Document:

GILD 2012.03.31 EX-10.51

Exhibit 10.51

GILEAD SCIENCES, INC.
PERFORMANCE SHARE AWARD AGREEMENT

RECITALS

A.    The Corporation has implemented the Plan for the purpose of providing incentives to attract, retain and motivate eligible Employees, Directors and Consultants to continue their service relationship with the Corporation.
B.    Participant is to render valuable services to the Corporation (or a Related Entity), and this Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Corporation's issuance of shares of Common Stock to Participant thereunder.
C.    All capitalized terms in this Agreement shall have the meaning assigned to them in the attached Appendix A.
NOW, THEREFORE, it is hereby agreed as follows:
1.Grant of Performance Shares.  The Corporation hereby awards to Participant, as of the Award Date indicated below, an award (the “Award”) of Performance Shares under the Corporation's 2004 Equity Incentive Plan, as amended (the “Plan”).  Each Performance Share which vests pursuant to the terms of this Agreement shall provide Participant with the right to receive one or more shares of Common Stock on the designated issuance date for those shares.  The number of shares of Common Stock subject to the awarded Performance Shares, the applicable performance-vesting and service-vesting requirements for each separate tranche or subtranche of those shares, the date or dates on which the shares of Common Stock that vest hereunder shall become issuable and the remaining terms and conditions governing the Award, including the applicable vesting acceleration provisions, shall be as set forth in this Agreement.

Exhibit 10.51

AWARD SUMMARY

	
			
	Participant
	 
	FIRST NAME, MIDDLE NAME, LAST NAME

	Award Date:
	 
	GRANT DATE

	Designated Number of Performance Shares:
	 
	The actual number of shares of Common Stock that may become issuable pursuant to the Performance Shares awarded under this Agreement shall be determined in accordance with the performance-vesting and service-vesting provisions of attached Schedules I and II.   For purposes of the applicable calculations under those schedules, the total designated number of Performance Shares to be utilized is [SHARES] shares.        
Those Performance Shares shall be divided into two separate Tranches. ______percent (__ %) of the Performance Shares shall be allocated to Tranche One, and the remaining _____ percent (___ %) of the Performance Shares shall be allocated to Tranche Two.   

	Vesting Schedule:
	 
	Tranche One shall be subject to the performance-vesting and service-vesting requirements set forth in attached Schedule I.  Tranche Two shall be divided into _____Subtranches, with each Subtranche equal to ______ percent (____ %) of the number of Performance Shares allocated to Tranche Two.  Each such Subtranche shall have its own separate performance-vesting and service-vesting requirements as set forth in attached Schedule II. 
Change in Control Vesting.  The shares of Common Stock underlying Tranche One and the three separate Subtranches of Tranche Two may also vest on an accelerated basis in accordance with the applicable provisions of Paragraph 4 and Paragraph 5 should a Change in Control occur after the start but prior to the completion of the Performance Period or Service Period applicable to that Tranche or Subtranche.

	Issuance Date:
	 
	The shares of Common Stock which actually vest and become issuable pursuant to Tranche One or each Subtranche of Tranche Two shall be issued in accordance with the provisions of this Agreement applicable to the particular circumstances under which such vesting occurs.

2.Limited Transferability.  Prior to the actual issuance of the shares of Common Stock which vest hereunder, Participant may not transfer any interest in the Performance Shares subject to this Award or the underlying shares of Common Stock or pledge or otherwise hedge the sale of those Performance Shares or underlying shares, including (without limitation) any short sale or any acquisition or disposition of any put or call option or other instrument tied to the value of the underlying shares of Common Stock.  However, any shares of Common Stock which vest hereunder but otherwise remain unissued at the time of Participant's death may be transferred pursuant to the provisions of Participant's will or the laws of inheritance or to Participant's designated beneficiary or beneficiaries of this Award.  Participant may also direct the Corporation to record the ownership of any shares of Common Stock which in fact vest and become issuable hereunder in the name of a revocable living trust established for the exclusive benefit of Participant or Participant and his or her spouse.  Participant may make such a beneficiary designation or ownership directive at any time by completing the Corporation's Universal Beneficiary Designation form and filing the completed form with the Plan Administrator or its designee.
3.Stockholder Rights and Dividend Equivalents
(a)The holder of this Award shall not have any stockholder rights, including voting, dividend or liquidation rights, with respect to the shares of Common Stock subject to the Award until Participant becomes the record holder of those shares upon their actual issuance following the Corporation's 

Exhibit 10.51

collection of the applicable Withholding Taxes. Notwithstanding the foregoing, should any dividend or other distribution, whether regular or extraordinary and whether payable in cash, securities (other than Common Stock) or other property, be declared and paid on the outstanding Common Stock while one or more Performance Shares remain subject to this Award (i.e., the underlying shares of Common Stock are not otherwise issued and outstanding for purposes of entitlement to the dividend or distribution), then a special book account shall be established for Participant and credited with a phantom dividend equivalent to the actual dividend or distribution that would have been paid on the maximum number of shares of Common Stock that can qualify as Performance-Qualified Shares under this Award, had that number of shares been issued and outstanding and entitled to that dividend or distribution. As one or more shares of Common Stock subsequently vest hereunder upon the satisfaction of the applicable vesting requirements for those shares, the phantom dividend equivalents credited to those particular shares in the book account shall vest, and those vested dividend equivalents shall be distributed to Participant (in the same form the actual dividend or distribution was paid to the holders of the Common Stock entitled to that dividend or distribution or in such other form as the Administrator deems appropriate under the circumstances) concurrently with the issuance of those vested shares. However, such distribution shall be subject to the Corporation's collection of the Withholding Taxes applicable to that distribution.  To the extent any phantom dividend equivalents are to be distributed in shares of Common Stock, the following conversion process will be in effect.  For each such dividend or distribution that is to be converted into shares of Common Stock, the aggregate dollar value of the cash, securities or other property that would have been paid as an actual dividend or distribution on the shares of Common Stock subject to this Award had they been actually issued and outstanding shares at the time of such dividend or distribution will be divided by the Fair Market Value per share of Common Stock measured as of the date on which such dividend or distribution was paid on the outstanding Common Stock, with any fractional share of Common Stock rounded up to the next whole share of Common Stock.  The Administrator shall have the sole discretion to determine the dollar value of any such dividend or distribution paid other than in the form of cash, and its determination shall be controlling.   
(b)To the extent the maximum number of shares of Common Stock that can qualify as Performance-Qualified Shares under any Tranche or Subtranche of this Award is not in fact earned by reason of the level at which the Performance Goal applicable to that Tranche or Subtranche is actually attained, then the phantom dividend equivalents credited to those unearned shares shall be cancelled, and Participant shall cease to have any right or entitlement to receive any distributions or other amounts with respect to those cancelled dividend equivalents.
(c)Should Participant cease Continuous Service without vesting in one or more of the shares of Common Stock subject to this Award (including any shares which do not otherwise vest at that time after taking into account any applicable vesting acceleration provisions set forth in this Agreement and the attached Schedules), then the phantom dividend equivalents credited to those unvested shares shall be cancelled, and Participant shall thereupon cease to have any further right or entitlement to those cancelled amounts.
4.Change in Control - Tranche One.  The following provisions shall apply only to the extent a Change in Control is consummated prior to the completion of the Performance Period applicable to Tranche One and shall have no force or effect if the effective date of the Change in Control occurs after the completion date of the Tranche One Performance Period:
(a)Should (i) the Change in Control occur within the first twelve (12) months of the Tranche One Performance Period and (ii) Participant remain in Continuous Service through the effective date of that Change in Control, then Participant shall immediately vest in that number of shares of Common Stock equal to the designated number of Performance Shares allocated to Tranche One in accordance with Paragraph 1, without any measurement of Tranche One Performance Goal attainment to date.

