What changed in this filing

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Item 9A. Controls and Procedures

2023-03-01 compared with 2022-03-10 · 61 added, 72 removed, 96 unchanged (58% of the section changed)

2 unchanged sentences

Our management, with the participation of our Chief Executive Officer and Chief Financial Officer, have evaluated the effectiveness of our disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act, as of December 31, 2022.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, due to the material weaknesses in our internal control over financial reporting described below, our disclosure controls and procedures were not effective at the reasonable assurance level as of December 31, 2021.

Notwithstanding the material weaknesses, management has concluded that our audited financial statements included in this Annual Report on Form 10-K are fairly stated in all material respects in accordance with U.S.

GAAP for each of the periods presented herein.

Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that, as of such date, our disclosure controls and procedures were effective.

Management’s Report on Internal Control Over Financial Reporting

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Clarivate's management assessed the effectiveness of Clarivate's internal control over financial reporting as of December 31, 2022, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control — Integrated Framework (2013).

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Clarivate's management identified material weaknesses in our internal control over financial reporting related to:

(1) the lack of an effectively designed control over the communication of modifications to pre-existing compensation agreements in an acquisition transaction between the legal function and the accounting function to ensure the accounting impact of the modifications could be evaluated, and (2) the lack of an effectively designed control with a sufficient level of precision to allow for an appropriate review of the tax balances associated with the opening balance sheet of acquired entities.

The material weakness related to the communication of modifications to pre-existing compensation agreements in an acquisition transaction resulted in the restatement of the Company’s consolidated financial statements for the year ended December 31, 2020, the quarter ended December 31, 2020, and each of the quarters of 2021 related to restricted cash, prepaid expenses, goodwill, accrued expenses, other current liabilities, other non-current liabilities, treasury shares, and accumulated other comprehensive income (loss) and accumulated deficit.

The material weakness related to the review of the

tax balances associated with the opening balance sheet of acquired entities resulted in immaterial adjustments of the Company’s consolidated financial statements for the year ended December 31, 2020 and each of the quarters of 2020 and 2021 related to goodwill, deferred income tax asset, and deferred income tax liability.

Additionally, these material weaknesses could result in misstatements of the aforementioned account balances or disclosures that would result in a material misstatement to the annual or interim consolidated financial statements that would not be prevented or detected.

Because of these material weaknesses, management concluded that the Company did not maintain effective internal control over financial reporting as of December 31, 2021.

In the year ended December 31, 2021, the Company acquired ProQuest in a purchase business combination.

Management excluded ProQuest from our assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2021.

ProQuest represented 2% of the Company's total assets and 4% of the Company's total revenues as of and for the year ended December 31, 2021.

Based on this evaluation, management concluded that the Company's internal control over financial reporting was effective as of December 31, 2022.

The effectiveness of the Company’s internal control over financial reporting as of December 31, 2022 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears under "Item 8.

Financial Statements and Supplementary Data".

Remediation Plan

Our remediation plan related to the first identified material weakness includes management designing a control to identify and communicate the inventory of pre-existing compensation agreements in an acquisition transaction to the accounting department through the transaction close date to ensure the inventory includes the current version of the agreements.

Our remediation plan will also include bring down procedures each quarter through the measurement period.

Our remediation plan related to the second identified material weakness includes management designing an enhanced control to operate periodically during the measurement period to allow for an appropriate review of the tax balances associated with the opening balance sheet of acquired entities.

Remediation of Prior Material Weaknesses

To address the previously reported material weakness in internal control over financial reporting related to the communication of modifications to pre-existing compensation agreements in an acquisition transaction, as disclosed in Part II, Item 9A in our 2021 Annual Report on Form 10-K, we designed and implemented new control activities to identify and communicate the inventory of pre-existing compensation agreements in an acquisition transaction, and any modifications of such agreements, to the accounting department through the transaction close date to ensure the inventory includes the current version of the agreements.

Based on the actions taken, we determined that this material weakness was remediated as of September 30, 2022, as disclosed in Part I, Item 4 in our third quarter 2022 Quarterly Report on Form 10-Q.

To address the previously reported material weakness in internal control over financial reporting related to the tax balances associated with the opening balance sheet of acquired entities, as disclosed in Part II, Item 9A in our 2021 Annual Report on Form 10-K, we designed and implemented enhanced control activities to operate periodically during the measurement

period to allow for an appropriate review of the tax balances.

