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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
 
Form
10-K/A
Amendment No. 1
 
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
For the fiscal year ended December 31, 2019
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
 
 
 
 
For the transition period from
                    
to
                    
 
             
Commission
File Number
 
Exact name of registrant as specified in its charter,
principal office and address and telephone number
 
State of incorporation
or organization 
 
I.R.S. Employer
Identification No. 
001-36867
 
Allergan plc
Clonshaugh Business and Technology Park
Coolock, Dublin, D17 E400, Ireland
(862)
261-7000
 
Ireland
 
98-1114402
001-36887
 
Warner Chilcott Limited
Victoria Place, 5
th
Floor
Hamilton HM 10
Bermuda
(441)
295-2244
 
Bermuda
 
98-0496358
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
         
Title of Each Class
 
Trading
Symbol
 
Name of Each Exchange
on Which Registered
Allergan plc Ordinary Shares, $0.0001 par value
 
AGN
 
New York Stock Exchange
         
Floating rate notes due 2020
 
AGN20A
 
New York Stock Exchange
         
0.500% notes due 2021
 
AGN21
 
New York Stock Exchange
         
1.500% notes due 2023
 
AGN 23A
 
New York Stock Exchange
         
1.250% notes due 2024
 
AGN 24A
 
New York Stock Exchange
         
2.625% notes due 2028
 
AGN28
 
New York Stock Exchange
         
2.125% notes due 2029
 
AGN29
 
New York Stock Exchange
 
 
 
 
 
Securities registered pursuant to Section 12(g) of the Act:
None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
         
Allergan plc
 
Yes    
 
No    
Warner Chilcott Limited
 
Yes    
 
No    
 
 
 
 
 
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
         
Allergan plc
 
Yes    
 
No    
Warner Chilcott Limited
 
Yes    
 
No    
 
 
 
 
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days:
         
Allergan plc
 
Yes    
 
No    
Warner Chilcott Limited
 
Yes    
 
No    
 
 
 
 
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation
 S-T
(§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
         
Allergan plc
 
Yes    
 
No    
Warner Chilcott Limited
 
Yes    
 
No    
 
 
 
 
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a
non-accelerated
filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule
 12b-2
of the Exchange Act.
                 
Allergan plc
 
Large accelerated filer
 
 
Accelerated filer
 
                 
 
Non-accelerated filer
 
 
Smaller reporting company
 
                 
 
Emerging growth company
 
 
 
                 
Warner Chilcott Limited
 
Large accelerated filer
 
 
Accelerated filer
 
                 
 
Non-accelerated filer
 
 
Smaller reporting company
 
                 
 
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.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule
 12b-2
of the Act).
         
Allergan plc
 
Yes    
 
No    
Warner Chilcott Limited
 
Yes    
 
No    
 
 
 
 
 
The aggregate market value of the voting and
non-voting
stock held by
non-affiliates
of Allergan plc as of June 30, 2019, based upon the last sale price reported for such date on the New York Stock Exchange, was $54.8 billion. The calculation of the aggregate market value of voting and
non-voting
stock excludes Class A ordinary shares of Allergan plc held by executive officers, directors, and stockholders that the registrant concluded were affiliates of Allergan plc on that date.
Number of shares of Allergan plc’s Ordinary Shares outstanding on April 27, 2020: 329,765,537
This Amendment No. 1 to the Annual Report on Form
10-K
is a combined report being filed separately by two different registrants: Allergan plc and Warner Chilcott Limited. Warner Chilcott Limited is an indirect wholly owned subsidiary of Allergan plc. The information in this Amendment No 1 to the Annual Report on Form
10-K
is equally applicable to Allergan plc and Warner Chilcott Limited, except where otherwise indicated. Warner Chilcott Limited meets the conditions set forth in General Instruction H(1)(a) and (b) of Form
10-K
and, to the extent applicable, is therefore filing this form with a reduced disclosure format.
 
 
 
 
 

ALLERGAN PLC
WARNER CHILCOTT LIMITED
TABLE OF CONTENTS
FORM
10-K
FOR THE YEAR ENDED DECEMBER 31, 2019
             
 
PAGE
 
   
PART III
 
             
     
1
 
             
     
20
 
             
     
48
 
             
     
50
 
             
     
51
 
   
PART IV
 
             
     
53
 
             
     
65
 
 
 
 
 
 

EXPLANATORY NOTE
This Amendment No. 1 to the Annual Report on Form
10-K
(this “Amendment”) amends Part III, Items 10 through 14 of the previously filed Annual Report on Form
10-K
for the fiscal year ended December 31, 2019, originally filed on February 18, 2020 (the “Original Filing”) by Allergan plc and Warner Chilcott Limited (collectively, “we,” “our,” “us,” the “Company” or “Allergan”). We are filing this Amendment to include information previously omitted from the Original Filing in reliance on General Instruction G(3) to Form
10-K,
which provides that registrants may incorporate by reference certain information from a definitive proxy statement that involves the election of directors, provided that the definitive proxy statement is filed with the Securities and Exchange Commission (“SEC”) within 120 days after the end of the fiscal year. Due to the Company’s previously announced and pending transaction with AbbVie Inc. (the “AbbVie Transaction”), the Company does not anticipate that a definitive proxy statement that involves the election of directors will be filed within 120 days of the end of the Company’s fiscal year. Accordingly, Part III of the Original Filing is hereby amended as set forth below.
In addition, as required by Rule
12b-15
under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), new certifications by our principal executive officer and principal financial officer are filed as exhibits under Item 15 of Part IV to this Amendment.
Except as stated herein, this Amendment does not reflect events occurring after the filing of the Original Filing and no attempt has been made in this Amendment to modify or update other disclosures presented in the Original Filing. Among other things, forward-looking statements made in the Original Filing have not been revised to reflect events that occurred or facts that became known to the Company after the filing of the Original Filing, and such forward-looking statements should be read in their historical context. Accordingly, this Amendment should be read in conjunction with the Original Filing and the Company’s other filings with the SEC subsequent to the filing of the Original Filing.

ITEM 10.
DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE
 
Directors
The following summaries set forth information regarding the Company’s current directors as of April 27, 2020.
     
 
 
NESLI BASGOZ, M.D.
 
