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 |
Commission File Number |
Exact name of registrant as specified in its charter, principal office and address and telephone number |
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Title of Each Class |
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Allergan plc |
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No ☐ | ||
Warner Chilcott Limited |
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No ☐ |
Allergan plc |
Yes ☐ |
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Warner Chilcott Limited |
Yes ☐ |
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Allergan plc |
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No ☐ | ||
Warner Chilcott Limited |
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No ☐ |
Allergan plc |
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No ☐ | ||
Warner Chilcott Limited |
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No ☐ |
Allergan plc |
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Accelerated filer |
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Non-accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Warner Chilcott Limited |
Large accelerated filer |
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Accelerated filer |
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Smaller reporting company |
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Emerging growth company |
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Allergan plc |
Yes ☐ |
No | ||
Warner Chilcott Limited |
Yes ☐ |
No |
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PART III |
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PART IV |
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ITEM 10. |
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE |
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NESLI BASGOZ, M.D. Director Since: Age: Committees: • Quality and Innovation Committee (Chair) | |
Dr. Basgoz joined the Board of Directors in July 2014 following the Company’s acquisition of Forest Laboratories, Inc. Dr. Basgoz is currently the Associate Chief and Clinical Director, Division of Infectious Diseases at Massachusetts General Hospital (MGH), a role she has held since 2001. In addition, Dr. Basgoz is an Associate Professor of Medicine at Harvard Medical School. Dr. Basgoz earned her MD degree and completed her residency in internal medicine at Northwestern University Medical School. She also completed a fellowship in the Infectious Diseases Division at the University of California at San Francisco. She is board certified in both infectious diseases and internal medicine. Dr. Basgoz serves on the Board of Directors because of her extensive experience in clinical medicine. Other Public Company Directorships: • NonePrevious, Recently-Held Public Company Directorships: • None |
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JOSEPH H. BOCCUZI Director Since: Age: Committees: • Compensation Committee• Nominating and Corporate Governance Committee | |
Mr. Boccuzi joined the Board of Directors in 2017. He retired from Spencer Stuart in December 2016 after 24 years of service, where he played a central role in establishing and building the firm’s Life Sciences Practice. He served in positions of increasing responsibility within Spencer Stuart, most recently as a Partner in the firm’s Global Life Sciences, Board and Chief Executive Officer Practices, a role he had held since 1996. Prior to joining Spencer Stuart, Mr. Boccuzi worked in executive search, venture capital and corporate management roles. He served as a consultant with Paul R. Ray & Company, an executive search firm. Prior to that, he worked as a Financial Advisor for Merrill Lynch. Mr. Boccuzi also held several leadership positions at National Patent Development Corporation, a venture capital firm specializing in medical technology and investment throughout the U.S. and worldwide. While there, he managed four medical startup operations serving as chief operating officer, board member and adviser to the board of directors. Prior to that, Mr. Boccuzi worked in sales for Xerox Corporation. Mr. Boccuzi serves on the Board of Directors because of his deep understanding of leadership, talent and compensation issues in the pharmaceutical industry. Other Public Company Directorships: • NonePrevious, Recently-Held Public Company Directorships: • None |
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CHRISTOPHER W. BODINE Director Since: Age: Committees: • Compensation Committee• Nominating and Corporate Governance Committee (Chair) | |
Mr. Bodine joined the Board of Directors in 2009. Mr. Bodine retired from CVS Caremark in January 2009 after 24 years with CVS. Prior to his retirement, Mr. Bodine served as President, Healthcare Services of CVS Caremark Corporation, where he was responsible for strategy, business development, trade relations, sales and account management, pharmacy merchandising, marketing, information technology and Minute Clinic. Prior to the merger of CVS Corporation and Caremark Rx, Inc. in March 2007, Mr. Bodine served for several years as Executive Vice President—Merchandising and Marketing of CVS Corporation. Mr. Bodine is active in the pharmaceutical industry, having served on a number of boards and committees, including the Healthcare Leadership Council, RI Quality Institute, National Retail Federation, National Association of Chain Drug Stores (NACDS), and the NACDS Pharmacy Affairs and Leadership Committees. Mr. Bodine currently serves on the Board of Directors of OneWater Marine Inc. and previously served on the Board of Directors of Nash Finch and Fred’s Inc. Mr. Bodine serves on the Board of Directors because of his extensive industry experience and knowledge of the needs and operations of our major customers. Other Public Company Directorships: • OneWater Marine Inc.Previous, Recently-Held Public Company Directorships: • Fred’s Inc.• Nash Finch |
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ADRIANE M. BROWN Director Since: Age: Committees: • Audit and Compliance Committee• Quality and Innovation Committee | |
Ms. Brown joined the Board of Directors in 2017. She is a Venture Partner with Flying Fish Venture Partners. She is the former President and Chief Operating Officer of Intellectual Ventures Management LLC (Intellectual Ventures). Prior to joining Intellectual Ventures, Ms. Brown served in a number of leadership positions at Honeywell International, Inc. (Honeywell) from 1999-2009, most recently as Senior Vice President, Energy Strategy, and prior to that, as President and CEO of Honeywell’s Transportation Systems global operating group. Prior to joining Honeywell, Ms. Brown had a nearly 20 year career at Corning, Inc. Ms. Brown received her Bachelor of Science in environmental health from Old Dominion University and later received both a Master’s of Science in management (Sloan Fellow) from Massachusetts Institute of Technology and a Doctorate of Humane Letters from Old Dominion University. Ms. Brown currently serves on the Board of Directors of eBay, Inc., where she is a member of the Audit Committee. Ms. Brown formerly served on the board of Harman International Industries, Incorporated. Other directorships include: Pacific Science Center, Jobs of America’s Graduates and Washington Research Foundation. Ms. Brown serves on the Board of Directors because of her global business experience as a senior executive in technology-rich companies and her experience identifying, protecting and licensing intellectual property. Other Public Company Directorships: • eBay, Inc.Previous, Recently-Held Public Company Directorships: • Harman International Industries, Incorporated• Raytheon Company |
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CHRISTOPHER J. COUGHLIN Lead Independent Director Director Since: Age: Committees: • Compensation Committee• Mergers and Acquisitions Committee• Nominating and Corporate Governance Committee | |
