UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
CURRENT REPORT
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging Growth Company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
| ITEM 5.02 | Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers. |
As described below, at the Annual Meeting of Shareholders of Teva Pharmaceutical Industries Limited (“Teva” or the “Company”), held on June 9, 2020 (the “Annual Meeting”), Teva’s shareholders approved Amendment No. 1 to the terms of office and employment of Teva’s President and Chief Executive Officer, Mr. Kåre Schultz (the “Amendment”). The Amendment amends the employment agreement, dated September 7, 2017, by and between Teva and Mr. Schultz (the “Employment Agreement”) as follows:
The initial term of Mr. Schultz’s employment will extend by one year to a sixth year, from November 1, 2022 to November 1, 2023.
The target grant date fair value of Mr. Schultz’s annual long-term incentive equity award will increase by $4 million, all of which would vest solely subject to achievement of pre-established performance metrics.
The treatment of outstanding long-term incentive awards upon certain qualifying terminations of employment will change such that in the event Mr. Schultz incurs a termination of employment with the Company (a) by the Company without “cause,” (b) by Mr. Schultz for “good reason,” (c) following the Company’s decision not to renew the employment agreement, or (d) by Mr. Schultz following his decision not to renew the employment agreement due to his retirement, any then-outstanding long-term incentive equity grants (both time and performance-based equity grants) would continue to vest following such a termination of employment in accordance with their terms. Continued vesting following a qualifying termination of employment will be subject to Mr. Schultz’s continued compliance with the non-compete, non-solicitation, non-disparagement and confidentiality covenants contained within his employment agreement.
In addition, the non-compete covenant will also apply following a termination of employment due to the Company’s decision not to renew the employment agreement and following Mr. Schultz’s decision not to renew the employment agreement due to his retirement.
The foregoing description is qualified by its entirety by the terms and conditions set forth in the Amendment, a copy of which is attached hereto as exhibit 10.1, and is incorporated by reference.
| ITEM 5.03 | Amendments to Articles of Incorporation or Bylaws; Change in Fiscal Year. |
At the Annual Meeting, Teva’s shareholders approved an amendment to the Company’s Articles of Association (the “Articles”) to change the language of Article 59 of the Articles to (a) eliminate the requirement that a majority of the members of Teva’s Board of Directors (the “Board”) shall be residents of Israel, (b) remove the provision specifying that directors are not required to hold Teva shares, and (c) remove the provision that a corporation is not qualified to serve as a director of the Company.
The foregoing description is qualified in its entirety by reference to the full text of the Amended Articles of Association which is attached hereto as Exhibit 3.1.
| ITEM 5.07 | Submission of Matters to a Vote of Security Holders. |
The Annual Meeting was held on June 9, 2020. The following is a summary of the matters voted on at the meeting.
| (1) | The shareholders elected to appoint the following persons to the Board, to serve until Teva’s 2023 annual meeting of shareholders, as follows: |
| Directors |
For |
Against |
Abstain |
Brokers |
||||||||||||
| Dr. Sol J. Barer |
573,382,687 |
49,551,092 |
751,951 |
152,637,286 |
||||||||||||
| Jean-Michel Halfon |
586,847,245 |
35,731,536 |
1,106,848 |
152,637,286 |
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| Nechemia (Chemi) J. Peres |
545,838,341 |
73,916,234 |
3,931,094 |
152,637,286 |
||||||||||||
| Janet S. Vergis |
574,022,233 |
48,888,160 |
775,236 |
152,637,286 |
||||||||||||
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| (2) | The shareholders approved, on a non-binding advisory basis, the compensation for Teva’s named executive officers listed in the proxy statement for the Annual Meeting (the “Proxy Statement”), as follows: |
| For |
Against |
Abstain |
Brokers non-vote | |||
| 491,832,844 |
130,236,055 |
1,616,730 |
152,637,286 |
| (3) | The shareholders approved Teva’s 2020 Long-Term Equity-Based Incentive Plan, substantially in the form attached as Appendix A to the Proxy Statement, as follows: |
| For |
Against |
Abstain |
Brokers non-vote | |||
| 492,815,765 |
129,185,224 |
1,669,308 |
152,637,286 |
| (4) | The shareholders approved an amendment to the terms of office and employment of Teva’s President and Chief Executive Officer, as follows: |
| For |
Against |
Abstain |
Brokers non-vote | |||
| 446,097,522 |
176,210,750 |
1,377,397 |
152,637,286 |
| (5) | The shareholders approved an amendment to Teva’s Articles of Association: |
| For |
Against |
Abstain |
Brokers non-vote | |||
| 598,428,637 |
23,837,616 |
1,403,983 |
152,637,286 |
| (6) | The shareholders approved the appointment of Kesselman & Kesselman, a member of PricewaterhouseCoopers International Ltd., as Teva’s independent registered public accounting firm until Teva’s 2021 annual meeting of shareholders, as follows: |
| For |
Against |
Abstain |
Brokers non-vote | |||
| 751,783,149 |
20,035,998 |
1,921,263 |
0 |
| Item 9.01 | Financial Statements and Exhibits. |
| (d) | Exhibits. |
| Exhibit |
Description | |||
| 3.1 |
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| 10.1 |
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| 104 |
Cover Page Interactive Data File (embedded within the Inline XBRL document). | |||
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| TEVA PHARMACEUTICAL INDUSTRIES LIMITED | ||||||
| Date: June 9, 2020 |
By: |
/s/ Eli Kalif | ||||
| Name: |
Eli Kalif | |||||
| Title: |
Executive Vice President, Chief Financial Officer | |||||
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