Based on the actions taken, we determined that this material weakness has been remediated as of December 31, 2022.

Changes in Internal Control Over Financial Reporting

During the fourth quarter of 2021, there were no changes in Clarivate’s internal control over financial reporting that materially affected, or is reasonably likely to materially affect, internal control over financial reporting.

There were no changes in Clarivate’s internal control over financial reporting during the fourth quarter of 2022 that materially affected, or are reasonably likely to materially affect, internal control over financial reporting.

Other Information

Iran Threat Reduction And Syria Human Rights Act Disclosure

Pursuant to Section 219 of the Iran Threat Reduction and Syria Human Rights Act of 2012, which amended the Securities Exchange Act of 1934, an issuer is required to disclose in its annual or quarterly reports, as applicable, whether, during the reporting period, it or any of its affiliates knowingly engaged in certain activities, transactions or dealings relating to Iran or with individuals or entities designated pursuant to certain Executive Orders.

Disclosure is generally required even where the activities, transactions or dealings were conducted in compliance with applicable laws and regulations.

During the reporting period, the Company sold access to information and informational materials, which are generally exempt from U.S.

economic sanctions, to 3 entities that are part of, or may be owned or controlled by, the Government of Iran.

We were advised by counsel that these transactions were permissible under U.S.

sanctions pursuant to certain statutory and regulatory exemptions for the exportation of information and informational materials.

The Company terminated this activity in October 2019 and does not intend to resume it.

Amendments to outstanding performance share units

On February 23, 2023, in order to continue to enhance the alignment of executive compensation and long-term shareholder value, as well as in response to certain market- and company-level changes, the Human Resources and Compensation Committee (the “HRCC”) of the Board of Directors of Clarivate Plc (“Clarivate”) approved certain amendments to outstanding performance share units (“PSUs”), which were originally granted in 2021 and 2022, respectively.

The HRCC believes that these changes will more closely align management’s interests with the current long-term goals of Clarivate, which the HRCC believes is crucial for the long-term interests of its shareholders.

As originally granted, the 2021 and 2022 PSU grants are eligible to vest at the end of a three-year period subject to achievement of performance measures and certain other conditions.

The awards had three one-year measurement periods with a three-year relative TSR modifier as compared to the S&P 500.

The numerical goals applicable to the performance measures for each measurement period are approved by the HRCC and communicated to the participant during the first quarter of the applicable measurement period.

The performance measures applicable to each measurement period were Clarivate’s consolidated revenue and adjusted EBITDA margin percentage (which were equally weighted).

The overall payout of the PSUs is capped at 200% of the target shares granted.

In light of our change in executive leadership and refocus on longer term objectives, the HRCC approved amendments to the 2021 PSU grants such that the performance measures for the last one-year measurement period (i.e., the 2023 measurement period) will be adjusted earnings per share and adjusted EBITDA (which will be equally weighted).

The 2021 PSU grants will continue to be subject to the three-year relative TSR modifier.

Consistent with the terms of the original grant, the overall payout of the PSUs is capped at 200% of the target shares granted.

The HRCC believes that linking the vesting of PSUs to the company’s adjusted earnings per share and adjusted EBITDA serves to better align the interests of the award holders with our shareholders.

With respect to the PSUs which were granted in 2022, the HRCC also determined that the performance measures for the remaining measurement periods should be adjusted earnings per share and adjusted EBITDA (which will be equally weighted) for the reasons described above.

Consistent with our refocus on longer term objectives, the HRCC determined that, instead of having two one-year measurement periods for the remainder of the 2022 PSUs’ performance period (i.e., separate 2023 and a 2024 measurement periods), achievement of the performance measures should be determined over a two-year measurement period (i.e., a cumulative 2023 and 2024 measurement period).

For purposes of determining the vesting of the 2022 PSU grants, achievement of the consolidated revenue and adjusted EBITDA margin percentage measures during the 2022 measurement period will be weighted 33.3% and achievement of adjusted earnings per share and adjusted EBITDA measures during the 2023-2024 measurement period will be weighted 66.7%.

The 2022 PSU grants will continue to be subject to the three-year relative TSR modifier.

Consistent with the terms of the original grant, the overall payout of the PSUs is capped at 200% of the target shares granted.

