The Israeli Companies Law mandates the appointment of an audit committee comprising at least three
directors. Under the Israeli Companies Law, the audit committee must include all of the statutory independent
directors, one of which shall serve as the chairman of the committee, must be comprised of a majority of
directors meeting certain independence criteria and may not include certain directors. As a NYSE-listed
company, Teva’s audit committee must be comprised solely of independent directors, as defined by the SEC and
Under the Israeli Companies Law, the audit committee is responsible for:
(a) identifying flaws in the management of a company’s business and making recommendations to the board of directors as to how to correct them;
(b) making determinations and considering providing approvals concerning certain related party
transactions and actions involving conflicts of interest;
(c) reviewing the internal auditor’s work program;
(d) examining the company’s internal control structure and processes, the performance of the internal auditor and whether the internal auditor has the tools and resources required to perform his or her duties;
(e) examining the independent auditor’s scope of work as well as the independent auditor’s fees and providing the corporate body responsible for determining the independent auditor’s fees with its recommendations; and
(f) implementing procedures concerning employee complaints on deficiencies in the administration of the company’s business and the protection to be provided to such employees.
Furthermore, the audit committee discusses the financial statements and presents to the Board its
recommendations with respect to the proposed financial statements. In accordance with the Sarbanes-Oxley Act and NYSE requirements, the audit committee is directly responsible for the appointment, compensation and oversight of the work of our independent auditors. In addition, the audit committee is responsible for assisting the Board in monitoring our financial statements, the effectiveness of our internal controls and our compliance with legal and regulatory requirements. The audit committee also discusses Teva policies with respect to risk assessment and risk management, including any off balance sheet arrangements, and reviews contingent liabilities and risks that may be material to Teva and major legislative and regulatory developments that could materially impact Teva’s contingent liabilities and risks. The audit committee charter sets forth the scope of the committee’s responsibilities, including its structure, processes and membership requirements; the committee’s purpose; and its specific responsibilities and authority with respect to registered public accounting firms, complaints relating to accounting, internal accounting controls
or auditing matters, and its authority to engage advisors as determined by the audit committee. All of the audit committee members have been determined to be independent as defined by the applicable NYSE and SEC rules and Ory Slonim has been designated by the audit committee as an independent director under the Israeli Companies Law.
The Board has determined that Prof. Dafna Schwartz, Joseph Nitzani and Erez Vigodman are “audit committee financial experts” as defined by applicable SEC regulations. See “Item 16A—Audit Committee Financial Expert” below.