patented Medicines (Notice of Compliance) Regulation relates to recoveries of lost revenue related to patent infringement proceedings in Canada. |
|
Year ended December, 31
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Venezuela devaluation (1)
|
$ |
—
|
$ |
—
|
$ |
42
|
||||||
Interest expenses and other bank charges
|
881
|
920
|
875
|
|||||||||
Income from investments
|
(41
|
) |
(39
|
) |
(84
|
) | ||||||
Foreign exchange (gains) losses
—
net
|
(15
|
) |
13
|
65
|
||||||||
Other, net (2)
|
(4
|
) |
65
|
(3
|
) | |||||||
Total finance expense—net
|
$ |
822
|
$ |
959
|
$ |
895
|
||||||
(1)
|
For further information regarding the Venezuela devaluation, refer to note 1a.
|
(2) |
In 2018
,
|
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S. $ in millions, except share data)
|
|||||||||||
Net income (loss) used for the computation of diluted
loss
per share
|
$
|
(999
|
) |
$
|
(2,399
|
) | $ |
(16,525
|
) | |||
Weighted average number of shares used in the computation of basic
loss
per share
|
1,091
|
1,021
|
1,016
|
|||||||||
Add:
|
|
|
|
|||||||||
Weighted average number of shares used in the computation of diluted
loss
per share
|
1,091
|
1,021
|
1,016
|
|||||||||
(a) | North America segment, which includes the United States and Canada. |
(b) | Europe segment, which includes the European Union and certain other European countries. |
(c) | International Markets segment, which includes all countries other than those in the North America and Europe segments. |
a.
|
Segment information:
|
|
Year ended December 31,
|
|||||||||||
|
2019
|
|||||||||||
|
North
|
|
Europe
|
|
International
*
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Revenues
|
$ |
8,542
|
$
|
4,795
|
$ |
2,246
|
||||||
Gross profit
|
4,350
|
2,704
|
1,167
|
|||||||||
R&D expenses
|
652
|
262
|
88
|
|||||||||
S&M expenses
|
1,021
|
890
|
481
|
|||||||||
G&A expenses
|
439
|
239
|
138
|
|||||||||
Other income
|
(14
|
) |
(5
|
) |
(3
|
) | ||||||
Segment profit
|
$ |
2,252
|
$ |
1,318
|
$ |
464
|
||||||
|
Year ended December 31,
|
|||||||||||
|
2018
|
|||||||||||
|
North America
|
|
Europe
|
|
International Markets
*
|
|
||||||
|
(U.S. $ in millions)
|
|||||||||||
Revenues
|
$ |
9,297
|
$ |
5,186
|
$ |
2,422
|
||||||
Gross profit
|
4,979
|
2,884
|
1,254
|
|||||||||
R&D expenses
|
713
|
283
|
96
|
|||||||||
S&M expenses
|
1,154
|
1,003
|
518
|
|||||||||
G&A expenses
|
484
|
325
|
153
|
|||||||||
Other income
|
(209
|
) |
—
|
(11
|
) | |||||||
Segment profit
|
$ |
2,837
|
$ |
1,273
|
$ |
498
|
||||||
*
|
The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b.
|
|
Year ended
|
|||||||||||
|
December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
(U.S.
|
|||||||||||
North America profit
|
$ |
2,252
|
$ |
2,837
|
$ |
4,624
|
||||||
Europe profit
|
1,318
|
1,273
|
1,029
|
|||||||||
International Markets profit
|
464
|
498
|
426
|
|||||||||
Total
reportable
segments profit
|
4,034
|
4,608
|
6,079
|
|||||||||
Profit (loss) of other activities
|
108
|
115
|
(6
|
) | ||||||||
Total segments profit
|
4,142
|
4,723
|
6,073
|
|||||||||
Amounts not allocated to segments:
|
|
|
|
|||||||||
Amortization
|
1,113
|
1,166
|
1,444
|
|||||||||
Other asset impairments, restructuring and other items
|
423
|
987
|
1,836
|
|||||||||
Goodwill impairment
|
—
|
3,027
|
17,100
|
|||||||||
Intangible asset impairments
|
1,639
|
1,991
|
3,238
|
|||||||||
Gain on divestitures, net of divestitures related costs
|
(50
|
) |
(66
|
) |
(1,083
|
) | ||||||
Inve
nto
—
r
y St
ep
up
|
|
|
— |
|
|
|
—
|
|
|
|
67
|
|
Other R&D expenses
|
(15
|
) |
83
|
221
|
||||||||
Costs related to regulatory actions taken in facilities
|
45
|
14
|
47
|
|||||||||
Legal settlements and loss contingencies
|
1,178
|
(1,208
|
) |
500
|
||||||||
Other unallocated amounts
|
252
|
366
|
187
|
|||||||||
Consolidated operating income (loss)
|
(443
|
) |
(1,637
|
) |
(17,484
|
) | ||||||
Financial expenses, net
|
822
|
959
|
895
|
|||||||||
Consolidated income (loss) before income taxes
|
$ |
(1,265
|
) | $ |
(2,596
|
) | $ |
(18,379
|
) | |||
b.
|
Segment revenues by major products and activities:
|
|
Year ended
December 31,
|
|||||||||||
|
2019
|
|
2018
|
|
2017
|
|
||||||
|
|
(U.S. $ in millions)
|
|
|||||||||
Generic products
|
$ |
3,963
|
$ |
4,056
|
$ |
5,203
|
||||||
COPAXONE
|
1,017
|
1,759
|
3,116
|
|||||||||
BENDEKA/TREANDA
|
496
|
642
|
656
|
|||||||||
ProAir*
|
274
|
397
|
501
|
|||||||||
QVAR
|
250
|
182
|
313
|
|||||||||
AJOVY
|
93
|
3
|
—
|
|||||||||
AUSTEDO
|
412
|
204
|
24
|
|||||||||
Anda
|
1,492
|
1,347
|
1,153
|
|||||||||
Other
|
546
|
708
|
1,175
|
|||||||||
Total
|
$ |
8,542
|
$ |
9,297
|
$ |
12,141
|
||||||
* |
Does not include revenues from the ProAir authorized generic, which are included under generic products.
|
|
Year ended December 31,
|
|
||||||||||
|
2019
|
|
2018
|
|
|
|
2017
|
|
||||
|
|
(U.S. $ in millions)
|
|
|||||||||
Generic products
|
|
$
|
3,470
|
|
|
$
|
3,593
|
|
|
$
|
3,471
|
|
COPAXONE
|
|
|
432
|
|
|
|
535
|
|
|
|
595
|
|
Respiratory products
|
|
|
354
|
|
|
|
402
|
|
|
|
368
|
|
Other
|
|
|
539
|
|
|
|
656
|
|
|
|
1,033
|
|
|
|
|
|
|||||||||
Total
|
|
$
|
4,795
|
|
|
$
|
5,186
|
|
|
$
|
5,466
|
|
|
|
|
|
|
Year ended December 31,
|
|
||||||||||
|
2019
|
|
2018
|
|
|
2017
|
|
|||||
|
|
(U.S. $ in millions)
|
|
|||||||||
Generic products
|
|
$
|
1,893
|
|
|
$
|
2,022
|
|
|
$
|
2,370
|
|
COPAXONE
|
|
|
63
|
|
|
|
72
|
|
|
|
91
|
|
Distributio
n
|
|
|
20
|
|
|
|
19
|
|
|
|
17
|
|
Other
|
|
|
271
|
|
|
|
309
|
|
|
|
385
|
|
Total
|
|
$
|
2,246
|
|
|
$
|
2,422
|
|
|
$
|
2,863
|
|
|
|
|
|
*
|
The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See note 1b.
|
c.
|
Supplemental data
—
major customers:
|
|
|
Percentage of Third Party Net Sales
|
|
|||||||||
|
|
2019
|
|
|
2018
|
|
|
2017
|
|
|||
McKesson Corporation
|
|
|
13
|
%
|
|
|
12
|
%
|
|
|
16
|
%
|
AmerisourceBergen Corporation
|
|
|
12
|
%
|
|
|
14
|
%
|
|
|
15
|
%
|
d.
|
Property, plant and equipment—by geographical location were as follows:
|
|
December 31, 2019
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|||||||||
|
(U.S. $ in millions)
|
|||||||||||||||
Cash and cash equivalents:
|
|
|
|
|
||||||||||||
Money markets
|
$ |
577
|
$ |
—
|
$ |
—
|
$ |
577
|
||||||||
Cash, deposits and other
|
1,398
|
—
|
—
|
1,398
|
||||||||||||
Investment in securities:
|
|
|
|
|
||||||||||||
Equity securities
|
42
|
—
|
—
|
42
|
||||||||||||
Other, mainly debt securities
|
2
|
—
|
12
|
14
|
||||||||||||
Derivatives:
|
|
|
|
|
||||||||||||
Asset derivatives
—
options and forward contracts
|
—
|
32
|
—
|
32
|
||||||||||||
Liabilities derivatives
—
options and forward contracts
|
—
|
(41
|
) |
—
|
(41
|
) | ||||||||||
Liabilities derivatives
—
interest rate and cross-currency swaps
|
—
|
(22
|
) |
—
|
(22
|
) | ||||||||||
Contingent consideration*
|
—
|
—
|
(460
|
) |
(460
|
) | ||||||||||
Total
|
$ |
2,019
|
$ |
(31
|
) | $ |
(448
|
) | $ |
1,540
|
||||||
|
December 31, 2018
|
|||||||||||||||
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total
|
|
||||||||
|
(U.S. $ in millions)
|
|||||||||||||||
Cash and cash equivalents:
|
|
|
|
|
||||||||||||
Money markets
|
$ |
203
|
$ |
—
|
$ |
—
|
$ |
203
|
||||||||
Cash, deposits and other
|
1,579
|
—
|
—
|
1,579
|
||||||||||||
Investment in securities:
|
|
|
|
|
||||||||||||
Equity securities
|
51
|
—
|
—
|
51
|
||||||||||||
Other, mainly debt securities
|
2
|
—
|
10
|
12
|
||||||||||||
Derivatives:
|
|
|
|
|
||||||||||||
Asset derivatives
—
options and forward contracts
|
—
|
18
|
—
|
18
|
||||||||||||
Asset derivatives
—
cross-currency swaps
|
—
|
58
|
—
|
58
|
||||||||||||
Liability derivatives
—
options and forward contracts
|
—
|
(26
|
) |
—
|
(26
|
) | ||||||||||
Liabilities derivatives
—
interest rate and cross-currency swaps
|
—
|
(50
|
) |
—
|
(50
|
) | ||||||||||
Contingent consideration*
|
—
|
—
|
(507
|
) |
(507
|
) | ||||||||||
Total
|
$ |
1,835
|
$ |
—
|
|
$ |
(497
|
) | $ |
1,338
|
||||||
* | Contingent consideration represents liabilities recorded at fair value in connection with acquisitions. |
|
|
|
|
|
|
|
|
|
|
December 31,
2019
|
|
December 31,
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Fair value at the beginning of the period
|
$ |
(497
|
) | $ |
(717
|
) | ||
Investment in debt securities
|
2
|
(8
|
)
|
|||||
Adjustments to provisions for contingent consideration:
|
|
|
||||||
Actavis Generics transaction
|
92
|
—
|
||||||
Labrys acquisition
|
—
|
(17
|
) | |||||
Eagle transaction
|
(151
|
) |
(40
|
) | ||||
Settlement of contingent consideration:
|
|
|
||||||
Labrys acquisition
|
—
|
151
|
||||||
Eagle transaction
|
106
|
134
|
||||||
Fair value at the end of the period
|
$ |
(448
|
) | $ |
(497
|
) | ||
|
Estimated fair value*
|
|||||||
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Senior notes included under long-term liabilities
|
$ |
22,686
|
$ |
23,560
|
||||
Senior notes and convertible senior debentures included under short-term liabilities
|
2,318
|
2,140
|
||||||
Fair value at the end of the period
|
$ |
25,004
|
$ |
25,700
|
||||
*
The fair value was estimated based on quoted market prices.
|
a.
|
Long-term employee-related obligations consisted of the following:
|
|
December 31,
|
|||||||
|
2019
|
|
2018
|
|
||||
|
(U.S. $ in millions)
|
|||||||
Accrued severance obligations
|
$ |
76
|
$ |
75
|
||||
Defined benefit plans
|
165
|
146
|
||||||
Total
|
$ |
241
|
$ |
221
|
||||
b.
|
Terms of arrangements:
|
|
|
2019
|
|
|||||||||||||
|
|
4th quarter
|
|
|
3rd quarter
|
|
|
2nd quarter
|
|
|
1st quarter
|
|
||||
|
|
(U.S $ in millions except per share amounts)
|
|
|||||||||||||
Net revenues *
|
|
|
4,468
|
|
|
|
4,093
|
|
|
|
4,177
|
|
|
|
4,149
|
|
Gross profit
|
|
|
1,958
|
|
|
|
1,830
|
|
|
|
1,893
|
|
|
|
1,856
|
|
Net income (loss)
|
|
|
75
|
|
|
|
(307
|
)
|
|
|
(671
|
)
|
|
|
(97
|
)
|
Net income (loss) attributable to Teva
|
|
|
110
|
|
|
|
(314
|
)
|
|
|
(689
|
)
|
|
|
(105
|
)
|
Net income (loss) attributable to ordinary shareholders
|
|
|
110
|
|
|
|
(314
|
)
|
|
|
(689
|
)
|
|
|
(105
|
)
|
Earnings per share attributable to ordinary shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
0.10
|
|
|
|
(0.29
|
)
|
|
|
(0.63
|
)
|
|
|
(0.10
|
)
|
Diluted
|
|
|
0.10
|
|
|
|
(0.29
|
)
|
|
|
(0.63
|
)
|
|
|
(0.10
|
)
|
|
|
2018
|
|
|||||||||||||
|
|
4th quarter
|
|
|
3rd quarter
|
|
|
2nd quarter
|
|
|
1st quarter
|
|
||||
|
|
(U.S $ in millions except per share amounts)
|
|
|||||||||||||
Net revenues *
|
|
|
4,419
|
|
|
|
4,385
|
|
|
|
4,552
|
|
|
|
4,916
|
|
Gross profit
|
|
|
1,971
|
|
|
|
1,977
|
|
|
|
2,033
|
|
|
|
2,315
|
|
Net income (loss)
|
|
|
(3,243
|
)
|
|
|
(197
|
)
|
|
|
(166
|
)
|
|
|
1,134
|
|
Net income (loss) attributable to Teva
|
|
|
(2,886
|
)
|
|
|
(208
|
)
|
|
|
(176
|
)
|
|
|
1,120
|
|
Net income (loss) attributable to ordinary shareholders
|
|
|
(2,940
|
)
|
|
|
(273
|
)
|
|
|
(241
|
)
|
|
|
1,055
|
|
Earnings per share attributable to ordinary shareholders:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
|
(2.85
|
)
|
|
|
(0.27
|
)
|
|
|
(0.24
|
)
|
|
|
1.04
|
|
Diluted
|
|
|
(2.85
|
)
|
|
|
(0.27
|
)
|
|
|
(0.24
|
)
|
|
|
1.03
|
|
*
|
The data presented for prior periods have been revised to reflect a revision in the presentation of net revenues and cost of sales in the consolidated financial statements. See table below and not
e
1b.
|
|
|
|
|
|
Net revenues
|
|
|
Cost of sales
|
|
|||||||||||||||||||
|
|
|
|
|
As reported
|
|
|
Adjustment
|
|
|
As revised
|
|
|
As reported
|
|
|
Adjustment
|
|
|
As revised
|
|
|||||||
|
|
|
|
|
(U.S. $ in millions)
|
|
||||||||||||||||||||||
2018
|
|
|
Q1
|
|
|
|
5,065
|
|
|
|
(149
|
)
|
|
|
4,916
|
|
|
|
2,750
|
|
|
|
(149
|
)
|
|
|
2,601
|
|
|
Q2
|
|
|
|
4,701
|
|
|
|
(150
|
)
|
|
|
4,552
|
|
|
|
2,668
|
|
|
|
(150
|
)
|
|
|
2,518
|
|
||
|
Q3
|
|
|
|
4,529
|
|
|
|
(143
|
)
|
|
|
4,385
|
|
|
|
2,552
|
|
|
|
(143
|
)
|
|
|
2,409
|
|
||
|
Q4
|
|
|
|
4,559
|
|
|
|
(141
|
)
|
|
|
4,419
|
|
|
|
2,588
|
|
|
|
(141
|
)
|
|
|
2,447
|
|
||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
Q1
|
|
|
|
4,295
|
|
|
|
(146
|
)
|
|
|
4,149
|
|
|
|
2,440
|
|
|
|
(146
|
)
|
|
|
2,293
|
|
|
Q2
|
|
|
|
4,337
|
|
|
|
(159
|
)
|
|
|
4,177
|
|
|
|
2,443
|
|
|
|
(159
|
)
|
|
|
2,284
|
|
||
|
Q3
|
|
|
|
4,264
|
|
|
|
(171
|
)
|
|
|
4,093
|
|
|
|
2,435
|
|
|
|
(171
|
)
|
|
|
2,264
|
|
Column A
|
|
Column B
|
|
|
Column C
|
|
|
Column D
|
|
|
Column E
|
|
||||||||
|
|
Balance at
beginning of period |
|
|
Charged to costs
and expenses |
|
|
Charged to other
accounts |
|
|
Deductions
|
|
|
Balance at end of
period |
|
|||||
Allowance for doubtful accounts:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
|
$
|
232
|
|
|
$
|
(16
|
)
|
|
$
|
—
|
|
|
$
|
(7
|
)
|
|
$
|
209
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
$
|
232
|
|
|
$
|
13
|
|
|
$
|
(9
|
)
|
|
$
|
(4
|
)
|
|
$
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2017
|
|
$
|
191
|
|
|
$
|
12
|
|
|
$
|
51
|
|
|
$
|
(22
|
)
|
|
$
|
232
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Allowance in respect of carryforward tax losses and deductions that may not be utilized:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2019
|
|
$
|
1,633
|
|
|
$
|
555
|
|
|
$
|
—
|
|
|
$
|
(214
|
)
|
|
$
|
1,974
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2018
|
|
$
|
1,504
|
|
|
$
|
407
|
|
|
$
|
5
|
|
|
$
|
(283
|
)
|
|
$
|
1,633
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year ended December 31, 2017
|
|
$
|
1,690
|
|
|
$
|
173
|
|
|
$
|
390
|
|
|
$
|
(749
|
)
|
|
$
|
1,504
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) |
The following financial statements are filed as part of this Annual Report on Form
10-K:
|
|
page
|
|
||
97
|
||||
Consolidated Financial Statements:
|
|
|
|
|
101
|
||||
Statements of income (loss)
|
102
|
|||
103
|
||||
104
|
||||
105
|
||||
107
|
||||
Financial Statement Schedule:
|
|
|
|
|
Report of Independent Registered Public Accounting Firm
|
|
|||
183
|
3.1
|
Memorandum of Association (1)(2)
|
|||
3.2
|
||||
3.3
|
||||
4.1
|
||||
4.2
|
||||
4.3
|
||||
4.4
|
||||
4.5
|
||||
4.6
|
||||
4.7
|
||||
4.8
|
4.25
|
||||
4.26
|
||||
4.27
|
||||
4.28
|
||||
4.29
|
||||
4.30
|
||||
4.31
|
||||
4.32
|
||||
4.33
|
||||
4.34
|
Other long-term debt instruments: The registrant hereby undertakes to provide the Securities and Exchange Commission with copies upon request.
|
|||
10.1
|
||||
10.2
|
||||
10.3
|
||||
10.4
|
||||
10.5
|
10.6
|
||||
10.7
|
||||
10.8
|
||||
10.9
|
||||
10.10
|
||||
10.11
|
||||
10.12
|
||||
10.13
|
||||
10.14
|
Teva Pharmaceutical Industries Limited 2015 Long-Term Equity-Based Incentive Plan (46) |
|||
10.15
|
||||
10.16
|
||||
10.17
|
||||
10.18
|
||||
10.19
|
||||
10.20
|
||||
10.21
|
||||
10.22
|
||||
10.23
|
||||
10.24
|
||||
10.25
|
||||
10.26
|
10.27
|
||||
10.28
|
||||
10.29
|
||||
10.30
|
||||
10.31
|
||||
10.32
|
||||
21
|
||||
23
|
||||
31.1
|
||||
31.2
|
||||
32
|
||||
101.INS
|
Inline XBRL Instance Document (The instance document does not appear in the interactive data file because its XBRL tags are embedded within the Inline XBRL document)
|
|||
101.SCH
|
Inline XBRL Taxonomy Extension Schema Document
|
|||
101.CAL
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document
|
|||
101.DEF
|
Inline XBRL Taxonomy Extension Definition Linkbase Document
|
|||
101.LAB
|
Inline XBRL Taxonomy Extension Labels Linkbase Document
|
|||
101.PRE
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document
|
|||
104
|
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)
|
* | Filed herewith |
1. | English translation or summary from Hebrew original, which is the official version. |
2. | Incorporated by reference to Exhibit 3.1 to Registration Statement on Form F-1(Reg. No. 33-15736). |
3. | Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed on December 14, 2018. |
4. | Incorporated by reference to Exhibit 3.3 to Current Report on Form 8-K filed on December 14, 2018. |
5. | Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on December 4, 2018. |
6. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on January 31, 2006. |
7. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on January 31, 2006. |
8. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on January 31, 2006. |
9. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on May 4, 2010. |
10. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on November 10, 2011. |
11. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on December 18, 2012. |
12. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on November 10, 2011. |
13. | Incorporated by reference to Exhibit 4.4 to Form 6-K filed on November 10, 2011. |
14. | Incorporated by reference to Exhibit 4.4 to Form 6-K filed on December 18, 2012. |
15. | Incorporated by reference to Exhibit 4.5 to Form 6-K filed on November 10, 2011. |
16. | Incorporated by reference to Exhibit 4.6 to Form 6-K filed on November 10, 2011. |
17. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on April 25, 2012. |
18. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on April 25, 2012. |
19. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on March 31, 2015. |
20. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on March 31, 2015. |
21. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 25, 2016. |
22. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on July 21, 2016. |
23. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 21, 2016. |
24. | Incorporated by reference to Exhibit 4.1 to Form 6-K filed on July 28, 2016. |
25. | Incorporated by reference to Exhibit 4.2 to Form 6-K filed on July 28, 2016. |
26. | Incorporated by reference to Exhibit 4.3 to Form 6-K filed on July 28, 2016. |
27. | Incorporated by reference to Exhibit 4.5 to Form 6-K filed on July 28, 2016. |
28. | Incorporated by reference to Exhibit 4.6 to Form 6-K filed on July 28, 2016. |
29. | Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed on March 14, 2018. |
30. | Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on March 14, 2018. |
31. | Incorporated by reference to Exhibit 4.5 to Current Report on Form 8-K filed on March 14, 2018. |
32. | Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K filed on March 14, 2018. |
33. | Incorporated by reference to Exhibit 4.2 to Current Report on Form 8-K filed on November 25, 2019. |
34. | Incorporated by reference to Exhibit 4.4 to Current Report on Form 8-K filed on November 25, 2019. |
35. | Incorporated by reference to Exhibit 4.6 to Current Report on Form 8-K filed on November 25, 2019. |
36. | Incorporated by reference to Exhibit 4.8 to Current Report on Form 8-K filed on November 25, 2019. |
37. | Incorporated by reference to Exhibit 10.1 to Current Report on Form 8-K filed on April 10, 2019. |
38. | Incorporated by reference to Exhibit 10.20 to Annual Report on Form 10-K filed on February 12, 2018. |
39. | Incorporated by reference to Exhibit 10.27 to Annual Report on Form 10-K filed on February 12, 2018. |
40. | Incorporated by reference to Exhibit 10.29 to Annual Report on Form 10-K filed on February 12, 2018. |
41. | Incorporated by reference to Exhibit 10.30 to Annual Report on Form 10-K filed on February 12, 2018. |
42. | Incorporated by reference to Exhibit 10.31 to Annual Report on Form 10-K filed on February 12, 2018. |
43. | Incorporated by reference to Exhibit 10.32 to Annual Report on Form 10-K filed on February 12, 2018. |
44. | Incorporated by reference to Exhibit 10.26 to Annual Report on Form 10-K filed on February 19, 2019. |
45. | Incorporated by reference to Exhibit 10.1 to Quarterly Report on Form 10-Q filed on November 1, 2018. |
46. | Incorporated by reference to Exhibit A to Proxy Statement filed on June 8, 2017. |
47. | Incorporated by reference to Exhibit 10.49 to Annual Report on Form 10-K filed on February 12, 2018. |
48. | Incorporated by reference to Exhibit 10.50 to Annual Report on Form 10-K filed on February 12, 2018. |
49. | Incorporated by reference to Exhibit 10.51 to Annual Report on Form 10-K filed on February 12, 2018. |
50. | Incorporated by reference to Exhibit 10.52 to Annual Report on Form 10-K filed on February 12, 2018. |
51. | Incorporated by reference to Exhibit 10.53 to Annual Report on Form 10-K filed on February 12, 2018. |
52. | Incorporated by reference to Exhibit 10.54 to Annual Report on Form 10-K filed on February 12, 2018. |
53. | Incorporated by reference to Exhibit 10.56 to Annual Report on Form 10-K filed on February 12, 2018. |
54. | Incorporated by reference to Exhibit 10.57 to Annual Report on Form 10-K filed on February 12, 2018. |
55. | Incorporated by reference to Exhibit 10.58 to Annual Report on Form 10-K filed on February 12, 2018. |
56. | Incorporated by reference to Exhibit 10.60 to Annual Report on Form 10-K filed on February 12, 2018. |
57. | Incorporated by reference to Exhibit 10.61 to Annual Report on Form 10-K filed on February 12, 2018. |
58. | Incorporated by reference to Exhibit 10.63 to Annual Report on Form 10-K filed on February 12, 2018. |
59. | Incorporated by reference to Exhibit 10.64 to Annual Report on Form 10-K filed on February 12, 2018. |
60. | Incorporated by reference to Exhibit 10.65 to Annual Report on Form 10-K filed on February 12, 2018. |
TEVA PHARMACEUTICAL INDUSTRIES LIMITED
|
By:
|
/s/ Kåre Schultz
|
|
Name:
|
Kåre Schultz
|
|
Title:
|
President and Chief Executive Officer
|
|
Dated:
|
February 21, 2020
|
|
Name
|
Title
|
Date
|
|||
By:
|
/s/ Dr. Sol J. Barer
Dr. Sol J. Barer
|
Chairman of the Board of Directors
|
February 21, 2020
|
|||
By:
|
/s/ Kåre Schultz
Kåre Schultz
|
President and Chief Executive Officer and Director
|
February 21, 2020
|
|||
By:
|
/s/ Eli Kalif
Eli Kalif
|
Executive Vice President, Chief
Financial Officer (Principal Financial Officer) |
February 21, 2020
|
|||
By:
|
/s/ Deborah A. Griffin
Deborah A. Griffin
|
Senior Vice President, Chief
Accounting Officer (Principal Accounting Officer) |
February 21, 2020
|
|||
By:
|
/s/ Rosemary A. Crane
Rosemary A. Crane
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Amir Elstein
Amir Elstein
|
Director
|
February 21, 2020
|
|
Name
|
Title
|
Date
|
|||
By:
|
/s/ Murray A. Goldberg
Murray A. Goldberg
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Jean-Michel Halfon
Jean-Michel Halfon
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Gerald M. Lieberman
Gerald M. Lieberman
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Roberto A. Mignone
Roberto A. Mignone
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Dr. Perry D. Nisen
Dr. Perry D. Nisen
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Nechemia (Chemi) J. Peres
Nechemia (Chemi) J. Peres
|
Director
|
February 21, 2020
|
|||
By:
|
/s/ Prof. Ronit Satchi-Fainaro
Prof. Ronit Satchi-Fainaro
|
Director
|
February 21, 2020
|
Exhibit 4.33
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12
OF THE SECURITIES EXCHANGE ACT OF 1934
This section summarizes certain information regarding the American Depositary Shares (ADSs) of Teva Pharmaceutical Industries Limited (the Company), each of which represents one ordinary share of the Company, par value NIS 0.10 per share. The ADSs constitute the only class of the Companys securities that is registered under Section 12 of the Securities Exchange Act of 1934, as amended. The following description is only a summary and does not purport to be complete and is qualified by reference to our Memorandum of Association, as amended, our Articles of Association, as amended (Articles), and our Second Amended and Restated Deposit Agreement, by and among the Company, Citibank, N.A., as depositary, and the holders and beneficial owners of ADSs issued thereunder, dated as of December 4, 2018 (the Deposit Agreement), each of which is incorporated by reference as exhibits to our annual report on Form 10-K.
American Depositary Shares and Receipts
General
ADSs represent ownership interests in securities that are on deposit with the depositary bank. ADSs may be represented by certificates that are commonly known as American Depositary Receipts or ADRs. The depositary bank typically appoints a custodian to safekeep the securities on deposit. Citibank N.A., having its principal office at 388 Greenwich Street, New York, New York 10013, U.S.A., is acting as depositary bank for our ADSs and the custodians are Citibank Tel Aviv and Citibank, N.A.
The Company has appointed Citibank as depositary bank pursuant to the Deposit Agreement. A copy of the Deposit Agreement is on file with the SEC as an exhibit to the Companys Current Report on Form 8-K filed on December 4, 2018. ADS holders may obtain a copy of the Deposit Agreement from the SECs website (www.sec.gov).
Each ADS represents the right to receive one ordinary share on deposit with the custodian. An ADS also represents the right to receive any other property received by the depositary bank or the custodian on behalf of the owner of the ADS but that has not been distributed to the owners of ADSs because of legal restrictions or practical considerations. The custodian, the depositary bank and their respective nominees will hold all deposited property for the benefit of the holders and beneficial owners of ADSs. The deposited property does not constitute the proprietary assets of the depositary bank, the custodian or their nominees. Beneficial ownership in the deposited property will under the terms of the Deposit Agreement be vested in the beneficial owners of the ADSs. The depositary bank, the custodian and their respective nominees will be the record holders of the deposited property represented by the ADSs for the benefit of the holders and beneficial owners of the corresponding ADSs. Owners of ADSs will be able to exercise beneficial ownership interests in the deposited property only through the registered holders of the ADSs, by the registered holders of the ADSs (on behalf of the applicable ADS owners) only through the depositary bank, and by the depositary bank (on behalf of the owners of the corresponding ADSs) directly, or indirectly through the custodian or their respective nominees, in each case upon the terms of the Deposit Agreement.
Owners of ADSs become a party to the Deposit Agreement and will be bound to its terms and to the terms of any ADR that represents ADSs. The Deposit Agreement and the ADR specify the rights and obligations of the Company, the depositary bank and the ADS owners. The Deposit Agreement and the ADRs are governed by New York law. However, the Companys obligations to the holders of ordinary shares will continue to be governed by the laws of the State of Israel, which may be different from the laws of the United States.
Owners of ADSs may hold ADSs either by means of an ADR registered in their name, through a brokerage or safekeeping account, or through an account established by the depositary bank in their name reflecting the registration of uncertificated ADSs directly on the books of the depositary bank (commonly referred to as the direct registration system or DRS). The direct registration system reflects the uncertificated (book-entry) registration of ownership of ADSs by the depositary bank. Under the direct registration system, ownership of ADSs is evidenced by periodic statements issued by the depositary bank to the holders of the ADSs. The direct registration system includes automated transfers between the depositary bank and The Depository Trust Company, or DTC, the central book-entry clearing and settlement system for equity securities in the United States.
Dividends and Distributions
Holders of ADSs generally have the right to receive distributions made by the Company on the securities deposited with the custodian. Receipt of these distributions may be limited, however, by practical considerations and legal limitations. Holders of ADSs will receive such distributions under the terms of the Deposit Agreement in proportion to the number of ADSs held as of a specified record date, after deduction of the applicable fees, taxes and expenses.
Distributions of Cash
Whenever the Company makes a cash distribution for the securities on deposit with the custodian, the Company will deposit the funds with the depositary bank or the custodian on behalf of the depositary bank. Upon receipt of confirmation of the deposit of the requisite funds, the depositary bank will arrange for the funds to be converted into U.S. dollars and for the distribution of the U.S. dollars to the holders, subject to the laws and regulations of the State of Israel.
The conversion into U.S. dollars will take place only if practicable and if the U.S. dollars are transferable to the United States. The depositary bank will apply the same method for distributing the proceeds of the sale of any property (such as undistributed rights) held by the custodian in respect of securities on deposit.
The distribution of cash will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. The depositary bank will hold any cash amounts it is unable to distribute in a non-interest bearing account for the benefit of the applicable holders and beneficial owners of ADSs until the distribution can be effected or the funds that the depositary bank holds must be escheated as unclaimed property in accordance with the laws of the relevant states of the United States.