Exhibit 10.51

(b)Should (i) the Change in Control occur at any time on or after the completion of the first twelve (12) months of the Tranche One Performance Period but prior to the completion of the entire Tranche One Performance Period and (ii) Participant remain in Continuous Service through the effective date of that Change in Control, then Participant shall immediately vest in that number of shares of Common Stock equal to the greater of (i) the designated number of Performance Shares allocated to Tranche One in accordance with Paragraph 1 or (ii) the number of Performance-Qualified Shares determined by multiplying (A) the designated number of Performance Shares allocated to Tranche One in accordance with Paragraph 1 by (B) the applicable percentage (determined in accordance with the payout slope set forth in attached Schedule I) for the level at which the Tranche One Performance Goal is attained over an abbreviated Tranche One Performance Period ending with the close of the Corporation's fiscal quarter coincident with or immediately preceding the effective date of the Change in Control.
(c)The foregoing provisions of this Paragraph 4 shall also apply should Participant's Continuous Service terminate, by reason of an involuntary termination other than for Cause or his or her resignation due to Constructive Termination, at any time during the period beginning with the execution date of the definitive agreement for the Change in Control transaction and ending with the earlier of (i) the effective date of that Change in Control or (ii) the termination of the definitive agreement without the consummation of the Change in Control; provided, however, that in no event shall Participant become entitled to any shares of Common Stock pursuant to this Paragraph 4 if the Change in Control is not in fact consummated.
Should Participant cease Continuous Service during the Tranche One Performance Period by reason of death or Permanent Disability and a Change in Control subsequently occur prior to the completion of that Performance Period, then Participant shall, at the time of such Change in Control, vest in a pro-rated number of shares of Common Stock calculated by multiplying (i) the number of Performance Shares or Performance-Qualified Shares determined in accordance with the applicable provisions of subparagraphs (a) and (b) of this Paragraph 4 by (ii) a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the Tranche One Performance Period (rounded to the closest whole month), andthe denominator of which is the number of months(rounded to the closest whole number) comprising the portion of the Tranche One Performance Period ending with the earlier of (i) the effective date of the Change in Control or (ii) the last day of the abbreviated Tranche One Performance Period (if any) taken into account under clause (ii) of Paragraph 4(b).
(d)Should Participant cease Continuous Service by reason of his or her Retirement at any time after the completion of the first twelve (12) months of the Tranche One Performance Period but prior to the completion of the entire Tranche One Performance Period and a Change in Control subsequently occur prior to the completion of that Performance Period, then Participant shall, at the time of such Change in Control, vest in a pro-rated number of shares of Common Stock calculated by multiplying (i) the number of Performance Shares or Performance-Qualified Shares determined in accordance with the provisions of subparagraph (b) of this Paragraph 4 by (ii) a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the Tranche One Performance Period prior to his or her Retirement (rounded to the closest whole month), and the denominator of which is the number of months (rounded to the closest whole number) comprising the portion of the Tranche One Performance Period ending with the earlier of (i) the effective date of the Change in Control or (ii) the last day of the abbreviated Tranche One Performance Period (if any) taken into account under clause (ii) of Paragraph 4(b).
(e)The number of shares of Common Stock in which Participant vests on the basis of the Performance Shares or Performance-Qualified Shares determined in accordance with the foregoing provisions of this Paragraph 4 shall be converted into the right to receive for each such share the same consideration per share of Common Stock payable to the other stockholders of the Corporation in 

Exhibit 10.51

consummation of the Change in Control, and such consideration shall be distributed to Participant on the tenth (10th) business day following the effective date of that Change in Control.  Each issuance or distribution made under this Paragraph 4(f) shall be subject to the Corporation's collection of the applicable Withholding Taxes.
(f)Except for the actual number of shares of Common Stock in which Participant vests in accordance with this Paragraph 4 or Paragraph 5 below, Participant shall cease to have any further right or entitlement to any additional shares of Common Stock under this Agreement following the effective date of the Change in Control.
(g)This Agreement shall not in any way affect the right of the Corporation to adjust, reclassify, reorganize or otherwise change its capital or business structure or to merge, consolidate, dissolve, liquidate or sell or transfer all or any part of its business or assets.
5.Change in Control-Tranche Two.  The following provisions shall apply only to the extent a Change in Control is consummated prior to the completion of the one or more separate Service Periods that are in effect at the time of such Change in Control with respect to the individual Subtranches into which Tranche Two is divided in accordance with attached Schedule II:  
(a)Should (i) the Change in Control occur during a Performance Period that is in effect at the time with respect to any Subtranche into which Tranche Two is divided in accordance with Schedule II but prior to the completion of that Performance Period and (ii) Participant remain in Continuous Service through the effective date of that Change in Control, then Participant shall immediately vest in that number of shares of Common Stock equal to the designated number of Performance Shares allocated to that particular Subtranche in accordance with Paragraph 1 of this Agreement and the provisions of attached Schedule II, without any measurement of Performance Goal attainment to date with respect to that particular Subtranche.  To the extent a Performance Period for a particular Subtranche of Tranche Two has not commenced prior to the effective date of the Change in Control, the Performance Shares allocated to that Subtranche in accordance with Paragraph 1 of this agreement and the provisions of attached Schedule II shall be cancelled, and Participant shall not have any further right or entitlement to receive any shares of Common Stock with respect to those cancelled Performance Shares. 
(b)Should (i) the Change in Control occur at any time on or after the completion of the Performance Period applicable to any Subtranche into which Tranche Two is divided in accordance with Schedule  II but prior to the completion of the Service Period specified for that Subtranche in attached Schedule II and (ii) Participant remain in Continuous Service through the effective date of that Change in Control, then Participant shall immediately vest in the number of shares of Common Stock equal to the number of Performance-Qualified Shares (if any) at the time subject to that Subtranche  by reason of the level at which the Performance Goal for that Subtranche was in fact attained for the  Performance Period applicable to that Subtranche.
(c)Subparagraphs (a) and (b) of this Paragraph 5 shall also apply should Participant's Continuous Service terminate, by reason of an involuntary termination other than for Cause or his or her resignation due to Constructive Termination, at any time during the period beginning with the execution date of the definitive agreement for the Change in Control transaction and ending with the earlier of (i) the effective date of that Change in Control or (ii) the termination of the definitive agreement without the consummation of the Change in Control; provided, however, that in no event shall Participant become entitled to any shares of Common Stock pursuant to this Paragraph 5 if the Change in Control is not in fact consummated.

Exhibit 10.51

(d)Should Participant cease Continuous Service by reason of Retirement, death or Permanent Disability during one or more Service Periods that are, pursuant to the provisions of attached Schedule II, in effect at that time with respect to one or more Subtranches into which Tranche Two is divided and a Change in Control subsequently occur prior to the completion of each such applicable Service Period, then Participant shall, at the time of such Change in Control, vest in a pro-rated number of shares of Common Stock calculated by multiplying (i) the number of Performance Shares or Performance-Qualified Shares determined for each such Subtranche in accordance with the applicable provisions of subparagraphs (a) and (b) of this Paragraph 5 by (ii) a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the applicable Service Period for such Subtranche (rounded to the closest whole month), and the denominator of which is the number of months (rounded to the closest whole number) comprising the portion of that Service Period ending with the effective date of the Change in Control.
(e)The number of shares of Common Stock in which Participant vests on the basis of the Performance Shares or Performance-Qualified Shares determined in accordance with the foregoing provisions of this Paragraph 5 shall be converted into the right to receive for each such share the same consideration per share of Common Stock payable to the other stockholders of the Corporation in consummation of the Change in Control, and such consideration shall be distributed to Participant on the earlier of (i) tenth (10th) business days following the effective date of the Change in Control, provided such Change in Control also constitutes a Qualifying Change in Control, or (ii) the date those shares would have been issued to Participant in accordance with Paragraph 7 in the absence of such Change in Control, unless a later issuance date is in effect for those shares pursuant to any deferral election made by Participant pursuant to Paragraph 8.  Each issuance or distribution made under this Paragraph 5(e) shall be subject to the Corporation's collection of the applicable Withholding Taxes.
(f)Except for the actual number of shares of Common Stock in which Participant vests in accordance with this Paragraph 5 or Paragraph 4 above, Participant shall cease to have any further right or entitlement to any additional shares of Common Stock under this Agreement following the effective date of the Change in Control.
6.Adjustment in Shares.  Should any change be made to the Common Stock by reason of any stock split, stock dividend, recapitalization, combination of shares, exchange of shares, spin-off transaction, extraordinary dividend or distribution or other change affecting the outstanding Common Stock as a class without the Corporation's receipt of consideration, or should the value of the outstanding shares of Common Stock be substantially reduced as a result of a spin-off transaction or an extraordinary dividend or distribution, or should there occur any merger, consolidation or other reorganization, then equitable adjustments shall be made by the Administrator to the total number and/or class of securities issuable pursuant to this Award in order to reflect such change.  In making such equitable adjustments, the Administrator shall take into account any amounts credited to Participant's book account under Paragraph 3(a) in connection with the transaction, and the determination of the Administrator shall be final, binding and conclusive.  In the event of any Change in Control transaction, the provisions of Paragraphs 4 and 5 shall be controlling.
7.Issuance or Distribution of Vested Shares or Other Amounts.
(a)Except as otherwise provided in Paragraph 4, Paragraph 5 or Paragraph 8, the shares of Common Stock in which Participant vests pursuant to the performance-vesting and Continuous Service vesting provisions of attached Schedules I and II shall be issued in accordance with the following provisions:  