Director Since:
2014
 
Age:
62
 
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:
 
None
 
Previous, Recently-Held Public Company Directorships:
 
None
 
-1-

     
 
 
JOSEPH H. BOCCUZI
 
Director Since:
2017
 
Age:
73
 
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:
 
None
 
Previous, Recently-Held Public Company Directorships:
 
None
 
-2-

     
 
 
CHRISTOPHER W. BODINE
 
Director Since:
2009
 
Age:
64
 
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
 
-3-

     
 
 
ADRIANE M. BROWN
 
Director Since:
2017
 
Age:
61
 
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
 
-4-

     
 
 
CHRISTOPHER J. COUGHLIN
Lead Independent Director
 
Director Since:
2014
 
Age:
67
 
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 Healthcare
 
Previous, Recently-Held Public Company Directorships:
 
The Dun & Bradstreet Corp. (Former Chairman of the Board)
 
Hologic, Inc.
 
Dipexium
 
-5-

     
 
 
CAROL ANTHONY (JOHN) DAVIDSON
 
Director Since:
2018
 
Age:
64
 
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
 
-6-

     
 
 
THOMAS C. FREYMAN
 
Director Since:
2018
 
Age:
65
 
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
 
-7-

     
 
 
MICHAEL E. GREENBERG, PHD
 
Director Since:
2018
 
Age:
65
 
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:
 
None
 
Previous, Recently-Held Public Company Directorships:
 
None
 
-8-

     
 
 
ROBERT J. HUGIN
 
Director Since:
2019
 
Age:
65
 
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:
 
None
 
Previous, Recently-Held Public Company Directorships:
 
Celgene Corporation (Former Chairman of the Board)
 
Danaher Corporation
 
The Medicines Company
 
 
-9-

     
 
 
PETER J. MCDONNELL, M.D.
 
Director Since:
2015
 
Age:
62
 
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:
 
None
 
Previous, Recently-Held Public Company Directorships:
 
None
 
-10-

     
 
 
BRENTON L. SAUNDERS
Chairman
 
Director Since:
2014
 
Age:
50
 
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
 
 
-11-

Executive Officers of the Registrant
Below are our executive officers as of April 27, 2020:
             
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
 
 
Brenton L. Saunders
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.
William Meury
Mr. Meury is Executive Vice President and Chief Commercial Officer of Allergan and has served in this role since May 2016, having previously served as President, Branded Pharma from March 2015 and Executive Vice President, Commercial, North American Brands from July 2014. Mr. Meury served as Executive Vice President, Sales and Marketing at Forest prior to its acquisition by Allergan (then known as Actavis). He joined Forest in 1993 and held multiple roles of increasing responsibility in Marketing, New Products, Business Development, and Sales. Before joining Forest, Mr. Meury worked in public accounting for Reznick Fedder & Silverman and in financial reporting for MCI Communications. He received a B.S. in Economics from the University of Maryland. Mr. Meury serves on the Board of Directors of Syndax Pharmaceuticals, The Jed Foundation and the International Council of Ophthalmology Foundation.
Matthew M. Walsh
Mr. Walsh is Executive Vice President and Chief Financial Officer of Allergan and has served in this role since February 2018. Prior to joining Allergan, Mr. Walsh served as EVP, CFO at Catalent for 10 years. Before Catalent, Mr. Walsh was President, CFO and Acting CEO at Escala Group, Inc. He previously held a variety of finance leadership roles at GenTek, Inc., including Vice President-Finance & Chief Financial Officer, Vice President & Treasurer and Group Controller. Mr. Walsh is a CFA
®
charterholder. He received an MBA from Cornell University, SC Johnson School of Management and a Bachelor of Science in Chemical Engineering from Cornell University, College of Engineering.
-12-

A. Robert D. Bailey
Mr. Bailey is Executive Vice President and Chief Legal Officer and Corporate Secretary of Allergan, and has served in this role since July 2014, having served as Senior Vice President, Chief Legal Officer, General Counsel and Corporate Secretary of Forest prior to its acquisition by Allergan, from November 2013 to June 2014. Prior to that, Mr. Bailey served as Executive Vice President, Law, Policy and Communications at Bausch + Lomb from 2007 to 2013. Before joining Bausch + Lomb in 1994, he was an attorney at Nixon Peabody (formerly Nixon, Hargrave, Devans & Doyle). Mr. Bailey received his J.D. from the University of Minnesota and his B.A. from St. Olaf College.
Dr. C. David Nicholson
Dr. Nicholson is Executive Vice President and Chief R&D Officer of Allergan and has served in this role since March 2015. He joined Allergan (then known as Actavis) as Senior Vice President, Global Brands R&D in August 2014. Previously, he served as Chief Technology Officer and EVP, R&D for Bayer CropScience from March 2012 to August 2014; Vice President of Licensing and Knowledge Management at Merck from 2009 to December 2011; and Senior Vice President, responsible for Global Project Management and Drug Safety at Schering-Plough from 2007 to 2009. From 1988 to 2007, Dr. Nicholson held various leadership positions at Organon, where he most recently served as Executive Vice President, Research & Development and was a member of the company’s Executive Management Committee. Dr. Nicholson serves on the Board of Directors of Actinium Pharmaceuticals and Science Exchange. He received a B.Sc. from the University of Manchester and his Ph.D. from the University of Wales.
Wayne R. Swanton
Mr. Swanton is Executive Vice President, Global Operations of Allergan and has served in this role since January 2018. Previously, Mr. Swanton served as Senior Vice President Global Operations of Allergan. He joined the Company (then Watson) in March 2012 as Vice President, Global Supply Chain. Mr. Swanton brings expertise to all aspects of the
end-to-end
supply chain, including procurement, planning, manufacturing, external supply, quality and distribution. He has extensive leadership experience in global pharmaceutical operations and managing significant business transformations. Prior to joining Allergan, Mr. Swanton held various roles at Abbott Laboratories in finance, supply chain, project management and manufacturing operations in both local and global capacities. Mr. Swanton is a Fellow of the Chartered Association of Certified Accountants, UK.
Our executive officers are appointed annually by the Board of Directors, hold office until their successors are chosen and qualified and may be removed at any time by the affirmative vote of a majority of the Board of Directors. We have employment agreements with most of our executive officers. There are no family relationships between any director and executive officer of Allergan.
-13-