Distributions of Shares
Whenever the Company makes a free distribution of shares for the securities on deposit with the custodian, the Company will deposit the applicable number of shares with the custodian. Upon receipt of confirmation of such deposit, the depositary bank will either distribute to holders new ADSs representing the ordinary shares deposited or modify the ADS-to-shares ratio, in which case each ADS held by holders will represent rights and interests in the additional ordinary shares or preference shares so deposited. Only whole new ADSs will be distributed. Fractional entitlements will be sold and the proceeds of such sale will be distributed as in the case of a cash distribution.
The distribution of new ADSs or the modification of the ADS-to-ordinary shares ratio upon a distribution of ordinary shares or preference shares will be made net of the fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes or governmental charges, the depositary bank may sell all or a portion of the new ordinary shares so distributed. No such distribution of new ADSs will be made if it would violate a law (i.e., the U.S. securities laws) or if it is not operationally practicable. If the depositary bank does not distribute new ADSs as described above, it may sell the shares received upon the terms described in the Deposit Agreement and will distribute the proceeds of the sale as in the case of a distribution of cash.
Elective Distributions of Cash or Shares
Whenever the Company intends to distribute a dividend payable at the election of shareholders either in cash or in additional shares, it will give prior notice thereof to the depositary bank and will indicate whether it wishes the elective distribution to be made available to holders. In such case, the Company will assist the depositary bank in determining whether such distribution is lawful and reasonably practicable.
The depositary bank will make the election available to holders only if it is reasonably practicable and if the Company has provided all of the documentation contemplated in the Deposit Agreement. In such case, the depositary bank will establish procedures, in consultation with the Company, to enable holders to elect to receive either cash or additional ADSs, in each case as described in the Deposit Agreement.
If the election is not made available to holders, holders will receive either cash or additional ADSs, depending on what a shareholder under Israeli law would receive upon failing to make an election, as more fully described in the Deposit Agreement.
Distribution of Rights
Whenever the Company intends to distribute rights to purchase additional ordinary shares, it will give prior notice to the depositary bank and will assist the depositary bank in determining whether it is lawful and reasonably practicable to distribute rights to purchase additional ADSs to holders.
The depositary bank will establish procedures, in consultation with the Company, to distribute rights to purchase additional ADSs to holders and to enable such holders to exercise such rights if it is lawful and reasonably practicable to make the rights available to holders of ADSs, and if the Company provides all of the documentation contemplated in the Deposit Agreement (such as opinions to address the lawfulness of the transaction). Holders may have to pay fees, expenses, taxes and other governmental charges to subscribe for the new ADSs upon the exercise of their rights. The depositary bank is not obligated to establish procedures to facilitate the distribution and exercise by holders of rights to purchase new ordinary shares other than in the form of ADSs.
The depositary bank will not distribute the rights to holders if:
|
the Company does not timely request that the rights be distributed to holders or the Company requests that the rights not be distributed to holders; or |
|
the Company fails to deliver satisfactory documents to the depositary bank; or |
|
it is not reasonably practicable to distribute the rights. |
The depositary bank will sell the rights that are not exercised or not distributed if such sale is lawful and reasonably practicable. The proceeds of such sale will be distributed to holders as in the case of a cash distribution. If the depositary bank is unable to sell the rights, it will allow the rights to lapse.
Other Distributions
Whenever the Company intends to distribute property other than cash, ordinary shares or rights to purchase additional ordinary shares, it will notify the depositary bank in advance and will indicate whether it wishes that such distribution be made to holders of ADSs. If so, the Company will assist the depositary bank in determining whether such distribution to holders is lawful and reasonably practicable. If it is reasonably practicable to distribute such property to holders and if the Company provides all of the documentation contemplated in the Deposit Agreement, the depositary bank will distribute the property to the holders in a manner it, in consultation with the Company, deems practicable.
The distribution will be made net of fees, expenses, taxes and governmental charges payable by holders under the terms of the Deposit Agreement. In order to pay such taxes and governmental charges, the depositary bank may, in consultation with the Company, sell all or a portion of the property received.
The depositary bank will not distribute the property to holders and will sell the property if:
|
the Company does not request that the property be distributed to holders or if the Company asks that the property not be distributed to holders; or |
|
the Company does not deliver satisfactory documents to the depositary bank; or |
|
the depositary bank determines, in consultation with the Company, that all or a portion of the distribution to holders is not reasonably practicable. |
The proceeds of such a sale will be distributed to holders as in the case of a cash distribution.
Redemption
Whenever the Company intends to redeem any of the securities on deposit with the custodian, it will notify the depositary bank in advance. If it is practicable and if the Company provides all of the documentation contemplated in the Deposit Agreement, the depositary bank will provide notice of the redemption to the holders.
The custodian will be instructed to surrender the shares being redeemed against payment of the applicable redemption price. The depositary bank will convert the redemption funds received into U.S. dollars upon the terms of the Deposit Agreement and will establish procedures to enable holders to receive the net proceeds from the redemption upon surrender of their ADSs to the depositary bank. Holders may have to pay fees, expenses, taxes and other governmental charges upon the redemption of their ADSs. If less than all ADSs are being redeemed, the ADSs to be retired will be selected by lot or on a pro rata basis, as the depositary bank may determine in consultation with the Company.
Changes Affecting Ordinary Shares and Preference Shares
The ordinary shares held on deposit for ADSs may change from time to time. For example, there may be a change in nominal or par value, a split-up, cancellation, consolidation or reclassification of such ordinary shares or a recapitalization, reorganization, merger, consolidation or sale of assets.
If any such change were to occur, the ADSs would, to the extent permitted by law, represent the right to receive the property received or exchanged in respect of the new ordinary shares held on deposit. The depositary bank may in such circumstances deliver new ADSs to holders, amend the Deposit Agreement, the applicable ADRs and the applicable Registration Statement(s) on Form F-6, call for the exchange of existing ADSs for new ADSs and take any other actions that are appropriate to reflect as to the ADSs the change affecting the ordinary shares. If the depositary bank may not lawfully distribute such property to holders, the depositary bank may sell such property and distribute the net proceeds to holders as in the case of a cash distribution.
Issuance of ADSs upon Deposit of Ordinary Shares
Upon receipt of notice from the custodian confirming (i) that a deposit of ordinary shares has been made pursuant to the requirements of the Deposit Agreement, (ii) that all required documentation has been received, and (iii) the person(s) to whom ADSs are deliverable and the number of ADSs to be delivered, the depositary bank will issue, subject to the terms of the Deposit Agreement, applicable law and payment of all applicable charges, taxes and other governmental fees, ADSs to the persons named in the custodians notice. The depositary bank will only issue ADSs in whole numbers.
When a holder makes a deposit of ordinary shares, such holder will be responsible for transferring good and valid title to the depositary bank. As such, holders will be deemed to represent and warrant that:
|
the ordinary shares are duly authorized, validly issued, fully paid, non-assessable and legally obtained; |
|
all preemptive (and similar) rights, if any, with respect to such ordinary shares have been validly waived or exercised; |
|
the person making the deposit is duly authorized to deposit the ordinary shares; |
|
the ordinary shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and the ADSs issuable upon such deposit will not be restricted securities (as defined in the Deposit Agreement); and |
|
the ordinary shares presented for deposit have not been stripped of any rights or entitlements. |
If any of the representations or warranties are incorrect in any way, the Company and the depositary bank may, at holders cost and expense, take any and all actions necessary to correct the consequences of the misrepresentations.
Transfer, Combination and Split of ADRs
Holders are entitled to transfer, combine or split up their ADRs and the ADSs evidenced thereby. For transfers of ADRs, holders will have to surrender the ADRs to be transferred to the depositary bank and also:
|
ensure that the surrendered ADR is properly endorsed or otherwise in proper form for transfer; |
|
provide such proof of identity and genuineness of signatures as the depositary bank deems appropriate; |
|
provide any transfer stamps required by the State of New York or the United States; and |
|
pay all applicable fees, charges, expenses, taxes and other government charges payable by ADR holders pursuant to the terms of the Deposit Agreement, upon the transfer of ADRs. |
To have ADRs either combined or split up, holders must surrender the ADRs in question to the depositary bank with a request to have them combined or split up, and holders must pay all applicable fees, charges and expenses payable by ADR holders, pursuant to the terms of the Deposit Agreement, upon a combination or split up of ADRs.
Withdrawal of Ordinary Shares upon Cancellation of ADSs
Holders of ADSs are entitled to present their ADSs to the depositary bank for cancellation and then receive the corresponding number of underlying ordinary shares at the custodians offices. Holders ability to withdraw the ordinary shares may be limited by U.S. and Israeli legal considerations applicable at the time of withdrawal. In order to withdraw the ordinary shares represented by ADSs, holders will be required to pay to the depositary bank the fees for cancellation of ADSs and any charges and taxes payable upon the transfer of the ordinary shares being withdrawn. Holders assume the risk for delivery of all funds and securities upon withdrawal. Once canceled, the ADSs will not have any rights under the Deposit Agreement.
If holders hold ADSs registered in their name, the depositary bank may ask such holders to provide proof of identity and genuineness of any signature and such other documents as the depositary bank may deem appropriate before it will cancel the ADSs. The withdrawal of the ordinary shares represented by the ADSs may be delayed until the depositary bank receives satisfactory evidence of compliance with all applicable laws and regulations. The depositary bank will only accept ADSs for cancellation that represent a whole number of securities on deposit.
Holders have the right to withdraw the securities represented by ADSs at any time except for:
|
temporary delays that may arise because (i) the transfer books for the ordinary shares or ADSs are closed, or (ii) ordinary shares are immobilized on account of a shareholders meeting or a payment of dividends; |
|
outstanding obligations to pay fees, taxes and similar charges; or |
|
restrictions imposed because of laws or regulations applicable to ADSs or the withdrawal of securities on deposit. |
The Deposit Agreement may not be modified to impair holders right to withdraw the securities represented by their ADSs, except to comply with mandatory provisions of law.
Reports and Communications
The Company will furnish to the depositary bank all notices of shareholders meetings, proxy soliciting material and other reports and communications that are made generally available to the holders of ordinary shares and English translations of the same (including a summary, in English, of any applicable provisions or proposed provisions of the Articles that may be relevant to such notices, reports and communications). The depositary bank will make such notices, reports and communications available for inspection by holders of ADSs at its principal office when furnished by the Company pursuant to the Deposit Agreement and, upon request by the Company, will mail such notices, reports and communications to holders at the Companys expense.
Voting Rights
Holders of ADSs generally have the right under the Deposit Agreement to instruct the depositary bank to exercise the voting rights for the ordinary shares represented by their ADSs.
At the Companys request, the depositary bank will distribute to holders any notice of shareholders meeting received from the Company together with information explaining how to instruct the depositary bank to exercise the voting rights of the securities represented by ADSs.
If the depositary bank timely receives voting instructions from a holder of ADSs, it will endeavor to vote the securities (in person or by proxy) represented by the holders ADSs in accordance with such voting instructions.
The ability of the depositary bank to carry out voting instructions may be limited by practical and legal limitations and the terms of the securities on deposit. The Company cannot assure that holders will receive voting materials in time to enable them to return voting instructions to the depositary bank in a timely manner. Securities for which no voting instructions have been received will not be voted.
Fees and Charges
Holders of ADSs will be required to pay the following service fees to the depositary bank:
Service |
Fees |
|
(1) Issuance of ADSs (e.g., an issuance upon a deposit of shares, upon a change in the ADS(s)-to-share(s) ratio, or for any other reason), excluding issuances as a result of distributions described in paragraph (4) below. | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) issued. | |
(2) Cancellation of ADSs (e.g., a cancellation of ADSs for delivery of deposited shares, upon a change in the ADS(s)-to-share(s) ratio, or for any other reason). | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) cancelled. | |
(3) Distribution of cash dividends or other cash distributions (e.g., upon a sale of rights and other entitlements). | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held. | |
(4) Distribution of ADSs pursuant to (i) stock dividends or other free stock distributions, or (ii) exercise of rights to purchase additional ADSs. | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held. | |
(5) Distribution of securities other than ADSs or rights to purchase additional ADSs (e.g., spin-off shares). | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held. | |
(6) ADS Services. | Up to U.S. $5.00 per 100 ADSs (or fraction thereof) held on the applicable record date(s) established by the depositary bank. |
Holders of ADSs will also be responsible to pay certain fees and expenses incurred by the depositary bank and certain taxes and governmental charges such as:
(1) |
taxes and other governmental charges; |
(2) |
fees related to the transfer and registration of ordinary shares charged by the registrar and transfer agent (i.e., upon deposit and withdrawal of ordinary shares); |
(3) |
expenses for cable, telex and fax transmissions and for delivery of securities; |
(4) |
expenses incurred for converting foreign currency into U.S. dollars; |
(5) |
expenses incurred in connection with compliance with exchange control regulations and other regulatory requirements; and |
(6) |
fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit. |
Depositary fees payable upon the issuance and cancellation of ADSs are typically paid to the depositary bank by the brokers (on behalf of their clients) receiving the newly issued ADSs from the depositary bank and by the brokers (on behalf of their clients) delivering the ADSs to the depositary bank for cancellation. The brokers in turn charge these fees to their clients. Depositary fees payable in connection with distributions of cash or securities to holders and the depositary services fee are charged by the depositary bank to the holders of record of ADSs as of the applicable ADS record date.
The Depositary fees payable for cash distributions are generally deducted from the cash being distributed. In the case of distributions other than cash (i.e., stock dividend, rights), the depositary bank charges the applicable fee to the ADS record date holders concurrent with the distribution. In the case of ADSs registered in the name of the investor (whether certificated or uncertificated in direct registration), the depositary bank sends invoices to the applicable record date ADS holders. In the case of ADSs held in brokerage and custodian accounts (via DTC), the depositary bank generally collects its fees through the systems provided by DTC (whose nominee is the registered holder of the ADSs held in DTC) from the brokers and custodians holding ADSs in their DTC accounts. The brokers and custodians who hold their clients ADSs in DTC accounts in turn charge their clients accounts the amount of the fees paid to the depositary banks.
In the event of refusal to pay the depositary fees, the depositary bank may, under the terms of the Deposit Agreement, refuse the requested service until payment is received or may set off the amount of the depositary fees from any distribution to be made to the holder.
The fees and charges holders may be required to pay may vary over time and may be changed by the Company and by the depositary bank. Holders will receive prior notice of such changes.
The depositary bank may reimburse the Company for certain expenses incurred by the Company in respect of the ADR program established pursuant to the Deposit Agreement, by making available a portion of the depositary fees charged in respect of the ADR program or otherwise, upon such terms and conditions as the Company and the depositary bank may agree from time to time.
Amendment and Termination
The Company may agree with the depositary bank to modify the Deposit Agreement at any time without holders consent. The Company undertakes to give holders 30 days prior notice of any modifications that would materially prejudice any of their substantial rights under the Deposit Agreement. Modifications to the Deposit Agreement shall be deemed not to materially prejudice holders substantial existing rights if such modifications are reasonably necessary for the ADSs to be registered under the Securities Act or to be eligible for book-entry settlement, in each case without imposing or increasing the fees and charges holders are required to pay. In addition, the Company may not be able to provide holders with prior notice of any modifications or supplements that are required to accommodate compliance with applicable provisions of law.
Holders will be bound by the modifications to the Deposit Agreement if they continue to hold ADSs after the modifications to the Deposit Agreement become effective. The Deposit Agreement cannot be amended to prevent holders from withdrawing the ordinary shares represented by their ADSs (except in order to comply with applicable by law).
The Company has the right to direct the depositary bank to terminate the Deposit Agreement. Similarly, the depositary bank may in certain circumstances on its own initiative terminate the Deposit Agreement. In either case, the depositary bank must give notice to holders at least 30 days before termination. Until termination, holders rights under the Deposit Agreement will be unaffected.
After termination, the depositary bank will continue to collect distributions received (but will not distribute any such property until holders request the cancellation of their ADSs) and may sell the securities held on deposit. After the sale, the depositary bank will hold the proceeds from such sale and any other funds then held for holders in a non-interest bearing account. At that point, the depositary bank will have no further obligations to holders other than to account for the funds then held for holders still outstanding (after deduction of applicable fees, taxes and expenses).
Book of Depositary
The depositary bank will maintain ADS holder records at its depositary office. Holders may inspect such records at such office during regular business hours but solely for the purpose of communicating with other holders in the interest of business matters relating to the ADSs and the Deposit Agreement.
The depositary bank will maintain in New York City (Borough of Manhattan) facilities to record and process the issuance, cancellation, combination, split-up and transfer of ADSs. These facilities may be closed from time to time, to the extent not prohibited by law.
Limitations on Obligations and Liabilities
The Deposit Agreement limits the obligations of the Company and the depositary bank to the holders of ADSs as follows:
|
the Company and the depositary bank are obligated only to take the actions specifically stated in the Deposit Agreement without negligence or bad faith; |
|
both the Company and the depositary bank disclaim any liability for any failure to carry out voting instructions, for any manner in which a vote is cast or for the effect of any vote, provided they act in good faith and in accordance with the terms of the Deposit Agreement; |
|
both the Company and the depositary bank disclaim any liability for any failure to accurately determine the lawfulness or practicality of any action, for the investment risks associated with investing in ordinary shares, for the validity or worth of the ordinary shares, for the value of ordinary shares or any distribution or interest thereon, for any tax consequences that result from the ownership of ADSs, for the credit-worthiness of any third party, for allowing any rights to lapse under the terms of the Deposit Agreement; for any action of or failure to act by, or any information provided or not provided by, DTC or any DTC participant; |
|
the depositary bank disclaims any liability for the content of any information submitted to it by the Company for distribution to holders or for any inaccuracy of any translation thereof or for the failure or timeliness of any notice from the Company; |
|
the Company and the depositary bank will not be obligated to perform any act that is inconsistent with the terms of the Deposit Agreement; |
|
the Company and the depositary bank disclaim any liability if the Company or the custodian or the depositary bank are prevented or forbidden from or subject to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement, by reason of any provision, present or future of any applicable law or regulation, or by reason of present or future provision of any provision of our Articles, or any provision of or governing the securities on deposit, or by reason of any act of God or war or other circumstances beyond the Companys control; |
|
the Company and the depositary bank disclaim any liability by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Articles or in any provisions of or governing the securities on deposit; |
|
the Company and the depositary bank further disclaim any liability for any action or inaction in reliance on the advice or information received from legal counsel, accountants, any person presenting ordinary shares for deposit, any holder of ADSs or authorized representatives thereof, or any other person believed by the Company or the depositary bank in good faith to be competent to give such advice or information; |
|
the Company and the depositary bank also disclaim liability for the inability of certain holders to benefit from any distribution, offering, right or other benefit that is made available to holders of ordinary shares but is not, under the terms of the Deposit Agreement, made available to such holders; |
|
the Company and the depositary bank also disclaim liability for any action or inaction of any clearing or settlement system (and any participant thereof) for the deposited property or the ADSs; |
|
the Company and the depositary bank may rely without any liability upon any written notice, request or other document believed to be genuine and to have been signed or presented by the proper parties; and |
|
the Company and the depositary bank also disclaim liability for any consequential or punitive damages for any breach of the terms of the Deposit Agreement. |
Taxes
Holders will be responsible for the taxes and other governmental charges payable on the ADSs and the securities represented by the ADSs. The Company, the depositary bank and the custodian may deduct from any distribution the taxes and governmental charges payable by holders and may sell any and all property on deposit to pay the taxes and governmental charges payable by holders. Holders will be liable for any deficiency if the sale proceeds do not cover the taxes that are due.
The depositary bank may refuse to issue ADSs, to deliver, transfer, split and combine ADRs or to release securities on deposit until all taxes and charges are paid by the applicable holder. The depositary bank and the custodian may take reasonable administrative actions to obtain tax refunds and reduced tax withholding for any distributions on behalf of holders. However, holders may be required to provide to the depositary bank and to the custodian proof of taxpayer status and residence and such other information as the Company, the depositary bank and the custodian may require to fulfill legal obligations. Holders are required to indemnify the Company, the depositary bank and the custodian for any claims with respect to taxes based on any tax benefit obtained for holders.
Foreign Currency Conversion
The depositary bank will arrange for the conversion of all foreign currency received into U.S. dollars if such conversion is practical, and it will distribute the U.S. dollars in accordance with the terms of the Deposit Agreement. Holders may have to pay fees and expenses incurred in converting foreign currency, such as fees and expenses incurred in complying with currency exchange controls and other governmental requirements.
If the conversion of foreign currency is not practical or lawful, or if any required approvals are denied or not obtainable at a reasonable cost or within a reasonable period, the depositary bank may take the following actions in its discretion:
|
convert the foreign currency to the extent practical and lawful and distribute the U.S. dollars to holders for whom the conversion and distribution is lawful and practical; or |
|
distribute the foreign currency to holders for whom the distribution is lawful and practical; or |
|
hold the foreign currency (without liability for interest) for the applicable holders. |
Exhibit 10.7
EXECUTION VERSION
SEPARATION AND GENERAL RELEASE AGREEMENT
This SEPARATION AND GENERAL RELEASE AGREEMENT (this Agreement) is made as of October 1, 2019 (the Effective Date), between Teva Pharmaceuticals USA, Inc., a Delaware corporation (the Company), and Carlo de Notaristefani (the Executive). The Company and the Executive are collectively referred to herein as the Parties. Capitalized terms not otherwise defined herein shall have the meaning set forth in that Amended and Restated Employment Agreement dated as of February 7, 2018, between the Company and the Executive (the Employment Agreement).
1. Notice and Separation. The Parties hereto agree and acknowledge that the Executive employment with the Company shall terminate on June 30, 2020 (the Termination Date). For the avoidance of doubt, the period between the date of the Agreement and the Termination Date shall include the Notice Period pursuant to the Employment Agreement.
2. The Executive hereby agrees to resign all of the Executives positions (whether as an officer, director or any other position) that he holds with the Company Group, effective as of October 1, 2019, and the Executive will execute such additional documents as reasonably requested by the Company to evidence the foregoing. The Parties further agree that through the Termination Date, the Executive shall provide assistance and support to the new Executive Vice President, Global Operations of the Teva Group to ensure a smooth transition and to perform any other duties assigned to him by the Chief Executive Officer of the Company Group.
3. 2019 Annual Cash Bonus. Subject to the discretion of the Compensation Committee, the TPI Board, the Compensation Policy and the terms of the 2019 Annual Cash Bonus Plan, the Executive shall be eligible to be considered for payment of the annual Cash Bonus for 2019. For the avoidance of doubt, Executive not be eligible to participate in the Company Groups 2020 Annual Cash Bonus Plan.
4. Severance. Subject to the terms and conditions of this Agreement, the Company agrees to pay to the Executive:
(a) all accrued but unpaid Base Salary through the Termination Date (which shall be paid on the first ordinary payroll date following the Termination Date), (ii) any unpaid or unreimbursed reasonable out-of-pocket expenses incurred by the Executive in connection with the business of the Company in accordance with Company policy to the extent incurred prior to the Termination Date (which shall be paid following Executive submission of such receipts evidencing such expenses in accordance with the Companys expense reimbursement policies), (iii) any other amounts required to be paid pursuant to applicable law, if any, and (iv) accrued and/or vested benefits under any plan or agreement covering the Executive which shall be paid in accordance with, and governed by, the terms of such plan or agreement;
(b) a lump sum cash payment in an amount equal to $836,400, which is equal to twelve (12) months of the Executives Base Salary as of the Termination Date, which shall be paid on the next regular payroll date immediately following the sixtieth (60th) day after the Termination Date;
(c) an amount equal to $836,400, which is equal to twelve (12) months of the Executives Base Salary as of the Termination Date in consideration for the Executives compliance with the Restrictive Covenants set forth in Section 9 of the Employment Agreement, which will be paid in substantially equal installments in accordance with the payroll practices of the Company during the twelve (12) month period commencing on the Termination Date;
(d) a lump sum cash payment of $42,313, which shall be paid on the next regular payroll date immediately following the sixtieth (60th) day after the Termination Date, in consideration of the Company obligations pursuant to Section 7(d)(v) of the Employment Agreement (the amounts described in Sections 3(b), 3(c) and 3(d), collectively, the Severance Payments); and
(e) all outstanding equity-based compensation awards granted to the Executive under the Long-Term Equity-Based Incentive Plan (the Equity Plan) of TPI (as defined in the Employment Agreement) shall continue to vest and remain exercisable (to the extent applicable) following the Termination Date as if Executive had remained employed by the Company, in accordance with the terms and conditions of the applicable Equity Plan and the individual award agreements evidencing such grants (including, for the avoidance of doubt, any performance vesting conditions and any original stated expiration date of options) (the Equity Benefits).
The Companys obligation to pay the Executive the Severance Payments and provide the Equity Benefits shall be subject to the Executives execution and non-revocation of the Release of Claims attached as Exhibit A to the Employment Agreement within sixty (60) days following the Termination Date (the date on which the Release of Claims becomes non-revocable, the Release Effective Date) and the Executives continued compliance with the Restrictive Covenants (as defined below).
Further, to the extent that any portion of the Severance Payments constitutes nonqualified deferred compensation within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the Code) and all applicable regulations and guidance thereunder (Section 409A), any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of the Executives termination of employment hereunder, but for the condition that the Executive execute the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day (subject to any additional delay as may be required under Section 7(a) of this Agreement), after which any remaining Severance Payments shall thereafter be provided to the Executive according to the applicable schedule set forth herein.
2
5. Restrictive Covenants.
(a) The Executive hereby acknowledges and agrees that Section 9 of the Employment Agreement contain certain restrictive covenants and related provisions (the Restrictive Covenants), all of which will remain in full force and effect following the Termination Date in accordance with their terms.
(b) The executive hereby acknowledge and agrees that until the Termination Date and at all times thereafter, he shall cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by Teva USA and/or his services to other members of the Teva Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against ant member of the Teva Group, and shall make himself available upon notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of the Company and to participate in legal proceedings by deposition or testimony.
(c) Notwithstanding any provision herein to the contrary, and without derogating from any other remedy available to the Company pursuant to applicable law, in the event that the Executive breaches any of the Restrictive Covenants, (i) payment or provision of the Severance Payments shall immediately cease (without prejudice to any other remedies available to the Company hereunder and/or pursuant to applicable law), (ii) the Company will have no further obligations to the Executive with respect to payment or provision of the Severance Payments and (iii) the Executive must promptly repay to the Company any Severance Payments and benefits set forth in Sections 3(b), 3(c) and 3(d) hereof paid or provided to the Executive prior to the date of such breach.
(d) The Executive understands that nothing in this Agreement or the Restrictive Covenants limits the Executives ability to file a charge or complaint with the Equal Employment Opportunity Commission, the National Labor Relations Board, the Occupational Safety and Health Administration, the Securities and Exchange Commission or any other federal, state or local government agency or commission (collectively, the Government Agencies). The Executive further understands that neither this Agreement nor the Restrictive Covenants limits the Executives ability to communicate with any Government Agencies or otherwise participate in any investigation or proceeding that may be conducted by any Government Agency, including providing documents or other information, without notice to the Company. Neither this Agreement nor the Restrictive Covenants limits the Executives right to receive an award for information provided to any Government Agencies.
3
6. Additional Section 409A Provisions. All payments and benefits under this Agreement shall be made and provided in a manner that is intended to comply with Section 409A, to the extent applicable. Notwithstanding any provision in this Agreement to the contrary:
(a) The payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) upon a termination of employment shall be delayed until such time as the Executive has also undergone a separation from service as defined in U.S. Treasury Regulation Section 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the Termination Date) shall be paid (or commence to be paid) to the Executive on the schedule set forth in this Agreement as if the Executive had undergone such termination of employment (under the same circumstances) on the date of his ultimate separation from service. Any payment otherwise required to be made hereunder to the Executive at any date as a result of the termination of the Executives employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the Delay Period) in the event that the Executive is deemed at the time of his separation from service to be a specified employee (in each case, within the meaning of Section 409A) and if such delay is otherwise required to avoid additional tax under Section 409A(a)(2) of the Code. In such event, on the first business day following the expiration of the Delay Period, the Executive shall be paid, in a single lump sum cash payment, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.
(b) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A.
(c) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by the Company no later than the last day of the taxable year following the taxable year in which such expense was incurred by the Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period during which the arrangement is in effect.
(d) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A, in no event whatsoever shall the Company or any of its affiliates be liable for (i) any additional tax, interest or penalties that may be imposed on the Executive as a result of Section 409A or (ii) any damages for failing to comply with Section 409A (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A).
4
7. Entire Agreement.
(a) Except as otherwise expressly provided herein, this Agreement and the Employment Agreement (including but not limited to Section 24 of the Employment Agreement) constitute the entire agreement between the Executive and the Company with respect to the subject matter hereof and supersedes any and all prior agreements or understandings between the Executive and the Company, any member of the Teva Group and any of the Companys principal shareholders, affiliates or subsidiaries.
(b) Notwithstanding the foregoing, each of the following will remain in full force and effect in accordance with their existing terms and will be unaffected by this Agreement: (i) any confidentiality, invention assignment, or similar agreement or arrangement to which the Executive is a party with any member of the Teva Group, which obligations shall remain in force and effect, (ii) the Indemnification and Release, dated as August 1, 2012.
(c) In addition, this Agreement shall not derogate from the TPI Board of Directors General Discretion and Clawback powers pursuant to TPI Compensation Policy and all restrictions set forth in the Compensation Policy (as defined in the Employment Agreement) shall remain in full force and effect through the Termination Date, and following the Termination Date shall remain in effect only to the extent applicable to terminated employees.
(d) This Agreement will bind the heirs, personal representatives, successors and assigns of the Executive and the Company, and inure to the benefit of the Executive and the Company, and each of the Executives respective heirs, successors and assigns, provided that the Executive may not assign his rights or obligations hereunder. This Agreement may be amended or modified only by a written instrument executed by the Executive and the Company. This Agreement and the obligations of the Parties hereunder shall be construed, interpreted and enforced in accordance with the laws of the State of Delaware (without reference to conflict of laws principles).
[Remainder of page intentionally left blank. Signature page follows.]
5
IN WITNESS WHEREOF, the Parties have executed this Agreement on the latest date set forth below.
TEVA PHARMACEUTICALS USA, INC. | ||
By: |
/s/ Deborah A. Griffin |
|
Name: | Deborah A. Griffin | |
Title: | SVP & Chief Accounting Officer | |
Date: | November 4, 2019 | |
By: |
/s/ Brian E. Shanahan |
|
Name: | Brian E. Shanahan | |
Title: | Secretary | |
Date: | November 4, 2019 |
EXECUTIVE |
/s/ Carlo De Notaristefani |
Carlo De Notaristefani |
Date: October 31, 2019 |
6
Exhibit 10.10
Execution Version
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement), dated as of May 6, 2018 (the Execution Date), is entered into by and between TEVA PHARMACEUTICALS USA, INC., a Delaware corporation (Teva USA), and BRENDAN OGRADY (the Executive).
R E C I T A L S:
WHEREAS, Teva USA desires to continue to employ the Executive and the Executive has indicated his willingness to continue to provide his services to Teva USA on the terms and conditions set forth herein; and
WHEREAS, Teva USA and the Executive deem it to be in their mutual best interests to memorialize the terms of such employment in a formal agreement.
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
1. Effective Date. This Agreement shall be effective as of November 27, 2017 (the Effective Date).
2. Term of Employment. Teva USA hereby agrees to employ the Executive and the Executive hereby accepts such employment with Teva USA, on the terms and conditions hereinafter set forth. The term of employment (the Term of Employment) hereunder shall commence on the Effective Date and shall continue until the Termination Date, as defined in Section 7 below.
3. Position; Duties and Responsibilities; Place of Performance.
(a) The Executive was appointed as Executive Vice President, North America Commercial, effective November 27, 2017, pursuant to that certain Promotion Letter, dated December 14, 2017, by and between Executive and Teva. In such capacity, the Executive reports directly to the President and Chief Executive Officer of Teva Pharmaceutical Industries Ltd. (TPI, and collectively with Teva USA, the Company). In addition, the Executive has such additional executive duties and responsibilities as may be assigned to him by the President and Chief Executive Officer of TPI. If the Executive is elected as a director or officer of any subsidiary or affiliate of the Company, the Executive shall serve in such capacity or capacities without additional compensation.
(b) From the Effective Date through December 31, 2017, Executive will continue his international assignment at Teva Pharmaceuticals Europe BV in Amsterdam, Netherlands, and effective as of January 1, 2018, the Executives principal place of employment will be in the United States. The Executive understands and agrees that it is expected that the Executive will be required to travel extensively (including internationally) in connection with the performance of his duties hereunder.
(c) Authority. Notwithstanding anything in this Agreement to the contrary, the Executive, while in the United States, (a) shall not have authority to bind TPI or any of its non-U.S. subsidiaries and (b) shall be subject to such further restrictions as to his activities on behalf of TPI or its non-U.S. subsidiaries as may be determined by TPI from time to time.