The HRCC believes that tracking performance over a two-year measurement period for the remainder of the 2022 PSU performance period serves to better align the interests of the award holders with our shareholders.

The foregoing description of the PSUs is qualified in its entirety by reference to the full text of the form of amendment to the PSU award agreement, a copy of which is filed as an exhibit to this Annual Report on Form 10-K for the year ended December 31, 2022.

Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

6 unchanged sentences

Clarivate intends to disclose on its website any future amendments of the Code of Ethics or waivers that exempt any principal executive officer, principal financial officer, principal accounting officer or controller, persons performing similar functions, or Clarivate’s directors from provisions in the Code of Ethics.

Statement of Significant Differences Between our Corporate Governance Practices and NYSE Corporate Governance Standards for U.S.

Pursuant to exceptions for foreign private issuers, we are not required to comply with certain of the corporate governance practices followed by U.S.

companies under NYSE listing standards.

However, Section 303A.11 of the NYSE Listed Company Manual requires that we state any significant differences between our corporate governance practices and the practices required by the NYSE.

In this regard, if we believe that circumstances warrant, we may elect to comply with provisions of Companies (Jersey) Law 1991 in lieu of the NYSE shareholder approval requirements applicable to certain dilutive events, such as the establishment or material amendment of certain equity-based compensation plans.

In addition, our compensation committee and nominating and corporate governance committee are not subject to annual performance evaluations.

Executive Compensation

8 unchanged sentences

EXHIBIT INDEX

2.1 ProQuest Transaction Agreement (incorporated by reference to Exhibit 2.1 to Clarivate's Form 8-K filed May 17, 2021)

2.2 Amendment to ProQuest Transaction Agreement (incorporated by reference to Exhibit 2.1 to Clarivate’s Form 8-K filed July 29, 2021)

2.3 Amendment No.

2 to ProQuest Transaction Agreement (incorporated by reference to Exhibit 2.1 to Clarivate's Form 8-K filed December 1, 2021)

3.1 Amended and Restated Memorandum and Articles of Association (incorporated by reference to Exhibit 3.1 to Clarivate’s Form 8-K filed May 12, 2021)

1 unchanged sentence

3.3 Form of Certificate of the 5.25% Series A Mandatory Convertible Preferred Shares (included as Exhibit A to Exhibit 3.2 hereto)

4.1* Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

3.4 Statement of Rights of Series B Participating Cumulative Preferred Shares of Clarivate Plc (incorporated by reference to Exhibit 3.1 to Clarivate’s Form 8-K filed December 22, 2022)

4.1 Warrant Agreement between Continental Stock Transfer & Trust Company and Churchill Capital Corp (incorporated by reference to Exhibit 4.4 to Churchill Capital Corp’s Form 8-K, filed on September 12, 2018)

4.2 Indenture dated as of October 31, 2019 , among Camelot Finance S.A., as Issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee governing the 4.50% Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.1 to Clarivate’s Form 6-K, filed on November 5, 2019)

4.4 Form of 4.50% Senior Secured Note due 2026 (included as Exhibit A to Exhibit 4.3 hereto)

4.3 Form of 4.50% Senior Secured Note due 2026 (included as Exhibit A to Exhibit 4.

4.4* Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934

4.5 First Supplemental Indenture, dated as of May 15, 2020, to the indenture dated as of October 31, 2019 among Camelot Finance S.A., as Issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee governing the 4.50% Senior Secured Notes due 2026 (incorporated by reference to Exhibit 4.1 to Clarivate's From 10-Q, filed on May 10, 2021)

7 unchanged sentences

4.13 First Supplemental Indenture dated as of December 1, 2021, to the indenture dated as of August 19, 2021 among Clarivate Science Holdings Corporation, as Issuer, the guarantors party thereto and Wilmington Trust, National Association, as trustee, governing the Issuer's 4.875% Senior Notes due 2029 (incorporated by reference to Exhibit 4.3 to Clarivate's Form 8-K, filed on December 1, 2021)

4.14 Tax Benefits Preservation Plan dated as of December 22, 2022 (incorporated by reference to Exhibit 4 .1 to Clarivate’s Form 8-K filed December 22, 2022)

4.15* First Amendment dated as of January 6, 2023 , to the Tax Benefits Preservation Plan dated as of December 22, 2022