Mr. Coughlin joined the Board of Directors in July 2014 following the Company’s acquisition of Forest Laboratories, Inc., having served as a member of the Board of Directors of Forest beginning 2011. Mr. Coughlin began serving as our Lead Independent Director in October 2016. Mr. Coughlin served as Senior Advisor to the CEO and Board of Directors of Tyco until September 2012. Prior to that, he was Executive Vice President and Chief Financial Officer of Tyco International from 2005 to 2010. During his tenure, he played a central role in the separation of Tyco into five independent, public companies. Prior to joining Tyco, he worked as the Chief Operating Officer of the Interpublic Group of Companies from June 2003 to December 2004, as Chief Financial Officer from August 2003 to June 2004 and as a director from July 2003 to July 2004. Previously, Mr. Coughlin was Executive Vice President and Chief Financial Officer of Pharmacia Corporation from 1998 until its acquisition by Pfizer in 2003. Prior to that, he was Executive Vice President of Nabisco Holdings and President of Nabisco International. From 1981 to 1996 he held various positions, including Chief Financial Officer, at Sterling Winthrop. Mr. Coughlin serves on the Board of Directors and as a member of the Compensation Committee of each of Alexion Pharmaceuticals, Inc. and Prestige Consumer Healthcare, and serves on the Board of Directors of Aldevron. Mr. Coughlin also previously served on the Board of Directors of Interpublic Group of Companies, Monsanto Company, The Dun & Bradstreet Corp., Hologic, Inc., Covidien, Dipexium, Forest Laboratories, Inc. and Perrigo Company. Mr. Coughlin serves on the Board of Directors, and as our Lead Independent Director, because his depth of experience in executive leadership roles within complex corporate organizations and his service on public company boards, including in the roles of Chairman and Lead Independent Director, contribute critical risk oversight and management insight to our Board of Directors. Other Public Company Directorships: • Alexion Pharmaceuticals, Inc.• Prestige Consumer HealthcarePrevious, Recently-Held Public Company Directorships: • The Dun & Bradstreet Corp. (Former Chairman of the Board)• Hologic, Inc.• Dipexium |
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CAROL ANTHONY (JOHN) DAVIDSON Director Since: Age: Committees: • Audit and Compliance Committee (Chair)• Nominating and Corporate Governance Committee | |
Mr. Davidson joined the Board of Directors in 2018. He retired from Tyco International in September 2012, having served as Senior Vice President, Controller and Chief Accounting Officer since January 2004, where he was responsible for overseeing financial reporting, internal controls, and accounting policies and processes. In this role, Mr. Davidson worked as part of Tyco’s new senior leadership team in establishing financial integrity, operational excellence and strong ethical practices across Tyco global operations. Prior to joining Tyco in January 2004, Mr. Davidson served as Vice President, Audit, Risk and Compliance for Dell Inc. During his six-year career at Dell he also served in other senior capacities, including chief compliance officer and vice president and corporate controller. In addition, Mr. Davidson spent 16 years with Eastman Kodak Company where he led the company’s internal audit function and previously served in a variety of accounting and financial leadership roles. He began his career with Arthur Andersen & Co. From 2011 to 2015 he served as a member of the board of trustees of the Financial Accounting Foundation which oversees the FASB and GASB in accounting standards setting. From 2012 to 2018, Mr. Davidson served on the Board of Governors of the Financial Industry Regulatory Authority (FINRA) which regulates and oversees the US financial industry in the interest of investor protection and market integrity. Mr. Davidson currently serves on the Board of Directors of TE Connectivity Ltd. and Legg Mason, Inc. and previously served on the Board of Directors of DaVita, Inc. and Pentair Plc. Mr. Davidson also serves as a trustee of the University of Rochester. He earned his BS in Accounting from St. John Fisher College and his MBA in Finance from the University of Rochester. Mr. Davidson was inducted into the Financial Executives International (FEI) Hall of Fame. Mr. Davidson serves on the Board of Directors because of his expertise in complex accounting and financial issues, his experience serving on the boards of self-regulatory organizations, including FINRA, his experience serving on the Audit Committees of public company boards, and his extensive leadership experience across multiple industries, which includes experience implementing governance and control processes. Other Public Company Directorships: • TE Connectivity Ltd.• Legg Mason, Inc.Previous, Recently-Held Public Company Directorships: • DaVita, Inc.• Pentair Plc |
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THOMAS C. FREYMAN Director Since: Age: Committees: • Audit and Compliance Committee• Compensation Committee (Chair)• Mergers and Acquisitions Committee | |
Mr. Freyman joined the Board of Directors in 2018. Mr. Freyman retired from Abbott Laboratories in 2017, having held various leadership positions during a period where the company executed a significant transformation and refocused its business portfolio. He brings broad-based healthcare experience in two of Allergan’s core therapeutic areas through his tenure at Abbott and his involvement in its proprietary pharmaceuticals and medical optics businesses. Most recently, he served as Executive Vice President, Finance and Administration for Abbott since June 2015. Prior to that, he served as Chief Financial Officer (CFO) and Executive Vice President, Finance for Abbott. He was first appointed CFO and Senior Vice President, Finance at Abbott in 2001. Previously, he served as Vice President and Controller of Abbott’s Hospital Products Division and held a number of financial planning and analysis positions. Prior to joining Abbott, Mr. Freyman was a certified public accountant at Ernst & Whinney. Mr. Freyman holds a bachelor’s degree in accounting from the University of Illinois and a master’s degree in management from Northwestern University. He also serves on the Board of Directors of Tenneco Inc. and Hanger, Inc., serving on the audit committee of each of those boards and on the compensation committee of Tenneco Inc. Mr. Freyman serves on the Board of Directors because of his extensive experience as a senior executive in our industry, his expertise in complex accounting and financial issues and his experience serving on the Audit Committees of public company boards. Other Public Company Directorships: • Tenneco Inc.• Hanger, Inc.Previous, Recently-Held Public Company Directorships: • None |
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MICHAEL E. GREENBERG, PHD Director Since: Age: Committees: • Mergers and Acquisitions Committee• Quality and Innovation Committee | |
Dr. Greenberg joined the Board of Directors in 2018. Dr. Greenberg has been Harvard University’s Nathan Marsh Pusey Professor of Neurobiology since 2008. He has been a Co-Leader of Harvard Medical School’s Allen Discovery Center for Human Brain Evolution since 2017 and Chair of the Department of Neurobiology since 2008. He was also Founding Director of the F.M. Kirby Neurobiology Center, Children’s Hospital Boston, where he continues to serve as director. Prior to that he was a Professor in the Department of Microbiology & Molecular Genetics at Harvard Medical School, where he began in 1986. Dr. Greenberg serves on the Scientific Advisory Board of Decibel Therapeutics. Dr. Greenberg earned his Doctor of Philosophy from Rockefeller University and a Bachelor of Arts degree from Wesleyan University. He completed his post-doctoral fellowship at New York University Medical Center. Dr. Greenberg serves on the Board of Directors because of his extensive experience in academic medicine and 35-year track record of groundbreaking scientific discoveries in neurobiology, particularly with respect to the central nervous system, one of our therapeutic areas of focus. Other Public Company Directorships: • NonePrevious, Recently-Held Public Company Directorships: • None |
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ROBERT J. HUGIN Director Since: Age: Committees: • Mergers and Acquisitions Committee (Chair)• Quality and Innovation Committee | |
Mr. Hugin joined the Board of Directors in 2019. He previously served as Chief Executive Officer of Celgene Corporation from June 2010 until March 2016 and as Executive Chairman of the Board of Directors from June 2011 to January 2018. Mr. Hugin joined Celgene in 1999 as Chief Financial Officer. Prior to joining Celgene, Mr. Hugin served as a Managing Director at J.P. Morgan & Co. Inc., which he joined in 1985. Mr. Hugin holds a Bachelor of Arts degree from Princeton University and an MBA from the Darden School of Business at the University of Virginia. Mr. Hugin currently serves on the Board of Trustees of Princeton University, and on the Board of Directors of the Parker Institute for Cancer Immunotherapy, previously served on the boards of Coley Pharmaceutical Group and Atlantic Health System, previously served as Chairman of the Board of The Pharmaceutical Research and Manufacturers of America, and previously served on the Board of Trustees of the Darden School Foundation of the University of Virginia. Mr. Hugin serves on the Board of Directors because of his extensive experience as a senior executive in our industry, his expertise in complex financial, operational and strategic issues and his extensive corporate governance experience. Other Public Company Directorships: • NonePrevious, Recently-Held Public Company Directorships: • Celgene Corporation (Former Chairman of the Board)• Danaher Corporation• The Medicines Company |
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PETER J. MCDONNELL, M.D. Director Since: Age: Committees: • Compensation Committee• Quality and Innovation Committee | |