Exhibit 10.51

-    For any shares subject to Tranche One, the issuance shall be effected during the period beginning with the first business day of the calendar year immediately succeeding the end of the Tranche One Performance Period and ending no later than March 15 of that calendar year.
-    For any shares subject to any Subtranche of Tranche Two, the issuance shall be effected during the period beginning with the first business day of the calendar year immediately succeeding the end of the Service Period specified for that Subtranche in attached Schedule II and ending no later than March 15 of that calendar year.
(b)The Corporation shall, on the applicable issuance date, issue to or on behalf of Participant a certificate in electronic form for the shares of Common Stock in which Participant vests pursuant to the performance-vesting and Continuous Service vesting provisions of attached Schedules I and II and shall concurrently distribute to Participant any phantom dividend equivalents with respect to those Shares.  In lieu of such electronic delivery of the shares, Participant may request actual stock certificates for those shares.
(c)Except as otherwise provided in Paragraph 4 or Paragraph 5, no shares of Common Stock shall be issued prior to the completion of the Service Period applicable to those Shares.  No fractional shares of Common Stock shall be issued pursuant to this Award, and any fractional share resulting from any calculation made in accordance with the terms of this Agreement shall be rounded down to the next whole share.
(d)Regardless of any action the Corporation and/or the Employer take with respect to any or all Withholding Taxes related to Participant's participation in the Plan and legally applicable to Participant, Participant acknowledges that the ultimate liability for all Withholding Taxes is and remains Participant's responsibility and may exceed the amount actually withheld by the Corporation or the Employer.  Participant further acknowledges that the Corporation and/or the Employer (i) make no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspect of the Award, including the grant, vesting or settlement of the Award, the issuance of shares of Common Stock or other property in settlement of the Award, the subsequent sale of the shares of Common Stock acquired pursuant to such issuance and the receipt of any dividends and/or phantom dividend equivalents and (ii) do not commit to, and are under no obligation to, structure the terms of the grant or any aspect of the Award to reduce or eliminate Participant's liability for Withholding Taxes or achieve any particular tax result.  Further, if Participant has become subject to Withholding Taxes in more than one jurisdiction between the Award Date and the date of any relevant taxable or tax withholding event (as applicable), Participant acknowledges that the Corporation and/or the Employer (or former employer, as applicable) may be required to withhold or account for Withholding Taxes in more than one jurisdiction.  
(e)The Corporation shall collect, and Participant hereby authorizes the Corporation to collect, the Withholding Taxes with respect to the shares of Common Stock issued under this Agreement (including shares of Common Stock issued in settlement of phantom dividend equivalents) through an automatic share withholding procedure pursuant to which the Corporation will withhold, immediately as the shares of Common Stock are issued under the Award, a portion of those shares with a Fair Market Value (measured as of the issuance date) equal to the amount of such Withholding Taxes (the “Share Withholding Method”).  Notwithstanding the foregoing, the Share Withholding Method shall not be utilized if (i) such method is not permissible or advisable under local law or (ii) the Corporation otherwise decides no longer to utilize such method and provides Participant with notice to such effect.  

Exhibit 10.51

(f)If the Share Withholding Method is to be utilized for the collection of Withholding Taxes, then the Corporation shall withhold the number of otherwise issuable shares of Common Stock necessary to satisfy the applicable Withholding Taxes based on the applicable minimum statutory rate or other applicable withholding rate.  If the obligation for Withholding Taxes is satisfied by using the Share Withholding Method, then Participant will, for tax purposes, be deemed to have been issued the full number of shares of Common Stock subject to the vested Award, notwithstanding that a number of shares of Common Stock are withheld solely for the purpose of paying the applicable Withholding Taxes.
(g)The Corporation shall have sole discretion to determine whether or not the Share Withholding Method shall be utilized for the collection of the applicable Withholding Taxes.  Participant shall be notified (in writing or through the Corporation's electronic mail system) in the event the Corporation no longer intends to utilize the Share Withholding Method. Should any shares of Common Stock become issuable under the Award (including shares of Common Stock issued in settlement of phantom dividend equivalents) at a time when the Share Withholding Method is not being utilized by the Corporation, then the Withholding Taxes shall be collected from Participant through a sale-to-cover transaction authorized by Participant, pursuant to which an immediate open-market sale of a portion of the shares of Common Stock issued to Participant will be effected, for and on behalf of Participant, by the Corporation's designated broker to cover the Withholding Tax liability estimated by the Corporation to be applicable to such issuance. Participant shall, promptly upon request from the Corporation, execute (whether manually or through electronic acceptance) an appropriate sales authorization (in form and substance reasonably satisfactory to the Corporation) that authorizes and directs the broker to effect such open-market, sale-to-cover transactions and remit the sale proceeds, net of brokerage fees and other applicable charges, to the Corporation in satisfaction of the applicable Withholding Taxes. However, no sale-to-cover transaction shall be effected unless (i) such a sale is at the time permissible under the Corporation's insider trading policies governing the sale of Common Stock and (ii) the transaction is not otherwise deemed to constitute a prohibited loan under Section 402 of the Sarbanes-Oxley Act of 2002.
(h)If the Corporation determines that such sale-to-cover transaction is not permissible or advisable at the time or if Participant otherwise fails to effect a timely sales authorization as required by this Agreement, then the Corporation may, in its sole discretion, elect either to defer the issuance of the shares of Common Stock until such sale-to-cover transaction can be effected in accordance with Participant's executed sale directive or to collect the applicable Withholding Taxes through Participant's delivery of his or her separate check payable to the Corporation in the amount of such Withholding Taxes or by withholding such amount from other wages payable to Participant. In no event shall any shares of Common Stock be issued in the absence of an arrangement reasonably satisfactory to the Corporation for the satisfaction of the applicable Withholding Taxes, and any such arrangement must be in compliance with any applicable requirements of Code Section 409A.
(i)The Corporation shall collect the Withholding Taxes with respect to the  phantom dividend equivalents distributed in a form other than shares of Common Stock by withholding a portion of that distribution equal to the amount of the applicable Withholding Taxes, with the cash portion of the distribution to be the first portion so withheld, or through such other tax withholding arrangement as the Corporation deems appropriate
(j)Notwithstanding the foregoing provisions of Paragraphs 7(d) through 7(h), the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting of the shares of Common Stock or any other amounts hereunder (the “Employment Taxes”) shall in all events be collected from Participant no later than the last business day of the calendar year in which those shares or other amounts vest hereunder.  Accordingly, to the extent the applicable issuance date for one or more vested shares of Common Stock or the distribution date for such 

Exhibit 10.51

other amounts is to occur in a year subsequent to the calendar year in which those shares or other amounts vest, Participant shall, on or before the last business day of the calendar year in which such shares or other amounts vest, deliver to the Corporation a check payable to its order in the dollar amount equal to the Employment Taxes required to be withheld with respect to those shares or other amounts.  The provisions of this Paragraph 7(j) shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v).
(k)Except as otherwise provided in Paragraph 4 or Paragraph 5 or this Paragraph 7, the settlement of all Performance or Performance-Qualified Shares which vest under the Award shall be made solely in shares of Common Stock.
Special Deferral Election.      Provided Participant is a U.S. tax resident and subject to Participant's satisfaction of any applicable Withholding Tax obligations under Paragraph 7 and any other eligibility requirements established by the Administrator for a deferral election hereunder, Participant may elect to defer the issuance date of any shares of Common Stock which may become issuable to Participant pursuant to the terms of this Agreement, by submitting to the Corporation on a timely basis a deferral election in the form provided for such purpose.  Such deferral election must be submitted to the Corporation prior to the last six (6) months of the Performance Period (including any abbreviated Performance Period) applicable to the shares for which the deferral election is made, and any deferral election submitted within that six (6)-month period or after the performance-based compensation subject to that election has become ascertainable shall have no force and effect.  The deferral election must specify one or more deferred issuance dates or events that qualify as permissible distribution events under Code Section 409A and the Treasury Regulations thereunder.  In submitting such deferral election, Participant must represent that he or she understands the effect of such deferral under relevant federal, state and local income and employment tax laws, including (without limitation) the fact that Social Security, Medicare and other taxes may be due upon the vesting of theshares of Common Stock notwithstanding the deferral election.  In no event may such a deferral election be made after Participant's cessation of Continuous Service, and no deferral election shall have any force or effect unless such election complies with all applicable requirements of Code Section 409A and the Treasury Regulations thereunder.    

8.Leaves of Absence.  For purposes of the applying the various Continuous Service vesting provisions of this Agreement, Participant shall be deemed to cease Continuous Service on the commencement date of any leave of absence and not to remain in Continuous Service status during the period of that leave, except to the extent otherwise required under employment laws in the jurisdiction where Participant is employed or pursuant to the following policy:

-    Participant shall be deemed to remain in Continuous Service status during (i) the first three (3) months of an approved personal leave of absence or (ii) the first seven (7) months of any bona fide leave of absence (other than an approved personal leave) and shall be deemed to cease Continuous Service upon the expiration of the applicable three (3)-month or seven (7)-month period.
-    In no event, however, shall Participant be deemed, for vesting purposes hereunder, to remain in Continuous Service beyond the earlier of (i) the expiration date of that leave of absence, unless Participant returns to active Continuous Service or Employee status on or before that date, or (ii) the date Participant's Continuous Service or Employee status actually terminates by reason of his or her voluntary or involuntary termination or by reason of his or her death or disability.