4. Exclusivity. Subject to the terms and conditions set forth in this Agreement, the Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term of Employment, including, without limitation, any activity that (a) conflicts with the interests of the Company or its affiliates, (b) interferes with the proper and efficient performance of his duties for the Company or (c) interferes with the exercise of his judgment in the Companys or its affiliates best interests. Notwithstanding the foregoing, nothing herein shall preclude the Executive from: (i) serving, with the prior written consent of the President and Chief Executive Officer of TPI (which shall not be unreasonably withheld or delayed), as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (ii) engaging in charitable activities and community affairs; (iii) speaking at meetings of business, charitable and civic organizations; or (iv) subject to the terms and conditions set forth in Section 9 hereof, managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by the Executive so as not to be in contradiction to any Company policy and/or materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder or create a potential business or fiduciary conflict.
5. Compensation and Benefits.
(a) Base Salary. For services rendered under this Agreement, Teva USA shall pay the Executive a salary at the rate of U.S. $600,000 per annum (such salary, or any increased salary granted to the Executive pursuant to this Section 5(a), the Base Salary). The Executives Base Salary shall be payable in accordance with the payroll practices of Teva USA as the same shall exist from time to time. The Human Resources and Compensation Committee (the Compensation Committee) of the Board of Directors of TPI (the TPI Board), with input from the President and Chief Executive Officer of TPI, shall periodically consider and resolve whether to approve adjustments to the Executives Base Salary, according to the considerations specified in the shareholder-approved compensation policy of TPI in effect from time to time (the Compensation Policy) and subject to approval of the Compensation Committee and the TPI Board.
(b) Annual Bonus. For each fiscal year that ends during the Term of Employment, the Executive shall be eligible to be considered for an annual bonus under the Companys annual cash bonus plan in accordance with the Compensation Policy (the Annual Bonus) and subject to the sole discretion of the Compensation Committee and the TPI Board, with a target amount equal to 100% of Executives Base Salary. If payable, the Annual Bonus shall be paid to the Executive at the same time as annual bonuses are generally payable to other similarly situated senior executives of the Company, subject to the Executives continuous employment through the payment date, except as otherwise set forth in this Agreement.
2
(c) Equity Awards. During the Term of Employment, the Executive shall be considered for equity-based compensation awards under TPIs 2015 Long-Term Equity-Based Incentive Plan or any successor equity compensation plan(s) (the Equity Plan), at the sole discretion of the President and Chief Executive Officer of TPI, the Compensation Committee and the TPI Board. Any such awards shall be granted on such terms and conditions as may be determined by the Compensation Committee and the TPI Board.
(d) Benefits. During the Term of Employment, the Executive shall be eligible to participate in such benefit plans and programs as shall be provided to similarly situated executives of Teva USA, including medical insurance, long-term and short-term disability insurance, dental insurance, life insurance, 401(k) plan, Supplemental Deferred Compensation Plan and other benefit programs that may be adopted by Teva USA from time to time (but, excluding, for the avoidance of doubt, Teva USAs Supplemental Executive Retirement Plan and Defined Contribution Supplemental Executive Retirement Plan). Nothing contained herein shall be construed to limit the Companys ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing the Executive notice, and the right to do so is expressly reserved.
(e) Car Allowance. During the Term of Employment, the Executive will be provided with a car cash allowance of U.S. $2,000 per month.
(f) Vacation. During the Term of Employment, the Executive shall be entitled to the same number of vacation days, holidays, sick days and other paid time off benefits as are generally allowed to other similarly situated executives of Teva USA in accordance with Teva USAs policy as in effect from time to time. Teva USAs expectation is that the Executive will take a reasonable amount of vacation (not to exceed five (5) weeks per year). Because there are no set vacation allocations, the Executive acknowledges that, in accordance with Teva USAs policy, the Company will not make any payment for unused vacation time in connection with a termination of the Executives employment for any reason.
6. Ordinary Business Expenses. During the Term of Employment, Teva USA shall reimburse the Executive for all reasonable out-of-pocket expenses incurred by the Executive in connection with the business of the Company and in the performance of his duties under this Agreement, including expenses for travel, lodging and similar items, all in accordance with Teva USAs expense reimbursement policy, as the same may be modified from time to time. Teva USA shall reimburse all such proper expenses upon the Executives presentation to Teva USA of an itemized accounting of such expenses with reasonable supporting data.
7. Termination of Employment.
(a) General. The Term of Employment shall terminate upon the earliest to occur of (i) the Executives death, (ii) a termination by reason of a Disability (as defined below), (iii) a termination by Teva USA with or without Cause (as defined below) and (iv) a termination by the Executive with or without Good Reason (as defined below). The date on which employee-employer relations cease to exist between the parties (including as a result of acceleration of such cessation due to a waiver by the Company of Executives services during the relevant Notice Period (as defined below) and payment to the Executive of the entire amount the Executive is
3
entitled to in respect of such Notice Period) shall be referred to in this Agreement as the Termination Date. For the avoidance of doubt, in the event Executive shall be employed by any other member of the Teva Group following a termination of employment by Teva USA, such termination by Teva USA shall not be deemed termination of employment of Executive. Upon the termination of the Executives employment with the Teva Group for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by the Executive, the Executive shall resign from any and all directorships, committee memberships or any other positions the Executive holds with any member of the Teva Group.
(b) Death or Disability. The Executives employment shall terminate automatically upon his death. Teva USA may terminate the Executives employment immediately after the occurrence of a Disability, such termination to be effective upon the Executives receipt of written notice of such termination. In the event the Executives employment is terminated due to his death or Disability, the Executive or his estate or his beneficiaries, as the case may be, shall be entitled to (i) all accrued but unpaid Base Salary through the Termination Date; (ii) any unpaid or unreimbursed expenses incurred in accordance with Teva USA policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date; (iii) any other amounts required to be paid pursuant to applicable law, if any; and (iv) accrued and/or vested benefits under any plan or agreement covering the Executive which shall be governed by the terms of such plan or agreement (items (i) through (iv) collectively, the Accrued Obligations).
For purposes of this Agreement, Disability shall mean any physical or mental disability or infirmity that renders the Executive incapable of performing his usual and customary duties as set forth herein for a period of one hundred twenty (120) days during any twelve (12) month period. Any question as to the existence or extent of the Executives Disability upon which the Executive and Teva USA cannot agree shall be determined by a qualified, independent physician selected by Teva USA and approved by the Executive or the Executives representatives (which approval shall not be unreasonably withheld or delayed). The determination of any such physician shall be final and conclusive for all purposes of this Agreement.
Except as set forth in this Section 7(b), following the Executives termination by reason of his death or Disability, the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
(c) Termination by Teva USA for Cause. In the event of Cause, Teva USA may terminate the Executives employment for Cause as described in this Section 7(c): In the event Teva USA terminates the Executives employment for Cause, he shall be entitled only to (A) all accrued but unpaid Base Salary through the Termination Date; and (B) any unpaid or unreimbursed expenses incurred in accordance with Teva USA policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date. Following a termination of the Executives employment for Cause, except as set forth in this Section 7(c), the Executive shall have no further rights to any compensation or any other benefits.
For purposes of this Agreement, Cause shall mean: (A) the Executives indictment for, conviction of or pleading of guilty or nolo contendere to, (i) a felony or (ii) any crime involving moral turpitude; (B) the Executives embezzlement, dishonesty, misappropriation of Company property, breach of fiduciary duty or fraud with regard to the Company or any of its assets or
4
businesses; (C) the Executives willful misconduct or gross negligence in the performance of the Executives duties or continual failure to perform the material duties of his position; (D) the Executives material violation of a Company rule or regulation; or (E) the Executives breach of a material provision of this Agreement.
(d) Termination by Teva USA without Cause. Teva USA may terminate the Executives employment at any time without Cause, effective three (3) months following the Executives receipt of written notice of such termination (in this Section 7(d), the Notice Period). Teva USA may, in its sole and absolute discretion, by written notice, waive the services of the Executive during the Notice Period or in respect of any part of such period, and at Teva USAs sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date), all on the condition that Teva USA pay the Executive the monthly Base Salary and all additional compensation and benefits to which the Executive is entitled in respect of the Notice Period without regard to any such Teva USA waiver.
In the event the Executives employment is terminated by Teva USA without Cause (other than by reason of his death or Disability), the Executive shall be entitled to:
(i) the Accrued Obligations;
(ii) a lump sum cash payment in an amount equal to six (6) months of the Executives then-current Base Salary, payable on the sixtieth (60th) day following the Termination Date;
(iii) an amount equal to twelve (12) months of the Executives then-current Base Salary in consideration for the Executives undertaking set forth in Section 9(e) below and subject to the Executives compliance therewith, such amount to be paid in substantially equal installments in accordance with the payroll practices of Teva USA during the twelve (12) month period commencing on the Termination Date; and
(iv) a lump sum cash payment payable on the sixtieth (60th) day following the Termination Date in an amount equal to (A) the monthly COBRA premium cost for the Executive and the Executives covered dependents under Teva USAs group health plan as of the date of such termination, multiplied by (B) eighteen (18).
Notwithstanding the foregoing, and without derogating from any other remedy available to the Company, (A) the payments and benefits described in subsections (ii) through (iv) above shall immediately cease, (B) the Company shall have no further obligations to the Executive with respect thereto and (C) the Executive shall promptly repay to Teva USA any payments or benefits paid or provided to the Executive pursuant to subsections (ii) through (iv) above, in the event that the Executive breaches any provision of Section 9 hereof.
Following a termination of the Executives employment by Teva USA without Cause, except as set forth in this Section 7(d), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
5
(e) Termination by the Executive for Good Reason. The Executive may terminate his employment for Good Reason and receive severance compensation upon such termination as described in this Section 7(e).
(i) The Executive may terminate his employment for Good Reason by providing Teva USA three (3) months written notice setting forth with reasonable specificity the event that constitutes Good Reason, which written notice, to be effective, must be provided to Teva USA within ninety (90) days following the occurrence of such event. During such three (3) month notice period, Teva USA shall have a cure right (if curable), and if not cured within such period, the Executives termination will be effective upon the date immediately following the expiration of the three (3) month notice period.
(ii) In the event of the Executives termination for Good Reason, the Executive shall be entitled to the same payments and other benefits as provided in Section 7(d)(i) through (iv) above for a termination without Cause, it being agreed that the Executives right to any such payments shall be subject to the same terms and conditions as described in Section 7(d) above, including, without limitation, the forfeiture of the Executives right to the payments and benefits described in subsections (d)(ii) through (iv) thereof, and the Executives obligation to promptly repay such amounts, in the event that the Executive breaches any provision of Section 9 hereof. Following a termination of the Executives employment by the Executive for Good Reason, except as set forth in this Section 7(e), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
For purposes of this Agreement, Good Reason shall mean, without the Executives express written consent, the occurrence of any of the following events: (A) the Companys breach of a material provision of this Agreement, (B) a material diminution in the Executives duties or responsibilities that is inconsistent with the Executives position as described herein, or (C) a material reduction by Teva USA in the Executives rate of annual Base Salary.
(f) Termination by the Executive without Good Reason. The Executive may terminate his employment without Good Reason by providing Teva USA three (3) months written notice of such termination (in this Section 7(f), the Notice Period). In the event that the Executives employment is terminated by the Executive without Good Reason, the Executive shall be entitled to the Accrued Obligations.
In the event of the termination of the Executives employment under this Section 7(f), Teva USA may, in its sole and absolute discretion, by written notice, waive the services of the Executive during the Notice Period or in respect of any part of such period, and at Teva USAs sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date) and still have it treated as a termination without Good Reason.
Following a termination of the Executives employment by the Executive without Good Reason, except as set forth in this Section 7(f), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
6
(g) Change of Control. In the event that the Executives employment is terminated pursuant to subsection (d) of this Section 7, during the one year period following a merger of TPI with another entity, pursuant to which merger TPI is not the surviving entity, and such termination is a result of such merger, then, in addition to any payments or other benefits to which the Executive is entitled pursuant to Section 7(d), the Executive shall also be entitled to receive a lump sum cash payment in an amount equal to $1,500,000, payable on the next regular payroll date immediately following the sixtieth (60th) day after the Termination Date.
(h) Release. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to subsection (b), (d), (e) or (g) of this Section 7 (other than the Accrued Obligations) (collectively, the Severance Benefits) shall be conditioned upon the Executives execution, delivery to Teva USA, and non-revocation of a release of claims in the form attached as Exhibit A hereto, as the same may be revised from time to time by Teva USA upon the advice of counsel (the Release of Claims) (and the expiration of any revocation period contained in the Release of Claims) within sixty (60) days following the Termination Date. If the Executive fails to execute the Release of Claims in such a timely manner so as to permit any revocation period to expire prior to the end of such sixty (60) day period, or timely revokes his acceptance of such release following its execution, the Executive shall not be entitled to any of the Severance Benefits. Further, to the extent that any portion of the Severance Benefits constitutes nonqualified deferred compensation within the meaning of Section 409A of the U.S. Internal Revenue Code of 1986, as amended (the Code) and all applicable regulations and guidance thereunder (Section 409A), any payment of any amount or provision of any benefit otherwise scheduled to occur prior to the sixtieth (60th) day following the date of the Executives termination of employment hereunder, but for the condition that the Executive execute the Release of Claims as set forth herein, shall not be made until the first regularly scheduled payroll date following such sixtieth (60th) day (subject to any additional delay as may be required under Section 11(a) of this Agreement), after which any remaining Severance Benefits shall thereafter be provided to the Executive according to the applicable schedule set forth herein. For the avoidance of doubt, in the event of a termination by reason of the Executives death or Disability, the Executives obligations herein to execute and not revoke the Release of Claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs.
(i) Compliance with Covenants. Notwithstanding any provision herein to the contrary, and without derogating from any other remedy available to the Company, in the event that the Executive breaches any provision of Section 9 hereof, (A) payment or provision of the Severance Benefits shall immediately cease (without prejudice to any other remedies available to the Company hereunder and/or pursuant to applicable law), (B) the Company shall have no further obligations to the Executive with respect to payment or provision of the Severance Benefits and (C) the Executive shall promptly repay to the Company any Severance Benefits paid or provided to the Executive pursuant to this Section 7 prior to the date of such breach.
(j) Return of Property. Upon termination of the Executives employment, or earlier than that if required by the Company, the Executive shall promptly return to Teva USA any cell phone, laptop or other hand-held device provided to the Executive, and any confidential or proprietary information of the Company or any of their subsidiaries or affiliates that remains in the Executives possession; provided, however, that nothing in this Agreement or elsewhere shall prevent the Executive from retaining and utilizing documents relating to his personal benefits,
7
entitlements and obligations; documents relating to his personal tax obligations; his desk calendar, personal contact list, and the like; and such other records and documents as may reasonably be approved by the TPI CEO (such approval not to be unreasonably withheld or delayed).
8. Representations. The Executive hereby represents to the Company that (a) he is legally entitled to enter into this Agreement and to perform the services contemplated herein and is not bound under any employment, consulting or other agreement to render services to any third party, (b) he has the full right, power and authority, subject to no rights of third parties, to grant to the Company the rights contemplated by Section 9(b) hereof, and (c) he does not now have, nor within the last three (3) years has he had, any ownership interest in any business enterprise (other than interests in publicly traded corporations where his ownership does not exceed one percent (1%) or more of the equity capital) which is a customer of the Teva Group (as defined below), or from which the Teva Group purchases any goods or services or to whom such corporations owe any financial obligations or are required or directed to make any payments.
9. Executives Covenants.
(a) Disclosure of Information. The Executive recognizes and acknowledges that the trade secrets, know-how and proprietary information and processes of TPI, Teva USA and their subsidiaries and affiliates (the Teva Group), as they may exist from time to time, are valuable, special and unique assets of the business of the Teva Group, access to and knowledge of which are essential to the performance of the Executives duties hereunder. The Executive will not, during or at any time following the Term of Employment, in whole or in part, disclose such secrets, know-how or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall the Executive make use of any such secrets, know-how or processes for his own purposes or for the benefit of any person, firm, corporation or other entity (except for a member of the Teva Group) under any circumstances during or after the Term of Employment; provided, that, after the termination of his employment, these restrictions shall not apply to such secrets, know-how and processes which are then in the public domain (provided that the Executive was not responsible, directly or indirectly, for such secrets, know-how or processes entering the public domain without the Companys consent). In addition, nothing contained in this Agreement shall be construed to prohibit the Executive from reporting possible violations of federal or state law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any whistleblower provisions of federal or state law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.
(b) DTSA Disclosure. Pursuant to 18 U.S.C. § 1833(b), an individual may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret that: (i) is made (A) in confidence to a federal, state or local government official, either directly or indirectly, or to an attorney, and (B) solely for the purpose of reporting or investigating a suspected violation of law or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. Additionally, an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose a trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual: (A) files any document containing the trade secret under seal and (B) does not disclose the trade secret except pursuant to court order.
8
(c) Inventions. Without additional compensation, the Executive hereby sells, transfers and assigns to the Company, or to any person or entity designated by the Company, all of the entire right, title and interest of the Executive in, and to, all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly, during the Term of Employment, which relate to methods, apparatus, designs, products, processes or devices, sold, leased, used or under consideration or development by the Company or any of its subsidiaries or affiliates, or which otherwise relate to or pertain to the business, functions or operations of the Company or any of its subsidiaries or affiliates or which arise from the efforts of the Executive during the course of his employment for the Company or any of its subsidiaries or affiliates. The Executive shall communicate promptly and disclose to the Company, in such form as the Company requests, all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements. The Executive shall execute and deliver to the Company such formal transfers and assignments and such other papers and documents as may be necessary or required of the Executive to permit the Company or any person or entity designated by the Company to file and prosecute the patent applications and, as to copyrightable material, to obtain copyright thereof. Any invention relating to the business of the Company and its subsidiaries or affiliates made by the Executive within one year following the termination of the Term of Employment shall be deemed to fall within the provisions of this paragraph unless proved to have been first conceived and made following such termination.
(d) Covenant Not to Interfere. During the Term of Employment and for a period of twelve (12) months following the Termination Date, the Executive shall not, directly or indirectly, (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as agent of, the Company, its subsidiaries or affiliates to terminate such persons contract of employment or agency, as the case may be, with the Company, its subsidiaries or affiliates or (ii) divert, or attempt to divert, any person, concern or entity from doing business with the Company, its subsidiaries or affiliates, or attempt to induce any such person, concern or entity to cease being a customer or supplier of the Company, its subsidiaries or affiliates.
(e) Covenant Not to Compete. By signing this Agreement, the Executive hereby acknowledges and agrees that, in his capacity as Executive Vice President, North America Commercial, the Executive will have a great deal of exposure and access to a broad variety of commercially valuable proprietary information of the Teva Group, including, by way of illustration, confidential information regarding the Teva Groups current and future products and strategies, costs and other financial information, R&D and marketing plans and strategies, etc. As a result of the Executives knowledge of the above information and in consideration for the benefits offered by the Company under this Agreement, the Executive affirms and recognizes his continuing obligations with respect to the use and disclosure of confidential and proprietary information of the Teva Group pursuant to the Teva Groups policies and the terms and conditions of this Agreement, and hereby agrees that, during the Term of Employment and for a period of twelve (12) months following the Termination Date (to the extent such restriction does not violate any statute or public policy), the Executive shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other direct or indirect service provider) perform
9
any services for any division, subsidiary or product group of a company, which division, subsidiary or product group is involved in the development, manufacture of, sale of or trading in (i) generic products or (ii) specialty pharmaceutical products that are competitive with a fundamental product developed, manufactured, sold or otherwise traded in by the Company as of the date of such termination of employment, where the determination of whether a certain product constitutes a fundamental product manufactured, sold or otherwise traded in by the Teva Group shall be reasonably determined on an ad-hoc basis at the relevant time by the TPI CEO. If a company described in the preceding sentence is not organized into divisions, subsidiaries or product groups, the term division, subsidiary or product group in the preceding sentence shall refer to the entire company.
(f) Non-Disparagement. During the Term of Employment and at all times thereafter, the Executive agrees not to (i) make any disparaging or defamatory comments regarding any member of the Teva Group or any of its current or former directors, officers, employees or products or (ii) make any negative or disparaging comments concerning any aspect of the Executives relationship with any member of the Teva Group or any conduct or events relating to any termination of the Executives employment with the Company.
(g) Cooperation. During the Term of Employment and at all times thereafter, the Executive agrees to cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by Teva USA and/or his services to other members of the Teva Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against ant member of the Teva Group, and shall make himself available upon notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of the Company and to participate in legal proceedings by deposition or testimony.
(h) Blue Pencil. It is the desire and intent of the parties that the provisions of this Section 9 be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision or clause of this Section 9 shall be adjudicated to be invalid or unenforceable or overly broad in scope, time or geographic region, then such provision or clause shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable or to reduce or narrow down the portion thus adjudicated to be too broad in scope, time or geographic region, such deletion, reduction or narrowing down to apply only with respect to the operation of this Section 9 in the particular jurisdiction in which such adjudication is made.
(i) Injunctive Relief. Executive acknowledges and agrees that Teva USA entered into this Agreement in reliance on the provisions of this Section 9 and the enforcement of this Section 9 is necessary to ensure the preservation, protection and continuity of the goodwill of the Teva Groups business and confidential information. Executive agrees that, due to the nature of the business of the Teva Group, the restrictions set forth in this Section 9 are reasonable as to time, geography and scope. Executive agrees that the Teva Group would suffer irreparable harm and continuing damage for which money damages would be insufficient if Executive were to breach, or threaten to breach, this Section 9. Executive furthermore agrees that the Teva Group would by reason of such breach, or threatened breach, be entitled to injunctive, a decree for
10
specific performance, other equitable relief in aid of arbitration in a court of appropriate jurisdiction, and all other relief as may be proper (including money damages if appropriate), to the extent permitted by law, without the need to post any bond. Executive further consents and stipulates to the entry of such injunctive relief in such a court prohibiting Executive from breaching the terms of this Section 9. This section shall not, however, diminish the right of the Teva Group to claim and recover damages and other appropriate relief in addition to injunctive relief. Notwithstanding anything to the contrary contained herein, in the event of a breach of any covenant by Executive, the duration of any restriction breached shall be extended for a period equal to any time period that Executive was in violation of such covenant.
(j) Further Representations and Covenants. In signing this Agreement, Executive gives the Teva Group assurance that Executive has carefully read and considered all of the terms and conditions of this Section 9. Executive agrees that these restraints are necessary for the reasonable and proper protection of the Teva Group and its confidential information and that each and every one of the restraints is reasonable in respect to subject matter, length of time and geographic area, and that these restraints, individually or in the aggregate, will not prevent Executive from obtaining other suitable employment during the period in which Executive is bound by the restraints. Executive agrees that, before providing services to any entity during the period of time that Executive is subject to the constraints in this Section 9, Executive will provide a copy of this Section 9 to such entity, and Executive shall ensure that such entity acknowledge to the Company in writing that it has read this Section 9. Executive acknowledges that each of these covenants has a unique, very substantial and immeasurable value to the Teva Group, and that Executive has sufficient assets and skills to provide a livelihood while such covenants remain in force. Executive further covenants that Executive will not challenge the reasonableness or enforceability of any of the covenants set forth in this Section 9, and that Executive will reimburse the Teva Group for all costs (including, without limitation, reasonable attorneys fees) incurred in connection with any action to enforce any of the provisions of this Section 9 if either the Teva Group prevails on any material issue involved in such dispute or if Executive challenges the reasonableness or enforceability of any of the provisions of this Section 9. It is also agreed that each member of the Teva Group will have the right to enforce all of Executives obligations under this Agreement.
10. Insurance. The Company may, at its election and for its benefit, insure the Executive against death, and the Executive shall submit to such physical examination and supply such information as may be reasonably required in connection therewith.
11. Additional Section 409A Provisions. All payments and benefits under this Agreement shall be made and provided in a manner that is intended to comply with Section 409A, to the extent applicable. Notwithstanding any provision in this Agreement to the contrary:
(a) The payment (or commencement of a series of payments) hereunder of any nonqualified deferred compensation (within the meaning of Section 409A) upon a termination of employment shall be delayed until such time as the Executive has also undergone a separation from service as defined in U.S. Treasury Regulation Section 1.409A-1(h), at which time such nonqualified deferred compensation (calculated as of the Termination Date) shall be paid (or commence to be paid) to the Executive on the schedule set forth in this Agreement as if
11
the Executive had undergone such termination of employment (under the same circumstances) on the date of his ultimate separation from service. Any payment otherwise required to be made hereunder to the Executive at any date as a result of the termination of the Executives employment shall be delayed for such period of time as may be necessary to meet the requirements of Section 409A(a)(2)(B)(i) of the Code (the Delay Period) in the event that the Executive is deemed at the time of his separation from service to be a specified employee (in each case, within the meaning of Section 409A) and if such delay is otherwise required to avoid additional tax under Section 409A(a)(2) of the Code. In such event, on the first business day following the expiration of the Delay Period, the Executive shall be paid, in a single lump sum cash payment, an amount equal to the aggregate amount of all payments delayed pursuant to the preceding sentence, and any remaining payments not so delayed shall continue to be paid pursuant to the payment schedule set forth herein.
(b) Each payment in a series of payments hereunder shall be deemed to be a separate payment for purposes of Section 409A.
(c) To the extent that any right to reimbursement of expenses or payment of any benefit in-kind under this Agreement constitutes nonqualified deferred compensation (within the meaning of Section 409A), (i) any such expense reimbursement shall be made by Teva USA no later than the last day of the taxable year following the taxable year in which such expense was incurred by the Executive, (ii) the right to reimbursement or in-kind benefits shall not be subject to liquidation or exchange for another benefit, and (iii) the amount of expenses eligible for reimbursement or in-kind benefits provided during any taxable year shall not affect the expenses eligible for reimbursement or in-kind benefits to be provided in any other taxable year; provided that the foregoing clause shall not be violated with regard to expenses reimbursed under any arrangement covered by Section 105(b) of the Code solely because such expenses are subject to a limit related to the period during which the arrangement is in effect.
(d) While the payments and benefits provided hereunder are intended to be structured in a manner to avoid the implication of any penalty taxes under Section 409A, in no event whatsoever shall the Company or any of its affiliates be liable for (i) any additional tax, interest or penalties that may be imposed on the Executive as a result of Section 409A or (ii) any damages for failing to comply with Section 409A (other than for withholding obligations or other obligations applicable to employers, if any, under Section 409A).
12. Clawback. All payments made pursuant to this Agreement are subject to the clawback provisions in the Compensation Policy.
13. Required Stock Ownership. The Executive acknowledges and agrees to adhere to the Companys stock ownership guidelines applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
14. No-Hedging Policy. The Executive acknowledges and agrees to adhere to the Companys No-Hedging Policy applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
12
15. No-Pledging Policy. The Executive acknowledges and agrees to adhere to the Companys No-Pledging Policy applicable to senior executives of the Company, as may be amended from time to time in the Companys sole discretion.
16. Notices. Any notice required or permitted to be given under this Agreement shall be deemed sufficient if in writing and if sent by registered mail to the Executive at his home address as reflected on the records of the Company, in the case of the Executive, or, in the case of the Company, to TPI at TPIs headquarters, Attention: Group Executive VP, Human Resources, or to such other officer or address as the Company shall notify the Executive.
17. Waiver of Breach. A waiver by the Company or the Executive of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party.
18. Governing Law; Severability. This Agreement shall be governed by and construed and enforced in accordance with the laws of the state of New Jersey without giving effect to the choice of law or conflict of laws provisions thereof. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court determine that any provision or portion of any provision of this Agreement, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties agree that such provision should be interpreted and enforced to the maximum extent which such court deems reasonable or valid.
19. Taxes. The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment and social insurance taxes, as shall be required by applicable law.
20. Assignment. This Agreement may be assigned, without the consent of the Executive, by Teva USA to any member of the Teva Group or to any person, partnership, corporation or other entity that has purchased all or substantially all the assets of Teva USA and/or TPI; provided, that such assignee assumes any and all of the obligations of the Company hereunder. The Company shall cause any person, firm or corporation acquiring all or substantially all of the assets of Teva USA to execute a written instrument agreeing to assume any and all of the obligations of the Company hereunder as a condition to acquiring such assets.
21. Compensation Policy. This Agreement shall be subject to the Compensation Policy and nothing herein shall derogate in any way from the Companys rights thereunder.
22. Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties and supersedes any and all agreements, letters of intent or understandings between the Executive and (a) the Company, (b) any member of the Teva Group or (c) any of the Companys principal shareholders, affiliates or subsidiaries, except as to the Companys equity compensation plans and other separate agreements, plans and programs referred to herein;
13
provided, that this Agreement shall not alter (i) the Executives obligations to any member of the Teva Group under any confidentiality, invention assignment, or similar agreement or arrangement to which the Executive is a party with any member of the Teva Group, which obligations shall remain in force and effect and (ii) the Executives rights to any equity and/or retention award previously granted, which rights shall remain in full force and effect and shall not be overridden by this Agreement. Notwithstanding the foregoing, in the event of any inconsistency between this Agreement and the Compensation Policy, the terms of the Compensation Policy shall control. This Agreement may be changed only by an agreement in writing signed by a party against whom enforcement of any waiver, change, modification, extension or discharge is sought.
23. Headings. The headings of the sections and subsections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
24. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Signatures delivered by facsimile or by e-mail as a portable document format (.pdf) file or image file attachment shall be effective for all purposes.
25. Survival. The provisions of this Agreement that are intended to survive the termination of this Agreement shall survive such termination in accordance with their terms.
26. Indemnification. The Indemnification and Release Agreement between TPI and the Executive, dated November 27, 2017, shall continue to apply in full force and effect in accordance with its terms, and is incorporated by reference to this Agreement.
* * *
14
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date specified in the first paragraph of this Agreement.
TEVA PHARMACEUTICALS USA, INC. | ||
By: |
/s/ Deborah A. Griffin |
|
Name: Deborah A. Griffin | ||
Title: SVP & Chief Accounting Officer | ||
By: |
/s/ Brian E. Shanahan |
|
Name: Brian E. Shanahan | ||
Title: Secretary | ||
EXECUTIVE | ||
/s/ Brendan P. OGrady |
B-1
EXHIBIT A
FORM OF RELEASE AGREEMENT
As a material inducement to Teva Pharmaceuticals USA, Inc. (Teva USA) to providing the severance benefits and other benefits and payments in excess of the amounts required to be paid to Brendan OGrady (the Executive) by applicable law (if any) under the employment agreement (the Employment Agreement) dated as of May 6, 2018 by and between Teva USA and the Executive, and in consideration of its agreements and obligations under the Employment Agreement and for other good and valuable consideration, the receipt of which is hereby acknowledged by the Executive, the Executive on behalf of himself and his family, agents, representatives, heirs, executors, trustees, administrators, attorneys, successors and assigns (the Releasors) hereby irrevocably, unconditionally and generally releases Teva USA, Teva Pharmaceutical Industries Ltd., and their and the Teva Groups direct and indirect parents, subsidiaries, affiliates, shareholders, officers, directors, employees and attorneys, and the heirs, executors, administrators, receivers, successors and assigns of all of the foregoing (collectively, the Corporate Releasees), from, and hereby waives and/or settles any and all, actions, causes of action, suits, debts, sums of money, agreements, promises, damages, or any liability, claims or demands, known or unknown and of any nature whatsoever and which the Executive ever had, now has or hereafter can, shall or may have, for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to the date of this release (collectively, the Executive Claims) arising directly or indirectly pursuant to or out of his employment with Teva USA, the performance of services for Teva USA or any Corporate Releasee or the termination of such employment or services and, specifically, without limitation, any rights and/or the Executive Claims (a) arising under or pursuant to any contract, express or implied, written or oral, relating to the Executives employment or termination thereof or the employment relationship, including, without limitation, the Employment Agreement; (b) for wrongful dismissal or termination of employment; (c) arising under any federal, state, local or other statutes, orders, laws, ordinances, regulations or the like that relate to the employment relationship and/or that specifically prohibit discrimination based upon age, race, religion, sex, national origin, disability, sexual orientation or any other unlawful bases, including, but not limited to, any and all claims under Title VII of the Civil Rights Act of 1964, as amended, the Civil Rights Act of 1991, as amended, the Age Discrimination in Employment Act of 1967, as amended, the Older Workers Benefit Protection Act of 1990, the Equal Pay Act of 1963, the Americans with Disabilities Act of 1990, as amended, the Family and Medical Leave Act of 1993, the Employee Retirement Income Security Act of 1974, as amended, and applicable rules and regulations promulgated pursuant to or concerning any of the foregoing statutes; (d) for damages, including, without limitation, punitive or compensatory damages or for attorneys expenses, costs, wages, injunctive or equitable relief resulting or pertaining to those matters released hereunder; and (e) relating to salaries, benefits, bonuses, compensation, fringe benefits, social benefits according to any law or agreement, amounts of managers insurance, pension fund, provident fund and education fund, overtime, severance pay, sick pay, recreation payments, vacation payments, prior notice payments, options or other securities, reimbursement of expenses and/or any other payments or benefits due to the Executive. This paragraph shall not apply to any rights or claims that the Executive may have: (i) for a breach of Teva USAs obligation to provide, or cause to be provided, the severance and other payments and benefits due under the
B-2
Employment Agreement; (ii) for disability, life insurance, health, welfare, qualified and nonqualified pension and other employee benefit plans in accordance with the terms of the applicable plans; and (iii) any right(s) of indemnification that the Executive may have, whether under or pursuant to the Employment Agreement, this release or the charter, bylaws or other governing plans, policies or arrangements of, or any insurance policy maintained by Teva USA, for any and all actions undertaken by the Executive in his capacity as an employee, contractor, consultant, agent, officer, director, shareholder, trustee, fiduciary or other representative of Teva USA.