Arrangements between Officers and Directors
To our knowledge, there is no arrangement or understanding between any of our directors or officers and any other person, including directors or officers, pursuant to which the director or officer was selected.
Family Relationships
None of our directors or officers are related by blood, marriage, or adoption to any other director, executive officer, or other key employee.
Legal Proceedings
Except as set forth herein, we are not aware of any of our directors or officers being involved in any legal proceedings in the past ten years relating to any matters in bankruptcy, insolvency, criminal proceedings (other than traffic and other minor offenses) or being subject to any of the items set forth under Item 401(f) of Regulation
S-K.
Delinquent Section 16(a) Reports
Section 16(a) of the Exchange Act requires our directors, certain of our officers, and persons who own more than 10% of a registered class of our equity securities to file with the SEC reports of ownership and changes in ownership of our ordinary shares and our other equity securities. Officers, directors and
greater-than-10%
shareholders are required by SEC regulations to furnish us with copies of all Section 16(a) forms they file.
Based solely on a review of the copies of such reports furnished to us or written representations that no other reports were required, we believe that during and with respect to the 2019 fiscal year all filing requirements applicable to our officers, directors and greater-
than-10%
beneficial owners were complied with and all filings were timely filed.
Nomination Process
Our goal is to have a highly qualified, balanced, engaged and diverse Board whose members possess the skills and background necessary to maximize shareholder value in a manner consistent with all legal requirements and the highest ethical standards.
Specifically, our Board, through our Nominating and Corporate Governance Committee, seeks candidates who:
  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.
 
 
Our Corporate Governance Guidelines specify that the value of diversity, including with respect to race, age and gender, on the Board of Directors shall be considered by the Nominating and Corporate Governance Committee in the director identification and nomination process. Accordingly, when conducting searches for new directors, the Nominating and Corporate Governance Committee will take reasonable steps to include diverse candidates in the pool of nominees and any search firm engaged by the Nominating and Corporate Governance Committee will affirmatively be instructed to seek to include diverse candidates. Although the Nominating and Corporate Governance Committee does not assign
-14-

specific weights to particular criteria, and no particular criterion is necessarily applicable to all prospective nominees, the Committee and the Board both have a strong commitment to creating and maintaining diversity on our Board.
The Nominating and Corporate Governance Committee follows a rigorous process when evaluating candidates for nomination to the Board of Directors. The Nominating and Corporate Governance Committee considers candidates for our Board of Directors from diverse sources, including suggestions from our shareholders and, from time to time, a third party that the Committee engages for a fee to assist in identifying potential director candidates. The Committee makes a final recommendation to the Board of Directors, which then nominates a candidate for election by the shareholders or, as applicable, appoints a candidate to fill a vacancy or new position. The Nominating and Corporate Governance Committee employs the same process for evaluating all candidates, including those properly recommended by shareholders, and considers shareholder recommendations of candidates on the same basis as it considers all other candidates.
Shareholders wishing to recommend a director candidate for consideration by the Nominating and Corporate Governance Committee may do so by sending the candidate’s name, biographical information and qualifications, together with a consent in writing signed by the recommended nominee indicating that he or she is willing to be considered as a nominee and, if nominated and elected, will serve as a director, to the Chair of the Nominating and Corporate Governance Committee in care of the Corporate Secretary, Allergan plc, Clonshaugh Business and Technology Park, Coolock, Dublin, D17 E400, Ireland. The submission of a recommendation by a shareholder in compliance with these procedures does not guarantee the selection of the shareholder’s candidate or the inclusion of the candidate in our proxy statement. However, the Nominating and Corporate Governance Committee will consider any such candidate in accordance with the procedures and guidelines as described above and as set forth in our Corporate Governance Guidelines and the charter of our Nominating and Corporate Governance Committee.
Corporate Governance Guidelines and Code of Conduct
Our Board of Directors has adopted Corporate Governance Guidelines. These guidelines address the
make-up,
responsibility and functioning of the Board of Directors and its Committees, and include guidelines relating to:
  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
 
 
We have adopted a Code of Conduct that applies to all of our board members and all of our officers and employees, including our Principal Executive Officer, Principal Financial Officer and Principal Accounting Officer. The Code of Conduct sets forth and summarizes certain of our policies related to legal compliance and honest and ethical business practices. The Code of Conduct is intended to comply with the standards set forth in Section 303A.10 of the NYSE Listed Company Manual and applicable rules and regulations of the United States Securities and Exchange Commission (“
SEC
”). Any amendments to, or waivers from, provisions of the Code of Conduct that apply to our directors or executive officers, including our Chief Executive Officer and Chief Financial Officer and persons performing similar functions, will be promptly posted on our website at www.allergan.com under the “Investors—Corporate Governance” section.
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You can find links to our Corporate Governance Guidelines and our Code of Conduct on our website at www.allergan.com under the “Investors—Corporate Governance” section. Copies of these materials are also available to shareholders without charge by contacting our Investor Relations department by mail with your request at Allergan plc, Investor Relations, 5 Giralda Farms, Madison, NJ 07940.
Committees
The Board of Directors has five standing Committees: the Audit and Compliance Committee, the Compensation Committee, the Mergers and Acquisitions Committee, the Nominating and Corporate Governance Committee and the Quality and Innovation Committee.
Audit and Compliance Committee
         
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.
 
Key Responsibilities
The primary function of the Audit and Compliance Committee is to assist the Board of Directors in fulfilling its oversight of:
  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.
 
Additionally, the Audit and Compliance Committee serves as an independent and objective party that:
  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.
 
Financial Expertise
The Board of Directors determined that each member of the Audit and Compliance Committee is financially literate as required under the NYSE listing standards and that each of Messrs. Davidson and Freyman is an “audit committee financial expert” within the meaning of the SEC rules.
-16-

Compensation Committee
         
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.
 
Key Responsibilities
The key functions of the Compensation Committee are to:
  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.
 
Mergers and Acquisitions Committee
         
Members
 
Independence*
 
Robert J. Hugin (Chair)
   
 
Christopher J. Coughlin
   
 
Thomas C. Freyman
   
 
Michael E. Greenberg, PhD
   
 
 
* See Item 13 “Director Independence”.
 
Key Responsibilities
The key functions of the Mergers and Acquisitions Committee, which was formed in 2019, are to:
  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.
 
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Nominating and Corporate Governance Committee
         
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.
 
Key Responsibilities
The key functions of the Nominating and Corporate Governance Committee are to:
  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.
 
Quality and Innovation Committee
         
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”.
 
Key Responsibilities
The key functions of the Quality and Innovation Committee are to assist the Board with its oversight responsibilities regarding:
  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.
 
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  The Company’s commitments to patients, quality and safety, education and product accessibility as reflected in its Social Contract with Patients.
 
Each Committee:
  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.
 