Exhibit 10.51

9.Compliance with Laws and Regulations.  The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Corporation and Participant with all Applicable Laws relating thereto.
10.Notices.  Any notice required to be given or delivered to the Corporation under the terms of this Agreement shall be in writing and addressed to the Corporation at its principal corporate offices.  Any notice required to be given or delivered to Participant shall be in writing and addressed to Participant at the most current address then indicated for Participant on the Corporation's employee records or shall be delivered electronically to Participant through the Corporation's electronic mail system or through an on-line brokerage firm authorized by the Corporation to effect sales of the Common Stock issued hereunder.  All notices shall be deemed effective upon personal delivery or delivery through the Corporation's electronic mail system or upon deposit in the U.S. mail, postage prepaid and properly addressed to the party to be notified.
11.Successors and Assigns.  Except to the extent otherwise provided in this Agreement, the provisions of this Agreement shall inure to the benefit of, and be binding upon, the Corporation and its successors and assigns and Participant, Participant's assigns, the legal representatives, heirs and legatees of Participant's estate and any beneficiaries of the Award designated by Participant.
12.Code Section 409A      
(a)It is the intention of the parties that the provisions of this Agreement shall, to the maximum extent permissible, comply with the requirements of the short-term deferral exception to Section 409A of the Code and Treasury Regulations Section 1.409A-1(b)(4) with respect to one or more Tranches or Subtranches of this Award.  Accordingly, to the extent there is any ambiguity as to whether one or more provisions of this Agreement would otherwise contravene the requirements or limitations of Code Section 409A applicable to such short-term deferral exception, then those provisions, as they apply to such Tranches or Subtranches, shall be interpreted and applied in a manner that does not result in a violation of the requirements or limitations of Code Section 409A and the Treasury Regulations thereunder that apply to such exception.
(b)However, to the extent this Agreement should be deemed to create a deferred compensation arrangement subject to the requirements of Code Section 409A with respect to one or more Tranches or Subtranches of this Award, whether by reason of any  deferral election made pursuant to Paragraph 8 above or the pro-rata service-vesting provisions of this Agreement, then the following provisions shall apply with respect to any such Tranche or Subtranche, notwithstanding anything to the contrary set forth herein: 
-    No shares of Common Stock or other amounts which become issuable or distributable with respect to such Tranche or Subtranche by reason of Participant's cessation of Continuous Service shall actually be issued or distributed to Participant until the date of Participant's Separation from Service or as soon thereafter as administratively practicable, but in no event later than the later of (i) the close of the calendar year in which such Separation from Service occurs or (ii) the fifteenth day of the third calendar month following the date of such Separation from Service.
-    No shares of Common Stock or other amounts which become issuable or distributable with respect to such Tranche or Subtranche by reason of Participant's cessation of Continuous Service shall actually be issued or distributed to Participant prior to the earlier of (i) the first day of the seventh (7th) month following the date of Participant's Separation 

Exhibit 10.51

from Service or (ii) the date of Participant's death, if Participant is deemed at the time of such Separation from Service to be a specified employee under Section 1.409A-1(i) of the Treasury Regulations issued under Code Section 409A, as determined by the Administrator in accordance with consistent and uniform standards applied to all other Code Section 409A arrangements of the Corporation, and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  The deferred Shares or other distributable amount shall be issued or distributed in a lump sum on the first day of the seventh (7th) month following the date of Participant's Separation from Service or, if earlier, the first day of the month immediately following the date the Corporation receives proof of Participant's death.
-    No amounts that vest and become payable under Paragraph 4 or Paragraph 5 of this Agreement with respect to that Tranche or Subtranche by reason of a Change in Control shall be distributed to Participant at the time of such Change in Control, unless that transaction also constitutes a Qualifying Change in Control.  In the absence of such a Qualifying Change in Control, the distribution shall not be made until the date on which the shares to which those amounts pertain would have become issuable in accordance with the provisions of Paragraph 7(a) of this Agreement. 
-    If Participant has made a deferral election under Paragraph 8 of this Agreement with respect to any Tranche or Subtranche of this Award, no amounts that vest and become payable under Paragraph 4 or Paragraph 5 with respect to that Tranche or Subtranche by reason of a Change in Control shall be distributed to Participant at the time of that Change in Control unless (i) the transaction also constitutes a Qualifying Change in Control and (ii) such deferral election provides for a distribution upon such an event.  In the absence of such a Qualifying Change in Control or distribution election tied thereto, the distribution shall not be made until the date on which the shares to which those amounts pertain would have become issuable in accordance with Participant's deferral election under Paragraph 8 of this Agreement. 
-     The shares of Common Stock that are issuable pursuant to each Tranche or separate Subtranche of this Award in accordance with the provisions of this Agreement and attached Schedules I and II shall be deemed a separate payment for purposes of Code Section 409A.
13.Construction.  This Agreement and the Award evidenced hereby are made and granted pursuant to the Plan and are in all respects limited by and subject to the terms of the Plan.  In the event of any conflict between the provisions of this Agreement and the terms of the Plan, the terms of the Plan shall be controlling.  All decisions of the Administrator with respect to any question or issue arising under the Plan or this Agreement shall be conclusive and binding on all persons having an interest in the Award.
14.Governing Law.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of California without resort to that State's conflict-of-laws rules.
15.Employment at Will.  Nothing in this Agreement or in the Plan shall confer upon Participant any right to remain in Continuous Service for any period of specific duration or interfere with or otherwise restrict in any way the rights of the Corporation (or any Related Entity employing or retaining Participant) or of Participant, which rights are hereby expressly reserved by each, to terminate Participant's Continuous Service at any time for any reason, with or without Cause.

Exhibit 10.51

16.Plan Prospectus.  The official prospectus for the Plan is available on the Corporation's intranet at: http://gnet/ HR/stocks_new.asp.  Participant may also obtain a printed copy of the prospectus by contacting Stock Plan Services at stockadministration@gilead.com.
17.Participant Acceptance.  Participant must accept the terms and conditions of this Agreement either electronically through the electronic acceptance procedure established by the Corporation or through a written acceptance delivered to the Corporation in a form satisfactory to the Corporation.  In no event shall any shares of Common Stock be issued (or other securities or property distributed) under this Agreement in the absence of such acceptance.
IN WITNESS WHEREOF, Gilead Sciences, Inc. has caused this Agreement to be executed on its behalf by its duly-authorized officer on the day and year first indicated above.

	
		
	GILEAD SCIENCES, INC.

	 
	 

	By:
	 

	Title:
	 

Exhibit 10.51

APPENDIX A
DEFINITIONS
The following definitions shall be in effect under the Agreement:
A.Administrator shall mean the Compensation Committee of the Board acting in its capacity as administrator of the Plan.
B.Agreement shall mean this Performance Share Award Agreement.
C.Applicable Laws shall mean the legal requirements related to the Plan and the Award under applicable provisions of the federal securities laws, state corporate and securities laws, the Code, the rules of any applicable Stock Exchange on which the Common Stock is listed for trading, and the rules of any non-U.S. jurisdiction applicable to Awards granted to residents therein.
D.Award shall mean the award of Performance Shares made to Participant pursuant to the terms of this Agreement.
E.Award Date shall mean the date the Performance Shares are awarded to Participant pursuant to the Agreement and shall be the date indicated in Paragraph 1 of the Agreement.
F.Board shall mean the Corporation's Board of Directors.
G.Cause shall have the meaning assigned to such term in Section 11(c) of the Plan.
H.Change in Control shall mean a change in ownership or control of the Corporation effected through the consummation of any of the following transactions:
(i)a merger, consolidation or other reorganization approved by the Corporation's stockholders, unless securities representing more than fifty percent (50%) of the total combined voting power of the voting securities of the successor corporation are immediately thereafter beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation's outstanding voting securities immediately prior to such transaction;
(ii)a sale, transfer or other disposition of all or substantially all of the Corporation's assets;
(iii)the closing of any transaction or series of related transactions pursuant to which any person or any group of persons comprising a “group” within the meaning of Rule 13d-5(b)(1) of the 1934 Act (other than the Corporation or a person that, prior to such transaction or series of related transactions, directly or indirectly controls, is controlled by or is under common control with, the Corporation) becomes directly or indirectly (whether as a result of a single acquisition or by reason of one or more acquisitions within the twelve (12)-month period ending with the most recent acquisition) the beneficial owner (within the meaning of Rule 13d-3 of the 1934 Act) of securities possessing (or convertible into or exercisable for securities possessing) more than fifty percent (50%) of the total combined voting power of the Corporation's outstanding securities (as measured in terms of the power 