The Releasors agree not to bring any action, suit or proceeding whatsoever (including the initiation of governmental proceedings or investigations of any type) against any of the Corporate Releasees for any matter or circumstance concerning which the Releasors have released the Corporate Releasees under this Release. Further, the Executive agrees not to encourage any other person or suggest to any other person that he, he or it institute any legal action against the Corporate Releasees, and the Executive hereby declares, confirms and undertakes that, if the Releasors or anyone else in their name should deliver a claim as mentioned above, the Executive shall reimburse the Corporate Releasees and anyone else on their behalf to the full extent of the sum of the legal expenses and legal fees incurred by them as a result of any such claim; and in the event that Releasors prevail in such legal action, then the Corporate Releasees shall reimburse such sum to the Executive. Notwithstanding the foregoing, this Release is not intended to interfere with the Executives right to file a charge with the U.S. Equal Employment Opportunity Commission (the EEOC) in connection with any claim the Executive believes the Executive may have against Teva USA. The Releasors hereby agree to waive the right to any relief (monetary or otherwise) in any action, suit or proceeding the Executive may bring in violation of this Release, including any proceeding before the EEOC or any other similar body or in any proceeding brought by the EEOC or any other similar body on the Executives behalf. In addition, nothing contained in this release shall be construed to prohibit the Releasors from reporting possible violations of federal or state law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any whistleblower provisions of federal or state law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.
To the extent applicable, this release shall constitute a dismissal and compromise notice for the purposes of Section 29 of the Israeli Severance Pay Law 5713-1963.
Representation by Counsel/Revocation.
(a) By executing this release, the Executive acknowledges that: (i) he has been advised by Teva USA to consult with an attorney before executing this release and has consulted and been represented by counsel in connection therewith; (ii) he has been provided with at least a twenty-one (21) day period to review and consider whether to sign this release and, by executing and delivering this release to Teva USA, he is waiving any remaining portion of such twenty-one (21) day period; and (iii) he has been advised that he has seven (7) days following execution of the Release to revoke this release (the Revocation Period).
B-3
(b) This release will not be effective or enforceable until the Revocation Period has expired. Any revocation of this release shall only be effective if an originally executed written notice of revocation is delivered to Teva USA on or before 5:00 p.m. EST on the last day of the Revocation Period. If so revoked, this release shall be deemed to be void ab initio and of no further force and effect.
(c) Defined terms not otherwise defined herein shall have the same meanings ascribed to them in the Employment Agreement.
Dated: [To be Executed Following a Termination of Employment]
|
B-4
Exhibit 10.11
EXECUTION VERSION
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement), dated as of February 21, 2019 (the Execution Date), is entered into by and between TEVA PHARMACEUTICALS EUROPE B.V., a company incorporated under the laws of The Netherlands, Dutch Companies Register number 30110625 (TPE or Company), and GIANFRANCO NAZZI, born on 30 June 1968, nationality _____, passport number ________ (the Executive).
R E C I T A L S:
WHEREAS, Executive has been employed by TPE on the basis of terms and conditions as inter alia laid down in a written employment contract executed by Executive on 29 October 2013, as amended in Amendments/Addenda/Letters/Emails dated prior to 27 November 2017 and regardless whether those originated from TPE, TPI or any other Group Company (including without limitation, those dated 2 December 2013 (on the Commencement Date), 19 February 2016 (on school fees), the letter dated 20 January 2017 (retention bonus) and 19 May 2017 (on eligibility to payments upon termination of employment)), which shall jointly be referred to as the Previous Employment Contract.
WHEREAS, TPE desires to continue to employ the Executive and the Executive has indicated his willingness to continue to provide his services to TPE on the terms and conditions set forth herein (the Employment Contract), which shall henceforward apply in substitution of the (terms and conditions of the) Employment Contract; and
NOW, THEREFORE, on the basis of the foregoing premises and in consideration of the mutual covenants and agreements contained herein, the parties hereto agree as follows:
1. Effective Date. This Agreement shall be effective as of 27 November 2017 (the Effective Date). The (terms and conditions of the) subject Employment Contract will, as from the Effective Date, and unless specifically stated otherwise in the subject Employment Contract, substitute (all terms and conditions of) the Previous Employment Contract, with the exception of any provisions relating to outstanding cash retention awards dated 20 January 2017 and 18 September 2017, equity awards and the provisions on relocation conditions as referred to in Section 5 (e) (i) hereof (which provisions hence will remain in force).
2. Term of Employment. TPE hereby agrees to employ the Executive and the Executive hereby accepts such employment with TPE, on the terms and conditions hereinafter set forth. The term of employment (the Term of Employment) hereunder shall be considered to have commenced on 1 February 2014 and shall continue for an indefinite term.
3. Position; Duties and Responsibilities; Place of Performance.
(a) As from 27 November 2017, the Executive has been appointed as an Executive Officer of the Teva Group in the role of Executive Vice President, Growth Markets Commercial which was subsequently renamed as International Markets Commercial (the Role). In such capacity, the Executive reports directly to the President and Chief Executive Officer of Teva Pharmaceutical Industries, Ltd. (TPI). In addition, the Executive has such additional executive duties and responsibilities as may be assigned to him by the President and Chief Executive Officer of TPI. If the Executive is appointed as a director or officer of TPI and/or any of its subsidiaries or affiliates (jointly: the Teva Group or the Group Companies and each severally a Group Company), the Executive shall serve in such capacity or capacities without additional compensation.
(b) The Executives principal place of employment is at TPE headquarters in the Netherlands, except that during the Relocation Term (as defined below) Executives principal place of employment shall be at TPIs headquarters in Israel. The Executive understands and agrees that it is expected that the Executive will be required to travel extensively (including internationally) in connection with the performance of his duties hereunder.
(c) Notwithstanding anything in this Agreement to the contrary, the Executive, while outside of Israel, (i) shall not have authority to bind TPI and (ii) shall be subject to such further restrictions as to his activities on behalf of TPI or its subsidiaries as may be determined by TPI from time to time.
(d) The Executive shall perform his duties under the Employment Contract on a full-time basis. Executive shall be required to occasionally perform his duties during weekends and/or on public holidays, and/or outside regular office hours and/or in excess of the number of contractual working hours, if such is reasonably necessary for the proper performance of the Executives duties under the Employment Contract (Overtime). Sufficient remuneration for Overtime shall be deemed included in the Base Salary and the Executive shall therefore not be entitled to any (additional) remuneration for Overtime.
4. Exclusivity. Subject to the terms and conditions set forth in this Agreement, the Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term of Employment, including, without limitation, any activity that (a) conflicts with the interests of any Group Company, (b) interferes with the proper and efficient performance of his duties for TPI or TPE or (c) interferes with the exercise of his judgment in any Group Companys best interests. Notwithstanding the foregoing, nothing herein shall preclude the Executive from: (i) serving, with the prior written consent of the President and Chief Executive Officer of TPI, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (ii) engaging in charitable activities and community affairs; (iii) speaking at meetings of business, charitable and civic organizations; or (iv) subject to the terms and conditions set forth in Section 9 hereof, managing his personal investments and affairs; provided, however, that the activities set out sub (i), (ii), (iii) and (iv) shall be limited by the Executive so as not to be in contradiction to any Group Companys policy and/or materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder or create a potential business or fiduciary conflict.
2
5. Compensation and Benefits.
(a) Base Salary. For services rendered under this Agreement, the Executive shall be entitled to a salary at the rate of EUR 447,000 gross per annum for the prorated period starting the Effective Date and ending 31 March 2018, and EUR 464,100 gross per annum for the period commencing 1 April 2018, including Dutch statutory holiday allowance (such salary, or any increased salary granted to the Executive pursuant to this Section 5(a), the Base Salary), accruing on a pro rata tempore basis. The Executives Base Salary shall be payable in accordance with the payroll practices of TPE as the same shall exist from time to time. The Human Resources and Compensation Committee (the Compensation Committee) of the Board of Directors of TPI (the TPI Board), with input from the President and Chief Executive Officer of TPI, shall periodically consider and resolve whether to approve adjustments to the Executives Base Salary, according to the considerations specified in the shareholder-approved compensation policy of TPI in effect from time to time (the Compensation Policy) and subject to approval of the TPI Board.
(b) Annual Bonus. For each fiscal year that ends during the Term of Employment, the Executive shall be eligible to be considered for an annual bonus under the Companys annual cash bonus plan in accordance with the Compensation Policy (the Annual Bonus) and subject to the discretion of the Compensation Committee and the TPI Board. The Annual Bonus shall be paid to the Executive at the same time as annual bonuses are generally payable to other similarly situated senior executives of TPE, subject to the Executives continuous employment through the payment date, except as otherwise set forth in this Agreement. As from the Effective Date, the Annual Bonus target will be 100% of the Base Salary earned during the applicable year.
(c) Equity Awards. During the Term of Employment, the Executive shall be considered for equity-based compensation awards under TPIs 2015 Long-Term Equity-Based Incentive Plan or any successor equity compensation plan(s), at the sole discretion of the President and Chief Executive Officer of TPI, the Compensation Committee and the TPI Board. Any such awards shall be granted on such terms and conditions as may be determined by the Compensation Committee and the TPI Board.
(d) Benefits.
(i) General. During the Term of Employment, the Executive shall be eligible to participate in such benefit plans and programs (other than on (1) bonus (2) equity and (3) pension, since those benefits will be covered exclusively by the provisions of this Agreement) as shall be provided to similarly situated executives of TPE, subject to the terms and conditions of such benefit plans and programs. Nothing contained herein shall be construed to limit TPEs ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing the Executive notice, and the right to do so is
3
expressly reserved. The terms and conditions of any TPE Employee Handbook, as that handbook may read from time to time, will apply to the subject Employment Contract, albeit that any provision of that handbook shall be considered superseded by the provisions explicitly stated or referred to herein. In case of discrepancies between the provisions of that handbook and provisions explicitly stated or referred to herein (including compensation policies), the latter shall prevail and substitute the handbook-provisions. Any TPI or TPE codes of conduct and policies (other than those on (1) bonus (2) equity and (3) pension) shall fully apply to the subject Employment Contract.
(ii) Pension. The Executive hereby explicitly waives any entitlement to participation in, and hence any entitlements to accruals under, each and every company-pension scheme as operated by TPE (including, without limitation, both the basic gross pension scheme arranging for certain pension accruals over the salary up to the cap set by Dutch wage tax legislation and the net pension scheme arranging for certain pension accruals over the salary in excess of that cap), with retro-active effect to the date of commencement of the Term of Employment. The Executive acknowledges and understands that as a consequence of not participating in the TPE company-pension schemes, the Executive and/or his spouse/partner (i.e. partner pension) and/or children (i.e. orphans pension) have no rights/claims under the current and/or future company-pension schemes of TPE against either TPE and/or the pension provider, which inter alia means that they will have no claims against TPE and/or the pension provider in case of (e.g.): reaching any retirement age, the death of Executive before or after reaching any retirement age, sickness/incapacity for work of the Executive, divorce etc. At TPEs request, the Executive will execute each and every instrument required by TPE, or the pension provider, to (re-) confirm such waiver of rights. The Executive warrants that his spouse/partner will execute a written statement confirming his/her consent to the Executives above-mentioned waiver and/or will execute a similar waiver(s) him/herself. In lieu of participation in any TPE-operated company-pension scheme (and provided that all of the above waivers and further instruments required by TPE in that respect will be executed by both the Executive and his spouse/partner), the Executive will be entitled to a monthly gross allowance as well as a monthly net allowance, each in the amount of the fictitious employers pension contributions (excluding premiums for any risk based insurances associated with those pension schemes) that would have been contributed by TPE to the respective company-operated pension schemes if the Executive had participated in the TPE company-pension schemes (as those were and will be applicable from time to time). That net allowance and the (net equivalent of the) gross allowance are intended for financing a private retirement scheme to be concluded and operated by the Executive and for financing any risk-based insurances for his own benefit. Neither of these allowances will be considered to qualify as salary/income for the purpose of calculating any variable pay or for calculating the Lump Sum, transitional fee (statutory severance), value of accrued but untaken holidays, VaBene or any other severance/damages/benefits to which the Executive may be entitled during or upon termination of the Employment. Parties acknowledge that Executive has received all such allowances in full in respect of the period between the date of commencement of the Term of Employment and the Execution Date and that neither Party has any claims for over- or underpayment against the other Party in respect of the entitlement to allowances over that period.
4
(iii) Vacation. During the Term of Employment, the Executive shall be entitled to the same number of vacation days, holidays, sick days and other paid time off benefits as are generally allowed to other similarly situated executives of TPE in accordance with TPEs policy as in effect from time to time.
(e) Relocation.
(i) General. From the Effective Date until 31 July 2022, and if such term is not approved by the Committee and the Board then 31 May 2020 (the Relocation Term), the Executive will be entitled to (relocation) benefits in accordance with the terms of TPIs 2015 Long Term International Assignment Policy (the Relocation Policy), as shall be amended from time to time, and the terms of the Assignment Letter as executed by the Executive on 22 May 2017 (the Assignment Letter; Annex 2), to the extent relevant (i.e. to the extent covering similar benefits) and to the extent allowed by the applicable laws, in substitution of benefits/entitlements which apply pursuant to clause 5(d) of the subject Employment Contract.
(ii) Changes to Relocation Policy. The Executive acknowledges, agrees and understands that the Relocation Policy does not form part of this Agreement and the Company reserves the right to amend, suspend, or terminate the Relocation Policy at any time without providing the Executive notice, and the right to do so is expressly reserved. Notwithstanding the foregoing, (i) in the event of any conflict between the Relocation Policy and/or the Assignment Letter and this Agreement, the terms of this Agreement shall prevail, and (ii) the housing and education arrangements set forth in Executives Assignment Letter may not be revised during Relocation Term without receiving Executives consent.
6. Ordinary Business Expenses. During the Term of Employment, TPE shall reimburse the Executive for all reasonable out-of-pocket expenses incurred by the Executive in connection with the business of the Teva Group and in the performance of his duties under this Agreement, including expenses for travel, lodging and similar items, all in accordance with TPEs expense reimbursement policy, as the same may be modified from time to time. TPE shall reimburse all such proper expenses upon the Executives presentation to TPE of an itemized accounting of such expenses with reasonable supporting data.
5
7. Termination of Employment.
(a) General. The employment hereunder may be terminated by either party as per the last day of a calendar month, by giving written notice to the other party. The Executive shall in that respect observe a notice period of three (3) months and TPE shall in that respect observe a notice period of six (6) months.
(b) The date on which employment hereunder will formally terminate, shall be referred to in this Agreement as the Termination Date. Upon the termination of the Executives employment hereunder for any reason, except as may otherwise be requested by the relevant Group Company in writing, the Executive shall resign from any and all directorships, committee memberships or any other positions the Executive holds with any member of the Teva Group. For the avoidance of doubt, if the Executives employment with TPE will be terminated and be followed by employment between the Executive and any other member of the Teva Group, the Executive will not be entitled to receive any of the severance benefits under this Agreement and any severance or other termination benefits the Executive may thereafter become entitled to receive (pursuant to the subsequent employment with the other member of Teva Group) will be exclusively subject to the terms and conditions of any plan, program, policy or arrangement then in effect between the Executive and such other member of the Teva Group.
(c) Death or Disability. The Executives employment shall terminate automatically upon his death (Death). In the event the Executives employment is terminated due to his Death or for reasons of his Disability, the Executive or his estate or his beneficiaries, as the case may be, shall be entitled to (i) all accrued but unpaid Base Salary through the Termination Date; (ii) any unpaid or unreimbursed expenses incurred in accordance with TPE policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date, to the extent due under the applicable employment terms and/or mandatory applicable law; (iii) any other amounts required to be paid pursuant to applicable law, if any; and (iv) accrued and/or vested benefits under any plan or agreement covering the Executive which shall be governed by the terms of such plan or agreement (items (i) through (iv) collectively, the Accrued Obligations).
For purposes of this Agreement, Disability shall mean sickness/incapacity within the meaning of article 7:629 Dutch Civil Code, exceeding the period during which the Executive can benefit from statutory protection against dismissal because of such incapacity.
Except as set forth in this Section, following the Executives termination by reason of his Death or Disability, the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
(d) Termination by TPE for Cause. In the event of termination of the Executives employment for Cause, he shall be entitled only to (A) all accrued but unpaid Base Salary through the Termination Date; and (B) any unpaid or unreimbursed expenses incurred in accordance with TPE policy, including amounts due under Section 6 hereof to the extent incurred prior to the Termination Date. Following a termination of the Executives employment for Cause, except as set forth in this Section 7(d), the Executive shall have no further rights to any compensation or any other benefits.
6
For purposes of this Agreement, Cause shall mean: termination of the Executives employment hereunder through notice of termination issued by TPE for an urgent cause (dringende reden) within the meaning of article 7:677/678 Dutch Civil Code attributable to the Executive or at the initiative of TPE for serious culpable conduct or omission (ernstig verwijtbaar handelen of nalaten) by the Executive within the meaning of article 7:673 para 7 intro and sub c Dutch Civil Code or culpable conduct or omission (verwijtbaar handelen of nalaten) by the Executive within the meaning of article 7:669 para 3 intro and sub e Dutch Civil Code.
(e) Termination by TPE without Cause. In case of termination of the Executives employment hereunder at the initiative of TPE without Cause, the Executive will subject to the set-off and conditions described below- be entitled to:
(i) The Accrued Obligations;
(ii) A conditional gross payment (the Lump Sum), being the greater of:
(1) the Dutch statutory severance (transitievergoeding) and a supplement thereto, up to in aggregate (i.e. statutory severance plus supplement) 150% of the Executives Base salary; or
(2) the severance or damages to which the Executive would be entitled under any TPE Social Plan, if and to the extent the Executive would have any eligibility under such Social Plan.
The Lump Sum will be set-off against (i.e. decreased by): any further compensation (vergoeding), including any billijke vergoeding and/or damages, as may be awarded to Executive in respect of the termination of the employment hereunder, by a court in a ruling no longer subject to appeal.
Sixty-six percent (66%) of the Lump Sum shall be payable within a reasonable time following Executives execution and delivery of the Release of Claims pursuant to Section 7(i) and thirty-four percent (34%) of the Lump Sum shall be payable, in 12 equal monthly installments, with reasonable time following Executives execution and delivery of the Release of Claims pursuant to Section 7(i).
The entitlement to the payments and benefits described in subsection 7.e.(ii) (i.e. the Lump Sum after set-off, if applicable) shall, to the extent exceeding the benefits/payments to which Executive would be entitled in respect of the termination of the employment pursuant to (Dutch) statute or a court ruling which is no longer subject to appeal, be subject to Executive fully complying with the obligations arising from Section 9 hereof. In the event that the Executive breaches any provision of Section 9 hereof, the entitlement to such excess payments and benefits under subsection 7.e.(ii) shall immediately cease, which means that the Company shall have no further obligations to the Executive with respect thereto, and the Executive shall
7
promptly repay to TPE any payments or benefits paid or provided to the Executive pursuant to subsection 7.e.(ii) , in as far as those payments/benefits exceed the benefits/payments to which Executive would be entitled in respect of the termination of the employment pursuant to (Dutch) statute or a court ruling which is no longer subject to appeal.
Following a termination of the Executives employment at the initiative of TPE without Cause, except as set forth in this Section 7(e), the Executive shall have no further rights to any compensation or any other benefits under this Agreement.
For purposes of this Agreement, a termination of the Executives employment hereunder at the initiative of TPE without Cause shall mean: a termination of the Executives employment hereunder at the initiative of TPE on any ground other than Death, Disability or (for) Cause.
(f) Resignation. In the event of termination of Executives employment hereunder through a termination notice (opzegging) issued by the Executive (resignation) or through a court rescission (ontbinding) of the Executives employment hereunder upon a petition made by the Executive, the Executive shall be entitled to the Accrued Obligations and, unless TPE were to release the Executive from the non-compete restrictions included in Section 9 sub (d) hereof in its sole discretion, an amount equal to the Annual Base Salary accruing and payable in 12 monthly instalments, subject to the Executive compliance and continuing compliance with the restrictions pursuant to Section 9 hereof and following the Executives execution and delivery and non-revocation of the Release of Claims pursuant to Section 7(i).
(g) In the event of the termination of the Executives employment, TPE may, in its sole and absolute discretion, by written notice, waive the services of the Executive during any applicable notice period or in respect of any part of such period, all on the condition that TPE will pay the Executive the monthly Base Salary and all additional compensation and benefits to which the Executive is entitled in respect of the applicable notice period (including but not limited to relocation benefits, the extent applicable) without regard to any such TPE waiver, albeit not including compensation pursuant to Section 5(b) and 5 (c) hereof).
(h) Change of Control. In the event that the Executives employment is terminated at the initiative of TPE, during the one year period following a merger of TPI with another (non-Teva Group) entity, pursuant to which merger TPI is not the surviving entity, and such termination is both without Cause and a result of such merger, then, in addition to any payments or other benefits to which the Executive is entitled pursuant to this Section 7, the Executive shall also be entitled to receive a lump sum cash payment in an amount equal to USD 1,500,000 gross, payable on the next regular payroll date immediately following the sixtieth (60th) day after the Termination Date.
8
(i) Final Discharge. Notwithstanding any provision herein to the contrary, the payment of any amount or provision of any benefit pursuant to this Section 7 other than the Accrued Obligations (collectively, the Severance Benefits) shall be conditioned upon and be payable within a reasonable time after the Executives execution, delivery to TPE, and non-revocation of a statement of full and final discharge of any claims Executive has or may have pursuant to the employment hereunder and/or the termination of such employment (the Release of Claims) within sixty (60) days following the Termination Date. If the Executive fails to execute the Release of Claims within sixty (60) days following the Termination Date, the Executive shall not be entitled to any of the Severance Benefits. For the avoidance of doubt, in the event of a termination by reason of the Executives Death or Disability, the Executives obligations herein to execute the Release of Claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs.
(j) Compliance with Covenants. The Executives entitlement to the Severance Benefits, to the extent those Severance Benefits exceed the statutory minimum to which the Executive may be entitled under Dutch law, will be subject to the Executives full compliance with any and all of the restrictions included in or referred to in Section 9 hereof, without prejudice to any other remedies available to the Company hereunder and/or pursuant to applicable law, and the Executive shall promptly repay to TPE any Severance Benefits (to the extent exceeding Executives statutory minimum entitlements) paid or provided to the Executive pursuant to this Section 7 prior to the date of any breach of any of the restrictions included in or referred to in Section 9 hereof and the Executives entitlement to any as yet unpaid Severance Benefits (including without limitation the Executives entitlement to the Restriction Compensation) will cease as from the date of such breach.
(k) Return of Property. Upon termination of the Executives employment, the Executive shall promptly return to TPE any cell phone, laptop or other hand-held device provided by any Group Company to the Executive, and any confidential or proprietary information of any Group Company that remains in the Executives possession; provided, however, that nothing in this Agreement or elsewhere shall prevent the Executive from retaining and utilizing documents relating to his personal benefits, entitlements and obligations; documents relating to his personal tax obligations; his desk calendar, personal contact list, and the like; and such other records and documents as may reasonably be approved by the TPE Board or the President and Chief Executive Officer of TPI.
8. Representations. The Executive hereby represents that (a) he is legally entitled to enter into this Agreement and to perform the services contemplated herein and is not bound under any employment, consulting or other agreement to render services to any third party, (b) he has the full right, power and authority, subject to no rights of third parties, to grant to the relevant Group Companies the rights contemplated by Section 9(b) hereof, and (c) he does not now have, nor within the last three (3) years has he had, any ownership interest in any business enterprise (other than interests in publicly traded corporations where his ownership does not exceed one percent (1%) or more of the equity capital) which is a customer of the Teva Group, or from which the Teva Group purchases any goods or services or to whom any Group Companies owes any financial obligations or is required or directed to make any payments.
9
9. Executives Covenants.
(a) Disclosure of Information. The Executive recognizes and acknowledges that the trade secrets, know-how and proprietary information and processes of Teva Group, as they may exist from time to time, are valuable, special and unique assets of the business of the Teva Group, access to and knowledge of which are essential to the performance of the Executives duties hereunder. The Executive will not, during or at any time following the Term of Employment, in whole or in part, disclose such secrets, know-how or processes to any person, firm, corporation, association or other entity for any reason or purpose whatsoever, nor shall the Executive make use of any such secrets, know-how or processes for his own purposes or for the benefit of any person, firm, corporation or other entity (except for a member of the Teva Group) under any circumstances during or after the Term of Employment; provided, that, after the termination of his employment, these restrictions shall not apply to such secrets, know-how and processes which are then in the public domain (provided that the Executive was not responsible, directly or indirectly, for such secrets, know-how or processes entering the public domain without TPEs consent). In addition, nothing contained in this Agreement shall be construed to prohibit the Executive from reporting possible violations of federal or state law or regulation to any governmental agency or regulatory body or making other disclosures that are protected under any whistleblower provisions of federal or state law or regulation, or from filing a charge with or participating in any investigation or proceeding conducted by any governmental agency or regulatory body.
(b) Inventions. The Executive hereby sells, transfers and assigns to TPE, or to any person or entity designated by TPE, without any rights whatsoever to additional compensation all of the entire right, title and interest of the Executive in, and to, all inventions, ideas, disclosures and improvements, whether patented or unpatented, and copyrightable material, made or conceived by the Executive, solely or jointly, during the Term of Employment, which relate to methods, apparatus, designs, products, processes or devices, sold, leased, used or under consideration or development by any Group Company, or which otherwise relate to or pertain to the business, functions or operations of any Group Company or which arise from the efforts of the Executive during the course of his employment for any Group Company. The Executive shall communicate promptly and disclose to TPE, in such form as TPE requests, all information, details and data pertaining to the aforementioned inventions, ideas, disclosures and improvements. The Executive shall execute and deliver to TPE such formal transfers and assignments and such other papers and documents as may be necessary or required of the Executive to permit TPE or any person or entity designated by TPE, to file and prosecute the patent applications and, as to copyrightable material, to obtain copyright thereof. Any invention relating to the business of any Group Company made by the Executive within one year following the termination of the Term of Employment shall be deemed to fall within the provisions of this paragraph unless proved to have been first conceived and made following such termination. The Executives remuneration under this Employment Contract shall be considered to include ample and sufficient remuneration in respect of the Executives involvement in the conception or making of any and all of the inventions, ideas, disclosures and improvements referred to in this clause and the Executive shall hence not be entitled to any additional remuneration in respect of his involvement in their conception or making.
10
(c) Covenant Not to Interfere. During the Term of Employment and for a period of twelve (12) months following the Termination Date, the Executive shall not, directly or indirectly, (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or engaged as agent of, any Group Company to terminate such persons contract of employment or agency, as the case may be, with such Group Company or (ii) divert, or attempt to divert, any person, concern or entity from doing business with any member of Teva Group, or attempt to induce any such person, concern or entity to cease being a customer or supplier of any Group Company.
(d) Covenant Not to Compete. By signing this Agreement, the Executive hereby acknowledges and agrees that, in his Role, the Executive will have a great deal of exposure and access to a broad variety of commercially valuable proprietary information of the Teva Group, including, by way of illustration, confidential information regarding the Teva Groups current and future products and strategies, costs and other financial information, R&D and marketing plans and strategies, etc. As a result of the Executives knowledge of the above information and in consideration for the benefits offered by TPE under this Agreement, the Executive affirms and recognizes his continuing obligations with respect to the use and disclosure of confidential and proprietary information of the Teva Group pursuant to the Teva Groups policies and the terms and conditions of this Agreement, and hereby agrees that, during the Term of Employment and for a period of twelve (12) months following the Termination Date , the Executive shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other direct or indirect service provider) work for or perform any services for any company or group of companies, which is focused on the development, manufacture of, sale of or trading in (i) generic products or (ii) specialty pharmaceutical products that are competitive with a fundamental product developed, manufactured, sold or otherwise traded in by Teva Group as of the date of such termination of employment, where the determination of whether a certain product constitutes a fundamental product developed, manufactured, sold or otherwise traded in by the Teva Group shall be reasonably determined on an ad-hoc basis at the relevant time by the President and Chief Executive Officer of TPI. These restrictions shall apply world-wide, i.e. regardless of where the work or services would be performed by the Executive and regardless of where the relevant (division, subsidiary or product group of the) company or group of companies would be located or would be doing business.
(e) Non-Disparagement. During the Term of Employment and at all times thereafter, the Executive agrees not to (i) make any disparaging or defamatory comments regarding any member of the Teva Group or any of its current or former directors, officers, employees or products or (ii) make any negative or disparaging comments concerning any aspect of the Executives relationship with any member of the Teva Group or any conduct or events relating to any termination of the Executives employment with TPE.
11
(f) Cooperation. During the Term of Employment and at all times thereafter, the Executive agrees to cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by TPE and/or his services to other members of the Teva Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against ant member of the Teva Group, and shall make himself available upon notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of any Group Company and to participate in legal proceedings by deposition or testimony.
(g) Blue Pencil. It is the desire and intent of the parties that the provisions of this Section 9 be enforced to the fullest extent permissible under the laws and public policies applied in each jurisdiction in which enforcement is sought. Accordingly, if any particular provision or clause of this Section 9 shall be adjudicated to be invalid or unenforceable or overly broad in scope, time or geographic region, then such provision or clause shall be deemed amended to delete therefrom the portion thus adjudicated to be invalid or unenforceable or to reduce or narrow down the portion thus adjudicated to be too broad in scope, time or geographic region, such deletion, reduction or narrowing down to apply only with respect to the operation of this Section 9 in the particular jurisdiction in which such adjudication is made.
(h) Injunctive Relief. If there is a breach or threatened breach of the provisions or clauses of this Section 9, TPE shall be entitled to an injunction restraining the Executive from such breach. Nothing herein shall be construed as prohibiting TPE from pursuing any other remedies for such breach or threatened breach.
10. Insurance. TPE may, at its election and for its benefit, insure the Executive against death, and the Executive shall submit to such physical examination and supply such information as may be reasonably required in connection therewith.
11. Clawback. All payments made pursuant to this Agreement are subject to the clawback provisions in the Compensation Policy.
12. Required Stock Ownership. The Executive acknowledges and agrees to adhere to the TPIs stock ownership guidelines applicable to senior executives of TPI and/or TPE, as may be amended from time to time in TPIs sole discretion.
13. No-Hedging Policy. The Executive acknowledges and agrees to adhere to the TPIs No-Hedging Policy applicable to senior executives of TPI and/or TPE, as may be amended from time to time in TPIs sole discretion.
14. No-Pledging Policy. The Executive acknowledges and agrees to adhere to the TPIs No-Pledging Policy applicable to senior executives of TPI and/or TPI, as may be amended from time to time in TPIs sole discretion.
12
15. Notices. Any notice required or permitted to be given under this Agreement shall be deemed sufficient if in writing and if demonstrably received by the Executive and TPE or TPI respectively.
16. Waiver of Breach. A waiver by the Company or the Executive of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by the other party.
17. Governing Law; Severability. This Agreement shall be governed by and construed and enforced in accordance with the laws of The Netherlands without giving effect to the choice of law or conflict of laws provisions thereof. Whenever possible, each provision or portion of any provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court determine that any provision or portion of any provision of this Agreement, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties agree that such provision should be interpreted and enforced to the maximum extent which such court deems reasonable or valid.
18. Taxes. The Company may withhold from any payments made under this Agreement all applicable taxes, including but not limited to income, employment, payroll taxes and social insurance charges/taxes, as shall be required by applicable law.
19. Assignment. This Agreement may be assigned, without the consent of the Executive, by TPE to any member of the Teva Group or to any person, firm, partnership, corporation or other entity that has purchased all or substantially all the assets of TPE and/or TPI; provided, that such assignee assumes any and all of the obligations of TPE hereunder. TPE or, if applicable, TPI shall cause any person, firm, partnership, corporation or other entity acquiring all or substantially all of the assets of TPE respectively TPI to execute a written instrument agreeing to assume any and all of the obligations of TPE hereunder as a condition to acquiring such assets.
20. Compensation Policy. This Agreement shall be subject to the Compensation Policy and nothing herein shall derogate in any way from the Companys rights thereunder.