In addition to Board refreshment, the Board of Directors also values Committee refreshment when making Committee assignment decisions. Our Board believes that there are benefits to Committee refreshment and turnover so that the mix of committee members yield Committees that are as strong as possible from year to year. Because of the active Board refreshment process, there has also been significant Committee refreshment. Continuity but also ensuring that Committees have new perspectives are key considerations when determining Committee composition. Committee leadership refreshment is also part of the Board of Director’s ongoing review.
-19-

ITEM 11.
EXECUTIVE COMPENSATION
 
Director Compensation
Our director compensation program is overseen by the Nominating and Corporate Governance Committee. The Nominating and Corporate Governance Committee reviews the amount and form of director compensation annually, and in reviewing the compensation program considers a number of factors, including benchmarking studies prepared by an outside consultant and the amount and frequency of travel required of the directors in connection with their service on the Board and Committees.
Under our current director compensation program, all members of the Board of Directors who are not full-time employees of the Company receive a yearly cash retainer equal to $150,000, payable at the time of the directors’ election at our Annual General Meeting of Shareholders. Our Lead Independent Director also receives an additional yearly fee of $50,000. As compensation for serving as Committee Chair, the Chair of the Audit and Compliance Committee receives an additional yearly fee of $30,000 and the Chair of each of our other Committees receives an additional yearly fee of $24,000. In addition, all directors receive a yearly grant of restricted stock units valued at approximately $300,000 (using the closing stock price on the date of the Annual General Meeting of Shareholders commencing such Board Year). The restricted stock unit awards granted at the time of the 2019 Annual General Meeting of Shareholders will vest at the earlier of (1) May 1, 2020 or (2) the date of closing of the AbbVie Transaction. For the purposes of director compensation, the term “yearly” refers to a “Board Year” in which a director serves and which begins on the date of the Annual General Meeting of Shareholders for such year.
Mr. Saunders, who was employed by us during 2019, did not receive additional compensation for his service as a director during 2019.
The following table shows the compensation earned and equity awards granted in 2019 to each person who served as a director during 2019 (other than Mr. Saunders):
                                 
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
cash retainer for the period February 18, 2019 (the date of Mr. Hugin’s election to the Board of Directors) to the date of the 2019 Annual General Meeting of Shareholders.
 
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In order to better align the interests of our Board with those of our shareholders in a fair and reasonable manner, as well as to align with what we believe is a corporate governance “best practice,” we maintain share ownership guidelines for our directors. Our ownership guidelines require our directors to hold shares in the Company in an amount at least equal in value to five times their annual cash retainer and provide that a director has five years from the date of his or her appointment to achieve compliance with this holding requirement. Under our guidelines, restricted stock units held by a director are treated as shares for this purpose. As of December 31, 2019, each of our directors, other than our recently appointed or elected directors (Adriane M. Brown, Carol Anthony (John) Davidson and Michael E. Greenberg) held shares in the Company in an amount at least equal in value to five times their annual cash retainer. Given the dates of their respective appointments, Ms. Brown, Mr. Davidson and Dr. Greenberg each have additional time to achieve compliance with this holding requirement under our share ownership guidelines.
-21-

Compensation Discussion and Analysis
In this section, we discuss and analyze the material elements of compensation paid to each of our Named Executive Officers (or “
NEOs
”) in 2019.
2019 Named Executive Officers
     
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
The Executive Summary that follows provides an overview of our performance and its relationship with our compensation decisions and practices. Following the Executive Summary, we will review each element of compensation. This Compensation Discussion and Analysis should be read together with the information in the Summary Compensation Table and other executive compensation tables below.
TABLE OF CONTENTS
         
 
22
   
         
 
25
   
         
 
28
   
         
 
34
   
         
 
37
   
Executive Summary
2019 Business Highlights
On June 25, 2019, Allergan and AbbVie Inc. announced that the companies entered into a definitive transaction agreement under which AbbVie will acquire Allergan in a cash and stock transaction for a transaction equity value of approximately $63 billion, based on the closing price of AbbVie’s common stock of $78.45 on June 24, 2019. Upon the consummation of the transaction, Allergan will become a wholly owned subsidiary of AbbVie.
We were also able to achieve many important milestones in 2019, creating strong momentum for 2020 and our proposed combination with AbbVie, including:
  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
®
for bipolar depression;
  Gaining two new FDA approvals for BOTOX
®
for pediatric spasticity; and
-22-

  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.
Our Guiding Principle: Pay for Performance
We remain committed to a
pay-for-performance
culture and implementation of the best practices in corporate governance. Within our
pay-for-performance
framework, our compensation program is designed to promote six key objectives:
  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
Application of Best Practices in Compensation and Corporate Governance
Our
pay-for-performance
culture is supported through sound compensation and corporate governance policies and programs that reflect best practices.
         
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
 
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2019 Compensation Decisions
Compensation Adjustments
In 2019, after reviewing market compensation data, the Compensation Committee determined it to be in the best interests of our shareholders to maintain competitive compensation programs for our NEOs and make adjustments to our CEO’s base salary and to the base salaries and incentive targets of our other NEOs as follows:
                                 
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
 
Prior to 2019, no adjustments to base salaries or target annual incentive opportunities for the NEOs had been made since 2017. In addition, no annual equity incentive awards were granted to our executives in 2018 or 2019 (other than Mr. Walsh who was hired in 2018), given that the previous equity grant was biennial in nature and reflected 2018 and 2019 target equity values.
Retention Grant
In recognition of the criticality of continued growth in our key therapeutic areas, Mr. Meury was granted a cash retention award of $6,000,000, payable on December 31, 2022, subject to Mr. Meury’s continued employment with us through such date and subject to his agreement to a
one-year
post-termination
non-competition
restriction. If Mr. Meury’s employment is terminated without cause (as defined in the applicable retention award letter), or in the event of his death or disability before December 31, 2022, he will receive payment of the award subject to his execution without revocation of a release of claims in favor of the Company.
Annual Incentive Award Payout Reflects Performance
For the 2019 performance year, the financial metrics used to determine the corporate financial performance factor were 50%
Non-GAAP
Net Revenue (“
Net Revenue
”) and 50%
Non-GAAP
Performance Net Income Per Share (“
PNI
”). These metrics were chosen to align to our objective of driving
top-
and bottom-line growth. Financial performance under our AIP resulted in 138% achievement of the corporate financial metrics. Actual incentive amounts for our NEOs, other than our CEO, ranged from 179% to 193% of target, reflecting our NEOs’ significant efforts to complete
pre-closing
milestones to enable successful completion of the AbbVie Transaction and maintain focus across the organization on execution and delivering strong operating results during 2019. Our CEO received an actual incentive amount of 207% of target, reflecting his strong leadership during 2019, with respect to exceeding our Net Revenue and PNI goals, successfully launching Vraylar for bipolar depression, executing and advancing our pipeline and demonstrating strong financial discipline, and also with respect to the AbbVie Transaction.
-24-