Dr. McDonnell joined the Board of Directors in March 2015 following the Company’s acquisition of Allergan, Inc., having served as a member of the Allergan, Inc. Board of Directors from 2013. Dr. McDonnell has been the Director and William Holland Wilmer Professor of the Wilmer Eye Institute of the Johns Hopkins University School of Medicine since 2003. Dr. McDonnell has also served as the Chief Medical Editor of Ophthalmology Times since 2004, and has served on the editorial boards of numerous ophthalmology journals. Dr. McDonnell also served as the Assistant Chief of Service at the Wilmer Institute from 1987 to 1988. Dr. McDonnell also serves as the Immediate-Past President and a director of the National Alliance for Eye and Vision Research and the Alliance for Eye and Vision Research, serving as a member the Nominating Committee of the board, and as the Chief Medical Editor of the Ophthalmology Times. He served as a consultant to the United States Department of Health and Human Services in 1996. Dr. McDonnell served as a full-time faculty at the University of Southern California from 1988 until 1999, where he advanced to the rank of professor in 1994. Dr. McDonnell serves on the Board of Directors because he provides our Board of Directors with wide-ranging expertise in ophthalmology, one of our therapeutic areas of focus. He is widely recognized as an international leader in corneal transplantation, laser refractive surgery and the treatment of dry eye. Other Public Company Directorships: • NonePrevious, Recently-Held Public Company Directorships: • None |
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BRENTON L. SAUNDERS Chairman Director Since: Age: Committees: • None | |
Mr. Saunders is Chairman, President and Chief Executive Officer of Allergan and has served in the role of President and Chief Executive Officer since July 2014 and of Chairman since October 2016, having previously served as Chief Executive Officer and President, and as director, of Forest Laboratories, Inc., prior to its acquisition by Allergan. Prior to that, he served as Chief Executive Officer of Bausch + Lomb Incorporated, a leading global eye health company, serving in this capacity from March 2010 until August 2013. Mr. Saunders also held a number of leadership positions at Schering-Plough, including the position of President of Global Consumer Health Care and was named head of integration for the company’s merger with Merck & Co. and for Schering-Plough’s acquisition of Organon BioSciences. Before joining Schering-Plough, Mr. Saunders was a Partner and Head of Compliance Business Advisory at PricewaterhouseCoopers LLP. Prior to that, he was Chief Risk Officer at Coventry Health Care and Senior Vice President, Compliance, Legal and Regulatory at Home Care Corporation of America. Mr. Saunders began his career as Chief Compliance Officer for the Thomas Jefferson University Health System. Mr. Saunders serves on the Board of Directors of Cisco Systems, Inc., where he is a member of the Compensation Committee, and The Allergan Foundation, and is a member of the Business Council and PhRMA. Mr. Saunders serves on our Board of Directors given his role as Allergan’s CEO; because he brings to the Board leadership experience and deep knowledge of the Company; because of his experience as CEO of two global healthcare companies; and because of his deep pharmaceutical experience, deep management and operational experience, invaluable senior compliance experience, and broad regulatory expertise. Other Public Company Directorships: • Cisco Systems, Inc.Previous, Recently-Held Public Company Directorships: • None |
Name |
Age |
Principal Position with Registrant | ||||
Brenton L. Saunders |
50 |
Chairman, President and Chief Executive Officer | ||||
William Meury |
52 |
Executive Vice President and Chief Commercial Officer | ||||
Matthew M. Walsh |
53 |
Executive Vice President and Chief Financial Officer | ||||
A. Robert D. Bailey |
56 |
Executive Vice President and Chief Legal Officer and Corporate Secretary | ||||
Dr. C. David Nicholson |
65 |
Executive Vice President and Chief R&D Officer | ||||
Wayne R. Swanton |
53 |
Executive Vice President, Global Operations |
• | Bring to our Board not only critical skills and experience in areas identified by the Board as directly important to the success of the Company’s strategy and business, but also a diversity of experiences and backgrounds, both professionally and personally. |
• | Have high integrity, sound moral character and good judgment. |
• | For outside directors, satisfy the independence requirements of the New York Stock Exchange (“NYSE”), our Corporate Governance Guidelines and applicable law. |
• | The Board’s determination of its leadership structure, composition and director independence |
• | Criteria for Board membership and refreshment |
• | The self-evaluation process of the Board and its Committees |
• | Shareholder engagement |
• | Review of management performance |
• | The Board’s authority to retain independent advisors |
Members |
Independence* |
|||
Carol Anthony (John) Davidson (Chair) |
✓ |
|||
Adriane M. Brown |
✓ |
|||
Thomas C. Freyman |
✓ |
* | See Item 13 “Director Independence”. All of the members of the Audit and Compliance Committee have been determined to be “independent” and to meet the financial literacy and audit committee independence requirements of the NYSE listing standards and SEC Rule 10A-3. |
• | The integrity of Allergan’s financial statements. |
• | Allergan’s compliance with legal and regulatory requirements and Allergan’s processes, controls, resources and plans to manage risk. |
• | The qualifications and independence of Allergan’s independent auditor. |
• | The performance of Allergan’s internal audit function and of its independent auditor. |
• | Monitors Allergan’s financial reporting process and internal control systems. |
• | Evaluates the effectiveness of Allergan’s corporate compliance program. |
• | Retains, oversees and monitors the qualifications, independence, compensation and performance of Allergan’s independent auditor. |
• | Provides an open avenue of communication among the independent auditor, financial and senior management, the internal audit department, the Global Chief Compliance Officer and the Board of Directors. |
Members |
Independence* |
|||
Thomas C. Freyman (Chair) |
✓ |
|||
Joseph H. Boccuzi |
✓ |
|||
Christopher W. Bodine |
✓ |
|||
Christopher J. Coughlin |
✓ |
|||
Peter J. McDonnell, M.D. |
✓ |
* | See Item 13 “Director Independence”. All of the members of the Compensation Committee have been determined to be “independent” and to meet the independence requirements of the NYSE listing standards. In addition, all current Compensation Committee members have been determined to qualify as “non-employee directors” within the meaning of Section 16 of the Securities Exchange Act of 1934, as amended, and as “outside directors” within the meaning of Section 162(m) of the Internal Revenue Code. |
• | Evaluate the performance and determine the compensation of our Chief Executive Officer. |
• | Review and determine the compensation payable to our other Named Executive Officers. |
• | Oversee and administer our equity compensation and other incentive compensation plans. |
• | Oversee the use of senior executive employment agreements and severance plans. |
• | Review compensation programs and policies for features that may encourage excessive risk taking, and determine the extent to which there may be a connection between compensation and risk. |
• | Review and approve the Compensation Discussion and Analysis to be included in the proxy statement for our Annual General Meetings of Shareholders. |
Members |
Independence* |
|||
Robert J. Hugin (Chair) |
✓ |
|||
Christopher J. Coughlin |
✓ |
|||
Thomas C. Freyman |
✓ |
|||
Michael E. Greenberg, PhD |
✓ |
* | See Item 13 “Director Independence”. |
• | Review potential mergers, acquisitions, dispositions, investments, joint ventures, collaborations, partnerships, licensing arrangements or similar transactions or arrangements, whether by transfer of equity, assets, or otherwise that are proposed by the Company’s management. |
• | In connection with its review of potential transactions that are proposed by the Company’s management, approve any transactions where the total consideration does not exceed $2 billion. |
Members |
Independence* |
|||
Christopher W. Bodine (Chair) |
✓ |
|||
Joseph H. Boccuzi |
✓ |
|||
Christopher J. Coughlin |
✓ |
|||
Carol Anthony (John) Davidson |
✓ |
* | See Item 13 “Director Independence”. All of the members of the Nominating and Corporate Governance Committee have been determined to be “independent” and to meet the independence requirements of the NYSE listing standards. |
• | Identify and present qualified candidates to the Board of Directors for election or re-election as directors of the Company. |
• | Ensure that the size and composition of the Board of Directors and its Committees best serve our practices and objectives. |
• | Develop and recommend to the Board of Directors a set of corporate governance guidelines and principles and periodically review and recommend changes to such guidelines and principles as deemed appropriate. |