21. Entire Agreement; Amendment. This Agreement contains the entire agreement of the parties and supersedes any and all agreements, letters of intent or understandings between the Executive and (a) TPE, (b) TPI, (c) any other Group Company or (d) any of TPIs principal shareholders, except for applicable provisions of the Assignment Letter, the 14 December 2017 Letter, cash retention awards dated January 20, 2017 and September 18, 2017, equity compensation plans, policies, and other separate agreements, plans and programs explicitly referred to herein; provided, that this Agreement shall not alter the Executives obligations to any
13
member of the Teva Group under any confidentiality, invention assignment, or similar agreement or arrangement to which the Executive is a party with any member of the Teva Group, which obligations shall remain in force and effect. Notwithstanding the foregoing, in the event of any inconsistency between the provisions of this Agreement and the (provisions of the) Compensation Policy, the terms of the Compensation Policy shall prevail/control. TPE is entitled to unilaterally amend the employment conditions (arbeidsvoorwaarden) under this Employment Contract whether included in this instrument, or any TPE or TPI policies, whether referred to in this instrument or not, with due observance of the provisions of article 7:613 and/or 7:611 Dutch Civil Code.
22. Headings. The headings of the sections and subsections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement.
23. Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original and all of which together shall be considered one and the same agreement. Signatures delivered by facsimile or by e-mail as a portable document format (.pdf) file or image file attachment shall be effective for all purposes.
24. Survival. The provisions of this Agreement that are intended to survive the termination of this Agreement shall survive such termination in accordance with their terms.
25. Indemnification. The Indemnification and Release Agreement between TPI and the Executive, dated November 27, 2017, shall continue to apply in full force and effect in accordance with its terms, and is incorporated by reference to this Agreement.
26. No Collective Bargaining Agreement. TPE is not bound by any collective bargaining agreement and no collective bargaining agreement applies to the Executives employment hereunder.
* * *
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date specified in the first paragraph of this Agreement.
14
TPE. | ||
By: |
/s/ Niels Walch |
|
Name: Niels Walch | ||
Title: SVP, HR Europe | ||
By: |
/s/ David Vrhovec |
|
Name: David Vrhovec | ||
Title: CFO Europe | ||
EXECUTIVE | ||
/s/ Gianfranco Nazzi |
||
Gianfranco Nazzi | ||
EVP, International Markets | ||
Tel Aviv, 1/4/2019 |
15
Private & Confidential
March 15, 2017
To: Gianfranco Nazzi
Dear Gianfranco,
Reference: Your Home Based Long Term International Assignment
Congratulations on your assignment. Global Mobility is an important part of Tevas growth, globalization, and talent initiatives. We believe that international assignments help Teva achieve worldwide business targets while simultaneously developing employees capabilities and international business experience. We hope that you will benefit both personally and professionally from your experience. This letter summarizes the general terms and conditions of your assignment with Teva.
ASSIGNMENT SUMMARY
Home Country: | The Netherlands | |
Host Country: | Israel | |
Employer (Legal Entity): | Teva Pharmaceuticals Europe BV | |
Host Site Entity: Annual Base Salary: |
Teva Pharmaceutical Industries Ltd 442,000.00 EUR |
|
Bonus Guideline: | 60% | |
Position Title: Grade: |
President & CEO Growth Markets 21 |
|
Citizenship/Permanent Resident Status: | Italy | |
Manager While on Assignment: | Dipankar Bhattacharjee | |
Estimated Assignment Start Date*: | June 01st , 2017 | |
Scheduled Assignment End Date: | May 31st , 2020 | |
Assignment Policy: Home or Host based Assignment: International Assignment Policy Date: |
2015 Long Term International Assignment Home Based Assignment April 2015 |
|
Family Size at Host (including Employee): |
5 |
* |
Your actual effective date of assignment will be determined following receipt of your authorization to work and reside in the Host country. |
This letter does not create a contract of employment, but simply seeks to confirm the conditions which pertain to your temporary international assignment. Should the nature of your position change or if this assignment extends beyond its initial duration} the terms may be subject to change at that time. Teva reserves the right to modify the global assignment policies and procedures at any time in whole or in part, with or without notice.
1
COMPENSATION
As a Home Based assignee, it is the intention of the Teva International Assignment policy to provide you with a compensation package derived from what you would receive as an employee based in your home country. You will continue on the Annual Increment Policy of the home country based on your performance. It is Tevas intention to pay your compensation via your Home Companys payroll into your home country bank account in the home country currency. When required per local host regulations however, you may be paid a portion or all of your compensation in the host country. When your assignment ends, all assignment benefits and allowances will cease. During your assignment if applicable and according to your Home country managers sole discretion, your base salary will be reviewed and adjusted according to your home country policies.
ANNUAL INCENTIVE COMPENSATION
Any incentive compensation eligibility (e.g., cash bonus, stock option, restricted stock units, etc.) is in accordance with Tevas incentive compensation plans and programs as they may be amended from time to time. Incentive compensation paid in the form of cash, if any, will be paid from your home country payroll.
BONUS
Over the current performance year 2017 respectively and thereafter you will have the opportunity to earn an on-target bonus of 60% as stated above, payable in March/April of the following calendar year. Superior performance may be rewarded above that on-target level, subject to management discretion. Any bonus earned will be paid from your home country payroll.
BENEFITS
You and your dependents will participate in the International Benefits Plan for medical, dental, long-term disability, group life and accidental death & Dismemberment insurance coverage. Currently medical and dental coverage in Israel is provided through David Shield International Medical Insurance an insurance provider that specializes in international benefits. Medical coverage is provided in two ways:
i. |
By using the network of the health fund used by David Shield and under this system there is a direct billing arrangement between the doctor and the insurance company |
ii. |
Through a fee-for-service medical plan in which you select whichever doctor or hospital you want to use. You pay for services up-front, and then submit claims to David Shield for reimbursement of the covered medical expenses currently at 80%. Dental coverage is provided through David Shield via dental clinics associated with them. This is a comprehensive dental plan which pays 100% for certain treatments and the insured pays a subsidized contribution to more advanced treatments. |
VISA/IMMIGRATION
It is important that you have the required documentations to legally work and reside in the host country; our professional immigration partner will be authorized to assist you. Relocation to your new host location must not take place until your work authorization is received. The terms of this Letter of Assignment shall not come into, or remain in force, unless and until you are granted any necessary visas or work permits allowing you to live and work in the host. Necessary costs incurred to obtain your authorization to work and your spouses and dependents authorization to reside in the host country will be managed by Tevas global relocation provider.
2
Teva supports only required documentation for the intended assignment duration and will not provide financial assistance towards the acquisition of permanent resident status or documentation.
PRE-ASSIGNMENT TRIP
If necessary, to help you become familiar with the assignment location, house hunting trip of up to 5 days will be authorized for you and your spouse and 3 children. During this time, you will receive a per diem in accordance with the Teva Business Travel policy to cover reasonable costs of meals and incidentals. Ground transportation, lodging and air travel (booked at least 14 days in advance via the most direct route) will be provided in accordance with The Teva Travel policy. Reimbursement must be claimed via your usual home country travel expense process.
SHIPMENT OF HOUSEHOLD GOODS
Teva provides assistance with the shipment of personal effects, as well as the cost of packing, loading, inland transportation, and customs or import duties up to established limits.
For immediate needs, excess baggage is reimbursed. Household goods may be shipped via sea or overland container.
Excess Baggage Limits (Unaccompanied and Accompanied)
Three (3) excess bags for each relocating family member.
Surface Shipment Limits (Accompanied only)
40 ft. (68 m³) container for assignees with a total family size of 4 or greater.
Insurance
Teva insures against damage to or losses from the goods shipment, exclusive of those items not approved for shipment up to limits established by the shipping provider.
Storage (Unaccompanied and Accompanied)
Teva provides temporary storage support in cases where your household goods shipment arrives in the receiving location before permanent housing is available (e.g. during the temporary living period). Any other storage needs in your home country or in your host country is your responsibility.
Pets (Unaccompanied and Accompanied)
Teva does not cover pet shipment costs.
All approved costs will be paid directly by Tevas global relocation provider.
Please note that Teva does not cover costs for the shipment of items restricted by the government or other regulations, or any items that are excessively large, high value, or perishable, or that require special care. The following is a representative list (this list does not include all prohibited items): alcohol, appliances, automobiles, boats, building materials/shop equipment, firearms/ammunition, furs/jewelry/fine art/antiques, hot tubs, lawnmowers, motorcycles, pianos, plants, and RVs/campers.
3
HOME COUNTRY HOUSING LEASE CANCELLATION
Teva reimbursement up to two (2) months rent incurred as a penalty due to lease cancellation. Reimbursement DOES NOT include loss of security deposit due to neglect, damage, or loss of a pet/smoking deposit. In order to claim reimbursement proper documentation must be provided to Tevas designated dedicated relocation provider
TRAVEL TO THE HOST LOCATION
On your relocation trip to your new Host Country, Teva will pay the cost of travel for you (and your spouse/dependents) including airfare, ground transportation, and in-transit living expenses. Travel class is based on Tevas Business Travel policy, booked at least 30 days in advance via the most direct route. This cost should be booked via Tevas travel provider and expenses claimed via Tevas dedicated relocation provider.
DESTINATION SERVICES
A provider designated by Teva will assist with house hunting and the coordination of a variety of settling-in services, e.g. local registrations, banking, and utility connections.
TEMPORARY LIVING
You will be provided Temporary Living for up to 30 days after vacating your residence in your Home Country and prior to establishing residence in your new Host Country. Your per diem will be 75 EUR net per person per day. (Children under the age of 14 will receive 50% of this amount). If needed, you will also receive car rental for this period. The per diem will be paid to you by Tevas dedicated relocation provider and car rental (if applicable) will arranged by Tevas relocation provided and paid directly on your behalf.
RELOCATION ALLOWANCE
To cover any individual costs not specifically covered in the assignment policy, you will receive a Miscellaneous Relocation allowance equivalent to 4,691 EUR. This payment will be processed by the dedicated relocation provider in advance of your departure from the Home Country or upon arrival in the Host country whichever you prefer. You will receive the full amount listed above and Teva is responsible for any applicable taxes.
SPOUSAL ASSISTANCE ALLOWANCE
Teva does not compensate for the loss of spousal/partner income as a result of the assignment but rather recognizes that the financial impact exists. To ease the transition, Teva reimburses for job placement and related services if your spouse accompanies you full time on assignment. Maximum reimbursement is equivalent to 1,876.00 EUR. Reimbursement must be claimed within 12 months of the effective date of your assignment and Teva is responsible for any applicable taxes. Reimbursement will be processed by Tevas dedicated relocation provider.
LIFESTYLE ALLOWANCE
To recognize the fact that you (and your spouse/family) have different needs that may not be covered elsewhere in the policy, you will receive a one-time allowance equivalent to 2,815.00 EUR net payable upon your first anniversary of this assignment. This payment will be processed by Tevas dedicated relocation provider and Teva is responsible for any applicable taxes.
4
COST LIVING ALLOWANCE
A cost of living allowance may be provided in those circumstances where the cost of a representative market basket of goods and services (excluding housing, taxes, education and auto purchase) in the host country location exceeds the cost of the same or similar basket of goods and services in the home country location. COLA is analyzed by an independent statistical data provider and considers both the price of the market basket as well as the effect of currency fluctuations on purchasing power. If a COLA is applicable, it will be paid to you each pay period. The amount will be reviewed periodically, but at least semi-annually and adjusted, up or down, at the discretion of the Company. You will be advised of any changes prior to its implementation. Based on your salary level, family size and current statistical data, you are eligible for a monthly COLA payment of:
Current monthly Goods & Services Allowance | 2,551.17 EUR per month NET |
This payment is payable by Tevas payroll and Teva will cover any related taxes.
LANGUAGE LESSONS
Your ability to speak and understand the host language will increase business effectiveness and expedite social integration in the host location. If needed, you and your spouse will each be provided up to 100 hours of language instruction which will be coordinated by Global Mobility. When considering schools for your children, please consider any host language needs as the cost for language lessons for your school aged children are your responsibility. Tevas dedicated relocation provider will arrange language lessons on your behalf and all related costs will be covered by Teva through the relocation provider.
INTERCULTURAL ORIENTATION
To help you acclimate to the host countrys culture and environment both from a business and a social perspective, Teva provides a one-day mandatory Intercultural Orientation for you and your spouse. All arrangements for this training will be coordinated by Tevas dedicated Relocation Provider and Teva will pay all related expenses directly.
Following your training and during your assignment, you will have the ability to utilize Tevas internal Cross-Cultural training located on the Tevas intranet. You may access the site through this link: http://tevanet.teva.corp/global/EN/Campiagns/Pages/Introducing-GlobeSmart.aspx.
HOUSING ALLOWANCE
Teva will pay for suitable accommodation costs in your host country for the duration of your assignment, with a monthly housing allowance of 32,000 ILS, net. The housing allowance will be provided in services only and not cash. A provider designated by Teva will assist you with the arrangements to ensure that your lease agreement includes a lease break clause and that you do not sign a document that binds you to unnecessary liability. If you select housing above your maximum rental budget, the overage is your responsibility. Teva will also pay for security and lease deposits required by the lease agreement. At the end of your assignment, these funds are to be refunded to you by the landlord. Whether or not your deposits are refunded, you are responsible for returning the funds to Teva. It is highly recommended that you insure your personal household items. The cost for Renters insurance is your responsibility. Your housing will be paid directly by Tevas designated provider to your landlord or to you for payment to your landlord.
5
Please note that if you purchase your primary residence in the host country, your housing allowance will immediately cease.
HOST AUTOMOBILE BENEFIT
Any entitlement is strictly based on the host company car policy. All arrangements will be coordinated by your Host country HR representative.
EDUCATION ALLOWANCE
Teva will cover the cost and related taxes of local or international schooling for accompanying dependent children meeting compulsory school age. Teva will cover costs which are reasonable, as determined by the provider designated by Teva. Teva will cover the following expenses, which are paid directly to the school: tuition, enrollment fees and mandatory administration fees. Any other education related fees will not be covered. Nursery School and Daycare are not covered. Payment of school fees will be made directly to the school by Tevas dedicated relocation provider or to you for payment to the school, whichever is more cost effective for Teva.
HOME LEAVE BENEFIT
You will be provided one home leave every 12 months on assignment between your home country and your host country for you and your spouse/partner/dependents who live with you full time in the host country. Teva covers round trip airfare, based on economy fare booked at least 30 days in advance and via the most direct route. Any ground transportation and/or lodging costs are your responsibility. You must use your vacation time for your home leave visits and the time away must be approved by your manager. Reimbursement will be claimed via Tevas dedicated relocation provider.
HOURS OF WORK, HOLIDAY, & VACATION
While on assignment you will follow the nationally recognized paid holiday schedule of the host location and your vacation benefit continues in accordance with your home guidelines except where host country labor laws require otherwise. Your vacation time must be approved by your direct manager.
EMERGENCY ASSISTANCE/EVACUATION
In instances of political or civil emergency affecting an employee on an international assignment, it is the primary objective of Teva to ensure the safety and welfare of the employee and accompanying dependents. Please notify your Host Country Human Resources department and Global Mobility of all actual or potentially serious emergencies so that appropriate steps may be taken.
PENSION & SOCIAL SECURITY
To the extent possible, you remain on the home country pension/retirement plan and contribution schedule and your home social security scheme through regular payroll deductions. In cases where the home country pension/retirement plan cannot be maintained through the usual or voluntary contributions while on assignment, you may be able to participate in the host country scheme or Teva will arrange for you to participate in an alternative scheme. In some host locations, contributions to social tax schemes are mandatory and when that is the case, Teva will meet any mandatory host country employer and employee contributions on your behalf.
6
TAX POLICY
You will be under the Teva tax equalization policy during your assignment. The intent of this policy is that your ultimate tax liability will be similar to that which you have paid in the Home Country on your regular compensation had you not received assignment-related compensation or special tax considerations. Under this policy:
|
you will be responsible for a hypothetical tax liability on both income and social taxes, which will be calculated and deducted from each paycheck, |
|
Teva will be responsible for an excess tax liability in the host country, and |
|
it is your responsibility to pay income taxes in the home country (although covered by Teva) |
The extent of this tax coverage by Teva is limited to your Teva compensation including salary, bonus, benefits and earnings related to equity that is vested while you are on assignment, but does not include earnings that you receive outside of your employment with Teva. The intent of the policy is that your ultimate tax liability will be similar to the amount you would have paid in the home country on your regular compensation had you not received assignment-related compensation or special tax considerations. Each year, a final tax equalization calculation will be prepared to settle your assignment tax obligations.
TAX PREPARATION AND SERVICES
It is a condition of employment that you comply with all personal tax responsibilities for each taxing authority in which a responsibility exists. The responsibility includes the proper filing of all tax returns. You are also responsible for notifying Teva of the tax payments due. The Company has retained the services of a Tax Consultant to prepare your home country and host country tax returns as required during the assignment period. Although you are fully responsible for the payment of all applicable income taxes and tax duties while on assignment, the Company will directly pay the consultant tax preparation and consulting fees on your behalf. Contact information of the Tax Consultant will be provided to you prior to the commencement of your assignment so that you may discuss your particular tax preparation needs in detail. Tax preparation assistance is limited to your filing and only extends to a spouse/partner when filing jointly. The Company will directly pay the consultant tax preparation and consulting fees on your behalf. Costs associated with personal financial planning will be your responsibility.
CHANGE IN TEVAS INTERNATIONAL ASSIGNMENT POLICY DURING ASSIGNMENT
This Letter of Assignment has been prepared by referencing Tevas International Assignment Policy (the policy). The policy does not form part of the Letter of Assignment and Teva reserves the right to vary the policy and associated benefits from time to time. You will be notified of any such variations or amendments to the policy and the impact on your arrangements. Where the provisions of the policy differ from those in this Letter of Assignment, the terms set out in this letter shall prevail.
EARLY TERMINATION OF INTERNATIONAL ASSIGNMENT
In the event Teva, in its sole discretion, ends your international assignment before its scheduled end date, Teva will provide return trip airfare for you and your dependents back to the point of origin, and will ship household goods back to the point of origin or to some other mutually agreed upon location. Unless otherwise agreed to by regional management and Human Resources, the return must be completed within 60 days after the effective date of the termination of the international assignment. By failing to relocate within 60 days, you forfeit Tevas offer to pay for repatriation transportation costs.
INVOLUNTARY TERMINATION OF EMPLOYMENT
In the case of an involuntary termination of employment with Teva, Teva will provide return trip airfare for you and your dependents back to the point of origin, and will ship household goods back to the point of origin or to some other mutually agreed upon location. Unless otherwise agreed to by regional management and Human Resources, the return must be completed within 60 days after the effective date of the termination of employment. By failing to relocate within 60 days, you forfeit Tevas offer to pay for repatriation transportation costs.
7
VOLUNTARY TERMINATION OF EMPLOYMENT
Should you resign from employment with Teva or should your Teva employment be terminated with cause during your assignment, Teva reserves the right to cease all assignment payments, including payment of relocation costs, from the date of resignation or the date of misconduct, whichever is applicable. In a voluntary termination case, your signed payback agreement is enforced.
PAYBACK AGREEMENT
As a condition of your assignment, should you voluntarily terminate your assignment within 12 months of your effective assignment date, you are required to repay Teva a prorated sum towards relocation costs including:
|
Household goods shipment |
|
Storage costs |
|
Temporary lodging (excluding associated per diem) |
|
Relocation allowance |
REPATRIATION BENEFITS
At the end of your assignment Teva provides:
|
Household goods move support with the same limitations as when you relocated to the Host Country |
|
Flights back to the Home Country for you and your spouse/partner or dependents, and |
|
Thirty days temporary accommodations in accordance with the Teva global travel policy. |
|
Departure services: accommodation lease and utilities cancellation, visa cancellation, deregistration with local authorities, and the closing of bank account. |
Tevas dedicated relocation provider will assist and all fees will be paid directly.
LOCALIZATION
If at any time during or at the end of your assignment, the Business decides that you are needed in the host country for an indefinitely, your assignment will not be extended. Instead, with your agreement, you will be localized in accordance with Teva global mobility policy in force at the time of localization. This means that your employment with your Home country will end and you will become an employee of the Host country on Host country terms and your assignment related allowances will stop. As part of your localization, Teva will work to transition you and your spouse/family to an immigration status that would allow you to remain in the Host country.
EMPLOYMENT TERMINATION
In case of employment termination, the notice period should be according to your local employment agreement with Teva Pharmaceuticals Europe BV as follows: The employment agreement may be terminated by either party as per last of a calendar month, by giving notice to the other party. Employee shall in that respect observe a notice period of 3 months and Teva Europe shall in that respect observe a notice period of 6 months. During this period, Employee is prohibited to directly or indirectly engage in any activities for any other company competing in any way with Teva Europe or an affiliated company of the Teva-group, also in case Teva Europe decides to put him on garden leave.
8
If a suitable work position is not available upon the expiration of the assignment period or in case this assignment is terminated for reasons other than termination with cause, the above will also apply and severance will be according to the terms of the Home Company.
We are very happy to offer you this opportunity for a Long Term International Assignment and feel your skills and accomplishments are an excellent match for the challenges ahead.
Sincerely, |
Moshe Netzer |
SVP Human Resources Growth Markets Reg |
/s/ Moshe Netzer |
I acknowledge that I had an assignment briefing with a Global Mobility representative, and I had the opportunity to ask questions regarding the policy. I further understand my signature above indicates my acceptance of these terms and conditions.
/s/ Gianfranco Nazzi |
22.05.2017 |
|||
Gianfranco Nazzi | Date |
Cc: |
HRBP - Daniel Lawlor |
Host Manager - Dipankar Bhattacharjee |
Home HR Moshe Netzer |
Host HR Raffi Hirsh |
9
Exhibit 10.13
Execution Version
EMPLOYMENT AGREEMENT
This Employment Agreement (this Agreement) is entered on November 6, 2019, and is made by and between TEVA PHARMACEUTICAL INDUSTRIES LTD., an Israeli corporation located at 5 Basel Street, Petach Tikwa, Israel, Company No. 52-001395-4 (the Company, Teva), and Eli Kalif (Executive).
WHEREAS, the Company wishes to employ Executive as its Chief Financial Officer (CFO), and Executive wishes to be so employed; and
WHEREAS, the parties have agreed on the terms pursuant to which Executive shall serve as CFO, and wish to set forth such terms in this Agreement.
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. |
Term; Positions and Duties; Location |
1.1 |
The Company agrees to employ Executive, and Executive agrees to serve the Company and its affiliates, subject to the terms and conditions of this Agreement, for the period commencing on December 22, 2019 (the Effective Date) and until the termination of this Agreement pursuant to Section 7 of this Agreement (the Term). |
1.2 |
Executive shall report directly to the President and Chief Executive Officer of Teva (CEO). Executive shall have all of the duties, authorities and responsibilities customarily exercised by an individual serving as the CFO of a company the size and nature of the Company. In addition, the Executive shall have such additional executive duties and responsibilities as may be assigned to him by the CEO. |
1.3 |
The Executive shall devote his full business time, attention, and efforts to the performance of his duties under this Agreement and shall not engage in any other business or occupation during the Term, including, without limitation, any activity that (a) conflicts with the interests of the Company or its affiliates, (b) interferes with the proper and efficient performance of his duties for the Company or (c) interferes with the exercise of his judgment in the Companys or its affiliates best interests. Notwithstanding the foregoing, nothing herein shall preclude the Executive from: (i) serving, with the prior written consent of the CEO, as a member of the board of directors or advisory boards (or their equivalents in the case of a non-corporate entity) of non-competing businesses and charitable organizations; (ii) engaging in charitable activities and community affairs; (iii) speaking at meetings of business, charitable and civic organizations; or (iv) managing his personal investments and affairs; provided, however, that the activities set out in clauses (i), (ii), (iii) and (iv) shall be limited by the Executive so as not to be in contradiction to any Company policy and/or materially interfere, individually or in the aggregate, with the performance of his duties and responsibilities hereunder or create a potential business or fiduciary conflict. |
1.4 |
During the Term, and as part of Executives position, Executive may be required to serve as a director, officer or committee member of the Company and its subsidiaries and affiliates (collectively, the Company Group), and the fulfillment of such position shall not constitute an employer-employee relationship between Executive and any such entity (other than the Company), and notwithstanding any such position, Executive shall only be considered to be an employee of the Company and shall not be entitled to receive any additional compensation for serving in such additional position. |
1.5 |
Executives principal place of employment shall be at the Companys principal offices in Israel. However, Executive acknowledges and agrees that he shall be required to travel abroad extensively on Company business. |
1.6 |
Executive acknowledges and agrees that no collective and/or special bargaining agreement that might apply to the Companys employees shall apply to Executive in his capacity as an employee of the Company, unless required by applicable Law. |
1.7 |
This Agreement and all compensation and benefits payable hereunder are subject to the Companys compensation plans and policies applicable to senior officers or any successor compensation plans or policies, including the Companys Compensation Policy for Executive Officers and Directors adopted by the shareholders at the 2019 annual general meeting of shareholders (the Compensation Policy) and nothing herein shall derogate in any way from the Companys rights thereunder. |
2. |
Base Salary |
2.1 |
The Executives gross annual base salary shall be 2,343,200 New Israeli Shekels (the Annual Salary). The Annual Salary shall be divided by 12, and each such 1/12 shall constitute Executives monthly salary (the Monthly Salary) payable in arrears in monthly installments. The Annual Salary shall be reviewed, from time to time, by the Human Resources & Compensation Committee of the Companys Board of Directors (the Compensation Committee) and/or the Board of Directors. |
2.2 |
Executive hereby acknowledges and agrees that in light of his position and areas of responsibility, which require a special degree of trust, and since he is part of the Companys senior management, the provisions of the Hours of Work and Rest Law, 5711-1951, shall not apply to his employment. |
2.3 |
It is hereby agreed that only the Monthly Salary payable to Executive pursuant to Section 2.1 shall constitute the basis for the calculation of all social benefits granted to Executive pursuant to this Agreement (including contributions and deductions related to the Insurance Arrangements (as such term is defined below)) and for any other purpose or benefit plan for which deductions are calculated based on a percentage of Executives salary. |
2
2.4 |
The parties hereby acknowledge and agree that the compensation terms set forth in this Agreement constitute fair consideration to Executive, given, inter alia, his managerial responsibilities and obligations towards the Company and that the Executive shall not be entitled to receive any other payment or compensation of any kind beyond the Monthly Salary and the other payments and benefits specified in this Agreement unless otherwise agreed between the Company and the Executive in writing and approved as required by applicable Law. |
2.5 |
The Company shall pay or reimburse Executive for all reasonable out-of-pocket business expenses incurred by Executive in performing his duties under this Agreement, subject to presentation of appropriate supporting documentation and in accordance with the expense reimbursement policy of the Company. |
3. |
Annual Bonus |
3.1 |
For each fiscal year that ends during the Term, the Executive shall be eligible to be considered for an annual bonus under the Companys annual cash bonus plan in accordance with the Compensation Policy (the Annual Bonus) and subject to the sole discretion of the CEO, the Compensation Committee and the Board of Directors, with a target amount equal to 100% of Executives Annual Salary. If payable, the Annual Bonus shall be paid to the Executive at the same time as annual bonuses are generally payable to other similarly situated senior executives of the Company, subject to the Executives continuous employment through the payment date. For the avoidance of doubt, Executive shall not be eligible to be considered for Annul Bonus for 2019. |
4. |
Equity Awards |
4.1 |
Sign-On Equity-based Award. Executive shall be granted a one-time award of Restrictive Share Units (Sign-On RSU) in a total fair market value of U.S. $250,000 at Grant Date, subject to (i) the Executives commencement of employment with the Company, (ii) the terms of TPIs 2015 Long Term Equity-Based Incentive Plan (the 2015 Plan) (including any applicable sub-plans and the terms of the award agreement), (iii) the Executives acceptance of the award agreement (iv) the Compensation Policy, and (v) any applicable law. The number of RSUs shall be determined according to the fair value of RSU on or about the Grant Date (as defined below), in accordance with the terms of the 2015 Plan and the resolutions of the Compensation Committee and the Board, and based on Company practice. The Sign-on RSU shall vest in equal installments on the second (2nd), third (3rd) and fourth (4th) anniversaries of the Grant Date. The Sign-On RSU will be granted on the Effective Date (or, if the Company is subject to a blackout on the Effective Date, the first day of trading after the blackout period ends) (the Grant Date). |
3
4.2 |
Annual Equity-based Awards. During the Term, the Executive shall be considered for equity-based compensation awards under the Equity Plan or any successor equity compensation plan(s), at the sole discretion of the CEO, the Compensation Committee and the Board of Directors. Any such awards shall be granted on such terms and conditions as may be determined by the Compensation Committee and the Board of Directors. |
5. |
Executive Benefits |
5.1 |
During the Term, Executive (and, to the extent eligible, his dependents and Beneficiaries (as defined below)) shall be entitled to participate in any and all health, medical, dental, group insurance (including life insurance), welfare, fringe benefits, perquisites and other employee benefit plans, programs and arrangements that are generally available from time to time to similarly situated senior executives of the Company and their dependents and Beneficiaries (the Executive Benefits). Nothing contained herein shall be construed to limit the Companys ability to amend, suspend, or terminate any employee benefit plan or policy at any time without providing the Executive notice, and the right to do so is expressly reserved. |
5.2 |
Vacation. Executive shall be entitled to twenty three and a half (23.5) paid vacation working days per calendar year during the Term, which shall accrue in accordance with Company policy. Executive shall be required to utilize at least five (5) consecutive vacation days every calendar year, and may accumulate the remaining vacation days up to 47 days in total and in accordance with Company policy which may be revised from time to time. Any accumulated vacation days above 47 days shall be forfeited by the Company with no consideration. The dates of Executives annual vacation shall be coordinated in advance with the CEO. |
5.3 |
Sick Leave. Executive shall be entitled to twenty two (22) paid sick working days per calendar year during the Term (without any reduction in the compensation or benefits payable hereunder), which may accumulate during the Term in accordance with the Companys practice or policy, as in effect from time to time but in no event shall exceed twelve (12) months. The sick pay shall include the Monthly Salary and all other amounts and benefits to which Executive is entitled under this Agreement, as if Executive worked at the Company during the period of his illness (in respect of period for which he is entitled to receive payment as aforesaid), less any amount that Executive is entitled to receive with respect to the aforementioned period of his illness, including from any Israeli pension fund; provided that Executive provides the Company with medical confirmation of his illness. The parties hereto hereby acknowledge and agree that the payments to Executive set forth in this Section 5.3 and Executives insurance in the pension fund and/or loss of ability to work are meant to also cover the Companys obligations under the Sick Pay Law, 57361976. |
4
5.4 |
Recreation Pay. Executive shall be entitled to fifteen (15) paid recreation days per calendar year during the Term (without any reduction in the compensation or benefits payable hereunder). The amount of recreation pay per recreation day, the payment conditions and any other conditions governing recreation pay shall be in accordance with applicable Law and the Companys policy in effect at the applicable time with respect to its employees generally. |
5.5 |
Study Fund. For every month in which the Executive is employed, Teva shall make contributions on Executives behalf to a study fund (keren hishtalmut) (the Study Fund), in an amount equal to 7.5% (seven and one half percent) of the Monthly Salary in such month, and shall deduct 2.5% (two and one half percent) from the Monthly Salary, and transfer these amounts to the Study Fund. By signing this Agreement, the Executive hereby irrevocably grants Teva a power-of attorney to exercise the aforementioned deduction from the Executives Monthly Salary. |
5.6 |
Car. The Company shall furnish the Executive with a car owned or leased by Teva, and which the Executive shall use during the Term. Subject to the provisions of any applicable Law, and the Companys policy on the matter, the Company shall bear all costs relating to the use and maintenance of the car. The Executive undertakes to use the car in a reasonable manner. |
6. |
Pension, Severance and Remuneration |
6.1 |
It is hereby declared and agreed that the rights of the Executive to pension allowance (kitzba), severance payment and remuneration will be insured in a pension fund, managers insurance, provident fund and/or any combination of the foregoing, according to the Executives choice, as set forth herein below. |
6.2 |
The Executive will specify, in a notice to Teva, which part of the Monthly Salary shall be insured in each of the programs specified below (the Insurance Arrangement). To the extent the Executive does not notify the Company of his choice, the Executives Monthly Salary shall be insured in accordance with the Companys policy. For the avoidance of doubt, it is hereby clarified that the accumulated contributions according to the Insurance Arrangement shall not be made, in any event, from an amount exceeding the Monthly Salary. |
5
6.3 |
The rate of allocations to the pension fund and/or managers insurance and/or provident fund, subject to the Insurance Arrangement, shall be as follows: |
6.3.1 |
Remunerations The Company shall contribute 7.5% out of the Monthly Salary according to the Insurance Arrangement to the remuneration component, and deduct the Executives contribution in the rate of 6% out of the Monthly Salary according to the Insurance Arrangement for this purpose. |
It is hereby clarified that the Companys contributions to the remuneration component to managers insurance and/or provident fund, shall include a contribution of 5% for the remuneration component as well as payment for acquiring loss of ability to work insurance to insure 75% of the Monthly Salary according to the Insurance Arrangement. For the avoidance of any doubt, it is hereby clarified that (i) the Companys contributions percentages to the remuneration component for managers insurance and/or provident fund shall not be lower than 5% of the Monthly Salary, and (ii) the total amount of the Companys contributions, including loss of ability to work insurance shall not be higher than 7.5% of the Monthly Salary and (iii) in the event that the cost of the loss of ability to work insurance shall be lower than 2.5% of the Monthly Salary according to the Insurance Arrangement, the remainder shall be contributed to the remuneration component for the benefit of the Executive, as detailed above.