Exhibit 10.51

to vote with respect to the election of Board members) outstanding immediately after the consummation of such transaction or series of related transactions, whether such transaction involves a direct issuance from the Corporation or the acquisition of outstanding securities held by one or more of the Corporation's existing stockholders; or
(iv)a change in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination.
In no event, however, shall a Change in Control be deemed to occur upon a merger, consolidation or other reorganization effected primarily to change the State of the Corporation's incorporation or to create a holding company structure pursuant to which the Corporation becomes a wholly-owned subsidiary of an entity whose outstanding voting securities immediately after its formation are beneficially owned, directly or indirectly and in substantially the same proportion, by the persons who beneficially owned the Corporation's outstanding voting securities immediately prior to the formation of such entity.  Should such holding company structure or other Parent entity be established for the Corporation, then subparagraph (iv) shall be applied solely to the board of directors of that holding company or Parent entity.
A.Code shall mean the Internal Revenue Code of 1986, as amended.
B.Common Stock shall mean shares of the Corporation's common stock.
C.Constructive Termination shall have the meaning assigned to such term in Section 11(d) of the Plan.
D.Consultant shall mean any person, including an advisor, who is compensated by the Corporation or any Related Entity for services performed as a non-employee consultant; provided, however, that the term “Consultant” shall not include non-employee Directors serving in their capacity as Board members.  The term “Consultant” shall include a member of the board of directors of a Related Entity.
E.Continuous Service shall mean the performance of services for the Corporation or a Related Entity (whether now existing or subsequently established) by a person in the capacity of an Employee, Director or Consultant.  For purposes of this Agreement, Participant shall be deemed to cease Continuous Service immediately upon the occurrence of either of the following events: (i) Participant no longer performs services in any of the foregoing capacities for the Corporation or any Related Entity or (ii) the entity for which Participant is performing such services ceases to remain a Related Entity of the Corporation, even though Participant may subsequently continue to perform services for that entity.  In jurisdictions requiring notice in advance of an effective termination of Participant's service as an Employee, Director or Consultant, Continuous Service shall be deemed to terminate upon the actual cessation of such service to the Corporation or a Related Entity notwithstanding any required notice period that must be fulfilled before Participant's termination as an Employee, Director or Consultant can be effective under Applicable Laws.
F.Corporation shall mean Gilead Sciences, Inc., a Delaware corporation, and any successor corporation to all or substantially all of the assets or voting stock of Gilead Sciences, Inc. which shall by appropriate action adopt the Plan.

Exhibit 10.51

G.Director shall mean a member of the Board.
H.Employee shall mean an individual who is in the employ of the Corporation (or any Related Entity), subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.
I.Employer shall mean the Corporation or any Related Entity employing Participant.
J.Fair Market Value per share of Common Stock on any relevant date shall be the closing price per share of Common Stock (or the closing bid, if no sales were reported) on that date, as quoted on the Stock Exchange that is at the time serving as the primary trading market for the Common Stock; provided, however, that if there is no reported closing price or closing bid for that date, then the closing price or closing bid, as applicable, for the last trading date on which such closing price or closing bid was quoted shall be determinative of such Fair Market Value.  The applicable quoted price shall be as reported in The Wall Street Journal or such other source as the Administrator deems reliable.
K.1934 Act shall mean the Securities Exchange Act of 1934, as amended from time to time.
L.Participant shall mean the person to whom the Award is made pursuant to the Agreement.
M.Parent shall mean any corporation (other than the Corporation) in an unbroken chain of corporations ending with the Corporation, provided each corporation in the unbroken chain (other than the Corporation) owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
N.Performance Goal shall, with respect to Tranche One, mean the performance goal specified on attached Schedule I (the “Tranche One Performance Goal”) that must be attained in order to satisfy the performance-vesting requirement for the shares of Common Stock allocated to Tranche One and shall, with respect to each separate Subtranche of Tranche Two, mean the performance goal established or to be established for that Subtranche in accordance with the provisions of attached Schedule II (the “Subtranche Performance Goal”) that must be subsequently attained in order to satisfy the performance-vesting requirement for the shares of Common Stock allocated to that particular Subtranche. 
O.Performance Period shall mean the (i) period specified on attached Schedule I over which the attainment of the Performance Goal for Tranche One is to be measured (the “Tranche One Performance Period”) and (ii) the period specified on attached Schedule II for each separate Subtranche of Tranche Two over which the attainment of the Performance Goal applicable to that particular Subtranche is to be measured.
P.Performance-Qualified Shares shall, with respect to Tranche One and each separate Subtranche of Tranche Two, mean the maximum number of shares of Common Stock in which Participant can vest based on the level at which the Performance Goal applicable to that Tranche or Subtranche is attained and shall be calculated in accordance with the provisions of attached Schedule I with respect to Tranche One and the provisions of attached Schedule II with respect to each separate Subtranche of Tranche Two.  
Q.Performance Share shall mean the phantom shares of Common Stock awarded under this Agreement which will entitle Participant to receive one or more actual shares of Common Stock pursuant to this Award upon the satisfaction of the performance and Continuous Service vesting requirements applicable to each Tranche or Subtranche of this Award.

Exhibit 10.51

R.Permanent Disability shall mean the inability of Participant to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment expected to result in death or to be of continuous duration of twelve (12) months or more.
S.Plan shall mean the Corporation's 2004 Equity Incentive Plan, as amended.
T.Qualifying Change in Control shall mean a change in control of ownership of the Company effected by one or more of the following transactions:
(i)a merger or consolidation in which the Company is not the surviving entity and in which one person or a group of related persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) acquires ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities or constituting more than fifty percent (50%) of the total fair market value of the Company's outstanding securities;
(ii)the sale, transfer or other disposition of all or substantially all of the assets of the Company in complete liquidation or dissolution of the Corporation; 
(iii)any reverse merger in which the Company is the surviving entity but in which one person or a group of related persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) acquires ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities or constituting more than fifty percent (50%) of the total fair market value of the Company's outstanding securities;
(iv)the acquisition, directly or indirectly, by any person or related group of persons (other than the Company or a person that directly or indirectly controls, is controlled by, or is under common control with, the Company) of beneficial ownership of securities possessing more than fifty percent (50%) of the total combined voting power of the Company's outstanding securities or constituting more than fifty percent (50%) of the total fair market value of the Company's outstanding securities pursuant to a tender or exchange offer made directly to the Company's stockholders; or
(v)a change in the composition of the Board over a period of twelve (12) consecutive months or less such that a majority of the Board members ceases, by reason of one or more contested elections for Board membership, to be comprised of individuals who either (A) have been Board members continuously since the beginning of such period or (B) have been elected or nominated for election as Board members during such period by at least a majority of the Board members described in clause (A) who were still in office at the time the Board approved such election or nomination. 
The foregoing definition of Qualifying Change in Control shall in all instances be applied and interpreted in such manner that the applicable Qualifying Change in Control transaction that serves as an issuance event for the shares of Common Stock subject to this Award (or distribution event for any amounts relating to those shares) that vest upon the occurrence of a Change in Control and are otherwise at the time subject to the issuance or distribution restrictions of Code Section 409A will also qualify as: (i) a change in the ownership of the Corporation, as determined in accordance with  Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective control of the Corporation, as determined in accordance with Section 1.409A-3(i)(5)(vi) of the Treasury Regulations, or (iii) a change in the ownership of a substantial 

Exhibit 10.51

portion of the assets of the Corporation, as determined in accordance with  Section 1.409A-3(i)(5)(vii) of the Treasury Regulations.  
U.Related Entity shall mean any Parent or Subsidiary of the Corporation and (ii) any corporation in an unbroken chain of corporations beginning with the Corporation and ending with the corporation in the chain for which Participant provides services as an Employee, Director or Consultant, provided each corporation in such chain owns securities representing at least fifty percent (50%) of the total outstanding voting power of the outstanding securities of another corporation or entity in such chain.
V.Retirement shall mean Participant's cessation of Employee status on or after the date on which his or her combined age and years of Continuous Service equal or exceed seventy (70) years.
W.Separation from Service shall mean Participant's cessation of Employee status by reason of his or her death, retirement or termination of employment.  Participant shall be deemed to have terminated employment for such purpose at such time as the level of his or her bona fide services to be performed as an Employee (or as a consultant or independent contractor) permanently decreases to a level that is not more than twenty percent (20%) of the average level of services he or she rendered as an Employee during the immediately preceding thirty-six (36) months (or such shorter period for which he or she may have rendered such services).  Solely for purposes of determining when a Separation from Service occurs, Participant will be deemed to continue in “Employee” status for so long as he or she remains in the employ of one or more members of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.  “Employer Group” means the Corporation and any Parent or Subsidiary and any other corporation or business controlled by, controlling or under common control with, the Corporation, as determined in accordance with Sections 414(b) and (c) of the Code and the Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section 1.414(c)-2 of the Treasury Regulations.  Any such determination as to Separation from Service, however, shall be made in accordance with the applicable standards of the Treasury Regulations issued under Section 409A of the Code.
X.Service Period shall, with respect to Tranche One, mean the period coincident with the Performance Period applicable to Tranche One (plus the additional period between the last day of that Performance Period and the date the Administrator certifies the attained level of the Tranche One Performance Goal) over which the Continuous Service vesting requirement in effect for Tranche One is to be measured and shall, with respect to each separate Subtranche of Tranche Two, mean the applicable service period specified for that Subtranche in attached Schedule II over which the Continuous Service vesting requirement in effect for that Subtranche is to be measured.
Y.Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.
Z.Subsidiary shall mean any corporation (other than the Corporation) in an unbroken chain of corporations beginning with the Corporation, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.