• | Oversee the evaluation of the Board of Directors and senior management. |
• | Make recommendations to the Board of Directors regarding the compensation payable to members of the Board of Directors. |
• | Make recommendations to the Board of Directors regarding governance matters, including our Memorandum of Association and Articles of Association. |
Members |
Independence* |
|||
Nesli Basgoz, M.D. (Chair) |
✓ |
|||
Adriane M. Brown |
✓ |
|||
Michael E. Greenberg, PhD |
✓ |
|||
Robert J. Hugin |
✓ |
|||
Peter J. McDonnell, M.D |
✓ |
* | See Item 13 “Director Independence”. |
• | The Company’s compliance with quality systems and other legal and regulatory requirements related to product safety and quality and environmental, health and safety matters. |
• | The Company’s strategy, activities, results and investment in product research and development and innovation initiatives. |
• | The Company’s commitments to patients, quality and safety, education and product accessibility as reflected in its Social Contract with Patients. |
• | Operates in accordance with a written charter adopted by the Board (published on our website at www.allergan.com under the “Investors—Corporate Governance—Committee Charters” section). |
• | Reviews its charter on an annual basis. |
• | Evaluates its performance on an annual basis. |
• | Schedules regular executive sessions in which all of the Committee members meet without management participation, including as part of each regularly scheduled in-person Committee meeting. |
ITEM 11. |
EXECUTIVE COMPENSATION |
Name (1) |
Fees Earned or Paid in Cash (2) ($) |
Restricted Stock Unit Awards (3) ($) |
All Other Compensation (4) ($) |
Total |
||||||||||||
Nesli Basgoz, M.D. |
174,000 |
299,961 |
5,757 |
479,757 |
||||||||||||
Joseph H. Boccuzi |
150,000 |
299,961 |
5,757 |
455,757 |
||||||||||||
Christopher W. Bodine |
174,000 |
299,961 |
5,757 |
479,757 |
||||||||||||
Adriane M. Brown |
150,000 |
299,961 |
5,757 |
455,757 |
||||||||||||
Christopher J. Coughlin |
200,000 |
299,961 |
5,757 |
505,757 |
||||||||||||
Carol Anthony (John) Davidson |
180,000 |
299,961 |
5,757 |
485,757 |
||||||||||||
Thomas C. Freyman |
174,000 |
299,961 |
3,396 |
477,396 |
||||||||||||
Michael E. Greenberg, PhD |
150,000 |
299,961 |
1,743 |
451,743 |
||||||||||||
Robert J. Hugin |
203,670 |
(5) |
299,961 |
0 |
503,670 |
|||||||||||
Catherine M. Klema |
0 |
0 |
5,757 |
5,757 |
||||||||||||
Peter J. McDonnell, M.D. |
150,000 |
299,961 |
5,757 |
455,757 |
(1) | Catherine M. Klema did not stand for reelection to the Board of Directors in 2019. Yearly cash retainer fees are payable at the time of the directors’ election at our Annual General Meeting of Shareholders and therefore Catherine M. Klema did not receive any cash retainer fees in 2019. |
(2) | Includes yearly cash retainer fees and, if applicable, Lead Independent Director or Committee Chair fees. |
(3) | Consists of the annual grant of restricted stock units to non-employee directors, equal to 2,064 units with a per share fair value of $145.33 granted on May 2, 2019. As of December 31, 2019, each of our current non-employee directors held 2,064 outstanding unvested restricted stock units. |
(4) | Reflects a dividend equivalent paid on unvested restricted stock units. |
(5) | Includes yearly cash retainer for the Board Year that commenced on the date of the 2019 Annual General Meeting of Shareholders and a prorated yearly |
Brenton L. Saunders |
Chairman, President and Chief Executive Officer | |
Matthew M. Walsh |
Executive Vice President and Chief Financial Officer | |
William Meury |
Executive Vice President and Chief Commercial Officer | |
C. David Nicholson, PhD |
Executive Vice President and Chief R&D Officer | |
A. Robert D. Bailey |
Executive Vice President and Chief Legal Officer and Corporate Secretary |
22 |
||||
25 |
||||
28 |
||||
34 |
||||
37 |
• | Growing our core business 1 by 7.1 percent in 2019; |
• | Gaining FDA approval of UBRELVY ™ , a first-in-class oral treatment for migraine; |
• | Gaining FDA approval for VRAYLAR ® |
• | Gaining two new FDA approvals for BOTOX ® |
• | Submitting filings for two new eye care drugs—Bimatoprost SR for glaucoma and Abicipar for Age-related Macular Degeneration. |
(1) |
For a description of “core business,” see table 12 of February 10, 2020 Press Release reporting 2019 Fourth Quarter and 2019 Full-Year financial results. |
• | Create unambiguous long-term shareholder alignment |
• | Drive sustainable top- and bottom-line growth |
• | Create a unified management team aligned to a shared set of objectives |
• | Attract and retain key executive talent |
• | Reinforce our entrepreneurial culture |
• | Encourage a long-term perspective and discourage short-term risk taking |
What We Do and What We Don’t Do | ||||
✓ |
Retain an independent compensation consultant that performs no services for the Company other than for the Board and Compensation Committee |
× Don’t allow executives to participate in the determination of their own compensation | ||
✓ |
Pay the vast majority of executive compensation in the form of incentive awards tied to performance |
× Don’t pay guaranteed bonuses | ||
✓ |
Determine incentive payouts based on a variety of challenging, pre-determined performance goals |
× Don’t use the same performance metrics for short-term and long-term compensation | ||
✓ |
Cap the maximum payout under our annual incentive awards and maximum vesting percentage of our PSUs |
× Don’t backdate options or re-price underwater options | ||
✓ |
Include a clawback provision in our Annual Incentive Plan and in our CEO’s employment agreement |
× Don’t provide excessive perquisites | ||
✓ |
Take into consideration the compensation levels of an appropriate and relevant peer group of companies when setting compensation |
× Don’t pay compensation that is significantly misaligned with peer companies | ||
✓ |
Subject executives to a robust stock ownership policy |
× Don’t allow our officers or directors to hedge or pledge our stock | ||
✓ |
Include double-trigger vesting provisions in our equity award agreements |
× Don’t provide tax gross-ups | ||
✓ |
Conduct a periodic risk assessment of our compensation program |
× Don’t encourage excessive risk taking | ||
✓ |
Regularly engage with shareholders on compensation and governance matters |
Name |
2018 Base Salary ($) |
2019 Base Salary ($) |
2018 Bonus Target ($) |
2019 Bonus Target ($) |
||||||||||||
Brenton L. Saunders |
$ | 1,300,000 |
$ | 1,350,000 |
$ | 3,000,000 |
$ | 3,000,000 |
||||||||
William Meury |
$ | 900,000 |
$ | 950,000 |
$ | 1,000,000 |
$ | 1,100,000 |
||||||||
C. David Nicholson, PhD |
$ | 900,000 |
$ | 950,000 |
$ | 1,000,000 |
$ | 1,100,000 |
||||||||
Matthew M. Walsh |
$ | 800,000 |
$ | 900,000 |
$ | 825,000 |
$ | 900,000 |
||||||||
A. Robert D. Bailey |
$ | 775,000 |
$ | 850,000 |
$ | 775,000 |
$ | 850,000 |
Peer Group* | ||
AbbVie Inc. |
Eli Lilly | |
Amgen Inc. |
Gilead Sciences Inc. | |
AstraZeneca plc |
GlaxoSmithKline plc | |
Biogen Inc. |
Merck & Co. Inc. | |
Bristol Myers Squibb Company |
Novo Nordisk A/S. | |
Celgene** |
Sanofi |
* |
The Compensation Committee may, from time to time, also use Pfizer, Inc., as a reference company when reviewing pay levels and programs/practices. | |
** |
Celgene Corporation has since been acquired by Bristol-Myers Squibb Company. |
• | Level of responsibility. |
• | Individual performance. |
• | Internal review of the NEO’s total compensation, individually and relative to our other officers and executives with similar responsibilities within the Company. |
• | General levels of salaries and salary changes relative to other officers and executives with similar responsibilities at peer companies. |
Name |
2018 Base Salary ($) |
2019 Base Salary ($) |
||||||
Brenton L. Saunders |
$ | 1,300,000 |
$ | 1,350,000 |
||||
William Meury |
$ | 900,000 |
$ | 950,000 |
||||
C. David Nicholson, PhD |
$ | 900,000 |
$ | 950,000 |
||||
Matthew M. Walsh |
$ | 800,000 |
$ | 900,000 |
||||
A. Robert D. Bailey |
$ | 775,000 |
$ | 850,000 |
Name |
2018 Bonus Target ($) |
2019 Bonus Target ($) |
||||||
Brenton L. Saunders |
$ | 3,000,000 |
$ | 3,000,000 |
||||
William Meury |
$ | 1,000,000 |
$ | 1,100,000 |
||||
C. David Nicholson, PhD |
$ | 1,000,000 |
$ | 1,100,000 |
||||
Matthew M. Walsh |
$ | 825,000 |
$ | 900,000 |
||||
A. Robert D. Bailey |
$ | 775,000 |
$ | 850,000 |
Metric |
Rationale | |
Net Revenue |
• Incentivizes sustainable top-line revenue growth• Focuses management on extending category leadership across therapy areas• Aligns with strategy of targeted geographic expansion• Is easy to understand and communicate• Aligns with the market practice among our peers | |
PNI |
• Aligns to investor expectations• Maintains a strong focus on profitability• Is easy to understand and communicate• Aligns with the market practice among our peers |
Non-GAAP Metric1 |
Weighting |
Performance Range |
Threshold Goal |
Target Goal |
Stretch Goal |
Results |
Funding |
|||||||||||||||||||||