6.3.2 |
Severance Pay The Company shall contribute each month an amount equal to 8.33% of the Monthly Salary to the component of Severance Pay (the Severance Contribution). |
6.4 |
In the event of an increase in the Executives Monthly Salary, the Executive shall be entitled to choose (in accordance with the Provident Funds Articles of Association and applicable provisions of Law) the Insurance Arrangement which will apply to the increase in the Monthly Salary. The Executive shall notify the Company with respect to such choice in accordance with the Companys policies regarding this matter. The provisions of Section 6.3 above shall apply to the Insurance Arrangement, which the Executive chose for the increase in the Monthly Salary. |
It is hereby declared and agreed that in the event of an increase in the Executives Monthly Salary, the Company shall not have an obligation to contribute to the pension fund and/or managers insurance and/or the provident funds its indebtedness for severance payment, which derives (if at all) from the aforementioned increase, with respect to the term of employment prior to the salary increase.
6.5 |
By signing this Agreement, the Executive grants the Company an irrevocable power of attorney to deduct from his salary the contributions relating to the Monthly Salary, and to transfer such amounts to any of the pension fund and/or managers insurance and/or the provident funds included in the Insurance Arrangement, which he chose, all as set forth in Section Error! Reference source not found. above. |
6
7. |
Termination of Employment |
7.1 |
General. Executives employment with the Company shall terminate upon the earliest to occur of (a) Executives death, (b) a termination by reason of a Disability, (c) a termination by the Company with or without Cause, and (d) a termination by Executive with or without Good Reason. The date on which employee-employer relations cease to exist between the parties shall be referred to in this Agreement as the Date of Termination. Upon any termination of Executives employment for any reason, except as may otherwise be requested by the Company in writing and agreed upon in writing by Executive, Executive shall be deemed to have resigned, effective immediately, from any and all directorships, committee memberships, and any other positions Executive holds with any member of the Company Group. If for any reason this Section 7.1 is deemed to be insufficient to effectuate the resignations contemplated by the immediately preceding sentence, then Executive shall without incurring any costs on him, upon the Companys request, execute any documents or instruments that the Company may deem necessary or desirable to effectuate such resignations. In addition, Executive hereby designates the Secretary or any Assistant Secretary of the Company to execute any such documents or instruments as Executives attorney-in-fact to effectuate such resignations if execution by the Secretary or any Assistant Secretary of the Company is deemed by the Company to be a more expedient means to effectuate such resignation or resignations. In addition, Executive undertakes to cooperate with the Company to ensure the orderly transition of position and provide any other assistance that may be required by the Company in connection with the Executives duties and responsibilities. |
Furthermore, upon any termination of Executives employment for any reason, except for termination for Cause, the Company shall provide Executive with letters addressed to the pension fund, managers insurance, provident fund and Study Fund (as applicable) that will enable Executive to receive any amounts due to him in connection with the termination of his employment.
7.2 |
Termination Due to Death or Disability. Executives employment shall terminate automatically upon his death. The Company may terminate Executives employment immediately upon the occurrence of a Disability (as defined in Section 8.4), such termination to be effective upon Executives receipt of written notice of such termination and subject to applicable proceedings pursuant to applicable Law. Upon Executives death or in the event that Executives employment is terminated due to his Disability, Executive or his estate or his Beneficiaries, as the case may be, shall be entitled to: |
7.2.1 |
The Accrued Obligations; |
7.2.2 |
Amounts accumulated in the funds pursuant to the Severance Contributions; |
7
Notwithstanding the foregoing provisions of this Section 7.2, the payments and benefits described in this Section 7.2 (other than the components of the Accrued Obligations and any portion of the Severance Payment required to be paid pursuant to applicable Law) (a) are subject to Executives or his estate or his Beneficiaries, as the case may be, execution and non-revocation of the Release of Claims in accordance with Section 7.6 and (b) shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of Sections Sections 9, 10, 11, 12 or 13. In addition, in the event Executive breaches any provision of Sections 9, 10, 11 12 or 13, Executive shall repay to the Company all payments and benefits which were made and/or paid by the Company pursuant to Section 7.4 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law)
7.3 |
Termination by the Company for Cause. |
7.3.1 |
The Company may terminate Executives employment at any time and without any advance notice, in the event of Cause. |
7.3.2 |
In the event that the Company terminates Executives employment for Cause, he shall be entitled only to those components of the Accrued required to be paid by applicable Law, and subject to applicable Law. |
7.3.3 |
In the event of termination of employment for Cause, the Executive shall be entitled to receive from Teva appropriate letters regarding his termination of employment with Teva, addressed to the pension fund, provident funds and/or the insurer of the managers insurance, pursuant to which the Executive shall be entitled to receive from them the amounts accumulated therein in the Executives favor from the contributions of the parties to remuneration, together with linkage differentials and earnings on such contributions, and Teva shall be entitled to the amounts accumulated in such funds that constitute the aggregate Severance Contributions. In the event that the Executive has reimbursed Teva an amount equal to the Severance Contributions, then the Executive shall be entitled to receive from Teva letters as specified in Section 7.1 above without any reservations. In addition, the Executive shall be entitled to receive a letter addressed to the Study Fund according to which Executive will be entitled to receive only the amounts contributed by the Executive to the Study Fund, and Teva shall be entitled to the employer contributions made by Teva to the Study Fund. |
7.3.4 |
Following such termination of Executives employment by the Company for Cause, except as set forth in this Section 7.3, Executive shall have no further rights to any compensation or any benefits under this Agreement. |
8
7.4 |
Termination by the Company without Cause. The Company may terminate Executives employment at any time without Cause, effective six (6) months following the date of Executives receipt of notice of such termination (the Company Notice Period); provided, however, that the Company may, in its sole and absolute discretion and by written notice, waive the services of the Executive during the Company Notice Period or in respect of any part of such period, and at the Companys sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date), all on the condition that the Company pay the Executive the Monthly Salary and all additional compensation and benefits to which the Executive is entitled in respect of the Notice Period without regard to any such Company waiver. |
In the event that Executives employment is terminated by the Company without Cause (other than due to death or Disability), Executive shall be entitled to:
7.4.1 |
The Accrued Obligations; |
7.4.2 |
The Severance Payment (as such term is defined below); and |
7.4.3 |
If Executives employment is terminated by the Company without Cause within one (1) year following a Change In Control event (as defined in the Compensation Policy as in effect on the date hereof), the CIC Amount (as defined below). |
7.4.4 |
Notwithstanding the foregoing, the payments and benefits described in this Section 7.4 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law) (a) are subject to Executives execution and non-revocation of the Release of Claims in accordance with Section 7.7 and (b) shall immediately terminate, and the Company shall have no further obligations to Executive with respect thereto, in the event that Executive breaches any provision of Sections 9, 10, 11 12 or 13. In addition, in the event Executive breaches any provision of Sections 9, 10, 11 12 or 13, Executive shall repay to the Company all payments and benefits which were made and/or paid by the Company pursuant to Section 7.4 (other than the components of the Accrued Obligations and the portion of the Severance Payment required to be paid pursuant to applicable Law) |
7.5 |
Termination by Executive with or without Good Reason. Executive may terminate his employment with or without Good Reason by providing the Company six (6) months prior written notice of such termination (the Executive Notice Period); provided, however, that the Company may, in |
9
its sole and absolute discretion, by written notice, waive the services of the Executive during the Executive Notice Period or in respect of any part of such period, and at Companys sole discretion accelerate the effective date of such termination of employee-employer relationship (such accelerated date shall constitute the Termination Date) and still have it treated as a termination without Good Reason. |
In the event of a termination of employment by Executive for Good Reason, Executive shall be entitled to the same payments and benefits as provided in Sections 7.4.1 and 7.4.2, subject to the same conditions on payment and benefits as described in Section 7.4 (including execution and non-revocation of the Release of Claims in accordance with Section 7.6 and compliance with Sections 9, 10, 11, 12 or 13). Notwithstanding the above, the Company may terminate the employment of Executive without Cause in accordance with Section 7.1 after receipt of the Good Reason Notice (as defined below).
In the event of a termination of employment by Executive without Good Reason, Executive shall be entitled to only the Accrued Obligations and the Severance Contributions accumulated in the Insurance Arrangements;
7.6 |
Release. Notwithstanding any provision in this Agreement to the contrary, the payment of any amount or provision of any benefit pursuant to Section 7 (other than the components of the Accrued Obligations and those components of the Severance Payment required to be paid pursuant to applicable Law) (collectively, the Severance Benefits) shall be conditioned upon Executives execution, delivery to the Company, and non-revocation of the Release of Claims within thirty (30) days following the Date of Termination. If Executive fails to execute the Release of Claims in such a timely manner or revokes the Release of Claims, Executive shall not be entitled to any of the Severance Benefits. For the avoidance of doubt, in the event of a termination due to Executives death or Disability or Executives death or Disability following a notice of termination of employment without Cause or for Good Reason, Executives obligations herein to execute and not revoke the Release of Claims may be satisfied on his behalf by his estate or a person having legal power of attorney over his affairs. |
7.7 |
Full Settlement. The payments and benefits provided under this Section 7 shall be in full satisfaction of all obligations of the Company Group to Executive under this Agreement or any other agreement, plan, arrangement or policy of the Company Group in connection with his termination of employment. For the avoidance of doubt, Executives sole and exclusive remedy upon a termination of employment shall be receipt of the payments and benefits specified in this Section 7. |
7.8 |
Definitions. For purposes of this Agreement, the following terms have the following meanings: |
10
7.8.1 |
Accrued Obligations means (a) any unpaid Monthly Salary earned through the Date of Termination, and any unused vacation days and recreation days accrued in accordance with Company policy and this Agreement through the Date of Termination, which amounts shall be paid on the next regular payroll date immediately following the Date of Termination, (b) any other payment to which Executive is entitled under the applicable terms of any applicable plan, program, agreement, corporate governance document or arrangement of the Company or its affiliates, including Company reimbursement of any unreimbursed business expenses and rights to any Company indemnification as set forth in Section 8. |
7.8.2 |
Beneficiaries means, subject to applicable Law, the executors of Executives estate, the Executives legal heirs and those beneficiaries whom the Executive stipulated in a written notice to any applicable Insurance Arrangement Providers. |
7.8.3 |
Cause means (A) the Executives indictment for, conviction of or pleading of guilty or nolo contendere to, (i) a felony or (ii) any crime involving moral turpitude; (B) the Executives embezzlement, dishonesty, misappropriation of Company property, breach of fiduciary duty or fraud with regard to the Company or any of its assets or businesses; (C) the Executives willful misconduct or gross negligence in the performance of the Executives duties or continual failure to perform the material duties of his position; (D) the Executives material violation of a Company rule or regulation; (E) the Executives breach of a material provision of this Agreement; or (F) circumstances entitling the Company under any applicable law to terminate the employment of the Executive without payment of severance pay. |
7.8.4 |
Disability means that Executive, due to a physical or mental disability, has been substantially unable to perform his duties under this Agreement for a continuous period of ninety (90) days or longer, as determined by a physician selected by the Company and reasonably acceptable to Executive. |
7.8.5 |
Good Reason means a termination by Executive if (a) any of the following events occurs without Executives express prior written consent, (b) Executive notifies the Company in writing that such event has occurred, describing such event in reasonable detail and demanding cure, within ninety (90) days after Executive learns of the occurrence of such event (the Good Reason Notice), (c) such event is not substantially cured within thirty (30) days after Executive delivers the Good Reason Notice to the Company, and (d) the Date of Termination occurs within one hundred twenty (120) days after the failure of the Company to so cure: (A) the Companys breach of a material provision of this Agreement, (B) a material diminution in the Executives duties or responsibilities that is inconsistent with the Executives position as described herein, or (C) a material reduction in the Executives rate of Annual Salary. |
11
7.8.6 |
Law means any Israeli law, rule or regulation, and the regulations of any securities exchange on which the Companys securities are listed, or any applicable judgment, order, writ, decree, permit or license of any governmental authority. |
7.8.7 |
CIC Amount means one and a half (1.5) million USD converted into local currency at the Date of Termination and in accordance with the Companys practice and polices. |
7.8.8 |
Release of Claims means the release of claims in favor of the Company and its affiliates substantially in the form attached hereto as Exhibit A. |
7.8.9 |
Severance Payment means an amount equal to twice the most recent Monthly Salary multiplied by the number of years of employment by Teva (pro rated for partial year) of which any amounts accumulated in the Insurance Arrangement as a result of the Severance Contributions shall be deducted, provided, however, that (i) in no event shall the Executive (or, if applicable, his Beneficiaries) be entitled to receive from the Company an amount which, together with the Severance Contributions accumulated in the Insurance Arrangements, exceeds eighteen (18) months of the Executives most recent Monthly Salary (unless required otherwise by applicable Law). |
8. |
Indemnification |
8.1 |
In accordance with and subject to the provisions of applicable Law and the applicable provisions of the Companys Articles of Association and the Compensation Policy then in effect, Executive shall be indemnified and released by the Company in accordance with the provisions of the Indemnification and Release Agreement attached hereto as Exhibit B, the terms of which shall be incorporated by reference herein. |
9. |
Confidentiality and Disclosure of Information |
Executive shall execute the Confidentiality, Disclosure of Information and Assignment of Inventions Agreement attached hereto as Exhibit C concurrently with the execution of this Agreement and agrees to abide by the terms thereof, which shall be deemed incorporated into this Section 9.
10. |
Non-Competition |
By signing this Agreement, the Executive hereby acknowledges and agrees that, in his capacity as Executive Vice President, Chief Financial Officer, the Executive will have a great deal of exposure and access to a broad variety of commercially valuable proprietary information of the Company Group, including, by way of illustration, confidential
12
information regarding the Company Groups current and future products and strategies, costs and other financial information, R&D and marketing plans and strategies, etc. As a result of the Executives knowledge of the above information and in consideration for the benefits offered by the Company under this Agreement, the Executive affirms and recognizes his continuing obligations with respect to the use and disclosure of confidential and proprietary information of the Company Group pursuant to the Company Groups policies and the terms and conditions of this Agreement, and hereby agrees that, during the Term and for the six (6) months following the Date of Termination, the Executive shall not, directly or indirectly (whether as an officer, director, owner, employee, partner, consultant or other direct or indirect service provider) engage, directly or indirectly, anywhere in the world, in any activity, business or any other engagement in the pharmaceutical industry, which competes with the business of any member of the Company Group as of the Date of Termination (including any business that any member of the Company Group is actively planning to enter as of the Date of Termination), except with the Companys prior written approval. Notwithstanding anything to the contrary contained in this Section 10, the foregoing shall not prevent Executive from acquiring for his own personal investment not more than 1% of the outstanding voting securities of any publicly-traded corporation.
It is hereby agreed and clarified that, when determining the above non-competition undertaking, the parties took into account the entire consideration provided to Executive pursuant to this Agreement, which is being made in consideration, inter alia, for such undertaking.
11. |
Non-Solicitation |
Executive herby agrees that during the Term and for the six (6) months following the Date of Termination, the Executive shall not, directly or indirectly, (i) solicit or induce, or in any manner attempt to solicit or induce, any person employed by, or as agent of, the Company Group to terminate such persons contract of employment or agency, as the case may be, with the Company Group, or (ii) divert, or attempt to divert, any person, concern or entity from doing business with the Company Group, or attempt to induce any such person, concern or entity to cease being a customer or supplier of the Company Group.
It is hereby agreed and clarified that, when determining the above non-solicitation undertaking, the parties took into account the entire consideration provided to Executive pursuant to this Agreement, which is being made in consideration, inter alia, for such undertaking.
12. |
No Disparagement |
During the Term and at all times thereafter, the Executive agrees not to (i) make any disparaging or defamatory comments regarding any member of the Company Group or any of its current or former directors, officers, employees or products or (ii) make any negative or disparaging comments concerning any aspect of the Executives relationship with any member of the Teva Group or any conduct or events relating to any termination of the Executives employment with the Company.
13
Nothing herein shall prevent Executive from testifying truthfully in any legal proceeding, to any governmental or regulatory body or as may otherwise be required by applicable Law.
It is hereby agreed and clarified that, when determining the above non-disparagement undertaking, the parties took into account the entire consideration provided to Executive pursuant to this Agreement, which is being made in consideration, inter alia, for such undertaking.
13. |
Cooperation. |
During the Term and at all times thereafter, Executive agrees to cooperate with the Company and its attorneys in connection with any matter related to the period he was employed by the Company and/or his services to any other member of the Company Group, including but not limited to any threatened, pending, and/or subsequent litigation, government investigation, or other formal inquiry against any member of the Company Group, and shall make himself available upon reasonable notice to prepare for and appear at deposition, hearing, arbitration, mediation, or trial in connection with any such matters. Such cooperation will include willingness to be interviewed by representatives of the Company and to participate in legal proceedings by deposition or testimony. To the extent reasonably practicable, the Company shall coordinate with Executive to minimize scheduling conflicts with Executives business and personal commitments. The Company shall reimburse Executive for any reasonable re approved out-of-pocket expenses (including travel expenses) incurred in connection with providing such assistance and subject to any terms and limitation in the Indemnification and Release Agreement
14. |
No-Hedging Policy; No-Pledging Policy; Stock Ownership Guidelines. |
Executive acknowledges and agrees to adhere to the Companys No-Hedging Policy, No-Pledging Policy and Stock Ownership Guidelines applicable to executive officers of the Company, as each may be amended from time to time in the Companys sole discretion
15. |
Return of Car, Equipment and Documents |
As of no later than the Date of Termination, or earlier than that if required by the Company, Executive shall return to the Company the car, cell phone (or other hand-held device), laptop, credit card(s) and any other company equipment, if any, provided to Executive, and any other confidential or proprietary information of the Company that remains in Executives possession; provided, however, that nothing in this Agreement or elsewhere shall prevent Executive from retaining and utilizing documents relating to his personal benefits, personal contact list, and the like; and such other records and documents as may reasonably be approved by the CEO (such approval not to be unreasonably withheld or delayed). Executive shall confirm such return in writing to the Company promptly upon Companys written request, together with confirmation that Executive no longer has any Company property or confidential or proprietary information of the Company in his possession or control.
14
16. |
Assignability; Binding Nature |
This Agreement shall inure to the benefit of, and be binding on, the parties and each of their respective successors, heirs (in Executives case) and assigns. No rights or obligations of the Company under this Agreement may be assigned or transferred by the Company except that such rights and obligations may be assigned or transferred pursuant to a merger or consolidation, or the sale or liquidation of all or substantially all of the business and assets of the Company; provided that the assignee or transferee is the successor to all or substantially all of the business and assets of the Company and such assignee or transferee contractually assumes the liabilities, obligations and duties of the Company, as contained in this Agreement.
17. |
Tax Payments; Clawback |
17.1 |
Tax and Social Security Payments. Executive hereby acknowledges and agrees that the payments and benefits granted to him under this Agreement shall be subject to income tax deductions and other mandatory tax deductions which the Company is required to deduct and/or withhold by applicable Law, and further represents that, except as specifically set forth in this Agreement, nothing in this Agreement shall be construed as imposing on the Company the obligation to pay taxes or any other obligatory payment imposed on Executive due to any payment or benefit, except that the Company shall pay taxes related to the use of car pursuant to Section 5.6. |
17.2 |
Clawback. All payments made pursuant to this Agreement are subject to the clawback provisions in the Compensation Policy as may be amended from time to time. By signing this Agreement, Executive grants the Company a power of attorney to deduct from the Monthly Salary and/or any other payments due to Executive by the Company, any amounts owed by him, in accordance with applicable Law and any Company clawback provisions in the Compensation Policy. |
18. |
Representations |
Executive represents that (a) he has provided to the Company complete and accurate information regarding the terms of all contracts, arrangements, agreements, policies or understandings applicable to Executive, with prior employers or otherwise, which include post-employment covenants including those relating to competition or solicitation of third parties and (b) he is not subject to (or has been released from all restrictive covenants under) any contract, arrangement, agreement, policy or understanding that in any way impacts his ability to enter into or fully perform his obligations under this Agreement. Executive and the Company each represent and warrant (i) that such party is not otherwise unable to enter into and fully perform such partys obligations under this Agreement; and (ii) that, upon the execution and delivery of this Agreement by both parties, this Agreement shall be such partys valid and binding obligation, enforceable against such party in accordance with its terms, except to the extent that enforceability may be limited by applicable bankruptcy, insolvency or similar laws affecting the enforcement of creditors rights generally, or otherwise as may be limited by applicable Laws. Notwithstanding any portion of this Agreement to the contrary, if any of Executives representations under this Section 18 prove to be inaccurate, the Company may immediately declare this Agreement null and void and Executives employment with the Company shall terminate immediately without obligation of any sort by the Company, including pursuant to any equity or other award previously issued to Executive.
15
19. |
Notices |
Any notice or other communication required or permitted to be delivered under this Agreement shall be (a) in writing; (b) delivered personally, by email received by the intended receiver of such email, by facsimile, by courier service or by certified or registered mail, first class postage prepaid and return receipt requested; (c) deemed to have been received on the date of delivery or, if so mailed, on the third business day after the mailing thereof; and (d) addressed as follows (or to such other address as the party entitled to notice shall hereafter designate in accordance with the terms hereof):
If to the Company: to the Companys headquarters, Attn: CEO;
If to Executive: to the last address on file with the Company.
Miscellaneous
19.1 |
Entire Agreement. As of the Effective Date, this Agreement shall constitute the entire agreement between the parties with respect to the subject matter hereof, and this Agreement (including the agreements attached hereto as Exhibits) shall supersede all prior representations, agreements and understandings (including any prior course of dealings), both written and oral, between the parties with respect to the subject matter hereof. |
19.2 |
Amendment or Waiver. No provision in this Agreement may be amended unless such amendment is set forth in writing that expressly refers to the provision of this Agreement that is being amended and that is signed by Executive and by an authorized officer of the Company. No waiver by either party of any breach of any condition or provision contained in this Agreement shall be deemed a waiver of any similar or dissimilar condition or provision at the same or any prior or subsequent time. To be effective, any waiver must be set forth in a writing signed by the waiving party and must specifically refer to the condition(s) or provision(s) of this Agreement being waived. |
19.3 |
Inconsistencies. Subject to applicable Law, in the event of any inconsistency between any provision of this Agreement and any provision of any applicable plan, program, agreement, corporate governance document or arrangement of the Company or its affiliates, the provisions of this Agreement shall control unless Executive and the Company otherwise agree in a writing that expressly refers to the provision of this Agreement whose control they are waiving. |
19.4 |
Headings; Construction. The headings of the sections and sub-sections contained in this Agreement are for convenience only and shall not be deemed to control or affect the meaning or construction of any provision of this Agreement. For purposes of this Agreement, the term including shall mean including, without limitation. |
16
19.5 |
Survivorship. The provisions of this Agreement that by their terms call for performance subsequent to the termination of either Executives employment or this Agreement (including the terms of Sections 7 through 13 and Section 19) shall survive such termination in accordance with their applicable terms. |
19.6 |
Governing Law; Severability. This Agreement shall be governed by the laws of the State of Israel, without regard to its conflict of laws rules. Whenever possible, each provision or portion of any provision of this Agreement shall be interpreted in such manner as to be effective and valid under Law but the invalidity or unenforceability of any provision or portion of any provision of this Agreement in any jurisdiction shall not affect the validity or enforceability of the remainder of this Agreement in that jurisdiction or the validity or enforceability of this Agreement, including that provision or portion of any provision, in any other jurisdiction. In addition, should a court or arbitrator determine that any provision or portion of any provision of this Agreement, is not reasonable or valid, either in period of time, geographical area, or otherwise, the parties agree that such provision should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable or valid. |
19.7 |
Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, but all such counterparts shall together constitute one and the same instrument. Signatures delivered by facsimile shall be effective for all purposes. |
19.8 |
Board Approvals. Any reference made in this Agreement to an approval required of the Board or a committee of the Board shall also include any approval of the Board or any committee of the Board as may be required by Law, the Compensation Policy or the Companys corporate documents. |
Signature page follows
17
IN WITNESS WHEREOF, the parties have executed this Agreement in one or more counterparts as of the Effective Date.
TEVA PHARMACEUTICAL INDUSTRIES LTD. |
/s/ Mark Sabag |
||
By: | Mark Sabag | |
Title: | Chief HR Officer | |
/s/ Kåre Schultz |
||
By: | Kåre Schultz | |
Title: | President & CEO |
EXECUTIVE | ||
/s/ Eli Kalif |
||
Name: | Eli Kalif | |
Dated: |
[Signature Page to Employment Agreement]
Exhibit A
Form of Release Agreement
This Release Agreement (this Release Agreement) is dated as of [_____________] and is entered into by Eli Kalif (Executive, Me or I) and TEVA PHARMACEUTICAL INDUSTRIES LTD. (the Company) in connection with the termination of Executives employment with the Company.
1. General Release.
(a) In consideration for the receipt of those payments that are in excess of the amounts required to be paid to Me by Law (as detailed in the settlement of account attached hereto), I, on behalf of myself and my family, agents, representatives, heirs, executors, trustees, administrators, attorneys, successors and assigns (the Releasors), hereby irrevocably and unconditionally (i) represent and warrant that I have received in a timely manner full and complete payment of all amounts due to Me under my employment agreement with the Company or under any applicable law and/or in connection with the termination of my employment, both at law and pursuant to the terms of the employment agreement, and (ii) release, settle, cancel, acquit, discharge and acknowledge to be fully satisfied, and covenant not to sue the Company and each of its respective past and/or present subsidiaries, affiliates, successors and assigns, and each of their respective predecessors, and past and/or present stockholders, partners, members, directors, managers, officers, employees, agents or other representatives, and employee benefit plans of the Company or its affiliates, including, but not limited to, trustees and administrators of these plans, in each case, in their individual and/or representative capacities (collectively, the Releasees) from any and all claims, contractual or otherwise, demands, costs, rights, causes of action, charges, debts, liens, promises, obligations, complaints, losses, damages and all liability of whatever kind and nature, whether known or unknown, and hereby waive any and all rights that I, he, she or it may have, from the beginning of time up to and including the time of signing this Release Agreement, in respect of my employment or separation from employment with the Company, or is in any way connected with or related to any applicable compensatory or benefit plan, program, policy or arrangement, including, but not limited to, any claims relating to salaries, benefits, bonuses, compensation, fringe benefits, social benefits according to any law or agreement, amounts of pension fund, overtime, severance pay, sick pay, recreation payments, vacation payments, prior notice payments, options or other securities, reimbursement of expenses and/or any other payments or benefits due to Me by any of the Releasees, or claims under any policy, agreement, understanding or promise, written or oral, formal or informal, between the Company and any of its affiliates and myself, now or hereafter recognized, including claims for wrongful discharge, slander and defamation, as well as all claims for counsel fees and costs; provided that such released claims shall not include any claims to enforce my rights under, or with respect to, any post-termination obligations of the Company expressly undertaken by the Company under my employment agreement with the Company (including vested accrued benefits and compensation under the Companys employee benefit plans and arrangements as set forth in Section 7 to the Employment Agreement), rights as a shareholder of the Company and rights to indemnification and liability insurance coverage.
A-1
(b) The Releasors agree not to bring any action, suit or proceeding whatsoever (including the initiation of governmental proceedings or investigations of any type) against any of the Releasees hereto for any matter or circumstance concerning which the Releasors have released the Releasees under this Release Agreement. Further, the Releasors agree not to encourage any other person or suggest to any other person that he, she or it institute any legal action against the Releasees, and I hereby declare, confirm and undertake that, if the Releasors or anyone else in their name should deliver a claim as mentioned above, I shall reimburse the Releasees and anyone else on their behalf to the full extent of the sum of the legal expenses and legal fees incurred by them as a result of any such claim; and in the event that Releasors prevail in such legal action, then the Releasees shall reimburse such sum to Me or the Releasors. The Releasors hereby agree to waive the right to any relief (monetary or otherwise) in any action, suit or proceeding I may bring in violation of this Release Agreement.
(c) This Release Agreement shall constitute a dismissal and compromise notice for the purposes of Section 29 of the Severance Pay Law 5713-1963.
2. Legal Advice, Reliance. I represent and acknowledge that (a) I have been given adequate time to consider this Release Agreement and have been advised to discuss all aspects of this Release Agreement with my private attorney, (b) I have carefully read and fully understand all the provisions of this Release Agreement, (c) I have voluntarily entered into this Release Agreement, without duress or coercion, and (d) I have not heretofore assigned or transferred or purported to assign or transfer, to any person or entity, any of the claims described in Section 1(a), any portion thereof or any interest therein. I understand that if I request additional time to review the terms of this Release Agreement, a reasonable extension of time shall be granted.
3. Miscellaneous.
(a) No Violation of Law. I agree and acknowledge that this Release Agreement is not and shall not be construed to be an admission by the Company of any violation of any applicable laws of Israel, or of any duty owed by the Company to Me.
(b) Governing Law; Severability. This Release Agreement shall be governed by the laws of the State of Israel, without regard to its conflict of laws rules. In the event that any one or more of the provisions of this Release Agreement is held to be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.
(c) Counterparts. This Release Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.
* * * * *
Very truly yours, |
EXECUTIVE |
|
Name: |
Dated: |
A-2
ACCEPTED AND AGREED: | ||
TEVA PHARMACEUTICAL INDUSTRIES LTD | ||
|
||
By: | ||
Title: | ||
|
||
By: | ||
Title: |
A-3
Exhibit B
Indemnification Agreement
Indemnification and Release Agreement
This Indemnification and Release Agreement (this Indemnification Agreement) is being entered into, pursuant to the resolutions of the Board of Directors (the Board) of Teva Pharmaceutical Industries Ltd., a company organized under the laws of the State of Israel (the Company), dated July 31, 2012 and the resolutions of the Human Resources and Compensation Committee of the Board, and the Audit Committee of the Board, each dated July 30, 2012.
It is in the best interest of the Company to retain and attract as office holders the most capable persons available and such persons are becoming increasingly reluctant to serve in companies unless they are provided with adequate protection through insurance, exemption and indemnification in connection with such service.
You are or have been appointed as an office holder of the Company, and in order to enhance your service to the Company in an effective manner, the Company desires to provide for your indemnification to the fullest extent permitted by law and the Companys Articles of Association (the Articles of Association). In consideration of your service to the Company, the Company hereby agrees as follows:
1. The Company hereby undertakes to indemnify you to the maximum extent permitted by the Articles of Association and the Israeli Companies Law, 5759 1999, as amended from time to time (the Companies Law), the Israeli Securities Law, 5728-1968, as amended from time to time (the Securities Law) and any other applicable law, in respect of the following expenses or liabilities imposed on, or incurred by, you in consequence of any act performed or omission committed by you in your capacity as an Office Holder (such term shall bear the meaning assigned to it in the Companies Law) of the Company (including your service, at the request of the Company, as an officer, director, employee or board observer of any other company controlled directly or indirectly by the Company (a Subsidiary) or in which the Company holds shares (an Affiliate)).
1.1 any monetary liability imposed on you in favor of another person by a court judgment, including a settlement or an arbitrators award which was approved by court;
1.2 reasonable litigation expenses, including attorneys fees, actually incurred by you in connection with an investigation or proceeding that was conducted against you by a competent authority which has been Terminated Without the Filing of an Indictment (as such term is defined in the Companies Law) against you and without the Imposition on you of a Monetary Liability In Lieu of a Criminal Proceeding (as such term is defined in the Companies Law), or which has been Terminated Without the Filing of an Indictment against you but with the Imposition on you of a Monetary Liability in Lieu of a Criminal Proceeding in respect of a crime which does not require the proof of mens rea (criminal intent) or in connection with a monetary sanction;
1.3 reasonable litigation expenses, including attorneys fees, actually incurred by you or charged to you by a court, in a proceeding instituted against you by the Company or on its behalf or by another person, or in any criminal proceeding in which you were acquitted, or in any criminal proceedings in which you were convicted of a crime which does not require the proof of mens rea (criminal intent); and
1.4 payment which you are obligated to make to an injured party as set forth in Section 52(54)(a)(1)(a) of the Securities Law, and expenses actually incurred by you in connection with a proceeding under Chapters H3, H4, or I1 of the Securities Law, including reasonable legal expenses, which term includes attorneys fees or in connection with Article D of Chapter Four of Part Nine of the Companies Law.
For the purpose of this Indemnification Agreement, expenses shall include, without limitation, attorneys fees and all other costs, expenses and obligations paid or incurred by you in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to defend, be a witness in or participate in any claim relating to any matter for which indemnification hereunder may be provided, and expenses paid or incurred by you in successfully enforcing this Indemnification Agreement. Expenses shall be considered paid or incurred by you at such time as you are required to pay or incur such cost or expenses, including upon receipt of an invoice or payment demand.