10.1 Form of Director and Officer Indemnification Agreement (incorporated by reference to Exhibit 10.4 to Amendment No.

4 unchanged sentences

1 to the Registration Rights Agreement dated as of December 1, 2021 (incorporated by reference to Exhibit 10.1 to Clarivate’s Form 8-K, filed December 1, 2021)

10.5 Director Nomination Agreement dated as of December 1, 2021 (incorporated by reference to Exhibit 10.2 to Clarivate's Form 8-K, filed December 1, 2021)

10.6 Capri Transaction Agreement (incorporated by reference to Exhibit 10.2 to Clarivate’s Form 8-K, filed May 17, 2021)

10.5 Director Acknowledgement Letter (Stead) (incorporated by reference to Exhibit 10.12 to Clarivate’s Registration Statement on Form F-4, filed on February 27, 2019)

2 unchanged sentences

10.8 Incremental Facility Amendment, dated February 28, 2020, by and among Camelot UK Holdco Limited, Camelot UK Bidco Limited, Camelot Finance S.A., the other borrowers party thereto, the other subsidiaries of the Company party thereto, Bank of America, N.A., as administrative agent, and Citibank, N.A., as lender

10.9 Amendment to Credit Agreement dated October 1, 2020 (incorporated by reference to Exhibit 10.4 to Clarivate's Form 8-K filed October 1, 2020)

10.10 Amendment to the Credit Agreement dated as of November 30, 2021 to Credit Agreement dated as of October 31, 2019 (incorporated by reference to Exhibit 10.3 to Clarivate's Form 8-K, filed on December 1, 2021)

10.9 Amendment dated as of October 1, 2020 to the Credit Agreement dated as of October 31, 2019 (incorporated by reference to Exhibit 10.4 to Clarivate's Form 8-K filed October 1, 2020)

10.10 Amendment dated as of November 30, 2021 to the Credit Agreement dated as of October 31, 2019 (incorporated by reference to Exhibit 10.3 to Clarivate's Form 8-K, filed on December 1, 2021)

10.11 Amendment dated as of March 31, 2022 to the Credit Agreement dated as of October 31, 2019 (incorporated by reference to Exhibit 10.1 to Clarivate's Form 8-K filed April 5, 2022)

10.12+ Clarivate Analytics Plc 2019 Incentive Award Plan - Amended and Restated as of May 11, 2020

1 unchanged sentence

10.14+ Clarivate Analytics Plc 2019 Incentive Award Plan - Form of Performance Share Unit Agreement (incorporated by reference to Exhibit 10.4 to Clarivate's Quarterly Report on Form 10-Q, filed on July 30, 2020)

10.14*+ Separation Agreement, dated December 10, 2021, by and between Clarivate Plc and Richard Hanks

10.15*+ Offer Letter, dated November 29, 2021, by and between Clarivate Plc and Jonathan Collins

10.16+ Offer Letter, dated October 4, 2021, by and between Clarivate Plc and Heather Matzke-Hamlin (incorporated by reference to Exhibit 10.1 to Clarivate’s Form 8-K filed October 5, 2021)

10.17+ Agreement by and between Clarivate Analytics and Mukhtar Ahmed, dated January 1, 2018 (incorporated by reference to Exhibit 10.6 to Clarivate's Quarterly Report on Form 10-Q, filed on July 30, 2020)

10.18+ Executive Agreement, entered into as of July 26, 2021 by and between Clarivate Plc.

and Jeffrey Roy (incorporated by reference to Exhibit 10.3 to Clarivate's Quarterly Report on Form 10-Q, filed on July 29, 2021)

10.19+ Executive Agreement, entered into as of July 26, 2021 by and between Clarivate Plc.

and Stephen Hartman (incorporated by reference to Exhibit 10.4 to Clarivate's Quarterly Report on Form 10-Q, filed on July 29, 2021)

10.20+ Executive Severance Plan of Clarivate Plc (incorporated by reference to Exhibit 10.5 to Clarivate's Quarterly Report on Form 10-Q, filed on July 29, 2021)

10.15* Clarivate Analytics Plc 2019 Incentive Award Plan - Form of Amendment to the 2021 Performance Share Unit Agreement

10.16* Clarivate Analytics Plc 2019 Incentive Award Plan - Form of Amendment to the 2022 Performance Share Unit Agreement

10.17+ Agreement by and between Clarivate Analytics (UK) Ltd and Mukhtar Ahmed, dated January 7, 2022 ( incorporated by reference to Exhibit 10.