Net Revenue 2 |
50 |
% | 0%–150% |
$14.36B |
$15.12B |
$15.42B |
$15.33B |
135% |
||||||||||||||||||||
PNI 3 |
50 |
% | 0%–150% |
$ 14.73 |
$ 16.37 |
$ 16.70 |
$ 16.65 |
142% |
||||||||||||||||||||
Resulting Company Performance |
138% |
(1) | See Annex B for a reconciliation of GAAP to Non-GAAP results. |
(2) | Results adjusted to reflect U.S. Restasis ® revenue above budget earned after March 31, 2019, unplanned asset acquisition and to neutralize the impact of foreign exchange relative to budgeted rates. |
(3) | Results adjusted to reflect unreinvested portion of U.S. Restasis ® revenue above budget after March 31, 2019 and an unplanned asset acquisition. |
• | Secured $83 billion (on an enterprise value basis) deal with AbbVie. |
• | Exceeded the 2019 revenue target by delivering over $16.0 billion in revenue. |
• | Exceeded the 2019 Non-GAAP PNI/S with an actual value of $17.66. |
• | Executed and advanced the Company’s pipeline, including: |
• | 19 major pharma and device dossier submissions; and |
• | 14 major pharma and device approvals, including first in class Ubrelvy ® approval for episodic migraines. |
• | Improved leverage ratio to less than 2.3x, surpassing 2020 target. |
• | Launched Vraylar ® for bipolar depression with significant growth in 2019. |
• | Built on our Bold culture objectives, including launching career development programs, improved quality scores, decreased energy usage against 2015 baseline and continued to leverage operational excellence capabilities across functions. |
Executive |
Target Annual Incentive ($) |
Financial Performance |
Individual Performance Modifier |
2019 Incentive Award |
2019 Incentive Award as % of Target |
|||||||||||||||
Brenton L. Saunders |
$ | 3,000,000 |
138 |
% | 150 |
% | $ | 6,210,000 |
207 |
% |
• | Delivered total revenue of over $16.0 billion, with strong performance from key brands, including Botox ® , Vraylar® , Juvéderm® , and Lo Loestrin® . |
• | Sustained core business performance, with sales for the majority of our top products increasing versus 2018. |
• | Launched Vraylar ® for bipolar depression, revamped digital marketing programs, prepared Ubrelvy® for launch, including reconfiguring field force and launched Volux® into international markets. |
• | Received FDA approval of Ubrelvy ® for migraine and Vraylar® for bipolar depression. |
• | Achieved 14 approvals for major pharma and device dossiers. |
• | Performed over 175 major Tier 1 key opinion leader engagements at major meetings and delivered approximately 38,000 meaningful interactions worldwide with health care providers, key opinion leaders and key decision makers. |
• | Achieved 2.5x net leverage ratio one year ahead of schedule (surpassing the target to achieve a net leverage ratio of less than 2.3x). |
• | Significant efforts and supporting analyses in respect of strategic alternatives and served as Executive Co-Sponsor of the Integration for the AbbVie Transaction. |
• | Secured a $1.6 billion cash tax refund, related to 2015 capital gain taxes paid. |
• | Achieved successful settlement and defense of commercial and intellectual property litigation. |
• | Led key brand protection and regulatory initiatives. |
• | Supported key divestiture and acquisition activities. |
Executive |
Target Annual Incentive ($) |
Financial Performance |
Individual Performance |
2019 Incentive Award |
2019 Incentive Award as % of Target |
|||||||||||||||
William Meury |
$ | 1,100,000 |
138 |
% | 140 |
% | $ | 2,125,200 |
193 |
% | ||||||||||
C. David Nicholson, PhD |
$ | 1,100,000 |
138 |
% | 130 |
% | $ | 1,973,400 |
179 |
% | ||||||||||
Matthew M. Walsh |
$ | 900,000 |
138 |
% | 130 |
% | $ | 1,614,600 |
179 |
% | ||||||||||
A. Robert D. Bailey |
$ | 850,000 |
138 |
% | 130 |
% | $ | 1,524,900 |
179 |
% |
• | Reimbursement of financial counseling and tax preparation up to a maximum of $10,000 per year. We believe that it is important for executives to have professional assistance with managing their total compensation so that they can focus their full attention on growing and managing the business. |
• | Limited personal use of Company aircraft and Company cars. We believe that these benefits provide a more secure travel environment for executives and allow them to devote additional time to Company business. To ensure his safety and security, Mr. Saunders is required by our Board of Directors to use the Company aircraft for all business and personal travel. Mr. Saunders is required to reimburse the Company to the extent the incremental cost of any personal travel exceeds $200,000 in any calendar year. Additionally, Mr. Saunders is provided with access to a dedicated Company car and driver. |
Our executives’ significant share ownership reinforces our entrepreneurial mindset and ensures unambiguous shareholder alignment |
Role |
Requirements |
Unvested RSUs and PSUs do not toward satisfaction of the ownership requirements | ||||
Chief Executive Officer |
6 × base salary |
|||||
Other NEOs |
4 × base salary |
Committee Oversight: |
Appropriate Use of Discretion: non-financial performance and judgment. | |
Performance Goals: |
Clawbacks: | |
Stock Ownership Guidelines: |
Payout Caps: |
Name and Principal Position |
Year |
Salary 1 ($) |
Bonus ($) |
Stock Awards 2 ($) |
Option Awards (S) |
Non-Equity Incentive Plan Compensation 3 ($) |
Change in Pension Value and Nonqualified Deferred Compensation Earnings 4 ($) |
All Other Compensation 5 ($) |
Total ($) |
|||||||||||||||||||||||||||
Brenton L. Saunders |
2019 |
1,338,462 |
— |
1,923,673 |
— |
6,210,000 |
— |
298,394 |
9,770,528 |
|||||||||||||||||||||||||||
Chairman, President & |
2018 |
1,300,000 |
— |
2,143,395 |
— |
3,000,000 |
— |
181,078 |
6,624,473 |
|||||||||||||||||||||||||||
Chief Executive Officer |
2017 |
1,232,822 |
— |
22,682,025 |
— |
8,752,500 |
249 |
160,030 |
32,827,626 |
|||||||||||||||||||||||||||
Matthew M. Walsh |
2019 |
876,923 |
— |
642,195 |
— |
1,614,600 |
— |
72,802 |
3,206,519 |
|||||||||||||||||||||||||||
Chief Financial Officer |
2018 |
673,846 |
700,000 |
7,807,519 |
— |
1,360,545 |
— |
— |
10,541,910 |
|||||||||||||||||||||||||||
William Meury |
2019 |
938,461 |
— |
607,473 |
— |
2,125,200 |
— |
43,265 |
3,714,400 |
|||||||||||||||||||||||||||
Chief Commercial Officer |
2018 |
900,000 |
— |
676,926 |
— |
2,101,600 |
— |
32,431 |
3,710,957 |
|||||||||||||||||||||||||||
2017 |
873,973 |
— |
7,162,716 |
— |
3,022,500 |
— |
23,815 |
11,083,004 |
||||||||||||||||||||||||||||
C. David Nicholson, PhD |
2019 |
938,461 |
— |
607,473 |
— |
1,973,400 |
— |
119,125 |
3,638,460 |
|||||||||||||||||||||||||||
Chief R&D Officer |
2018 |
900,000 |
— |
676,926 |
— |
1,633,000 |
— |
53,818 |
3,263,744 |
|||||||||||||||||||||||||||
2017 |
837,158 |
— |
7,162,716 |
— |
3,022,500 |
5 |
30,387 |
11,052,765 |
||||||||||||||||||||||||||||
A. Robert D. Bailey |
2019 |
832,692 |
— |
404,967 |
— |
1,524,900 |
— |
94,556 |
2,857,115 |
|||||||||||||||||||||||||||
Chief Legal Officer & |
2018 |
775,000 |
— |
451,233 |
— |
1,507,685 |
— |
66,762 |
2,800,680 |
|||||||||||||||||||||||||||
Corporate Secretary |
— |
(1) | Salary includes annual salary and any salary earned but deferred, as applicable, under the Company’s deferred compensation plans. |
(2) | For our Named Executive Officers, the amounts shown in this column represent the aggregate grant date fair value of the 2019 R&D portion of the performance share units granted to our Named Executive Officers on April 4, 2017 (except for Mr. Walsh, whose award was granted on February 20, 2018). These values represent the accounting expense for awards made during 2017 (or in 2018 for Mr. Walsh), and these Named Executive Officers did not receive any additional equity grants during 2019. These amounts do not represent the actual value realized by the Named Executive Officers during the respective year. The maximum possible value of the portion of the performance share unit awards that relate to the 2019 R&D goals that were established in 2019 on the date the goals were established, assuming achievement at the highest performance level for the R&D goals, was as follows: $3,847,346 for Mr. Saunders, $1,284,389 for Mr. Walsh, $1,214,947 for Messrs. Meury and Nicholson, and $809,934 for Mr. Bailey. For discussion of the assumptions used in these valuations, see Share-Based Compensation in Note 9 to the audited consolidated financial statements in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019. For additional discussion of our long-term incentive program, see “Long-Term Incentives” on page 32 of the Compensation Discussion and Analysis. |
(3) | For additional detail on our annual incentive plan, see “Annual Incentive Awards” on page 27 of the Compensation Discussion and Analysis. For 2018 and 2017, the amounts shown in this column represent payment under our annual incentive plan for the 2018 and 2017 performance years. For 2019, the amounts shown in this column represent payment under our annual incentive plan (AIP) for the 2019 performance year. For additional detail on our annual incentive plan, see “Annual Incentive Awards” on page 27 of the Compensation Discussion and Analysis. For 2018 and 2017, the amounts shown in this column represent payment under our annual incentive plan for the 2018 and 2017 performance years. For 2017, the amount shown in this column also includes payment of a prior long-term cash incentive payment in connection with an earlier corporate transaction. |