2. Notwithstanding the forgoing provisions of Section 1, except to the extent permitted by applicable law, the Company will not indemnify you for any amount you may be obligated to pay in respect of:
2.1 A breach of your duty of loyalty to the Company or a Subsidiary or Affiliate, unless committed in good faith and with reasonable grounds to believe that such act would not prejudice the interests of the Company or a Subsidiary or Affiliate;
2.2 A breach of your duty of care to the Company or a Subsidiary or an Affiliate committed intentionally or recklessly;
2.3 An action or omission taken by you with the intent of unlawfully realizing personal gain;
2.4 A fine, monetary sanction, forfeit or penalty imposed upon you; or
2.5 With respect to proceedings or claims initiated or brought voluntarily by you against the Company or a Subsidiary or an Affiliate, other than by way of defense, by way of third party notice to the Company or a Subsidiary or an Affiliate, or by way of countersuit in connection with claims brought against you.
3. To the fullest extent permitted by law, the Company will, following receipt by the Company of your written request therefor, make available all amounts payable to you in accordance with Section 1 above on the date on which such amounts are first payable by you (Time of Indebtedness), and with respect to items referred to in Sections 1.2, 1.3 and 1.4 above, even prior to the time on which the applicable court renders its decision, provided however, that advances given to cover legal expenses will be repaid by you to the Company if it is determined that you are not lawfully entitled to such indemnification.
A-2
As part of the aforementioned undertaking, the Company will make available to you any security or guarantee that you may be required to post in accordance with an interim decision given by a court or an arbitrator, including for the purpose of substituting liens imposed on your assets.
4. The Company will indemnify you and advance expenses in accordance with this Indemnification Agreement even if at the relevant Time of Indebtedness you are no longer an Office Holder of the Company or a Subsidiary or an Affiliate, provided that the obligations with respect to which you will be indemnified hereunder are in respect of actions taken or omissions committed by you while you were an Office Holder of the Company or such Subsidiary or such Affiliate as aforesaid, and in such capacity.
5. The undertaking of the Company set forth in Section 1.1 shall be limited as follows:
5.1 to matters that are connected or otherwise related to those events or circumstances set forth in Schedule A hereto.
5.2 the maximum amount for which the Company undertakes to indemnify you for the matters and circumstances described in Section 1.1, jointly and in the aggregate, shall not exceed US$ 200 million according to the representative rate of exchange, or any other official rate of exchange that may replace it, at the Time of Indebtedness calculated with respect to each Office Holder of the Company. Such amount has been determined by the Board to be reasonable under the circumstances.
6. Subject to the limitations of Section 5 above and Section 7 below, the indemnification hereunder will, in each case, cover all sums of money that you will be obligated to pay, in those circumstances for which indemnification is permitted under the law, the Articles of Association and under this Indemnification Agreement.
7. Notwithstanding anything to the contrary herein, the Company will not indemnify you for any liability with respect to which you have received payment by virtue of an insurance policy or another indemnification agreement, including, without limitation, an indemnification undertaking provided by a Subsidiary or an Affiliate, other than for amounts which are in excess of the amounts actually paid to you pursuant to any such insurance policy or other indemnity agreement (including deductible amounts not covered by insurance policies), all within the limits set forth in Section 5 above. In order to eliminate any duplication of benefits, the Company will be entitled to receive any amount collected by you from a third party in connection with liabilities actually indemnified hereunder, up to the amount actually paid to you by the Company as indemnification hereunder, to be transferred by you to the Company within fifteen (15) days following the receipt of the said amount.
In the event of payment by the Company pursuant to this Indemnification Agreement, the Company shall be subrogated to the extent of such payment to all of your rights of recovery, and you shall execute all documents required, and shall do everything that may be necessary, to secure such rights, including the execution of such documents necessary to enable the Company effectively to bring suit to enforce such rights.
A-3
8. In all indemnifiable circumstances, indemnification will be subject to the following:
8.1 You shall promptly notify the Company in writing of any legal proceedings initiated against you and of all possible or threatened legal proceedings for which you may seek indemnification hereunder, without delay, and in any event within seven (7) days following your first becoming aware thereof, provided, however, that your failure to notify the Company as aforesaid shall not derogate from your right to be indemnified as provided herein except and to the extent that such failure to provide notice prejudices the Companys ability to defend against such action or to conduct any related legal proceeding. You shall deliver to the Company, or to such person as it shall advise you, without delay all documents you receive in connection with these proceedings or possible or threatened proceedings. Notice to the Company shall be directed to the Chairman of the Board, and in the event you are the Chairman of the Board, to the Chairman of the Audit Committee, at the address of the Companys principal office (or at such other address as the Company shall advise you).
8.2 Other than with respect to proceedings that have been initiated against you by the Company or in its name, the Company shall be entitled to undertake the conduct of your defense in respect of such legal proceedings and/or to hand over the conduct thereof to any attorney which the Company may choose for that purpose, except to an attorney who is not, upon reasonable grounds, acceptable to you. In such case, the fees and expenses of such counsel shall be paid by the Company. The Company shall notify you of any such decision to defend within ten (10) calendar days of receipt of notice of any such proceeding.
The Company or the attorney as aforesaid shall be entitled, within the context of the conduct as aforesaid, to conclude such proceedings, all as they shall see fit, including by way of settlement.
Notwithstanding the foregoing, in the case of criminal proceedings, the Company or the attorneys as aforesaid will not have the right to plead guilty in your name or to agree to a plea-bargain in your name without your consent. Furthermore, in a civil proceeding (whether before a court or as a part of a compromise arrangement), the Company and/or its attorneys will not have the right to admit to any occurrences that are not indemnifiable pursuant to this Indemnification Agreement and/or pursuant to law, without your consent. However, the aforesaid will not prevent the Company or its attorneys as aforesaid, with the approval of the Company, to come to a financial arrangement with a plaintiff in a civil proceeding or to consent to the entry of any judgment against you or enter into any settlement, arrangement or compromise, in each case without your consent, so long as such arrangement, judgment, settlement or compromise: (i) does not include an admission of your fault, (ii) is fully indemnifiable pursuant to this Indemnification Agreement and pursuant to law and (iii) further provides, as an unconditional term thereof, the full release of you from all liability in respect of such proceeding. This paragraph shall not apply to a proceeding brought by you under Section 8.7 below.
8.3 You will fully cooperate with the Company and/or any attorney as aforesaid in every reasonable way as may be required of you within the context of their conduct of such legal proceedings, including but not limited to the execution of power(s) of attorney and other documents required to enable the Company or its attorney as aforesaid to conduct your defense in your name, and to represent you in all matters connected therewith, in accordance with the aforesaid and will give the Company all information and access to documents, files and your advisors and representatives as shall be within your power, in every reasonable way as may be required by the Company with respect to any such legal proceedings, provided that the Company shall cover all reasonable costs incidental thereto such that you will not be required to pay the same or to finance the same yourself, and provided, further, that you shall not be required to take any action that would reasonably prejudice your defense in connection with any indemnifiable proceeding.
A-4
8.4 Notwithstanding the provisions of Sections 8.2 and 8.3 above, (i) if in a proceeding to which you are a party by reason of your status as an Office Holder of the Company or any Subsidiary or Affiliate, the named parties to any such proceeding include both you and the Company or any Subsidiary or Affiliate, and joint representation is inappropriate under applicable standards of professional conduct due to a conflict of interest or potential conflict of interest (including the availability to the Company and its Subsidiary or Affiliate, on the one hand, and you, on the other hand, of different or inconsistent defenses or counterclaims) that exists between you and the Company, or (ii) if the Company fails to assume the defense of such proceeding in a timely manner, or (iii) if the Company refers the conduct of your defense to an attorney who is not, upon reasonable grounds, acceptable to you, you shall be entitled to be represented by separate legal counsel, which may represent other persons similarly situated, of the Companys choice and reasonably acceptable to you and such other persons, at the sole expense of the Company. In addition, if the Company fails to comply with any of its material obligations under this Indemnification Agreement or in the event that the Company or any other person takes any action to declare this Indemnification Agreement void or unenforceable, or institutes any action, suit or proceeding to deny or to recover from you the benefits intended to be provided to you hereunder, except with respect to such actions, suits or proceedings brought by the Company that are resolved in favor of the Company, you shall have the right to retain counsel of your choice, reasonably acceptable to the Company and at the expense of the Company, to represent you in connection with any such matter.
8.5 If, in accordance with Section 8.2 (but subject to Section 8.4), the Company has taken upon itself the conduct of your defense, you shall have the right to employ counsel in any such action, suit or proceeding, who shall fully update, and be fully updated by, the Company on the defense procedure and shall consult with, and be consulted with by, the Company and the attorney conducting the legal defense on behalf of the Company, but the fees and expenses of such counsel, incurred after the assumption by the Company of the defense thereof, shall be at your expense and the Company will have no liability or obligation pursuant to this Indemnification Agreement or the above resolutions to indemnify you for any legal expenses, including any legal fees, that you may incur in connection with your defense, unless the Company shall agree to such expenses; in which event all reasonable fees and expenses of your counsel shall be borne by the Company to the extent so agreed to by the Company.
8.6 The Company will have no liability or obligation pursuant to this Indemnification Agreement to indemnify you for any amount expended by you pursuant to any compromise or settlement agreement reached in any suit, demand or other proceeding as aforesaid without the Companys consent to such compromise or settlement, which consent shall not be unreasonably withheld.
8.7 The Board and/or applicable committee(s) thereof and/or any other person(s) authorized by the Board will consider the request for indemnification and the amount thereof and will determine if you are entitled to indemnification and the amount thereof. In the event that you make a request for payment of an amount of indemnification hereunder or a request for an advancement of indemnification expenses hereunder and the Company fails to timely determine your right to indemnification hereunder or fails to timely make such payment or advancement in
A-5
whole or in part, you may request that a determination with respect to your entitlement thereto shall be made in the specific case by an Independent Counsel agreed upon by the Company and you, and in the absence of such agreement, appointed by the head of the Israeli Bar Association. The Company agrees to pay the reasonable fees of the Independent Counsel referred to above and to fully indemnify such counsel against any and all expenses, claims, liabilities and damages arising out of or relating to this Indemnification Agreement or its engagement pursuant hereto, provided, however, that you shall reimburse the Company for any such fees, expenses, claims, liabilities and damages in the event the matter is resolved in favor of the Company. Independent Counsel means a law firm, or a member of a law firm, that is experienced in matters of Israeli corporate law and neither presently is, nor in the past five years has been, retained to represent: (i) the Company, an interested party (as defined in the Companies Law) of the Company or you in any matter material to either such party (other than in the capacity of Independent Counsel with respect to this Indemnification Agreement or similar indemnification agreements of the Company), or (ii) any other party to the proceeding giving rise to a claim for indemnification hereunder. Notwithstanding the foregoing, the term Independent Counsel shall not include any person who, under the applicable standards of professional conduct then prevailing, would have a conflict of interest in representing either the Company or you in an action to determine your rights under this Indemnification Agreement.
8.8 Neither the Company nor any of its agents, employees, directors or officers shall make any statement to the public or to any other person regarding any settlement of claims made pursuant to this Indemnification Agreement against you that would in any manner cast any negative light, inference or aspersion against you.
8.9 By signing this Indemnification Agreement you hereby accept that you shall not make any statement to the public or to any other person regarding any settlement of claims made pursuant to this Indemnification Agreement against you or the Company that would in any manner cast any negative light, inference or aspersion against the Company, and that you will keep the terms of such settlement confidential.
9. The Company hereby exempts you, to the fullest extent permitted by law and the Articles of Association, from any liability for damages caused as a result of a breach of your duty of care to the Company, provided that in no event shall you be exempt with respect to any actions listed in Section 2 above or for a breach of your duty of care in connection with a Distribution (as defined in the Companies Law).
10. Subject to Section 20 below, if any act, resolution, approval or other procedure is required for the validation of any of the undertakings in this Indemnification Agreement, the Company undertakes to cause them to be done or adopted in a manner which will enable the Company to fulfill all its undertakings as aforesaid.
11. To the fullest extent permitted by law and the Articles of Association (as stated above), nothing contained in this Indemnification Agreement shall derogate from the Companys right (but in no way shall the Company be obligated) to indemnify you post factum for any amounts which you may be obligated to pay as set forth in Section 1 above without regard to the limitations set forth in Section 5 above. Your rights of indemnification hereunder shall not be deemed exclusive of any other rights you may have under the Articles of Association or applicable law or otherwise.
A-6
12. If any undertaking included in this Indemnification Agreement is held invalid or unenforceable, such invalidity or unenforceability will not affect any of the other undertakings which will remain in full force and effect. Furthermore, if such invalid or unenforceable undertaking may be modified or amended so as to be valid and enforceable as a matter of law, such undertaking will be deemed to have been modified or amended, and any competent court or arbitrator is hereby authorized to modify or amend such undertaking, so as to be valid and enforceable to the maximum extent permitted by law.
13. This Indemnification Agreement and the agreements herein shall be governed by and construed and enforced in accordance with the laws of the State of Israel, without regard to the rules of conflict of laws, and any dispute arising from or in connection with this Indemnification Agreement is hereby submitted to the sole and exclusive jurisdiction of the competent courts in Tel Aviv, Israel.
14. This Indemnification Agreement cancels and replaces any preceding letter of indemnification or arrangement for indemnification that may have been issued to you by the Company. Notwithstanding the foregoing, the indemnification obligation set forth in this Indemnification Agreement will also apply, subject to the terms, conditions and limitations set forth in this Indemnification Agreement, with respect to actions performed, or omissions committed, in your capacity as an Office Holder of the Company or a Subsidiary or an Affiliate, during the period prior to the date of this Indemnification Agreement.
15. Neither the settlement nor termination of any proceeding nor the failure of the Company to award indemnification or to determine that indemnification is payable shall create an adverse presumption that you are not entitled to indemnification hereunder. In addition, the termination of any proceeding by judgment or order (unless such judgment or order provides so specifically) or settlement shall not create a presumption that you did not act in good faith and in a manner which you reasonably believed to be in or not opposed to the best interests of the Company or, with respect to any criminal action or proceeding, that you had reasonable cause to believe that your action was unlawful.
16. This Indemnification Agreement shall be (a) binding upon all successors and assigns of the Company (including any transferee of all or a substantial portion of the business, stock and/or assets of the Company and any direct or indirect successor by merger or consolidation or otherwise by operation of law), and (b) binding on and shall inure to the benefit of your heirs, personal representatives, executors and administrators. This Indemnification Agreement shall continue for your benefit and your heirs, personal representatives, executors and administrators benefit after you cease to be an Office Holder of the Company.
17. The obligations of the Company according to this Indemnification Agreement shall be interpreted broadly and in a manner that shall facilitate its execution, to the extent permitted by law, and for the purposes for which it was intended. In the event of a conflict between any provision of this Indemnification Agreement and any provision of the law which cannot be conditioned upon, changed or added to, the said provision of the law shall supersede the specific provision in this Indemnification Agreement, but shall not limit or diminish the validity of the remaining provisions of this Indemnification Agreement.
A-7
18. Subject to Section 20 below, the Company hereby agrees to indemnify and exempt you to the fullest extent permitted by law, notwithstanding that such indemnification or exemption is not specifically authorized by the other provisions of this Indemnification Agreement. In the event of any change after the date of this Indemnification Agreement in any applicable law, statute or rule which expands the right of an Israeli company to indemnify Office Holders, it is the intent of the parties hereto that you shall enjoy by this Indemnification Agreement the greater benefits afforded by such change and such changes shall to the extent permitted by applicable law be, ipso facto, within the purview of your rights and the Companys obligations pursuant to this Indemnification Agreement.
19. Subject to Section 5 above and notwithstanding anything else to the contrary herein, in the event of any change in the Articles of Association after the date of this Indemnification Agreement which narrows the Companys right to indemnify you under this Agreement, such change shall apply only with respect to actions performed, or omissions committed, by you in your capacity as an Office Holder of the Company, of a Subsidiary or of an Affiliate, after the date of such change, to the extent permitted by applicable law.
20. Notwithstanding anything to the contrary herein, nothing in this Indemnification Agreement shall require or obligate the Company to amend its Articles of Association, or take any action with respect thereto.
21. No waiver of any of the provisions of this Indemnification Agreement shall be deemed or shall constitute a waiver of any other provisions of this Indemnification Agreement (whether or not similar), nor shall such waiver constitute a continuing waiver. Any waiver shall be in writing.
22. All notices and other communications required or permitted under this Indemnification Agreement shall be in writing, shall be effective (i) if mailed, three (3) business days after mailing (unless mailed abroad, in which case it shall be effective five (5) business days after mailing), (ii) if by air courier, two (2) business days after delivery to the courier service, (iii) if sent by messenger, upon delivery, (iv) if sent via facsimile, upon transmission and electronic (or other) confirmation of receipt or (if transmitted and received on a non-business day) on the first business day following transmission and electronic (or other) confirmation of receipt and (iv) if sent by email, on the date of transmission or (if transmitted and received on a non-business day) on the first business day following transmission, except where a notice is received stating that such mail has not been successfully delivered.
23. This Indemnification Agreement shall continue in effect regardless of whether you continue to serve as an Office Holder of the Company.
24. This Indemnification Agreement may be executed in any number of counterparts, each of which shall be deemed an original and enforceable against the parties actually executing such counterpart, and all of which together shall constitute one and the same instrument; it being understood that parties need not sign the same counterpart. The exchange of an executed Agreement (in counterparts or otherwise) by facsimile or by electronic delivery in pdf format shall be sufficient to bind the parties to the terms and conditions of this Indemnification Agreement, as an original.
The Board has determined, based on the current activity of the Company, that the amount stated in Section 5 is reasonable under the circumstances, and that those events and circumstances specified in Schedule A are foreseeable in light of the Companys activities as of the date hereof.
A-8
Schedule A
All references in this schedule to the Company shall be deemed to refer to a Subsidiary or Affiliate as well, to the extent that your service as an office holder, director, employee or board observer of the Subsidiary or Affiliate is at the request of the Company in the circumstances described in the preface of Section 1 to the Indemnification Agreement.
1. The offering of securities by the Company and/or by a shareholder to the public and/or to private investors or the offer by the Company to purchase securities from the public and/or from private investors or other holders pursuant to a prospectus, agreement, notice, report, tender and/or other proceeding, whether in Israel, the United States or abroad;
2. Occurrences resulting from the Companys public filings or omissions to make a public filing, delisting of shares, or buy-back of Companys securities;
3. Occurrences in connection with investments the Company make in other corporations whether before and/or after the investment is made, entering into the transaction, the execution, development and monitoring thereof, including without limitation, actions taken by you in the name of the Company as an Office Holder and/or board observer of the corporation which is the subject of the transaction and the like;
4. The sale, purchase and holding of negotiable securities or other investments for or in the name of the Company;
5. Actions in connection with an actual or anticipated change in ownership, control or structure of the Company, its reorganization, dissolution, including without limitation, a merger, sale or acquisition of shares, or change in capital;
6. Actions in connection with any actual or proposed transaction not in the ordinary course of business of the Company, including without limitation, the sale, lease or purchase of any assets, subsidiary, operations and/or business, or part thereof, of the Company;
7. Actions concerning the approval of transactions of the Company with officers and/or directors and/or holders of controlling interests in the Company, and any other transactions referred to in Section 270 of the Companies Law;
8. Without derogating from the generality of the above, actions in connection with the purchase or sale of companies, legal entities, business, securities or assets, and the division or consolidation thereof, including without limitation, any Tender Offer, Forced Sale of Shares, Arrangement and Compromise (as such capitalized terms are defined in the Companies Law) or any reorganization, merger or consolidation of whatever kind or nature within the meaning of any law applicable to such claim or demand;
9. Actions taken in connection with labor relations and/or employment matters in the Company and trade relations of the Company, including without limitation, with employees, independent contractors, customers, suppliers and various service providers;
S-A-1
10. Actions in connection with products or services developed and/or commercialized by the Company, including without limitation, the performance of pre-clinical and clinical trials on such products, whether performed by the Company or by third parties on behalf of the Company, and/or in connection with the certification, distribution, sale, license or use of such products, including without limitation in connection with professional liability and product liability claims and/or in connection with the procedure of obtaining regulatory or other approvals regarding such products, whether in Israel or abroad and including without limitation, liabilities arising out of advertising or marketing, including without limitation, misrepresentations regarding the Companys products and unlawful distribution of emails;
11. Actions taken in connection with the intellectual property of the Company, and its protection, including without limitation, the registration or assertion of rights to intellectual property and the defense of claims related to intellectual property, including without limitation, any assertion that the Companys products violate, infringe, misappropriate or misuse the intellectual property rights of any third party;
12. Actions taken pursuant to or in accordance with the policies and procedures of the Company (including without limitation, tax policies and procedures), whether such policies and procedures are published or not;
13. Approval of corporate actions, in good faith, including without limitation, the approval of the acts of the Companys management, their guidance and their supervision;
14. Claims of failure to exercise business judgment and a reasonable level of proficiency, expertise and care in regard of the Companys business;
15. Violations of laws requiring the Company to obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction;
16. Claims in connection with publishing or providing any information, including without limitation, any filings with governmental authorities, on behalf of the Company in the circumstances required under applicable laws;
17. Any claim or demand made under any securities laws of any jurisdiction or by reference thereto, or related to the failure to disclose any information in the manner or time such information is required to be disclosed pursuant to any securities authority or any stock exchange disclosure or other rules, or any other claims relating to relationships with investors, debt holders, shareholders and the investment community; or related to inadequate or improper disclosure of information to investors, debt holders, shareholders and the investment community, claims relating to or arising out of financing arrangements, any breach of financial covenants or other obligations towards lenders or debt holders of the Company, class actions, violations of laws requiring the Company to obtain regulatory and governmental licenses, permits and authorizations in any jurisdiction; actions taken in connection with the issuance of any type of securities of Company, including without limitation, the grant of options to purchase any of the same, or related to the purchase, holding or disposition of securities of the Company or any other investment activity involving or effected by such securities, including, without limitation, any offering of the Companys securities to private investors or to the public, and listing of such securities, or the offer by the Company to purchase securities from the public or from private investors or other holders, and any undertakings, representations, warranties and other obligations related to any such offering, listing or offer or to the Companys status as a public company or as an issuer of securities;
S-A-2
18. Any claim or demand made by any lenders or other creditors or for monies borrowed by, or other indebtedness of, the Company;
19. Any claim or demand made directly or indirectly in connection with complete or partial failure, by the Company, or their respective directors, officers and employees, to pay, report, keep applicable records or otherwise, any state, municipal, federal, county, local, city or foreign taxes or other mandatory payments of any nature whatsoever, including, without limitation, income, sales, use, transfer, excise, value added, registration, severance, stamp, occupation, customs, duties, real property, personal property, capital stock, social security, unemployment, disability, payroll or employee withholding or other withholding, including without limitation, any interest, penalty or addition thereto, whether disputed or not;
20. Any claim or demand arising out of dealings by the Company with third parties, including without limitation, agents, employees, customers, suppliers, creditors or others;
21. Any claim or demand arising out of presentations or reports submitted or delivered (or not submitted or delivered) to shareholders (whether current or prospective), customers or creditors of the Company or to any governmental entity or agency, including without limitation, relevant securities authorities or commissions;
22. Any claim or demand made by purchasers, holders, lessors or other users of products of the Company, or individuals treated with or exposed to such products, for damages or losses related to such use or treatment;
23. Review, approval and actions taken in connection with the financial and tax reports of the Company, including without limitation, any action, consent or approval related to or arising from the foregoing, including without limitation, execution of certificates for the benefit of third parties related to the financial statements;
24. Claims in connection with anti-competitive laws and regulations and laws and regulation of commercial wrongdoing;
25. Claims in connection with breach of confidentiality obligations, acts in regard of invasion of privacy, including with respect to databases, and acts in connection with slander and defamation;
26. Claims or demands made by any third party suffering any personal injury and/or bodily injury and/or property damage to business or personal property through any act or omission attributed to the Company, or its employees, agents or other persons acting or allegedly acting on their behalf;
27. Any administrative, regulatory or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation by any governmental entity, including without limitation, the Office of the Chief Scientist or the Investments Center of the Israeli Ministry of Industry, Trade and Labor, the Israeli Antitrust Authority, the Israel Securities Authority, the United States Securities and Exchange Commission,
S-A-3
or other person alleging the failure to comply with any statute, law, ordinance, rule, regulation, order or decree of any governmental entity applicable to the Company, or any of its businesses, subsidiaries, assets or operations, or the terms and conditions of any operating certificate or licensing agreement;
28. Any action or decision regarding Distribution;
29. An announcement, a statement, including without limitation, a position taken, or an opinion made in good faith by an Office Holder in the course of his duties and in conjunction with his duties, including without limitation, during a meeting of the Board or one of the committees of the Board;
30. An act or omission undertaken in contradiction to the Companys Memorandum of Association or Articles of Association;
31. Any action or decision in relation to work safety and/or working conditions;
32. An act or omission undertaken in negotiating, signing and performing an insurance policy or any claim relating to a failure to maintain appropriate insurance and/or adequate safety measures;
33. Any claim or demand made by a customer, supplier, contractor or other third party transacting any form of business with the Company, in the ordinary course of their business, relating to the negotiations or performance of such transaction, or representations or inducements provided in connection therewith or otherwise.
34. Any administrative, regulatory, civil or judicial actions, orders, decrees, suits, demands, demand letters, directives, claims, liens, investigations, proceedings or notices of noncompliance or violation by any governmental entity or other person alleging potential responsibility or liability (including without limitation, potential responsibility or liability for costs of enforcement, investigation, cleanup, governmental response, removal or remediation, for natural resources damages, property damage, personal injuries, or penalties or for contribution, indemnification, cost recovery, compensation, or injunctive relief) arising out of, based on or related to (x) the presence of release, spill, emission, leaking, dumping, pouring, deposit, disposal, discharge, leaching or migration into the environment (each a Release) or threatened Release of, or exposure to, any hazardous, toxic, explosive or radioactive substances, wastes or other pollutants and all other substances or wastes of any nature regulated pursuant to any environmental law, at any location, whether or not owned, operated, leased or managed by the Company, or any of its subsidiaries, or (y) circumstances forming the basis of any violation of any environmental law, environmental permit, license, registration or other authorization required under applicable environmental and/or public health law.
S-A-4
Exhibit C
Confidentiality, Disclosure of Information and
Assignment of Inventions Agreement
To: Teva Pharmaceutical Industries Ltd. and its subsidiaries and affiliates (the Company)
Re: Proprietary Information, Non-Disclosure and Assignment of Inventions Agreement
The undersigned (Executive) hereby acknowledges that he will have access to, certain proprietary information, inventions, commercial secrets and other confidential information of the Company and may participate in the development, planning or marketing of the Companys products, in connection with Executives employment under the Employment Agreement entered into between the Company and Executive dated November 6, 2019 (hereinafter, the Employment Agreement). In relation to such confidential information Executive hereby undertakes as follows, in full knowledge that the force of this undertaking is in no way dependent upon the force of the Employment Agreement, is entirely independent from said agreement, does not in any way constitute a concurrent obligation with the obligations defined in the Employment Agreement and has been a material part of the consideration of his engagement by the Company:
1. |
Proprietary Information and Non-Disclosure |
1.1. |
Executive acknowledges and agrees that he will have access to or be involved in the planning, making or development of, confidential and proprietary information concerning the business and financial activities of the Company or its property, business, dealings, clients, suppliers, people or entities that come into contact with them, their operational methods, research or manufacturing process, plans and strategies, business plans, research projects, employees, marketing plans, supplier lists, customers, data, trade secrets, test results, formulas, processes, data and know-how, improvements, inventions, patents, application for patents, copyrights, trademarks, engineering specifications, product designs, technical information discoveries, studies, techniques, specifications, computer programs (in source and object code), databases, products (actual or planned) and information contained in computers, preservation of information methods, disks, diskettes, drawings, plans, communications, prospectuses, reports, prices, calculations, fees, work conditions in the Company or other agreement conditions which relate to the Company and documents of the Company. All such information, whether in documentary, written, oral or digital format, and whether received by Executive as a result of his employment with the Company or brought to his attention in any other manner, shall be deemed to be and referred to as Proprietary Information. For purposes of this Confidentiality, Disclosure of Information and Assignment of Inventions Agreement, the term Company shall include all entities within the Company Group (as defined in the Employment Agreement). |
Proprietary Information shall be deemed to include any and all proprietary information disclosed by or on behalf of the Company irrespective of form, but excluding information that (i) was known to Executive prior to his association with the Company and can be so proven by Executive by documentary evidence; (ii)
C-1
shall have appeared in any printed publication or patent of a third party or shall have become a part of the public knowledge except as a result of a breach of this Agreement by Executive; or (iii) shall have been received by Executive from a third party having no obligation to the Company.
In addition, the term Proprietary Information shall include information regarding salaries, bonuses and benefits paid or granted to Executive by the Company under the Agreement to which this Exhibit E is attached.
1.2. |
Executive agrees and declares that all Proprietary Information and rights in connection therewith are, and shall be, the sole property of the Company and its assignees. At all times, both during the term of his engagement with the Company and thereafter Executive will keep in strict confidence and trust all Proprietary Information, and Executive will not copy, transmit, reproduce, summarize, quote, publish and/or make any commercial or other use or disclose directly or indirectly any Proprietary Information or anything relating to it without the prior written consent of the Company, except as may be necessary in the ordinary course of performing Executives duties in his engagement with the Company and in the best interests of the Company. |
1.3. |
Executive recognizes that the Company received and will receive confidential or proprietary information from third parties subject to a duty on the Companys part to maintain the confidentiality of such information and to use it only for certain limited purposes. At all times, both during the term of his engagement with the Company and thereafter, Executive undertakes to hold and maintain all such information in strict confidence, and not to use or disclose any of such information without the prior written consent of the Company, except as may be necessary to perform his duties as an Executive of the Company and consistent with the Companys agreement with such third party. |
2. |
Assignment of Inventions |
2.1. |
Executive understands that the Company is engaged, involved or associated in a continuous program of investment, research, development, production or marketing in connection with its business and that, as an essential part of his engagement with the Company, he may make new contributions to and create know-how of value for the Company. |
2.2. |
During the term of his engagement, Executive undertakes and covenants that he will promptly disclose in confidence to the Company all inventions, improvements, ideas, themes, designs, original works of authorship, formulas, concepts, techniques, forecasts, test results and documentation, discoveries, models, drawings, tooling, schematics and other diagrams, instructional material, notes, records, algorithms, operating procedures methods, systems, processes, compositions of matter, computer software programs, databases, mask works, and trade secrets, whether or not patentable, copyrightable or protectable as trade secrets or under any other intellectual property right, that are made or conceived or first reduced to practice or created by him, either alone or jointly with others, in the course of his engagement with the Company and due to his engagement with the Company (Inventions). |
C-2
2.3. |
Executive agrees and represents, that all Inventions will be the sole and exclusive property of the Company and/or its assignees and undertakes to act with respect to such Inventions in accordance with the Companys applicable corporate policy. |
2.4. |
To the extent relevant, Executive agrees to keep and maintain adequate and current written records of all Inventions made by him (solely or jointly with others) during the term of his engagement. The records will be in the form of notes, sketches, drawings and any other format that may be specified by the Company. The records will be available to and remain the sole property of the Company at all times and will be returned to the Company upon the termination of Executives employment or earlier at the request of the Company. |
2.5. |
Executive hereby irrevocably transfers and assigns to the Company and/or its assignees and shall in the future take all reasonable steps (including by way of illustration only, signing all appropriate documents) to assign to Company and/or its assignees without additional consideration to Executive (other than Executives salary and other benefits to which he is entitled to as an employee of the Company (including without limitation, without any compensation or royalties in accordance with Sections 132 or 134 of the Patent and Design Act of 1967 (the Patent Law)): (a) all worldwide patents, patent applications, copyrights, mask works, trade secrets and other intellectual property rights, titles and interests, in any Invention, including, without limitation, service inventions under Section 134 of the Patent Law, and hereby further acknowledges and shall in the future acknowledge Companys full and exclusive ownership in all such Inventions; and (b) any and all Moral Rights (as defined below) that he may have in or with respect to any Invention. Executive also hereby forever waives and agrees never to assert any and all Moral Rights he may have in or with respect to any Invention, even after termination of his engagement with the Company. Moral Rights mean any rights of paternity or integrity, any right to claim authorship of an invention, to object to any distortion, mutilation or other modification of, or other derogatory action in relation to, any Invention, whether or not such would be prejudicial to his honor or reputation, and any similar right, existing under judicial or statutory law of any jurisdiction whatsoever, or under any treaty, regardless of whether or not such right is denominated or generally referred to as a moral right. |
2.6. |
Executive expressly waives all economic rights in the Inventions including without limitation any rights to royalties from any intellectual property right (specifically including patent rights under Section 134 of the Patent Law) and any right to receive any payment or other consideration whatsoever. |
2.7. |
Executive agrees to assist the Company in every reasonable way to obtain and enforce, for the benefit of the Company and/or its assignees exclusive and absolute title, right, interest, patents, copyrights, mask work rights, and other legal protections for the Inventions in any and all countries. Executive will execute any documents that may be reasonably requested of him for use in obtaining or enforcing such patents, copyrights, mask work rights, trade secrets and other legal protections. Executives obligations under this Section 2.7 will survive the termination of his engagement with the Company; provided that the Company will compensate him at a reasonable rate after such termination for time or expenses actually spent by him at the Companys request on such assistance. After the termination of Executives engagement with the Company, any assistance |
C-3
requested by the Company or any of its assignees pursuant to this Section 2.7 shall take into account Executives obligations towards third parties. Executive hereby irrevocably appoints the Company and/or its duly authorized officers and agents (including, without limitation, the chairman of the Board) as his attorney-in-fact to execute documents on his behalf for this purpose and agrees that, if the Company is unable because of Executives unavailability, mental or physical incapacity, or for any other reason, to secure Executives signature for the purpose of applying for or pursuing any application for any Israeli or foreign patents or mask work or copyright registrations covering the Inventions assigned to the Company in this Section 2, to act for and on Executives behalf to execute and file any such applications and to do all other lawfully permitted acts to further the prosecution and issuance of patents, copyright and mask work registrations with the same legal force and effect as if executed by Executive. |
2.8. |
Executive hereby acknowledge and agrees that the salary and other benefits provided to him under his Employment Agreement constitute appropriate, full and fair consideration in connection with his employment with the Company, including, without limitation, with respect to this Agreement and including with respect to Executives undertakings under this Section 2, and with respect to any Inventions created, conceived or reduced to practice or that may be created, conceived or reduced to practice by Executive, either alone or jointly with others, in the course of his employment with the Company, all of which are assigned to the Company in accordance with this Agreement, and Executive hereby unconditionally and irrevocably waives any right that he may have to receive any additional payment or other consideration whatsoever to which Executive may be entitled with respect to any Invention pursuant to any applicable law, in any jurisdiction, including (but not limited to) pursuant to Section 134 of the Patent Law, or any provision that may supersede it. In the event that for any reason such right cannot be waived, Executive hereby assigns and transfers to the Company any such right Executive may have to receive any additional payment or other consideration whatsoever with respect to any Invention pursuant to any applicable law, including the Patent Law, in any jurisdiction. |
2.9. |
The provisions of this Section 2 shall survive termination or expiration of the Employment Agreement and shall be and remain in full force and effect at all times thereafter. |
2.10. |
Executive acknowledges that the Company has entered into the Employment Agreement in reliance on his undertaking set forth in this Section, and that given his access to information regarding the Company, the provisions of this Section 2 are reasonable and necessary to protect the Companys business and rights. |
2.11. |
If any one or more of the terms contained in this Proprietary Information, Assignment of Inventions and Non-Disclosure Agreement shall for any reason be held to be excessively broad with regard to time, geographic scope or activity, the term shall be construed in a manner to enable it to be enforced to the extent compatible with applicable law. |
3. |
Miscellaneous |
3.1. |
Governing Law. This Agreement shall be governed by and construed according to the laws of the State of Israel. Any dispute arising under or relating to this Agreement or any transactions contemplated herein shall be resolved in accordance with Section 20.6 of the Employment Agreement. |
C-4
3.2. |
Injunctive Relief. Any breach of this Agreement may cause irreparable harm to the Company, for which damages would not be an adequate remedy, and therefore, the Company will be entitled to injunctive relief from any court of competent jurisdiction as such court so determines, restraining any violation or further violation of this Agreement by Executive. The Companys right to injunctive relief shall be cumulative and in addition to any other remedies provided by law or equity and without any requirement to post bond. |
C-5
IN WITNESS WHEREOF, Executive has signed this Proprietary Information, Non-Disclosure and Assignment of Inventions Agreement as of November 6, 2019.