Impact of 2019 Say on Pay Vote & Shareholder Engagement
Consistent with the preference of a substantial majority of our shareholders, the Company has determined to hold a
say-on-pay
advisory vote on executive compensation annually. Accordingly, at our 2019 Annual General Meeting of Shareholders, we provided shareholders with the opportunity to cast a
non-binding
advisory vote on a proposal regarding the compensation of our executives in the year ended December 31, 2019. Of the votes cast on this 2019
“say-on-pay”
vote, approximately 87% were in favor of the proposal. We believe this result reflects our continuous efforts to engage with shareholders and solicit their feedback on our compensation program.
As described herein, over the past several years, certain independent members of our Board and senior management have engaged with our shareholders to discuss and obtain additional feedback on a variety of topics, including our compensation programs. Shareholder feedback from these engagements was shared with the Board and its committees so that they could discuss and consider the significant comments or concerns that were identified.
An Independent and Deliberate Process for Determining Compensation
Authority of the Independent Compensation Committee
The Compensation Committee consists entirely of independent directors, and makes all compensation decisions regarding senior management, which includes our NEOs and certain other senior officers of the Company. In 2019, the Compensation Committee met three times. Meeting agendas are determined by the Chair of the Compensation Committee with the assistance of our Chief Human Resources Officer. At the invitation of the Committee, members of management, including the Chief Human Resources Officer, as well as representatives from the Committee’s independent compensation consultant, Steven Hall & Partners, may attend Committee meetings. The Compensation Committee periodically reviews our overall executive compensation program to ensure that it remains aligned with current business objectives and evolving best practices.
Role of the Independent Compensation Consultant
In 2019, the Compensation Committee continued its engagement of Steven Hall & Partners, an independent compensation consulting firm, to advise the Compensation Committee on executive compensation matters. Steven Hall & Partners reports directly to the Compensation Committee, and the Compensation Committee retains the sole right to terminate or replace Steven Hall & Partners at any time. Steven Hall & Partners does not provide any other services to the Company or management.
Each year the Compensation Committee reviews the independence of its compensation consultant and other advisors. In performing its analysis, the Compensation Committee considers the factors set forth in SEC rules and NYSE listing standards. After review and consultation with Steven Hall & Partners, the Compensation Committee has determined that Steven Hall & Partners is independent and there are no conflicts of interest raised by the work of Steven Hall & Partners during the year ended December 31, 2019.
Role of Management
At the Compensation Committee’s request, the CEO provides input regarding the performance and appropriate compensation of the other executive officers. The Compensation Committee considers the CEO’s perspective because of his direct knowledge of each executive officer’s performance and contributions. The CEO is not present during voting or deliberations by the Compensation Committee regarding his own compensation, and does not provide input regarding his own performance.
-25-

Importance of Shareholder Feedback
We value feedback from shareholders, and when structuring our executive compensation programs, the Compensation Committee considers feedback received through direct discussions with shareholders as well as the results of “Say on Pay” proposals and other shareholder proposals related to executive compensation.
Compensation Peer Group
In setting the compensation for our NEOs and other senior executives, the Compensation Committee reviews the elements of our compensation program, including executive officer compensation levels and opportunities as compared to those provided to similarly situated executives among a peer group of companies with which we compete for talent. In setting this compensation, the Compensation Committee considers compensation survey data from independent third-party sources as well as publicly available information. While we generally aim to set each NEO’s target total direct compensation (base salary, target annual incentive compensation and target long-term incentive compensation) within the levels paid to similarly situated executives in our peer group, such data is intended to serve as only one of several reference points to assist the Compensation Committee in its discussions and deliberations.
The Compensation Committee reserves flexibility to vary pay levels for our executives based on a variety of factors, including the desired mix of variable and fixed pay elements, the NEO’s overall performance and changes in roles or responsibilities.
The Company’s peer group, which is unchanged from 2018, includes the pharmaceutical companies below.
     
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.
 
Principal Components of 2019 Executive Compensation
The structure of our executive compensation program for 2019 continues to support our compensation objectives.
Base Salary
Base salary provides our NEOs with a degree of financial certainty and stability; however, the focus of our program is on variable,
“at-risk”
pay. For 2019, base salary represented only 8% of the total target annual compensation opportunity for our CEO and an average of 17% of the total target annual compensation opportunities for our other NEOs.
In setting base salaries and determining base salary increases for our NEOs, the Compensation Committee considers a variety of factors, including:
  Level of responsibility.
 
-26-

  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.
 
Salary levels are typically reviewed upon a promotion or other change in job responsibility. Increases to the salaries of our NEOs are based on the Compensation Committee’s and the CEO’s assessment (other than for himself) of the individual’s performance and market conditions.
As discussed above, the Compensation Committee determined to make certain changes to the base salaries for our NEOs for 2019, based on a market review of compensation at our peers. Base salaries for our CEO and other NEOs continue to be positioned below the median of our peers to ensure that a substantial portion of their pay is variable and tied to our operating and stock price performance.
The base salaries for our CEO and Messrs. Meury, Nicholson, Walsh and Bailey for 2019 are set forth in the following table:
                                                 
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
 
 
Annual Incentive Awards
Annual cash incentive awards are an important feature of our performance-based compensation program. Annual cash incentive awards to our NEOs in 2019 were made under our Company-wide AIP. A majority of our
non-field-based
employees participate in the AIP. If earned, annual cash incentive awards are typically paid in March of the year following the AIP performance period.
2019 Incentive Award Targets
For 2019, the Compensation Committee determined to make adjustments to the annual incentive targets of our NEOs, other than our CEO, based on a market review of compensation at our peers and in order to continue to ensure that a substantial portion of their target compensation opportunity is variable and aligned to the achievement of our annual financial performance goals and other strategic objectives. The target bonus opportunities for our CEO and Messrs. Meury, Nicholson, Walsh and Bailey for 2019 are set forth in the following table:
                 