Exhibit 10.51

AA.Tranche shall mean the two separate tranches (Tranche One and Tranche Two) into which the Performance Shares subject to this Award are divided in accordance with the provisions of Paragraph 1 of this Agreement.  Tranche Two shall in turn be divided into _____ separate subtranches (“Subtranche”), each equal to ________ of the number of Performance Shares allocated to Tranche Two in accordance with the provisions of Paragraph 1 of this Agreement. 
AB.Withholding Taxes shall mean the federal, state and local income taxes and the employee portion of the federal, state and local employment taxes required to be withheld by the Corporation in connection with the vesting and issuance of the shares of Common Stock which vest under of the Award, any phantom dividend equivalents distributed with respect to those shares and any other amounts distributable in replacement or substitution of such shares.

Exhibit 10.51

SCHEDULE I
PERFORMANCE GOAL AND PERFORMANCE PERIOD FOR TRANCHE ONE 
PERFORMANCE PERIOD
The measurement period for the Performance Shares allocated to Tranche One shall be the period beginning _____________ and ending _______________ (the “Tranche One Performance Period”).
PERFORMANCE GOAL FOR PERFORMANCE VESTING
Performance Goal: The performance-vesting requirement for the Performance Shares allocated to Tranche One shall be tied to:

[Designate Applicable Performance Goal] 

Should a Change in Control occur during the Tranche One Performance Period, then the Tranche One Performance Goal will be measured over an abbreviated Tranche One Performance Period ending with the Corporation's last complete fiscal quarter coincident with or immediately preceding the effective date of that Change in Control.

Performance-Qualified Shares: Within sixty-five (65) days after the completion of the Tranche One Performance Period, the Administrator shall determine and certify the actual level at which the Tranche One Performance Goal is attained. The actual number of Performance-Qualified Shares that results from such certification (the “Tranche One Performance-Qualified Shares”) may range from 0% to 200% of the number of Performance Shares allocated to Tranche One in accordance with Paragraph 1 of this Agreement, with the actual percentage to be determined on the basis of the percentile level at which the Administrator certifies that the Tranche One Performance Goal has been attained; provided, however, that the maximum number of the shares of Common Stock that may qualify as Tranche One Performance-Qualified Shares may not exceed 200% of the number of Performance Shares allocated to Tranche One in accordance with Paragraph 1 of this Agreement.

Payout Slope for Determining Number of Performance-Qualified Shares Based on Attained Levels of Tranche One Performance Goal:  The number of shares of Common Stock that may qualify as Tranche One Performance-Qualified Shares on the basis of the certified  level of Tranche One Performance Goal attainment shall be calculated by multiplying the number of Performance Shares allocated to Tranche One in accordance with  Paragraph 1 of this Agreement by the applicable percentage determined in accordance with the following payout slope for the Tranche One Performance Goal: 
Tranche One Performance Goal Payout Slope
 
[Insert Payout Slope]    

CONTINUOUS SERVICE VESTING REQUIREMENT FOR TRANCHE ONE PERFORMANCE-QUALIFIED SHARES 

 The number of shares of Common Stock in which Participant may actually vest on the basis of the number of Tranche One Performance-Qualified Shares certified by the Administrator in accordance with the foregoing shall be tied to his or her completion of the following Continuous Service vesting requirement applicable to Tranche One: 

Exhibit 10.51

-    If Participant remains in Continuous Service through the date following the completion of the Tranche One Performance Period on which the Administrator certifies the attained level of the Tranche One Performance Goal for the Tranche One Performance Period, Participant shall vest in one hundred percent (100%) of the Tranche One Performance-Qualified Shares.
-    If Participant's Continuous Service terminates prior to the completion of the Tranche One Performance Period (or after the completion of the Tranche One Performance Period but before the date the Administrator certifies the attained level of the TSR Performance Goal) by reason of death or Permanent Disability, then Participant shall, following the completion of the Tranche One Performance Period, vest in that number of shares of Common Stock (if any) determined by multiplying the maximum number of Tranche One Performance-Qualified Shares in which Participant could vest, based on the actual level at which the TSR Performance Goal is attained and certified for the Tranche One Performance Period, by a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the Tranche One Performance Period (rounded to the closest whole month), and the denominator of which is the number of months (rounded to the closest whole number) constituting the entire Tranche One Performance Period.
-    If Participant's Continuous Service terminates by reason of his or her Retirement at any time after the completion of the first twelve (12) months of the Tranche One Performance Period but prior to the completion of that Performance Period (or after the completion of the Tranche One Performance Period but before the date the Administrator certifies the attained level of the Tranche One Performance Goal for the Tranche One Performance Period), then Participant shall, following the completion of the Tranche One Performance Period, vest in that number of shares of Common Stock (if any) determined by multiplying the maximum number of Tranche One Performance-Qualified Shares in which Participant could vest, based on the actual level at which the TSR Performance Goal is attained and certified for the Tranche One Performance Period, by a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the Tranche One Performance Period prior to his or her Retirement (rounded to the closest whole month), and the denominator of which is the number of months (rounded to the closest whole number) constituting the entire Tranche One Performance Period.
-    If (i) Participant's Continuous Service terminates by reason of  an involuntary termination other than for Cause, or his or her resignation due to Constructive Termination, at any time after the completion of the Tranche One Performance Period but before the date the Administrator certifies the attained level of the Tranche One Performance Goal for that  Performance Period and (ii) such termination of Continuous Service also occurs during a period while there is in effect a definitive executed agreement for the Change in Control transaction, then Participant shall vest in the maximum number of Tranche One Performance-Qualified Shares in which Participant could vest, based on the actual level at which the Tranche One Performance Goal is attained and certified for the Tranche One Performance Period, had Participant remained in Continuous Service through such certification date.
-    If Participant's Continuous Service ceases for any other reason (including, without limitation, any deemed cessation of Continuous Service under Paragraph 9) prior to the completion of the Tranche One Performance Period or prior to the date on which the Administrator certifies the attained level of the Tranche One Performance Goal for 

Exhibit 10.51

the Tranche One Performance Period, then Participant shall not vest in any of the Tranche One Performance-Qualified Shares, and all of Participant's right, title and interest to the shares of Common Stock subject to Tranche One of this Award shall immediately terminate; provided, however, that should a Change in Control occur prior to the completion of the Tranche One Performance Period, then the provisions of Paragraph 4 shall govern the vesting of the Performance Shares allocated to Tranche One.

Exhibit 10.51

SCHEDULE II
PERFORMANCE GOALS AND PERFORMANCE PERIODS FOR TRANCHE TWO 

ESTABLISHMENT OF SEPARATE SUBTRANCHES
The number of Performance Shares allocated to Tranche Two in accordance with Paragraph 1 of this Agreement shall be subdivided into _____ (__) separate Subtranches.  Each such separate Subtranche shall cover _____ of the number of shares of Common Stock allocated to Tranche Two and shall  have its own separate Performance Period and Service Period. 

PERFORMANCE PERIOD FOR SUBTRANCHE ONE
The measurement period for the Performance Goal for the Performance Shares allocated to Subtranche One shall be the period commencing _____________ and ending __________ (the “Subtranche One Performance Period”).
SERVICE PERIOD FOR SUBTRANCHE ONE

The applicable Service Period to which the Performance Goal for Subtranche One relates shall be the period beginning ____________ and ending ____________.

PERFORMANCE GOAL FOR PERFORMANCE VESTING FOR SUBTRANCHE ONE
Performance Goal for Subtranche One: The performance-vesting requirement for the Performance Shares allocated to Subtranche One shall be:  [specify applicable goal]. 

Performance-Qualified Shares: Within sixty-five (65) days after the completion of the Subtranche One Performance Period, the Administrator shall determine and certify the actual level at which the Subtranche One Performance Goal has been attained. The actual number of Performance-Qualified Shares that results from such certification (the “Subtranche One Performance-Qualified Shares”) may range from 0% to 200% of the number of Performance Shares allocated to Subtranche One in accordance with  Paragraph 1 of this Agreement, with the actual percentage to be determined on the basis of the level at which the Administrator certifies that the Subtranche One Performance Goal has been attained; provided, however, that the maximum number of the shares of Common Stock that may qualify as Subtranche One Performance-Qualified Shares may not exceed 200% of the number of Performance Shares allocated to Subtranche One in accordance with Paragraph 1 of this Agreement.