EMPLOYEE | ||
|
||
ACCEPTED AND AGREED: | ||
TEVA PHARMACEUTICAL INDUSTRIES LTD | ||
|
||
Name: | ||
Title: | ||
|
||
Name: | ||
Title: |
C-6
Exhibit 10.29
Private & Confidential
Full Name
September 18, 2017
Special Award
Dear Name,
There are numerous reasons to believe in Teva and they start with people like you who are loyal, dedicated and professional. We are committed to maintaining a strong focus on our people, enhancing professional and leadership capabilities, while embracing a diverse range of perspectives.
We would like to recognize the critical role you play in Teva and to ensure your continued valuable contribution to the companys future.
Therefore, we are pleased to inform you that you have been selected by the Teva Executive Committee (TEC) to receive a one-time Special Award.
The Special Award has a total value of approximately NIS _________ divided among the following three components:
NIS _________ in cash (pre-tax), _________ Options and _________ RSUs*.
50% of the award shall vest in September 2018; and 50% of the award shall vest in September 2019.
* |
Number of Options and RSUs were determined based on the fair values of Options and RSUs as of August 11, 2017 ($5.47 and $16.5 respectively) and the average FX rate of August 2017. Please note that the fair value on grant date may differ and the final value of Options and RSUs on grant date shall be computed based on the number of units listed above. |
The Special Award is subject to the terms and conditions set forth in the attached document, Conditions for Special Award.
We strongly believe in the company and in your contribution to its success. We look forward to your continued commitment towards Tevas short and long-term strategic goals.
Sincerely,
Dr. Sol J. Barer Chairman of the Board of Directors |
Dr. Yitzhak Peterburg Interim President and Chief Executive Officer |
Private & Confidential
Conditions for Special Award
|
The cash component is payable only if the employee is actively employed by the Company on the applicable vesting and payment date(s) set out in the Special Award letter. For the avoidance of doubt, notice period shall not be deemed as active employment. |
|
The vested portion of the cash component shall be payable on the next regular payroll date immediately following the applicable vesting date. |
|
The equity award will be subject to the terms and conditions of Tevas 2015 Long-Term Equity-Based Incentive Plan (including any applicable sub-plans and the terms of the award agreement which may contain additional terms and conditions) (the 2015 Plan). |
|
Confidentiality is a condition to employees receipt of the Special Award to the maximum extent permitted by applicable law. Therefore, if employee discloses the details of the Special Award, the Company reserves the right to withhold the payment, unless prohibited by applicable law. |
|
Please note that this letter does not constitute a contract of employment and/or an offer to enter into a contract of employment for any specific period of time. |
|
The Special Award is a one-time special award. Receipt of all or part of the Special Award shall not in any way give rise to a right to receive the same or similar awards and/or payments in the future. |
|
To the extent mandated by applicable law, the Special Award shall be subject to required withholdings and deductions. |
|
The Special Award and any payment thereof shall not be taken into account for benefit contribution or severance calculation. |
Exhibit 10.30
AWARD AGREEMENT
This Award Agreement (this Agreement), is made effective as of [], between Teva Pharmaceutical Industries Limited (the Company) and [] (the Participant). Capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Companys 2015 Long-Term Equity-Based Incentive Plan (the Plan).
Pursuant to Sections 5 and 7 of the Plan, the Company hereby grants to the Participant as of the Grant Date (as defined below) the number of Options and/or Restricted Share Units (RSUs) (Options and RSUs are collectively and individually referred to herein as Awards) set forth below, subject to the terms and conditions contained herein and in the appendices attached hereto, as well as the terms and conditions of the Plan, which are incorporated herein in their entirety.
Total Fair Value of Award: | $[] | |
Fair Value of each Option: | $[] | |
Fair Value of each RSU: | $[] | |
Options Granted: | [], which represents approximately fifty percent (50%) of the Total Fair Value of Award divided by the Fair Value of each Option, calculated as follows: the difference between the Total Fair Value of Award and the product of (i) the Fair Value of each RSU and (ii) the number of RSUs granted is divided by the Fair Value of each Option, and the result is rounded up to the nearest whole number. | |
RSUs Granted: | [], which represents approximately fifty percent (50%) of the Total Fair Value of Award divided by the Fair Value of each RSU rounded down to the nearest whole number. | |
Grant Date: | [] |
Vesting of First [Third (1⁄3) / Quarter (1⁄4)] of Awards Granted: | First Anniversary of the Grant Date.1 | |
Vesting of Second [Third (1⁄3)/ Quarter (1⁄4) of Awards Granted: | Second Anniversary of the Grant Date. | |
[Vesting of Third Quarter (1⁄4) of Awards Granted:] | [Third Anniversary of the Grant Date.] | |
Vesting of Balance of Awards Granted: | [Third / Fourth] Anniversary of the Grant Date. | |
Option Exercise Price: | $[], the Fair Market Value per Share on the Grant Date. | |
Option Expiration Date: | Tenth Anniversary of the Grant Date. |
1. |
Options. |
(A) Grant of Options. As set forth above, the Company hereby grants to the Participant, as of the Grant Date, the number of Options as set forth in the table above to purchase an equal number of Shares.
(B) No Obligation to Exercise Options. The grant and acceptance of Options pursuant to this Agreement do not impose any obligation on the Participant to exercise them.
1 |
Note to Draft: Vesting schedule to be updated as necessary, as directed by the Human Resources and Compensation Committee. |
- 2 -
2. |
Restricted Share Units. |
(A) Grant of RSUs. As set forth above, the Company hereby grants to the Participant, as of the Grant Date, the number of RSUs as set forth in the table above.
(B) No Issuance at Grant. No Shares shall be issued or delivered to the Participant at the time the RSUs are granted.
3. |
Other Provisions. |
(A) Vesting. The Awards granted hereunder shall vest and become exercisable or settle, as the case may be, as set forth in the table above.
(B) Termination of Employment. In addition to the provisions of the Plan related to the treatment of Options and RSUs upon Termination, as applicable, the Companys Qualifying Retirement and Qualifying Termination Policy as in effect from time to time will be deemed to be is incorporated herein by reference and made a part hereof.
(C) Withholding. The Company or the Employer, or a third party holding Awards on behalf of the Participant, shall have the right to make all payments or distributions pursuant to this Agreement to the Participant net of any applicable taxes, fees or other required deductions, such as, but not limited to, income taxes, capital gains taxes, social security premiums, and custody fees, trustee charges, fees for exercise and/or transfer of any Award or its underlying Share payable by the Participant or required to be paid or withheld as a result of the exercise of an Option, the settlement of an RSU, the delivery of a Share or its transfer, and any other event occurring pursuant to the Plan or this Agreement, that necessitates the withholding of income, employment or capital gains taxes or any other required deductions or payments (hereinafter referred to as Taxes). The Company or the Employer, may withhold from wages or other amounts payable to the Participant such Taxes as may be required by law or otherwise payable by the Participant, or to otherwise require the Participant to pay such Taxes.
(D) Other Effective Documents; Other Agreements.
(i) |
The terms and provisions of the Plan are incorporated herein by reference and made a part hereof. In case of contradiction between the terms of this Agreement and/or its appendices and/or the Plan, it is agreed that the terms of the Plan shall prevail over the terms of this Agreement and any appendix, and that the terms of any appendix shall prevail over the terms of this Agreement. The Participant agrees to (x) execute and become a party to the agreements set forth in any appendix attached hereto, (y) the terms of an Award administration framework agreement and its terms and conditions, as may be set forth in an appendix or as requested by the Company or the Employer in the future, and shall also agree to such agreement in writing, and (z) to the extent applicable, to adhere to the terms of the Companys insider trading policy. |
- 3 -
(ii) |
The Participant is advised to exercise caution in relation to the Awards. If the Participant is in any doubt about any of the contents of the Plan or this Agreement, the Participant should obtain independent professional advice. Receiving Awards may have tax consequences under local tax laws. Neither Teva nor any of its Affiliates is responsible for, and has not provided, any advice to the Participant in relation to the Plan or the Awards, including but not limited to legal, investment or tax advice. |
(iii) |
By accepting the Awards, the Participant acknowledges his or her consent to receive the documents relating to participation in the Plan and evidencing the Awards in the English language only. The Participant also confirms that he or she fully understands the contents of the English language versions of such documents. Further, the Participant acknowledges that he or she is fluent, and regularly conducts business, in the English language as a part of his or her duties and responsibilities to Teva. |
(iv) |
The Participant acknowledges and agrees that, if the Participants employment location changes or the Participants employment transfers to a different Employer, whether the Participant will be able to continue participating in the Plan will depend on the Participants circumstances and will be determined by Teva in its discretion in accordance with the Plan. |
(E) Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators, and successors of the parties hereto.
(F) Governing Law. This Agreement (including, for the avoidance of doubt, any appendices attached hereto) shall be construed and interpreted in accordance with the local laws of country where the Participant is or was last employed by the Employer without giving effect to the principles of the conflicts of laws thereof.
(G) Entire Agreement; Modification. This Agreement (together with any appendices attached hereto) and the Plan constitute the entire agreement between the parties relative to the subject matter hereof, and supersede all proposals, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. This Agreement may be modified, amended, or rescinded only by a written agreement executed by both parties.
(H) No Employee-Employer Relationship. Nothing in this Agreement shall create employee-employer relationship between the Company and the Participant.
- 4 -
(I) Counterparts; Electronic Signature. This Agreement may be signed in counterparts, each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. Signature of this Agreement, unless otherwise stipulated in any appendix, may be by electronic or digital means.
By accepting the Award, the Participant hereby certifies that the Participant (A) has been furnished with all relevant information and materials with respect to the terms and conditions of the Award, (B) has read and understands such information and materials, (C) is fully aware and knowledgeable of the terms and conditions of the Award, and (D) completely and voluntarily agrees to the terms and conditions of the Award, as set forth in the Plan and this Agreement.
I acknowledge that I have read this Agreement and all appendices and I
- 5 -
Exhibit 10.31
AWARD AGREEMENT
This Award Agreement (this Agreement), is made effective as of [], between Teva Pharmaceutical Industries Limited (the Company) and [] (the Participant). Capitalized terms used and not otherwise defined herein shall have the meanings assigned thereto in the Companys 2015 Long-Term Equity-Based Incentive Plan (the Plan).
Pursuant to Sections 7 and 8 of the Plan, the Company hereby grants to the Participant as of the Grant Date (as defined below) the number of Restricted Share Units (RSUs) and Performance Share Units (PSUs) (RSUs and PSUs are collectively and individually referred to herein as Awards) set forth below, subject to the terms and conditions contained herein and in the appendices attached hereto, as well as the terms and conditions of the Plan and the Compensation Policy, as may be amended from time to time at the Companys sole discretion, which are incorporated herein in their entirety. All dollar amounts in this Agreement are in U.S. dollars.
Total Fair Value of the Award: | $[] | |
Fair Value of each RSU: | $[] | |
Fair Value of each PSU: | $[] | |
RSUs Granted: | [], which represents approximately [] of the Total Fair Value of the Award divided by the Fair Value of each RSU, rounded down to the nearest whole number. | |
Target Number of PSUs Granted: |
[], which represents approximately [] of the Total Fair Value of the Award divided by the Fair Value of each PSU, rounded down to the nearest whole number.
The Target Number of PSUs Granted represents the number of PSUs that would be earned, subject to vesting, if the Company were to achieve the target level of the PSU Performance Objectives and the target Relative TSR Modifier during the PSU Performance Period. The number of PSUs earned, if any, is subject to an increase or decrease based on the Companys actual achievement of the PSU Performance Objectives during the PSU Performance Period, as modified by the Relative TSR Modifier, and may range from [] to [] of the Target Number of PSUs Granted. |
|
Grant Date: | [] |
W/3012824
Vesting of [] of RSUs Granted: | [] anniversary of the Grant Date, subject to the Participants continued employment through such date. | |
Vesting of [] of RSUs Granted: | [] anniversary of the Grant Date, subject to the Participants continued employment through such date. | |
Vesting of the Balance of RSUs Granted: | [] anniversary of the Grant Date, subject to the Participants continued employment through such date. | |
Settlement of Vested RSUs: | Upon vesting, RSUs shall be settled by delivering one Share for each RSU (or the cash value of one Share, if so determined by the Committee) that vested as soon as practicable, but in any event no later than thirty (30) days, following the vesting date. | |
PSU Performance Period: | [] | |
PSU Performance Objectives: |
[] Performance Objective
[] Performance Objective |
|
Relative TSR Modifier: | The Relative TSR Modifier will be determined based on the Companys Relative TSR Percentile Rank for the PSU Performance Period, in accordance with the following table: |
Achievement Level |
Relative TSR Percentile Rank |
Relative
TSR Modifier |
||
Minimum |
Up to [] Percentile | [] % | ||
Target |
[] Percentile | [] % | ||
Maximum |
[]Percentile or above | [] % |
Linear interpolation shall be used to determine the Relative TSR Modifier between Achievement Levels.
For purposes hereof, the following terms have the following meanings:
Beginning Stock Price with respect to any company means the average of the closing prices of such companys stock for each of the sixty (60) trading days ending on (and including) the day immediately prior to the first day of the PSU Performance Period. |
- 2 -
Ending Stock Price with respect to any company means the average of the closing prices of such companys stock for each of the sixty (60) trading days ending on (and including) the last day of the PSU Performance Period.
Peer Group means the following group of companies: []
Relative TSR Percentile Rank means the percentile rank of the TSR of the Company relative to the TSR of the companies in the Peer Group, in each case, for the PSU Performance Period, equal to the product of (i) the quotient of (a) the numeric rank of Companys TSR relative to the Peer Group, where the lowest TSR in the Peer Group is ranked number 1, and (b) the total number of companies in the Peer Group plus 1, rounded to the nearest hundredth, and (ii) 100.
TSR as of a given date means the percentage change in the value of companys stock from the Beginning Stock Price to the Ending Stock Price calculated as the quotient of (i) (a) the applicable Ending Stock Price minus the applicable Beginning Stock Price, plus (b) dividends paid with respect to a record date occurring during the PSU Performance Period, divided by (ii) the applicable Beginning Stock Price. |
||
Earned PSUs: | The number of PSUs earned, if any, subject to vesting (Earned PSUs), will be based on the achievement of the PSU Performance Objectives for the PSU Performance Period, as determined in accordance with the following table and as adjusted by the Relative TSR Modifier. Performance will be measured for each PSU Performance Objective, and the arithmetic mean of the Applicable Earning Percentage of the [] Performance Objective and the Applicable Earning Percentage of the [] Objective shall equal the Applicable Earning Percentage of the PSU Performance Objectives: |
Achievement Level |
Percentage Achievement of
PSU Performance Objectives |
Applicable Earning
Percentage |
||
Below Threshold |
[] | [] | ||
Threshold |
[] | [] | ||
Target |
[] | [] | ||
Maximum |
[] | [] | ||
Above Maximum |
[] | [] |
- 3 -
Linear interpolation shall be used to determine the Applicable Earning Percentage between Achievement Levels.
The number of Earned PSUs shall equal the product of (i) the Target Number of PSUs Granted, (ii) the Applicable Earning Percentage and (iii) the Relative TSR Modifier; provided, however, that the number of Earned PSUs shall not be greater than [] % of the Target Number of PSUs Granted.
Any PSUs that do not become Earned PSUs based on performance during the PSUs Performance Period shall not be eligible to vest pursuant to this Agreement and shall immediately be forfeited to the Company for no consideration upon expiration of the PSU Performance Period. |
||
Vesting Date of Earned PSUs (if any): | [] anniversary of the Grant Date, subject to the Participants continued employment through such date. | |
Settlement of Vested, Earned PSUs: | Upon vesting, Earned PSUs shall be settled by delivering one Share for each Earned PSU (or the cash value of one Share, if so determined by the Committee) that vested as soon as practicable, but in any event no later than thirty (30) days, following the vesting date. |
- 4 -
1. |
Restricted Share Units. |
(A) Grant of RSUs. As set forth above, the Company hereby grants to the Participant, as of the Grant Date, the number of RSUs as set forth in the table above.
(B) No Share Issuance at Grant. No Shares shall be issued or delivered to the Participant at the time the RSUs are granted.
2. |
Performance Share Units. |
(A) Grant of PSUs. As set forth above, the Company hereby grants to the Participant, as of the Grant Date, the Target Number of PSUs Granted as set forth in the table above.
(B) No Share Issuance at Grant. No Shares shall be issued or delivered to the Participant at the time the PSUs are granted.
(C) Determination of the Earned PSUs. The Human Resources and Compensation Committee (the Committee) and the Board shall have the sole authority to determine the level of achievement of the PSU Performance Objectives and the Relative TSR Modifier and to calculate the number of Earned PSUs, and shall do so as soon as practicable following the completion of the PSU Performance Period and release of Financial Statements as set forth in the table above. For the avoidance of doubt, nothing herein shall derogate from the Committees and the Boards discretion to reduce variable compensation.
(D) Adjustment of PSU Performance Objectives. The Committee and, as applicable, the Board shall have the discretion to adjust (increase or decrease) the PSU Performance Objectives and their relative weights as set forth in the table above if one or more of the following items of gain, loss, profit or expense, having a material impact on the PSU Performance Objectives, is: (i) determined to be extraordinary, unusual or non-recurring in nature; (ii) related to changes in accounting principles under GAAP or tax laws; (iii) related to currency fluctuations; (iv) related to productivity initiatives or new business initiatives; (v) related to discontinued operations that do not qualify as a segment of business under GAAP; or (vi) attributable to the business operations or assets of any entity acquired or licensed by the Company during the fiscal year, to the extent the Committee or the Board, as applicable, determines that the adjustment is necessary or advisable to avoid the dilution or enhancement of the intended incentives and benefits of the PSUs or if such adjustments were reflected in the Companys public non-GAAP financial results.
3. |
Other Provisions. |
(A) Vesting. The Awards granted hereunder shall vest and settle as set forth in the table above.
(B) Termination of Employment. In order to vest in the Awards, the Participant must be actively employed by the Company or its Affiliates on the applicable vesting date, except as expressly provided in the Participants employment agreement including any amendment thereof and/or company policy applicable to Participant and/or the Plan.
- 5 -
(C) Withholding. The Company or the Employer, or a third party holding Awards on behalf of the Participant, shall have the right to make all payments or distributions pursuant to this Agreement to the Participant net of any applicable taxes, fees or other required deductions, such as, but not limited to, income taxes, capital gains taxes, social security premiums, and custody fees, trustee charges, fees for transfer of any Award or its underlying Share payable by the Participant or required to be paid or withheld as a result of the settlement of an RSU or a PSU, the delivery of a Share or its transfer, and any other event occurring pursuant to the Plan or this Agreement, that necessitates the withholding of income, employment or capital gains taxes or any other required deductions or payments (hereinafter referred to as Taxes). The Company or the Employer, may withhold from wages or other amounts payable to the Participant such Taxes as may be required by law or otherwise payable by the Participant, or to otherwise require the Participant to pay such Taxes.
(D) Other Effective Documents; Other Agreements.
(i) |
The terms and provisions of the Compensation Policy and the Plan are incorporated herein by reference and made a part hereof. In case of contradiction between the terms of this Agreement and/or its appendices and/or the Plan and/or the Compensation Policy, it is agreed that the terms of the Plan and the Compensation Policy shall prevail over the terms of this Agreement and any appendix, and that the terms of any appendix shall prevail over the terms of this Agreement. The Participant agrees (x) that by not declining this Agreement within 30 days following Grant Date, he/she will become a party to the agreements set forth in any appendix attached hereto, (y) to the terms of an Award administration framework agreement and its terms and conditions, as may be set forth in an appendix or as requested by the Company or the Employer in the future, and shall also agree to such agreement in writing and (z) to the extent applicable, to adhere to the terms of the Companys insider trading policy. In addition to any restrictions on resale and transfer noted in the Plan, Shares acquired pursuant to the Plan may be subject to certain restrictions on resale and/or disclosure of such sale imposed by local securities laws. Accordingly, the Participant is encouraged to seek legal advice prior to any resale of such Shares. |
(ii) |
The Participant is advised to exercise caution regarding the Awards. If the Participant is in any doubt about any provisions of the Plan or this Agreement, the Participant should obtain independent professional advice. Receiving Awards may have tax consequences under local tax laws. Neither the Company nor any of its Affiliates is responsible for, and has not provided, any advice to the Participant regarding the Plan or the Awards, including but not limited to legal, investment or tax advice. |
(iii) |
The Participant acknowledges and agrees that, if the Participants employment location changes or the Participants employment transfers to a different Employer, whether the Participant will be able to continue participating in the Plan will depend on the Participants circumstances and will be determined by Teva in its discretion in accordance with the Plan. |
- 6 -
(E) Clawback/Recoupment Policy. By signing this Agreement, the Participant grants the Employer a power of attorney to deduct from any payments due to the Participant by the Employer, any amounts owed by the Participant under Section 21(e) of the Plan, in accordance with applicable law.
(F) Binding Effect. This Agreement shall be binding upon the heirs, executors, administrators, and successors of the parties hereto.
(G) Governing Law. This Agreement (including, for the avoidance of doubt, any appendices attached hereto) shall be construed and interpreted in accordance with the local laws of country where the Participant is or was last employed by the Employer without giving effect to the principles of the conflicts of laws thereof.
(H) Entire Agreement; Modification. This Agreement (together with any appendices attached hereto) and the Plan constitute the entire agreement between the parties relative to the subject matter hereof, and supersede all proposals, written or oral, and all other communications between the parties relating to the subject matter of this Agreement. This Agreement may be modified or amended in accordance with Section 18 of the Plan.
(I) Counterparts; Electronic Signature. The award agreement shall be deemed automatically accepted by the Participant and the Participant shall be subject to all its terms and conditions, unless the Participant clicks the I decline button at the end of the award agreement on Equate+ within 30 days following the Grant Date. The Participant certifies that the Participant (A) has been furnished with all relevant information and materials with respect to the terms and conditions of the Award, (B) has read and understands such information and materials, (C) is fully aware and knowledgeable of the terms and conditions of the Award, and (D) completely and voluntarily agrees to the terms and conditions of the Award, as set forth in the Plan and this Agreement.
- 7 -
Exhibit 10.32
Amendment to Employment Agreement
This Amendment to the Employment Agreement (the Amendment) is entered into on this 5 day of February 2020 (the Effective Date), and is made by and between TEVA PHARMACEUTICAL INDUSTRIES LTD., an Israeli corporation located at 5 Basel Street, Petach Tikwa, Israel, Company No. 52-001395-4 (the Company, Teva), and Eli Kalif (Executive).
WHEREAS, the Company and the Executive entered into an Employment Agreement dated November 6, 2019 (the Agreement); and
WHEREAS, the Executives requested to limit the part of his Monthly Salary (as such term is defined in the Agreement) from which the Companys and the Executives contributions are made to the Study Fund in accordance with Sub Section 5.5 of the Agreement to 100,000 New Israeli Shekels (the Maximum Cap), and to receive the difference between the contribution rates for the Study Fund set forth in Sub Section 5.5 of the Agreement and the contribution rates to the Maximum Cap, as a special supplement to the salary (hereinafter Supplement in lieu of Study Fund); and
WHEREAS, the Company has accepted the Executives request subject to the terms detailed in this Amendment;
NOW, THEREFORE, THE PARTIES HAVE AGREED AS FOLLOWS:
1. |
Capitalized terms used in this Amendment and not otherwise defined herein, shall bear the meaning ascribed to them in the Agreement. |
2. |
As of February 2020 Monthlys Salary, the Companys contribution to the Study Fund pursuant to Sub Section 5.5 of the Agreement shall be made out of Monthly Salary only up to the Maximum Cap and the Company shall pay the Executive on a monthly basis the Supplement in lieu of Providence. |
3. |
It is hereby acknowledged and agreed that the Supplement in lieu of Study Fund shall not be deemed part of the Executives Salary for any purpose, including without derogating from the foregoing, for the purpose of payment of severance pay and any other entitlement calculated as a percentage of Executives Monthly Salary, and this Amendment shall not impose on the Company any additional current or future cost or expense, directly or indirectly. |
4. |
The Executive hereby explicitly waives any and all claim and/or demand and/or lawsuit of any kind with respect to the scope of the Study Fund contributions. The Executive undertakes to indemnify the Company for any damage and/or cost and/or expense incurred by the Company as a result of any demand and/or lawsuit filed by him and/or on his behalf in connection with the foregoing. |
5. |
The Executive shall be entitled to cancel and/or modify the arrangement specified in this Amendment, including the amount of the Maximum Cap, by providing the Company with a written request and the Company shall accept such request. For the sake of clarity, any such request made following the 15th day of a month shall apply to Monthly Salaries of the following month in which such a request was made. |
6. |
Unless explicitly set forth otherwise in this Amendment, the terms and conditions set forth in the Agreement shall remain without change, binding and of full force and effect. In event of conflict between the terms and conditions set forth in this Amendment and the terms and conditions set forth in the Agreement, the terms set forth in this Amendment shall prevail. |
IN WITNESS WHEREOF, the parties have executed this Amendment in one or more counterparts as of the Effective Date.
TEVA PHARMACEUTICAL INDUSTRIES LTD. | ||
/s/ Kåre Schultz |
||
By: | Kåre Schultz | |
Title: | President and CEO | |
/s/ Mark Sabag |
||
By: | Mark Sabag | |
Title: | Chief Human Resources Officer |
EXECUTIVE |
/s/ Eli Kalif |
Name: Eli Kalif |
Dated: 06/02/2020 |
Exhibit 21
The following is a list of subsidiaries of the Company as of December 31, 2019, omitting some subsidiaries which, considered in the aggregate, would not constitute a significant subsidiary.
Name of Subsidiary |
Jurisdiction of Organization |
|
Actavis Pharma Holding 4 ehf |
Iceland |
|
Allergan UK Group limited |
United Kingdom |
|
Medis ehf. |
Iceland |
|
Mepha Schweiz AG |
Switzerland |
|
Merckle GmbH |
Germany |
|
Norton (Waterford) Limited |
Ireland |
|
PLIVA HRVATSKA d.o.o. |
Croatia |
|
Plus Chemicals, branch of Teva Pharmaceuticals International GmbH |
Switzerland |
|
Ratiopharm GmbH |
Germany |
|
Teva API B.V. |
Netherlands |
|
Teva Canada Limited |
Canada |
|
Teva Capital Services Switzerland GmbH |
Switzerland |
|
Teva Czech Industries s.r.o |
Czech Republic |
|
Teva Finance Services B.V. |
Curacao |
|
Teva Finance Services II B.V. |
Curacao |
|
Teva GmbH |
Germany |
|
Teva Italia S.r.l |
Italy |
|
Teva Limited Liability Company |
Russia |
|
Teva Operations Poland |
Poland |
|
Teva Pharma S.L.U |
Spain |
|
Teva Pharmaceuticals Europe B.V. |
Netherlands |
|
Teva Pharmaceuticals International GmbH |
Switzerland |
|
Teva Pharmaceuticals USA, Inc. |
United States |
|
Teva Pharm. Works Private Ltd. Company |
Hungary |
|
Teva Santé SAS |
France |
|
Teva Takeda Pharma Ltd. |
Japan |
|
Teva Takeda Yakuhin Ltd. |
Japan |
|
Teva UK Limited |
United Kingdom |
Exhibit 23
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
We hereby consent to the incorporation by reference in the Registration Statements on Form S-8 (Nos. 333-168331, 333-206753, 333-212851, 333-214077 and 333-220382) and Form S-3 (No. 333-222767) of Teva Pharmaceutical Industries Limited of our report dated February 21, 2020 relating to the financial statements and financial statement schedule and the effectiveness of internal control over financial reporting, which appears in this Form 10-K.
/s/ Kesselman & Kesselman Kesselman & Kesselman Certified Public Accountants (Isr.) A member of PricewaterhouseCoopers International Limited |
Tel-Aviv, Israel February 21, 2020 |
Exhibit 31.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER
I, Kåre Schultz, certify that:
1. |
I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. |
The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. |
The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 21, 2020
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
Exhibit 31.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO SECTION 302
CERTIFICATION OF THE CHIEF FINANCIAL OFFICER
I, Eli Kalif, certify that:
1. |
I have reviewed this annual report on Form 10-K of Teva Pharmaceutical Industries Limited; |
2. |
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report; |
3. |
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report; |
4. |
The companys other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have: |
a. |
designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared; |
b. |
designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles; |
c. |
evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and |
d. |
disclosed in this report any change in the companys internal control over financial reporting that occurred during the companys most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and |
5. |
The companys other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions): |
a. |
all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and |
b. |
any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting. |
Date: February 21, 2020
/s/ Eli Kalif |
Eli Kalif |
Chief Financial Officer |
Exhibit 32
CERTIFICATION OF THE CEO AND CFO PURSUANT TO SECTION 906
CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER AND CHIEF
FINANCIAL OFFICER
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Annual Report of Teva Pharmaceutical Industries Limited (the Company) on Form 10-K for the period ended December 31, 2019 as filed with the Securities and Exchange Commission on the date hereof (the Report), we, Kåre Schultz, President and Chief Executive Officer of the Company, and Eli Kalif, Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. §1350, as adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:
(1) |
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and |
(2) |
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company. |
Dated: February 21, 2020
/s/ Kåre Schultz |
Kåre Schultz |
President and Chief Executive Officer |
/s/ Eli Kalif |
Eli Kalif |
Chief Financial Officer |