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
 
 
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Determination of Corporate Financial Metrics
Goal Setting Process
The Compensation Committee annually approves the corporate financial metrics to be used under the AIP based on our strategy and goals for the year. Once it determines the corporate financial metrics to be used, the Compensation Committee sets the threshold, target and stretch performance goals for each metric. The goals selected are determined through a rigorous process led by the Committee in close partnership with management. Target performance is generally aligned to the operating budget that is reviewed and approved by the full Board; however, the Committee undertakes an
in-depth
review of the assumptions included in the budget to confirm that it reflects the appropriate level of performance necessary to generate a target payout. The Committee believes that it is generally appropriate to use the operating budget as the starting point for its discussion because it reflects the Company’s strategic priorities for the year, management’s best estimates for expected performance across our product lines and is the basis on which the Company provides guidance to our shareholders. Once the target performance goal is set, the Committee then reviews multiple scenarios and payout curves to back-test and challenge potential threshold and stretch performance levels to help ensure that the goals selected align with our compensation philosophy and incentivize management appropriately.
2019 Corporate Financial Metrics
For 2019, the Compensation Committee determined to continue to use Net Revenue and PNI as the equally weighted financial metrics under the AIP. We believe that these two measures continue to strike an appropriate balance that holds management accountable for creating durable growth and provides the best comparability with our competitors. Specifically, the Committee selected these metrics for the following reasons:
     
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
 
For the purpose of measuring corporate financial performance, “
PNI
” means the reported GAAP results for performance net income per share, adjusted for the following net of tax: (i) amortization expenses, (ii) global supply chain and operational excellence initiatives or other restructurings of a similar nature, (iii) acquisition, divestiture integration and licensing charges, (iv) accretion and fair market value adjustments on contingent liabilities, (v) impairment/asset sales and related costs, including the exclusion of discontinued operations, (vi) legal settlements and (vii) other unusual charges or expenses. For purposes of measuring corporate financial performance, “
Net Revenue
” means the reported GAAP results for net revenue, adjusted for divestitures, licensing transactions and other unusual events. See Annex B for a reconciliation of
Non-GAAP
results to GAAP results.
Achieving our target goal results in 100% performance for that measure; threshold goal achievement results in 50% performance; and stretch achievement results in 150% performance. For performance in
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between these levels, we apply linear interpolation.
Unless threshold performance is achieved on at least one corporate financial metric, no annual cash incentive awards would be earned under the AIP, regardless of achievement of individual performance goals.
If maximum performance goals are achieved for each corporate financial metric and the individual performance goals, an NEO could receive a maximum award of 225% of target.
Individual performance can never represent more than one-third of the total payout.
 
 
The Committee continually reviews and evaluates the metrics selected in our incentive programs to ensure that they align with our compensation philosophy and business strategy and appropriately balance risk and reward.
2019 Results
In 2019, management maintained focus across the organization on execution and delivering strong operating results, while dedicating significant efforts to complete
pre-closing
milestones to enable the successful completion of the AbbVie Transaction. We delivered strong performance across our business and key brands, driven by growth in top promoted products Including VRAYLAR
®
, BOTOX
®
, JUVÉDERM
®
Collection, OZURDEX
®
and Lo LOESTRIN
®
, with global facial aesthetics rising 9.5% in 2019 (excluding the impact of foreign exchange). We also continued to advance the R&D pipeline on key programs including the receipt of FDA Approval of UBRELVY
(Ubrogepant) for Migraine, and submissions of Bimatoprost SR for Glaucoma NDA and Abicipar for Wet
Age-Related
Macular Degeneration BLA for FDA review.
While the Company and shareholders continued to benefit from the exclusivity of Restasis
®
throughout 2019, which was more favorable to our Company than was anticipated in our operating budget, in order to minimize this impact on AIP funding,
the Compensation Committee exercised its negative discretion and excluded any above-budget U.S. revenue from Restasis
®
earned after March 31, 2019 (“Excess Restasis Revenue”) from Net Revenue results and excluded any unreinvested Excess Restasis Revenue from PNI results
in determining AIP funding. The Committee believes this is consistent with the approach taken with respect to 2018 and rewards management and the broader employee population for driving growth across our remaining product lines and avoids a potential windfall under the AIP solely as a result of a delayed generic entrant for Restasis
®
. The Committee also reduced our Net Revenue and PNI results to remove the positive impact of the Envy acquisition and adjusted our Net Revenue results to neutralize the impact of foreign exchange relative to budgeted rates.
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Non-GAAP
Metric
1
 
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.
 
2019 Individual Performance
2019 Individual Goals and Performance of Our CEO
The Compensation Committee believes that individual performance is an important consideration in determining the overall cash incentive award payable to an executive. To this end, the Compensation Committee annually approves
pre-set
strategic goals and objectives for Mr. Saunders to measure his individual performance for the year. In addition to reviewing Mr. Saunders’s accomplishments relative to those
pre-set
objectives, the Committee considers Mr. Saunders’s overall performance and leadership.
The Compensation Committee determined that Mr. Saunders demonstrated outstanding leadership and focus during 2019, delivering a year of strong operational execution and pipeline progression, while achieving significant
pre-closing
milestones, all of which created strong momentum for 2020 and our proposed combination with AbbVie.
Mr. Saunders’ award reflects the key accomplishments considered by the Committee when determining his overall individual performance, which included the following achievements:
  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
 
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  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.
 
 
 
CEO Award Determination
The Compensation Committee determined that Mr. Saunders’s performance against the
pre-set
strategic goals and objectives described above warranted an individual performance modifier of 150%, which, when applied to our 2019 corporate financial performance, resulted in a 2019 annual incentive award of $6,210,000.
                                         
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
%
 
 
 
2019 Individual Goals and Performance of our Other NEOs
In consultation with the Compensation Committee, our CEO assigned specific individual performance goals for 2019 to our other NEOs that were tailored to the scope and nature of their responsibilities. Our CEO then reviewed with the Compensation Committee the performance of each of our NEOs (other than himself) on the basis of these specific objectives and other factors and made recommendations to the Compensation Committee on final award amounts.
Mr. Meury
Mr. Meury’s award reflects the Company’s strong commercial performance during 2019, which included the following achievements:
  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.
 
 
 
Dr. Nicholson
Dr. Nicholson’s award reflects solid R&D performance during 2019, which included the following achievements:
  Received FDA approval of Ubrelvy
®
for migraine and Vraylar
®
for bipolar depression.
 
 
 
  Achieved 14 approvals for major pharma and device dossiers.
 