(4) | For 2017, the amount shown in this column represents above-market interest earned by our Named Executive Officers on their non-qualified deferred compensation account balances. For 2018 and 2019, the actual interest earned was not considered above-market for purposes of reporting under the instructions for this table. For additional detail regarding our non-qualified deferred compensation plans, see the tables and text under “2019 Non-qualified Deferred Compensation” on page 40. |
(5) | All Other Compensation for 2019 consisted of Company matches under our qualified and non-qualified savings plans and other perquisites as follows: |
Name |
Company Aircraft 1 ($) |
Car and Driver 2 ($) |
Savings Plan Company Matching Contributions ($) |
Financial Planning Reimbursement ($) |
Total Other Compensation ($) |
|||||||||||||||
Brenton L. Saunders |
43,939 |
2,330 |
242,125 |
10,000 |
298,394 |
|||||||||||||||
Matthew M. Walsh |
39,802 |
— |
33,000 |
— |
72,802 |
|||||||||||||||
William Meury |
160 |
105 |
33,000 |
10,000 |
43,265 |
|||||||||||||||
C. David Nicholson, PhD |
— |
— |
109,125 |
10,000 |
119,125 |
|||||||||||||||
A. Robert D. Bailey |
1,553 |
— |
87,928 |
5,075 |
94,556 |
(1) | Amounts represent the incremental costs to us associated with the executive’s personal use of our aircraft. Incremental costs include fuel costs, landing and parking fees, per hour accruals for maintenance service plans, passenger catering and ground transportation, crew travel expenses and other trip-related variable costs (including fees for contract crew members and the use of our fractional jet interest). Because our aircraft are used primarily for business travel, incremental costs exclude fixed costs that do not change based on usage, such as pilots’ salaries, aircraft purchase or lease costs, fractional jet interest management fees, home-base hangar costs and certain maintenance fees. |
(2) | The incremental cost for the Company car and driver for commuting and nonbusiness events is calculated by multiplying the variable rate by the applicable miles driven. The variable rate includes a driver’s overtime compensation (if any), plus a cost per mile calculation based on fuel and maintenance expense. Because Company car and drivers are used primarily for business travel, incremental costs exclude fixed costs that do not change based on usage such as drivers’ salaries and vehicle purchase or lease cost. For instances where a car service is used, the incremental cost to the company is the actual fees paid for such service. |
Estimated Possible Payouts Under Non-Equity IncentivePlan Awards |
Estimated Possible Payouts Under Equity Incentive Plan Awards |
All Other Stock Awards: Number of Stick or Units (#) |
All Other Option Awards: Number of Securities Underlying Options (#) |
Exercise or Base Price of Option Awards ($/sh) |
Grant Date Fair Value of Stock and Option Awards ($) |
|||||||||||||||||||||||||||||||||||||||||||||
Name |
Award Type |
Date |
Threshold ($) |
Target ($) |
Maximum ($) |
Threshold (#) |
Target (#) |
Maximum (#) |
||||||||||||||||||||||||||||||||||||||||||
Brenton L. Saunders |
Non-Equity Incentive Plan Award1 |
3/6/2019 |
750,000 |
3,000,000 |
6,750,000 |
|||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units 2 |
3/6/2019 |
0 |
13,989 |
27,979 |
1,923,673 |
|||||||||||||||||||||||||||||||||||||||||||||
Matthew M. Walsh |
Non-Equity Incentive Plan Award1 |
3/6/2019 |
225,000 |
900,000 |
2,025,000 |
|||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units |
3/6/2019 |
0 |
4,670 |
9,340 |
642,195 |
|||||||||||||||||||||||||||||||||||||||||||||
William Meury |
Non-Equity Incentive Plan Award1 |
3/6/2019 |
275,000 |
1,100,000 |
2,475,000 |
|||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units2 |
3/6/2019 |
0 |
4,418 |
8,835 |
607,473 |
|||||||||||||||||||||||||||||||||||||||||||||
C. David Nicholson, PhD |
Non-Equity Incentive Plan Award |
3/6/2019 |
275,000 |
1,100,000 |
2,475,000 |
|||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units2 |
3/6/2019 |
0 |
4,418 |
8,835 |
607,473 |
|||||||||||||||||||||||||||||||||||||||||||||
A. Robert D. Bailey |
Non-Equity Incentive Plan Award |
3/6/2019 |
212,500 |
850,000 |
1,912,500 |
|||||||||||||||||||||||||||||||||||||||||||||
Performance Share Units2 |
3/6/2019 |
0 |
2,945 |
5,890 |
404,967 |
(1) | Amounts represent threshold, target and maximum award opportunities under the 2019 AIP. The actual amounts earned by each Named Executive Officer are set forth in the “Non-Equity Incentive Plan Compensation” column of the Summary Compensation Table. For a discussion of the 2019 AIP, see page 27 of the Compensation Discussion and Analysis. |
(2) | Other than Mr. Walsh, the grant date fair value relates to the PSUs awarded in 2017, and these executives did not receive any additional equity grants during 2019. Mr. Walsh received his PSU grant in 2018 in connection with his hiring. The payout of PSUs awarded in 2017 (or 2018, for Mr. Walsh) can range from 0% to a maximum of 200% of target, depending on the level of achievement of the applicable performance goals. Earned PSUs vest 1/2 on each of December 31, 2020 and 2021. For more information on the PSUs, see page 33 hereof. |
Option Awards |
Stock Awards |
|||||||||||||||||||||||||||||||
Name |
Number of Securities Underlying Unexercised Options— Exerciseable (#) |
Number of Securities Underlying Unexercised Options— Unexerciseable (#) |
Option Exercise Price ($) |
Option Expiration Date |
Number of Shares or Units That Have Not Vested (#) |
Market Value of Shares or Units That Have Not Vested ($) |
Equity Incentive Plan Awards: Number of Shares or Units That Have Not Vested (#) |
Equity Incentive Plan Awards: Market Value of Shares or Units That Have Not Vested ($) |
||||||||||||||||||||||||
Brenton L. Saunders |
104,651 |
$ | 224.00 |
7/1/24 |
16,787 |
(1) |
$ | 3,209,171 |
83,936 |
(3) |
$ | 16,046,045 |
||||||||||||||||||||
63,566 |
$ | 196.16 |
5/12/24 |
|||||||||||||||||||||||||||||
222,958 |
$ | 91.13 |
9/30/23 |
|||||||||||||||||||||||||||||
2,790 |
$ | 90.22 |
8/14/23 |
|||||||||||||||||||||||||||||
3,691 |
$ | 73.14 |
8/22/22 |
|||||||||||||||||||||||||||||
9,446 |
$ | 70.79 |
8/22/21 |
|||||||||||||||||||||||||||||
Matthew M. Walsh |
7,472 |
(1) |
$ | 1,428,422 |
28,021 |
(3) |
$ | 5,356,775 |
||||||||||||||||||||||||
9,807 |
(2) |
1,874,804 |
||||||||||||||||||||||||||||||
William Meury |
19,278 |
$ | 224.00 |
7/1/24 |
5,301 |
(1) |
$ | 1,013,392 |
26,506 |
(3) |
$ | 5,067,152 |
||||||||||||||||||||
12,813 |
$ | 196.16 |
5/12/24 |
|||||||||||||||||||||||||||||
22,867 |
$ | 80.20 |
5/20/23 |
|||||||||||||||||||||||||||||
11,476 |
$ | 72.07 |
5/6/22 |
|||||||||||||||||||||||||||||
16,082 |
$ | 63.51 |
12/4/21 |
|||||||||||||||||||||||||||||
C. David Nicholson, PhD |
17,006 |
$ | 215.77 |
8/4/24 |
5,301 |
(1) |
$ | 1,013,392 |
26,506 |
(3) |
$ | 5,067,152 |
||||||||||||||||||||
A. Robert D. Bailey |
16,524 |
$ | 224.00 |
7/1/24 |
3,534 |
(1) |
$ | 675,595 |
17,670 |
(3) |
$ | 3,377,974 |
||||||||||||||||||||
12,813 |
$ | 196.16 |
5/12/24 |
|||||||||||||||||||||||||||||
13,602 |
$ | 161.66 |
11/11/23 |
(1) | Represents restricted stock units granted on April 3, 2017 (other than Mr. Walsh, whose grant was made February 20, 2018), which vest ratably 20% per year on each anniversary of the grant date. |
(2) | Represents restricted stock units granted on February 20, 2018, which vest ratably 25% per year on each anniversary of the grant date. |
(3) | Represents the target number of performance share units granted on April 3, 2017 (other than Mr. Walsh, whose grant was made February 20, 2018), which are not yet earned, with the number of units eligible to vest based 50% on our relative total shareholder return (R-TSR) between January 1, 2017 and December 31, 2019 and 50% on our achievement of R&D goals. Units remain subject to time-vesting thereafter, and vest 50% per year on December 31 of 2020 and 2021. The value reported is the target number of units granted multiplied by our closing share price on December 31, 2019. Upon closing of the AbbVie Transaction, these performance share units will vest at 130% of target. |
Option Awards |
Stock Awards |
|||||||||||||||
Name |
Number of Shares Acquired on Exercise (#) |
Value Realized on Exercise ($) |
Number of Shares Acquired on Vesting (1) (#) |
Value Realized on Vesting (2) ($) |
||||||||||||
Brenton L. Saunders |
22,461 |
4,118,709 |
||||||||||||||
Matthew M. Walsh |
5,137 |
735,773 |
||||||||||||||
William Meury |
4,874 |
870,242 |
||||||||||||||
C. David Nicholson, PhD |
3,858 |
673,169 |
||||||||||||||
A. Robert D. Bailey |
3,842 |
695,119 |
(1) | Shares acquired on vesting are presented on a pre-tax basis. |