3 to Clarivate's Quarterly Report on Form 10-Q, filed on May 9 , 202 2)

10.18+ Offer Letter, dated March 7, 2022, by and between Clarivate Plc and Michael Easton ( incorporated by reference to Exhibit 10.

2 to Clarivate's Quarterly Report on Form 10-Q, filed on May 9, 2022)

10.19+ Service Agreement, dated May 25, 2022, by and between CPA Limited and Gordon Samson (incorporated by reference to Exhibit 10.

1 to Clarivate's Quarterly Report on Form 10-Q, filed on August 9, 2022)

10.20+ Offer Letter, dated July 7, 2022, by and between Clarivate Plc and Jonathan Gear (incorporated by reference to Exhibit 10.1 to Clarivate's Quarterly Report on Form 10-Q, filed on August 9, 2022)

10.21+ Agreement terminating Director Nomination Agreement (incorporated by reference to Exhibit 10.1 to Clarivate's Form 8-K/A filed September 1, 2022)

10.22+ Chairman Emeritus Agreement (incorporated by reference to Exhibit 10.2 to Clarivate's Form 8-K/A filed September 1, 2022)

21.1* Subsidiaries of the Registrant

3 unchanged sentences

32* Certification of our Chief Executive Officer and our Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

101* The following information from our Form 10-K for the fiscal year ended December 31, 2021, formatted in Inline eXtensible Business Reporting Language:

(i) Consolidated Statement of Comprehensive Income, (ii) Consolidated Balance Sheet, (iii) Consolidated Statement of Changes in Equity, (iv) Consolidated Statement of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.

101* The following information from our Form 10-K for fiscal year ended December 31, 2022, formatted in Inline eXtensible Business Reporting Language:

(i) Consolidated Statements of Comprehensive Income, (ii) Consolidated Balance Sheets, (iii) Consolidated Statements of Changes in Equity, (iv) Consolidated Statements of Cash Flows, and (v) the Notes to the Consolidated Financial Statements.

104* The cover page from the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2022, formatted in Inline XBRL

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CLARIVATE PLC

/s/ Jerre Stead

Executive Chairman and Chief Executive Officer

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Jerre Stead, Jonathan M.

/s/ Jonathan Gear

Jonathan Gear

Chief Executive Officer and Director

KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears below hereby constitutes and appoints Jonathan Gear, Jonathan M.

Collins and Jas Chahal, and each of them, individually, as the undersigned’s true and lawful attorneys-in-fact and agents, with full power of substitution and resubstitution, for the undersigned and in the undersigned’s name, place and stead in any and all capacities, in connection with this annual report, including to sign in the name and on behalf of the undersigned, this annual report and any and all amendments hereto, and to file the same, with all exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto such attorneys-in-fact and agents full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as the undersigned might or could do in person, hereby ratifying and confirming all that said attorneys-in-fact and agents, or his substitute, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this annual report has been signed below by the following persons on March 1, 2023, on behalf of the registrant and in the capacities indicated.

/s/ Jerre Stead Executive Chairman and Chief Executive Officer

Jerre Stead (Principal Executive Officer)

/s/ Jonathan Gear Chief Executive Officer and Director

Jonathan Gear (Principal Executive Officer)

/s/ Jonathan M.

1 unchanged sentence

Collins (Principal Financial Officer)

/s/ Heather Matzke-Hamlin Acting Chief Accounting Officer

Heather Matzke-Hamlin (Acting Principal Accounting Officer)

/s/ Michael Easton Senior Vice President and Chief Accounting Officer

Michael Easton (Principal Accounting Officer)

/s/ Andrew M.

Snyder Chairman of the Board of the Directors

/s/ Valeria Alberola Director

4 unchanged sentences

Sheryl von Blucher

/s/ Kosty Gilis Director

/s/ Usama N Cortas Director

Usama N Cortas

/s/ Balakrishnan S.

Iyer Director

Balakrishnan S.

Levyn Director

/s/ Nicholas Macksey Director

Nicholas Macksey

/s/ Anthony Munk Director

/s/ Charles J.

Neral Director

/s/ Jane Okun Bomba Director

2 unchanged sentences

Roedel Director

/s/ Andrew M.

Snyder Director

/s/ Roxane White Director

Pritchett Director

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 9A. Controls and Procedures