 
 
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  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.
 
 
 
Mr. Walsh
Mr. Walsh’s award reflects solid performance during 2019, which included the following achievements:
  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.
 
 
 
Mr. Bailey
Mr. Bailey’s award reflects solid performance during 2019, which included the following achievements:
  Achieved successful settlement and defense of commercial and intellectual property litigation.
 
 
 
  Led key brand protection and regulatory initiatives.
 
 
 
  Supported key divestiture and acquisition activities.
 
 
 
Other NEO Award Determinations
Based on corporate performance and the individual performance of each NEO, the 2019 annual incentive award payable to each of the NEOs was as follows:
                                         
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
%
 
 
 
Long-Term Incentives
The Compensation Committee believes that long-term equity-based incentive awards provide a valuable tool for aligning the interests of management with our shareholders and focusing management’s attention on our long-term growth. In addition, the Compensation Committee believes that equity-based awards are essential to attract and retain the talented professionals and managers needed for our continued success. Additionally, unlike several of our industry peers, Allergan does not provide a defined-benefit pension program to our executive officers. As such, we view our long-term incentive program as a valuable driver of retention and opportunity for long-term wealth accumulation while still being variable and aligned with shareholders.
The Company currently maintains the shareholder-approved Amended and Restated 2013 Incentive Award Plan of Allergan plc (the
2013 IAP
) and the Amended and Restated Allergan, Inc. 2011 Incentive Award Plan (the
Legacy Allergan Plan
). Shares available for issuance under the Legacy Allergan Plan may also be used to settle awards granted under the 2013 IAP, subject to certain limitations.
-32-

Our long-term incentives were designed to permit us to pay compensation that could qualify for the performance-based exception under Section 162(m) although we reserved the right to pay compensation that did not qualify as “performance-based” to support the Company’s business strategy. See “Tax Deductibility of Compensation” on page 35 for further information regarding Section 162(m) and changes to its application as a result of tax reform. The Compensation Committee continues to assess the impact of Section 162(m) on our compensation programs and intends to attempt to fit within the transition rule for compensation awarded prior to the effective date of the rule, to the extent that the Compensation Committee determines that to be practical and in the interest of the Company.
Long-Term Incentive Program
PSUs and RSUs
In 2017, our Compensation Committee adopted a long-term incentive program (“
LTI
”) for 2018-2019 LTI awards and granted performance share units (“
PSUs
”) and restricted stock units (
RSUs
) to the NEOs in an amount representing two years of target equity award values. As a result of the biennial grant structure, no equity awards were granted to these NEOs in 2019.
The PSUs will be earned based 50% on our
3-year
relative total shareholder return (“
TSR
”) and 50% on our achievement of measurable R&D milestones. Upon the closing of the AbbVie Transaction, these PSUs will vest at 130% of target performance. Following the closing of the AbbVie Transaction, earned awards remain subject to additional service-based vesting, with 1/2 of the award vesting on each of December 31, 2020 and December 31, 2021. The RSU awards will vest 20% on each of the first, second, third, fourth and fifth anniversary of the grant date (and will continue to vest on this schedule following the closing of the AbbVie Transaction).
Employee and Other Benefits
Our NEOs are eligible to participate in a variety of retirement, health, insurance and welfare and paid time off benefits similar to, and on the same basis as, our other salaried, U.S.-based employees. Additionally, we provide our NEOs, along with our other executives, with a limited number of personal benefits that we believe have a business purpose and are reasonable and consistent with our overall compensation program and better enable us to attract and retain superior employees for key positions. The primary purpose of these additional benefits is to allow our executives to focus greater attention on important Company endeavors by helping them work more efficiently, minimizing distractions, and ensuring their safety and security. These benefits include:
  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.
 
 
 
All taxes payable on the value of the benefits described above are borne by the recipient of such benefits.
-33-

Other Compensation Practices
Share Ownership Guidelines
 
 
Our executives’ significant share ownership reinforces our entrepreneurial mindset and
ensures unambiguous shareholder alignment
 
 
 
 
Share ownership requirements support our strong ownership and entrepreneurial culture and ensure alignment of our senior management team with our shareholders over the longer term. We maintain a formal share ownership policy, under which our CEO and other senior executives are required to acquire and hold Allergan shares in an amount representing a multiple of base salary as set forth below:
             
Role
 
Requirements
 
 
 
Unvested RSUs and PSUs do
not
count
toward satisfaction of the ownership
requirements
 
Chief Executive Officer
 
6 × base salary
 
 
Other NEOs
 
4 × base salary
 
 
 
 
 
Under our share ownership policy, shares counted toward the ownership requirements include: (i) vested ordinary shares held of record or in a brokerage account by the individual or his or her spouse; and (ii) vested unexercised stock options. Executives are required to retain in stock 100% of the
after-tax
net proceeds associated with stock option exercises and/or PSU and RSU distributions until the designated multiple of base salary is reached.
Messrs. Saunders, Meury, Nicholson and Bailey are in compliance with the share ownership guidelines, with Mr. Saunders holding 78x his base salary and Messrs. Meury, Nicholson and Bailey holding 18x, 5x and 13x their base salaries, respectively, in each case as of December 31, 2019. Mr. Walsh began employment in 2018 and is below the stock ownership guidelines. Mr. Walsh is required to retain in stock 100% of the
after-tax
net proceeds associated with PSU and RSU distributions until he reaches 4x base salary. Mr. Saunders has purchased Company shares in the open market and has never sold shares (other than for tax or option exercise price withholding).
Prohibitions on Hedging and Pledging of Our Shares
Our global securities trading policy prohibits any NEO or any other officer or employee subject to its terms from entering into short sales or derivative transactions to hedge their economic exposure to our shares. In addition, these officers and employees are prohibited from pledging our shares as security for any loan.
Clawback Policies; Recoupment of Incentive Compensation
Pursuant to Mr. Saunders’s employment agreement with the Company, all equity awards (including any proceeds, gains or other economic benefit actually or constructively received upon any receipt or exercise of any equity award or upon the receipt or resale of any shares of the Company underlying an equity award) will be subject to the provisions of any clawback policy implemented by the Company, including, without limitation, any clawback policy adopted to comply with the requirements of applicable law, including without limitation the Dodd-Frank Wall Street Reform and Consumer Protection Act and any rules or regulations promulgated thereunder, to the extent set forth in such clawback policy and/or in the applicable equity award.
In addition to the clawback provision in Mr. Saunders’s employment agreement, our Annual Incentive Plan also provides that the Compensation Committee has the discretion to require a participant to repay the income, if any, derived from an award under the plan in the event of a restatement of the Company’s financial results within three years after payment of such award to correct a material error that is determined by the Compensation Committee to be the result of fraud or intentional misconduct.
-34-