Payout Slope for Determining Number of Performance-Qualified Shares Based on Attained Level of Subtranche One Performance Goal: The number of shares of Common Stock that may qualify as Subtranche One Performance-Qualified Shares on the basis of the certified  level of Subtranche One Performance Goal attainment shall be calculated by multiplying the number of Performance Shares allocated to Subtranche One in accordance with  Paragraph 1 of this Agreement by the applicable percentage determined in accordance with the following payout slope for the Subtranche One Performance Goal: 
Subtranche One Payout Slope
 
[Insert Payout Slope]

Exhibit 10.51

PERFORMANCE PERIOD FOR SUBTRANCHE TWO
The measurement period for the Performance Goal for the Performance Shares allocated to Subtranche Two shall be the period commencing _____________ and ending __________ (the “Subtranche Two Performance Period”).
SERVICE PERIOD FOR SUBTRANCHE TWO

The applicable Service Period to which the Performance Goal for Subtranche Two relates shall be the period beginning ____________ and ending ____________.

PERFORMANCE GOAL FOR PERFORMANCE VESTING FOR SUBTRANCHE TWO
Performance Goal for Subtranche Two: The performance-vesting requirement for the Performance Shares allocated to Subtranche Two shall be set by the Administrator no later than ninety (90) days after the start of the Subtranche Two Performance Period. As soon as practical following the Administrator's establishment of the applicable Subtranche Two Performance Goal, Participant shall be provided with written notice of that goal and the applicable payout slope approved by the Administrator with respect to that goal.  

Performance-Qualified Shares: Within sixty-five (65) days after the completion of the Subtranche Two Performance Period, the Administrator shall determine and certify the actual level at which the Subtranche Two Performance Goal has been attained.  The actual number of Performance-Qualified Shares that results from such certification (the “Subtranche Two Performance-Qualified Shares”) may range from 0% to 200% of the number of Performance Shares allocated to Subtranche Two in accordance with  Paragraph 1 of this Agreement, with the actual percentage to be determined on the basis of the level at which the Administrator certifies that the Subtranche Two Performance Goal has been attained; provided, however, that the maximum number of the shares of Common Stock that may qualify as Subtranche Two Performance-Qualified Shares may not exceed 200% of the number of Performance Shares allocated to Subtranche Two in accordance with Paragraph 1 of this Agreement.

Payout Slope for Determining Number of Performance-Qualified Shares Based on Attained Level of Subtranche Two Performance Goal: The number of shares of Common Stock that may qualify as Subtranche Two Performance-Qualified Shares on the basis of the certified level of Subtranche Two Performance Goal attainment shall be calculated by multiplying the number of Performance Shares allocated to Subtranche Two in accordance with  Paragraph 1 of this Agreement by the applicable percentage determined in accordance with the payout slope approved by the Administrator at the same time it establishes the applicable Performance Goal for the Subtranche Two Performance Period. 
 

REPEAT SIMILAR PROVISIONS FOR ANY ADDITIONAL SUBTRANCHES

    

Exhibit 10.51

CONTINUOUS SERVICE VESTING REQUIREMENT FOR TRANCHE TWO PERFORMANCE-QUALIFIED SHARES 
 The number of shares of Common Stock in which Participant may actually vest on the basis of the number of Performance-Qualified Shares certified by the Administrator for each separate Subtranche of Tranche Two in accordance with the foregoing shall be tied to his or her completion of the following Continuous Service vesting requirement applicable to each such Subtranche: 
-    If Participant remains in Continuous Service through the last day of the applicable Service Period specified above for that Subtranche, Participant shall vest in one hundred percent (100%) of the Performance-Qualified Shares certified by the Administrator for that Subtranche.
-    If Participant's Continuous Service terminates prior to the last day of the applicable Service Period specified above for that Subtranche by reason of Retirement, death or Permanent Disability, then Participant shall, following the completion of the applicable Service Period for that Subtranche, vest in that number of shares of Common Stock (if any) determined by multiplying the maximum number of Performance-Qualified Shares in which Participant could vest under that particular Subtranche,  based on the actual level at which the Performance Goal for that Subtranche is attained and certified, by a fraction the numerator of which is the number of months of Continuous Service actually completed by Participant in the applicable Service Period for that Subtranche (rounded to the closest whole month) and the denominator of which is the number of months (rounded to the closest whole number) constituting the  Service Period specified above for that Subtranche. 
-    If Participant's Continuous Service ceases for any other reason (including, without limitation, any deemed cessation of Continuous Service under Paragraph 9) prior to the completion of the applicable Service Period specified above for that Subtranche, then Participant shall not vest in any of the Performance-Qualified Shares covered by that Subtranche, and all of Participant's right, title and interest to the shares of Common Stock subject to that Subtranche shall immediately terminate; provided, however, that should a Change in Control occur prior to the completion of the applicable Service Period for that Subtranche, then the provisions of Paragraph 5 shall govern the vesting of the Performance Shares allocated to that Subtranche. 
-    Notwithstanding anything to the contrary in the foregoing provisions of this Continuous Service section, should Participant's Continuous Service cease for any reason prior to the start of the Service Period specified above for any Subtranche of Tranche Two, then Participant shall not vest in any of the Performance Shares allocated to that Subtranche, and all of Participant's right, title and interest to the shares of Common Stock subject to that Subtranche shall immediately terminate.GILD 2012.03.31 EX-10.62

Exhibit 10.62

GILEAD SCIENCES, INC.
SEVERANCE PLAN

Adopted on March 23, 2004,
to be effective January 29, 2003

Amended and Restated on May 9, 2006,
to be effective January 1, 2005

Amended and Restated on May 8, 2007
to be effective May 8, 2007

Amended on February 8, 2008 
to be effective January 1, 2008

Amended on May 7, 2008
to be effective May 7, 2008

Amended on December 15, 2008
to be effective January 1, 2009

Amended on December 14, 2009
to be effective January 1, 2010

Amended on January 28, 2010
to be effective January 28, 2010

Amended on January 26, 2012
to be effective January 1, 2012

GILEAD SCIENCES, INC.

SEVERANCE PLAN
AND 
SUMMARY PLAN DESCRIPTION

(As Amended and Restated Effective January 1, 2012)

		
	I.
	INTRODUCTION

The Gilead Sciences, Inc. Severance Plan (the “Plan”) was originally adopted by the Company effective January 29, 2003, and was subsequently amended and restated effective January 1, 2005, on May 9, 2006.  The Plan was further amended and restated on May 8, 2007 and subsequently amended in February and May 2008 in order to effect the following: (i) bring the Plan into documentary compliance with Section 409A of the Code and the final Treasury Regulations thereunder and (ii) incorporate certain transitional relief in accordance with (A) Treasury Notice 2005-1, Q&A-19, as modified by the preamble to the proposed and the final regulations pursuant to Section 409A of the Code, published in the Federal Register on October 4, 2005 and April 17, 2007, respectively, and (B) Treasury Notice 2007-86.  This Plan and Summary Plan Description as so amended and restated effects such full documentary compliance under Section 409A of the Code and the applicable Treasury Regulations,  effective January 1, 2009, and replaces all severance or similar plans or programs of the Company previously in effect.  The Company has no severance or similar plan or program other than this Plan.1  
The May 7, 2008 restatement of the Plan also revised the bonus component of the Severance Pay Benefit formulas in Appendix A, Appendix B and Appendix C to comply with Revenue Ruling 2008-13.  Such amendment was effective as of May 7, 2008.
The Plan was further amended on December 15, 2008 to provide, effective as of January 1, 2009,  that (i) the cash severance benefits to which individuals covered by Appendix D may become entitled under the Plan shall be paid in a lump sum and (ii) the  COBRA coverage costs that Participants may incur for the applicable period specified in Appendix A, B,  C or D following their termination of employment shall be paid in the form of a lump sum prepayment, subject to the Company's collection of the applicable withholding taxes.
The Plan was amended on December 14, 2009 to provide, effective as of January 1, 2010, that the bonus component of the severance benefit formula in effect under Appendix A and Appendix B of the Plan for the covered Participants thereunder whose qualifying termination occurs in a non-change in control situation will no longer calculated by applying the specified multiple in such situation to a pro-rated portion of their average actual bonus for the three-year or shorter period preceding the fiscal year of their termination but will instead be calculated by applying that multiple to one hundred percent of such average actual annual bonus.

      
1    The Triangle Pharmaceuticals, Inc. Severance Plan remained in effect until January 23, 2004 and provided benefits to employees of Triangle who were involuntarily terminated.