(2) | Represents the closing market price of our ordinary shares on the date of vesting (or date immediately prior that was a trading day) multiplied by the number of shares that have vested, plus the value of any accrued dividends paid in connection with the units vesting. |
Name |
Executive Contributions in Last FY (1) ($) |
Registrant Contributions in Last FY (2) ($) |
Aggregate Earnings in Last FY (3) ($) |
Aggregate Withdrawals/ Distributions ($) |
Aggregate Balance at Last FYE (4) ($) |
|||||||||||||||
Brenton L. Saunders |
— |
212,625 |
33,293 |
— |
992,823 |
|||||||||||||||
Matthew M. Walsh |
70,154 |
— |
1,261 |
— |
71,415 |
|||||||||||||||
William Meury |
— |
— |
— |
— |
— |
|||||||||||||||
C. David Nicholson, PhD |
65,320 |
76,125 |
9,911 |
— |
312,181 |
|||||||||||||||
A. Robert D. Bailey |
— |
54,928 |
5,162 |
— |
158,809 |
(1) | Executive contributions include salary contributions for 2019 for Mr. Walsh and deferrals related to a portion of 2018 AIP bonus awards paid in 2019 for Dr. Nicholson. Any contributions are also reported in the “Salary” column for 2019 or the “Non-Equity Incentive Plan Compensation” column for 2018 in the Summary Compensation Table on page 37. |
(2) | This column represents company matching contributions to the non-qualified deferred compensation plan in 2019, which relate to amounts deferred in March 2018 from 2017 annual incentive plan awards. All Registrant contributions are reported in the “All Other Compensation” column of the Summary Compensation Table on page 37. |
(3) | This column represents deemed investment earnings at the guaranteed fixed interest rate for 2019. No other investment alternatives for amounts deferred or credited are offered under the non-qualified deferred compensation plan. |
(4) | This column reflects balances as of December 31, 2019 and includes deferred compensation earned in prior years, which was disclosed as either “Salary” or “Non-Equity Incentive Plan Awards” in the Summary Compensation Table of prior proxy statements. |
• | a lump sum cash payment equal to two times the sum of (A) Mr. Saunders’ then-current annual base salary and (B) Mr. Saunders’ target bonus amount; and |
• | continued group health benefits for Mr. Saunders and his dependents for up to 24 months following termination. |
• | a lump sum payment equal to 1.5 multiplied by the sum of (A) the Participant’s annual base salary and (B) the Participant’s target annual incentive award for the fiscal year in which the termination occurs; |
• | continued group health benefits (medical, dental and vision) for the Participant and the Participant’s eligible dependents for a period of up to 24 months with the Participant paying active employee premium rates; and |
• | outplacement services for up to 24 months. |
• | a lump sum payment equal to 2.5 multiplied by the sum of (A) the Participant’s annual base salary as of the termination date or, if greater, the Participant’s annual base salary at the time of the first occurrence of a change in control within the two years preceding the termination date, and (B) the Participant’s target annual incentive award for the fiscal year in which the termination occurs; |
• | continued group health benefits (medical, dental and vision) for the Participant and the Participant’s eligible dependents for a period of up to 30 months with the Participant paying active employee premium rates; and |
• | outplacement services for up to 30 months. |
Name and Principal Position |
Cash Severance (1) ($) |
Health and Welfare Benefits (2) ($) |
Outplacement (3) ($) |
Restricted Stock (4) ($) |
Performance Shares (5) ($) |
Stock Options |
Total ($) |
|||||||||||||||||||||
Brenton L. Saunders |
||||||||||||||||||||||||||||
Good Reason or Without Cause |
8,700,000 |
39,671 |
50,000 |
— |
10,129,525 |
— |
18,919,196 |
|||||||||||||||||||||
Qualifying Termination in Event of Change in Control |
13,050,000 |
59,507 |
50,000 |
3,209,171 |
16,046,045 |
— |
32,414,723 |
|||||||||||||||||||||
Matthew M. Walsh |
||||||||||||||||||||||||||||
Good Reason or Without Cause |
2,700,000 |
38,372 |
50,000 |
— |
4,156,249 |
— |
6,944,621 |
|||||||||||||||||||||
Qualifying Termination in Event of Change in Control |
4,500,000 |
47,965 |
50,000 |
3,303,226 |
5,356,775 |
— |
13,257,966 |
|||||||||||||||||||||
William Meury |
||||||||||||||||||||||||||||
Good Reason or Without Cause |
3,075,000 |
37,229 |
50,000 |
— |
3,198,848 |
— |
6,361,076 |
|||||||||||||||||||||
Qualifying Termination in Event of Change in Control |
5,125,000 |
46,536 |
50,000 |
1,013,392 |
5,067,152 |
— |
11,302,080 |
|||||||||||||||||||||
C. David Nicholson, PhD |
||||||||||||||||||||||||||||
Good Reason or Without Cause |
3,075,000 |
15,319 |
50,000 |
— |
3,198,848 |
— |
6,339,167 |
|||||||||||||||||||||
Qualifying Termination in Event of Change in Control |
5,125,000 |
18,341 |
50,000 |
1,013,392 |
5,067,152 |
— |
11,273,885 |
|||||||||||||||||||||
A. Robert D. Bailey |
||||||||||||||||||||||||||||
Good Reason or Without Cause |
2,550,000 |
37,550 |
50,000 |
— |
2,132,501 |
— |
4,770,052 |
|||||||||||||||||||||
Qualifying Termination in Event of Change in Control |
4,250,000 |
46,938 |
50,000 |
675,595 |
3,377,974 |
— |
8,400,506 |
(1) | See the above narrative disclosure for a description of the cash severance benefits payable to the NEOs. |
(2) | See the above narrative disclosure for a description of the group health, insurance and welfare benefits payable to the NEOs. |
(3) | See the above narrative disclosure for a description of the outplacement services provided to the NEOs. The amount disclosed represents the minimum cost to the Company under our program terms. The actual cost may vary depending on the actual services provided. |
(4) | For all NEOs, all restricted stock units will accelerate upon a termination in connection with a change in control. |
(5) | In the event of termination without a change in control, for all NEOs, represents the pro-rated value of the Performance Share Units granted on April 3, 2017 (or for Mr. Walsh, February 20, 2018), based on target performance (upon an actual termination without a change in control, payout is based on actual performance at the conclusion of the performance period). For all NEOs, in the event of termination in connection with a change in control represents the target value of the Performance Share Units (upon an actual termination following a change in control, employees are entitled to the greater of (a) the award at target or (b) an award based on performance to date). Upon closing of the AbbVie Transaction, these Performance Share Units will vest at 130% of target. |
Plan Category |
Number of securities to be issued upon exercise of outstanding options, warrants and rights (#) (a) |
Weighted-average 1 exercise price of outstanding options, warrants and rights ($) (b |
Number of securities remaining available for future issuance under equity compensation plans (excluding security reflected in column (a)) (#) (c) |
|||||||||
Equity compensation plans approved by security holders |
3,633,180 |
148.91 |
2,993,646 |
|||||||||
Compensation plans not approved by security holders |
4,954,473 |
129.26 |
954,824 |
|||||||||
Total |
8,587,653 |
157.28 |
3,948,470 |
|||||||||
(1) | Reflects the weighted average exercise price of options only and excludes restricted stock unit and performance share unit awards. |
(2) | Includes shares issuable pursuant to 1,439,840 restricted stock units and performance share units (assuming target payout for the performance share units) and 2,193,340 options granted under the 2013 IAP. |
(3) | Includes shares issuable upon exercise of options and pursuant to other rights under the following plans assumed by the Company in connection with certain acquisitions: the Legacy Allergan Plan; Allergan, Inc. Deferred Directors’ Fee Program; Allergan Irish Share Participation Scheme; 2000 Stock option plan of Forest Laboratories, Inc.; 2004 Stock option plan of Forest Laboratories, Inc.; 2007 Stock option plan of Forest Laboratories, Inc.; Kythera Biopharmaceuticals, Inc. 2012 Equity Incentive Award Plan; Kythera Biopharmaceuticals, Inc. 2004 Stock Plan; and Kythera Biopharmaceuticals, Inc. 2014 Employment Commencement Incentive Plan. This amount includes 1,625,983 restricted stock units and performance share units (assuming target payout for the performance share units) and 3,328,490 options. |
(4) | Includes shares remaining available for issuance under the Legacy Allergan Plan and does not include shares remaining for issuance under any other legacy plans or plans assumed by the Company in connection with certain acquisitions. The Company has not and will not grant additional awards under these plans, other than the Legacy Allergan Plan. |
ITEM 12. |
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS |
Name and Address of Beneficial Owner |
Amount and Nature of Beneficial Ownership 1 |
Percent of Class (%) |
||||||
Wellington Management Group LLP 280 Congress Street Boston, MA 02210 |
24,934,153 |
(2) |
7.56 |
% | ||||
The Vanguard Group 100 Vanguard Blvd. Malvern, PA 19355 |
24,506,020 |
(3) |