These clawback policies help ensure that incentive compensation is payable only if the applicable underlying performance goals are met, consistent with our
pay-for-performance
philosophy.
Risk Assessment
The Compensation Committee, with the assistance of senior management, the Compensation Committee’s independent compensation consultant and management’s outside compensation consultant, periodically reviews the elements of our compensation programs to determine whether they encourage excessive risk taking. We recently performed a formal assessment of our global compensation programs, including our executive compensation and global sales incentive compensation programs and policies, and the results were reviewed with the Compensation Committee.
The assessment reaffirmed our belief that our compensation programs and policies are structured and operated in a manner that does not create risks that are reasonably likely to have a material adverse effect on our business. Among other items, we cite the following design elements in our executive compensation program that discourage excessive risk taking:
     
Committee Oversight:
The Compensation Committee makes all compensation decisions regarding senior management, including our NEOs, and has retained an independent compensation consultant that provides no services to the Company or management.
 
Appropriate Use of Discretion:
To reduce the tendency of formulae and other objective financial performance measures to encourage short-term or excessive risk taking, compensation decisions are not based solely on the Company’s financial performance, but also on subjective considerations that account for
non-financial
performance and judgment.
     
Performance Goals:
A significant portion of executives’ compensation is tied to the achievement of a variety of longer-term performance goals and sustained stock price performance, intended to encourage a long-term perspective and discourage short-term risk taking. Goals are appropriately set to be sufficiently challenging but also reasonably achievable with strong performance.
 
Clawbacks:
The Company has clawback provisions that give the Compensation Committee the discretion to reduce the incentive amounts payable to our NEOs based on factors determined to be appropriate, including the achievement of performance goals applied under our Company-wide AIP, as described on page 34.
     
Stock Ownership Guidelines:
The Company has robust stock ownership guidelines to further align the interests of our executives with shareholders and ensure a longer-term focus, as described on page 34.
 
Payout Caps:
The design of our short- and long-term incentives include payout caps that reduce incentives that may encourage short-term business decisions.
 
 
 
Tax Deductibility of Compensation
Section 162(m) of the Internal Revenue Code, as amended in 2017 by the Tax Cuts and Jobs Act, restricts deductibility for federal income tax purposes of annual individual compensation in excess of $1 million to the NEOs, effective for tax years beginning after 2017, subject to a transition rule for written binding contracts which were in effect on November 2, 2017, and which were not modified in any material respect on or after such date. In the past, Section 162(m)’s deductibility limitation was subject to an exception for compensation that qualified as “performance-based.” Our compensation programs were designed to permit us to pay compensation that could qualify for the performance-based exception,
-35-

although we reserved the right to pay compensation that did not qualify as “performance-based” to support the Company’s business strategy. While the Compensation Committee has considered the deductibility of compensation as a factor in making compensation decisions, it has retained the flexibility to provide compensation that is consistent with the Company’s goals for its executive compensation program, even if such compensation would not be fully
tax-deductible.
The Compensation Committee continues to assess the impact of Section 162(m) of the Code, as amended, on our compensation programs. The Company intends to attempt to fit within the transition rule referred to above, if applicable, for compensation awarded prior to the effective date of the rule, to the extent that the Compensation Committee determines that to be practical and in the interests of the Company. Despite the change in law, the Compensation Committee intends to continue to implement compensation programs that it believes are competitive and in the best interests of the Company and its shareholders. Accordingly, the Compensation Committee may approve amendments to compensatory arrangements or approve new compensatory arrangements that exceed the current limits of Section 162(m) of the Code, which may not be deductible.
CEO Pay Relative to Median Pay of Our Employees
The compensation for our CEO in 2019 ($9,770,528) as disclosed in the 2019 Summary Compensation Table) was approximately 106 times the annual “total compensation,” as defined by Item 402(u) of Regulation
S-K,
of our median employee ($92,255). Total compensation includes base salary, incentive compensation, equity awards and certain other retirement and health and welfare benefits and other perquisites and allowances. Our CEO to median employee pay ratio is calculated in accordance with Item 402(u) of Regulation
S-K
and represents a reasonable estimate calculated in accordance with SEC regulations and guidance.
We used the same median employee as was identified in 2018, based on the 2018 total target cash compensation for all individuals, excluding our CEO, who were employed by us on December 31, 2018. We included all employees, whether employed on a full-time, part-time, or seasonal basis. We did not make any assumptions, adjustments, or estimates with respect to total target cash compensation. Compensation was annualized for any full-time employees that were not employed by us for all of 2018. Compensation that was stated in
non-U.S.
dollars was converted to U.S. dollars using the conversion rate on November 30, 2018, for all individuals employed at that date and using the conversion rate on December 31, 2018, for those who were not employed as of November 30, 2018. After identifying the median employee based on total target cash compensation, we calculated annual total compensation for such employee using the same methodology we use for our Named Executive Officers as set forth in the 2019 Summary Compensation Table and based on the conversion rate on November 30, 2019.
Compensation Committee Report
The Compensation Committee of Allergan plc has reviewed and discussed the Compensation Discussion and Analysis required by Item 402(b) of Regulation
S-K
with management and, based on such review and discussions, the Compensation Committee recommended to the Board of Directors that the Compensation Discussion and Analysis be included in this our Annual Report on Form
10-K
for the fiscal year ended December 31, 2019 (as amended hereby).
The Compensation Committee
Thomas C. Freyman,
Chair
Joseph H. Boccuzi
Christopher W. Bodine
Christopher J. Coughlin
Peter J. McDonnell, M.D.
-36-

2019 Compensation Tables Summary
Compensation Table
The following table sets forth certain information regarding the annual and long-term compensation for services rendered to the Company in all capacities with respect to the fiscal years ended December 31, 2017, December 31, 2018 and December 31, 2019 of our NEOs:
                                                                         
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:
 
 
 
 
 
-37-

                                         
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.
 
 
 
 
 
2019 Grants of Plan-Based Awards
The following table provides information about
non-equity
awards granted to our NEOs for 2019:
                                                                                                     
 
 
 
 
 
 
 
Estimated Possible
Payouts Under
Non-Equity
Incentive
 Plan 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