7.43 |
% | ||||
BlackRock, Inc. 55 East 52nd Street New York, NY 10055 |
20,807,793 |
(4) |
6.31 |
% |
(1) |
Unless otherwise indicated in the footnotes to this table and pursuant to applicable community property laws, we believe the persons named in this table have sole voting and investment power with respect to all ordinary shares reflected in this table. As of April 27, 2020, 329,765,537 of our ordinary shares were issued and outstanding. |
(2) |
According to Schedule 13G/A filed with the SEC on February 12, 2019, each of Wellington Management Group LLP, Wellington Group Holdings LLP and Wellington Investment Advisors Holdings LLP is the beneficial owner of 24,934,153 shares (with shared voting power with respect to 5,591,827 shares and shared dispositive power with respect to 24,934,153 shares) while Wellington Management Company LLP is the beneficial owner of 22,912,800 shares (with shared voting power with respect to 4,850,729 shares and shared dispositive power with respect to 22,912,800 shares). Wellington Management Group LLP is the parent holding company of certain holding companies and the Wellington Investment Advisers. The securities reported on Schedule 13G/A are owned of record by clients of the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP controls directly, or indirectly through Wellington Management Global Holdings, Ltd., the Wellington Investment Advisers. Wellington Investment Advisors Holdings LLP is owned by Wellington Group Holdings LLP. Wellington Group Holdings LLP is owned by Wellington Management Group LLP. |
(3) |
According to Schedule 13G/A filed with the SEC on February 12, 2020, The Vanguard Group is the beneficial owner of 24,506,020 shares (with sole voting power with respect to 486,160 shares, shared voting power with respect to 90,796 shares, sole dispositive power with respect to 23,957,200 shares and shared dispositive power with respect to 548,820 shares). Vanguard Fiduciary Trust Company (“VFTC”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 371,165 shares as a result of its serving as investment manager of collective trust accounts. Vanguard Investments Australia, Ltd. (“VIA”), a wholly-owned subsidiary of The Vanguard Group, Inc., is the beneficial owner of 287,012 shares as a result of its serving as investment manager of Australian investment offerings. |
(4) |
According to Schedule 13G/A filed with the SEC on February 10, 2020, Blackrock, Inc. is the beneficial owner of 20,807,793 shares (with sole voting power with respect to 17,506,864 shares and sole dispositive power with respect to 20,807,793 shares). |
Name |
Ordinary Shares 1 (#) |
Rights to Acquire Shares (Options) (#) |
Rights to Acquire Shares (Restricted Stock Units) ($) |
Total (#) |
||||||||||||
Directors (excludes executive officer directors) |
||||||||||||||||
Nesli Basgoz, M.D. |
5,815 |
9,100 |
2,064 |
16,979 |
||||||||||||
Joseph H. Boccuzi |
2,532 |
0 |
2,064 |
4,596 |
||||||||||||
Christopher W. Bodine |
17,542 |
0 |
2,064 |
19,606 |
||||||||||||
Adriane M. Brown |
1,843 |
0 |
2,064 |
3,907 |
||||||||||||
Christopher J. Coughlin 2 |
25,478 |
15,927 |
2,064 |
43,469 |
||||||||||||
Carol Anthony (John) Davidson |
1,032 |
0 |
2,064 |
3,096 |
||||||||||||
Thomas C. Freyman |
1,910 |
0 |
2,064 |
3,974 |
||||||||||||
Michael E. Greenberg, PhD |
620 |
0 |
2,064 |
2,684 |
||||||||||||
Robert J. Hugin |
3,221 |
0 |
2,064 |
5,285 |
||||||||||||
Peter J. McDonnell, M.D |
5,279 |
0 |
2,064 |
7,343 |
||||||||||||
Named Executive Officers |
||||||||||||||||
Brenton L. Saunders |
149,384 |
407,102 |
79,805 |
636,291 |
||||||||||||
Matthew M. Walsh |
12,039 |
0 |
27,618 |
39,657 |
||||||||||||
William Meury |
7,434 |
82,516 |
25,201 |
115,151 |
||||||||||||
C. David Nicholson, PhD |
9,999 |
17,006 |
25,200 |
52,205 |
||||||||||||
A. Robert D. Bailey |
17,629 |
42,939 |
16,798 |
77,366 |
||||||||||||
All current directors and executive officers as a group (16 individuals) |
274,185 |
591,151 |
213,635 |
1,078,971 |
(1) |
Ordinary shares include voting securities represented by shares held of record, shares held by a bank, broker or nominee for the person’s account and shares held through family trust arrangements, including any shares of restricted stock which remain subject to sale restrictions. |
(2) |
Includes 10,000 shares held by a grantor retained annuity trust in which Mr. Coughlin retains a pecuniary interest. |
ITEM 13. |
CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE |
• | The related person’s relationship to us. |
• | The related person’s interest in the transaction. |
• | The material facts of the proposed transaction, including the proposed aggregate value of such transaction or, in the case of indebtedness, the amount of principal that would be involved. |
• | The benefits to us of the proposed transaction. |
• | If applicable, the availability of other sources of comparable products or services. |
• | Whether the proposed transaction is on terms that are comparable to the terms available to an unrelated third party or to employees generally. |
ITEM 14. |
PRINCIPAL ACCOUNTING FEES AND SERVICES |
Services |
2019 |
2018 |
||||||
Audit Fees |
$ | 21,046,000 |
$ | 22,041,000 |
||||
Audit-Related Fees |
$ | 4,520,000 |
4,785,000 |
|||||
Total Audit and Audit-Related Fees |
$ | 25,566,000 |
26,826,000 |
|||||
Tax Fees |
4,652,000 |
5,821,000 |
||||||
All Other Fees |
181,000 |
194,000 |
||||||
TOTAL FEES |
$ |
30,399,000 |
$ |
32,841,000 |
||||
ITEM 15. |
Exhibits, Financial Statement Schedules |
(a) | The following documents are filed as part of the Annual Report on Form 10-K: |
1. | Financial Statements |
Page in Original Filing |
||||
Reports of Independent Registered Public Accounting Firm |
F-2 |
|||
Consolidated Balance Sheets of Allergan plc as of December 31, 2019 and 2018 |
F-7 |
|||
Consolidated Statements of Operations of Allergan plc for the years ended December 31, 2019, 2018 and 2017 |
F-8 |
|||
Consolidated Statements of Comprehensive (Loss) / Income of Allergan plc for the years ended December 31, 2019, 2018 and 2017 |
F-9 |
|||
Consolidated Statements of Cash Flows of Allergan plc for the years ended December 31, 2019, 2018 and 2017 |
F-10 |
|||
Consolidated Statements of Equity of Allergan plc for the years ended December 31, 2019, 2018 and 2017 |
F-11 |
|||
Consolidated Balance Sheets of Warner Chilcott Limited as of December 31, 2019 and 2018 |
F-12 |
|||
Consolidated Statements of Operations of Warner Chilcott Limited for the years ended December 31, 2019, 2018 and 2017 |
F-13 |
|||
Consolidated Statements of Comprehensive (Loss) / Income of Warner Chilcott Limited for the years ended December 31, 2019, 2018 and 2017 |
F-14 |
|||
Consolidated Statements of Cash Flows of Warner Chilcott Limited for the years ended December 31, 2019, 2018 and 2017 |
F-15 |
|||
Consolidated Statements of Equity of Warner Chilcott Limited for the years ended December 31, 2019, 2018 and 2017 |
F-16 |
|||
Notes to the Consolidated Financial Statements |
F-17 |
2. | Financial Statement Schedules |
3. | Exhibits |
Exhibit No. |
Description | |||
2.1 |
||||
2.2 |
||||
2.3 |
||||
3.1 |
||||
3.2 |
||||
4.1 |
||||
4.2 |
||||
4.3 |
||||
4.4 |
||||
4.5 |
Exhibit No. |
Description | |||
4.6 |
||||
4.7 |
||||
4.8 |
||||
4.9 |
||||
4.10 |
||||
4.11 |
||||
4.12 |
||||
4.13 |
||||
4.14 |
||||
4.15 |
Exhibit No. |
Description | |||
4.16 |
||||
4.17 |
||||
4.18 |
||||
4.19 |
||||
4.20 |
||||
4.21 |
||||
4.22 |
||||
4.23 |
||||
4.24 |
Exhibit No. |
Description | |||
4.25 |
||||
4.26 |
||||
4.27 |
||||
4.28 |
||||
4.29 |
||||
4.30 |
||||
4.31 |
||||
4.32 |
||||
4.33 |
||||
4.34 |
Exhibit No. |
Description | |||
4.35 |
||||
4.36 |
||||
10.1 |
||||
10.2# |
||||
10.3# |
||||
10.4# |
||||
10.5# |
||||
10.6# |
||||
10.7# |
||||
10.8# |
Exhibit No. |
Description | |||
10.9# |
||||
10.10 |
||||
10.11 |
||||
10.12 |
||||
10.13 |
||||
10.14 |
||||
10.15 |
||||
10.16# |
||||
10.17# |
||||
10.18# |
||||
10.19# |
||||
10.20# |
Exhibit No. |
Description | |||
10.21# |
||||
10.22# |
||||
10.23# |
||||
10.24# |
||||
10.25# |
||||
10.26# |
||||
10.27# |
||||
10.28# |
||||
10.29 |
||||
10.30# |
||||
10.31# |
||||
10.32# |
Exhibit No. |
Description | |||
10.33# |
||||
10.34# |
||||
10.35# |
||||
10.36# |
||||
10.37# |
||||
21.1 |
||||
23.1 |
||||
23.2 |
||||
24.1 |
||||
31.1 |
||||
31.2 |
||||
31.3* |
||||
31.4* |
||||
32.1 |
||||
32.2 |
||||
101.INS |
Inline XBRL Instance Document. | |||
101.SCH |
Inline XBRL Taxonomy Extension Schema Document. | |||
101.CAL |
Inline XBRL Taxonomy Extension Calculation Linkbase Document. |
Exhibit No. |
Description | |||
101.DEF |
Inline XBRL Taxonomy Extension Label Definition Document. | |||
101.LAB |
Inline XBRL Taxonomy Extension Label 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) |
# Indicates a management contract or compensatory plan or arrangement. |
* Filed herewith. |
ITEM 16. |
Form 10-K Summary |
ALLERGAN plc | ||
By: |
/s/ Brenton L. Saunders | |
Brenton L. Saunders | ||
Chief Executive Officer and President |
WARNER CHILCOTT LIMITED | ||
By: |
/s/ A. Robert D. Bailey | |
A. Robert D. Bailey | ||
Secretary |