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The Plan was further amended on January 28, 2010 to limit the class of participants eligible to qualify for the potential tax gross-up payment under Appendicies A through C to the Plan that is designed to cover any excise tax liability they might incur under Section 4999 of the Code in connection with the severance benefits provided to them under the Plan and to implement a greatest after-tax benefit limitation for participants whose benefits under the Plan may constitute parachute payments under Section 280G of the Code but who are not otherwise eligible for any tax gross-up payment under the Plan that would cover any resulting tax liability to which they might otherwise become subject under Section 4999 of the Code.
The Plan was further amended on January 26, 2012 to (i) revise the Continuous Service definition with respect to any participant who is reemployed by the Company following an earlier termination of employment with the Company that resulted in his or her receipt of a severance pay benefit under the Plan so that such individual will not be entitled to any continuous service credit for his or her prior period of employment or service with the Company or for any bridge period between the period of such prior service and the date of his or her re-employment  and (ii) effect certain other clarifying changes to facilitate the administration of the Plan and assure that the Plan continues to comply with applicable laws and regulations. 
The purpose of the Plan is to provide a Severance Pay Benefit to certain Eligible Employees whose employment with the Company terminates under certain prescribed circumstances.  The Company is the Plan Administrator for purposes of the Employee Retirement Income Security Act of 1974, as amended (“ERISA”).  The Plan is intended to comply with the requirements of Section 409A of the Code.
Capitalized terms used in this Plan shall have the meaning set forth in Section XVII.
		
	II.
	COMMENCEMENT OF PARTICIPATION

An Eligible Employee shall commence participation in the Plan upon the later of (i) January 29, 2003 or (ii) his or her date of hire.
		
	III.
	TERMINATION OF PARTICIPATION

A Participant's participation in the Plan shall terminate upon the occurrence of the earliest of the following:
		
	(a)
	The Participant's employment terminates without meeting the requirements of Section IV(a)(i)(1).

		
	(b)
	The Participant's employment terminates with a provision of Section IV(a)(ii) being applicable.

		
	(c)
	The Participant fails to meet the requirements of Section IV(a)(i)(2).

		
	(d)
	The Participant has received a complete distribution of his or her Severance Pay Benefit.

		
	(e)
	The Participant ceases to be an Eligible Employee (other than by reason of termination of his or her employment with the Company).

		
	(f)
	The Plan terminates.

		
	IV.
	SEVERANCE PAY BENEFIT

		
	(a)
	Eligibility for Severance Pay Benefit.

		
	(i)
	Subject to Section IV(a)(ii), a Participant shall be eligible for a Severance Pay Benefit only 

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if the Participant meets the requirements of Section IV(a)(i)(1) and Section IV(a)(i)(2).
		
	(1)
	The Participant incurs a Separation from Service as a result of an  involuntary termination of his or her Employee status by the Company because of a Company-wide or departmental reorganization or a significant restructuring of the Participant's job duties; provided, however, that a Participant's Employee status shall also be deemed to have been involuntarily terminated by the Company if  he or she resigns because of (A) a transfer to a new work location that is more than 50 miles from his or her previous work location, and (B) in the case of a Participant whose Severance Pay Benefit is determined with reference to Appendix A, B or C, a Constructive Termination (as defined in Section 11(d) of the 2004 Equity Incentive Plan) in conjunction with a Change in Control and within the time specified in Appendix A, B or C, as applicable.

		
	(2)
	The Participant executes and delivers to the Company the Release within the time frame prescribed by the Company therein, but in no event later than the forty-fifth (45th) day following his or her Separation from Service, and the period (if any such period is prescribed by the Company in the Release) for revoking the execution of the Release under the Older Workers' Benefit Protection Act, 29 U.S.C. § 626(f), expires without the Participant's revocation of such Release. A Participant's failure to comply on a timely basis with such Release requirement shall render such individual ineligible to receive any Separation Pay Benefit under the Plan. 

Under no circumstances shall a Participant be eligible for a Severance Pay Benefit under the Plan if he or she terminates Employee status for the purpose of accepting employment with the entity that effectuates a Change in Control, its subsidiaries or affiliates.
		
	(ii)
	Notwithstanding Section IV(a)(i), a Participant shall be disqualified from receiving a Severance Pay Benefit upon the occurrence of any of the following:

		
	(1)
	The Participant voluntarily terminates Employee status for any reason prior to the termination date set by the Company;

		
	(2)
	The Participant's Employee status is terminated by death or for cause (including, without limitation, gross misconduct or dereliction of duty) or for failure to meet performance goals or objectives as determined by the Company;

		
	(3)
	If the Participant is receiving short-term sick leave benefits on the date his or her Employee status terminates, the Participant fails to execute and deliver to the Company, within thirty (30) days after his or her Separation from Service, a written waiver of any short-term sick leave benefits that might otherwise be payable after such termination of Employee status;

		
	(4)
	The Participant terminates Employee status in order to accept employment with an organization that is wholly or partly owned (directly or indirectly) by the Company or an Affiliate;

		
	(5)
	The Participant accepts any job with a Buyer or Outsourcing Supplier; 

		
	(6)
	The Participant is offered full-time employment with a Buyer or Outsourcing Supplier at a new work location 50 miles or less from his or her previous  work location with 

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the Company and taking such position would not result in a reduction in his or her Regular Earnings;
		
	(7)
	Except in the case of a Severance Pay Benefit payable on account of a Change in Control of the Company, the Participant received a severance benefit in connection with an acquisition effected by the Company within 24 months prior to his or her Separation from Service; or

		
	(8)
	Except for a Severance Pay Benefit payable on account of a Change in Control of the Company, the Participant has not completed six months of Continuous Service as of the date of his or her termination of Employee status; provided, however, that, effective May 8, 2007, such service requirement shall not be applicable to Employees who are Vice Presidents or in Grades 21 through 34.

The business decisions that may result in a Participant qualifying for a Severance Pay Benefit are decisions to be made by the Company in its sole discretion.  In making these decisions, similarly situated organizations, locations, functions, classifications, and/or Participants need not be treated in the same manner.  Each Participant remains an employee at will, and the date selected by the Company to terminate the Participant's Employee status is within its sole discretion.
		
	(b)
	Amount of Severance Pay Benefit.

		
	(i)
	Subject to Section IV(b)(ii), the Severance Pay Benefit payable to a Participant shall be as set forth in the applicable Appendix:

		
	(1)
	Appendix A - Chief Executive Officer.

		
	(2)
	Appendix B - Executive Vice Presidents and Senior Vice Presidents.

		
	(3)
	Appendix C - Vice Presidents and Senior Advisors.

		
	(4)
	Appendix D - All Eligible Employees not covered by Appendix A, B, or C.

Senior Advisors covered under Appendix C shall only be eligible for a Severance Pay Benefit in connection with a Change in Control.
		
	(ii)
	Notwithstanding Section IV(b)(i), the total Severance Pay Benefit otherwise payable to a Participant under the Plan shall be subject to reduction (but not below zero) as follows:

		
	(1)
	If a Participant is reemployed by the Company or an Affiliate within the number of weeks after his or her Separation from Service that is equal to the number of weeks taken into consideration in calculating the Regular Earnings component of his or her Severance Pay Benefit, the total Severance Pay Benefit payable to such Participant shall be reduced to the dollar amount that the Participant's Regular Earnings would have been for the period from the date of termination to the date of reemployment.  In all cases, the reduced benefit will be based on the Participant's Regular Earnings used to calculate such Participant's Severance Pay Benefit under the Plan.  A Participant will be considered “reemployed” under the Plan for purposes of the foregoing repayment provision if he or she is rehired as an Employee or if he or she is retained at a Company facility as or through a contractor for more than a full-time equivalent of more than 45 work days.

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	(2)
	If a Participant is employed by a Buyer or Outsourcing Vendor within the number of weeks after his or her Separation from Service that is equal to the number of weeks taken into consideration in calculating the Regular Earnings component of his or her Severance Pay Benefit, the total Severance Pay Benefit payable to such Participant shall be reduced to the dollar amount that the Participant's Regular Earnings would have been for the period from the date of termination to the date of employment with the Buyer or Outsourcing Vendor.

Section IV(b)(ii)(2) may be waived in writing by the Company in its     sole discretion.
		
	(3)
	The Severance Pay Benefit shall be reduced by severance pay or other similar benefits payable under any other plan or policy of the Company or an Affiliate or government required payment (other than unemployment compensation under United States law), including, but not limited to, any benefit enhancement program adopted as part of a pension plan, but only to the extent the time and form of such alternative payments do not otherwise result in an impermissible acceleration or deferral  under Code Section 409A of the Severance Pay Benefit payable under this Plan.

		
	(4)
	The Severance Pay Benefit shall be reduced by any amounts payable pursuant to the Worker Adjustment and Retraining Notification Act (“WARN”) or any other similar federal, state or local statute, but such reduction shall be effected in a manner that does not otherwise result in an impermissible acceleration or deferral  under Code Section 409A of the Severance Pay Benefit payable under this Plan.

		
	(5)
	The Severance Pay Benefit shall be reduced by the amount of any indebtedness owed to the Company, but only to the extent such offset would not otherwise contravene any applicable limitations of Code Section 409A.

		
	(c)
	Repayment of the Severance Pay Benefit.

If the Participant has received payment under the Plan in excess of the Severance Pay Benefit, as reduced in accordance with Section IV(b)(ii), the Participant must agree as a condition of reemployment that such excess will be repaid to the Company within sixty (60) days after the date his or her reemployment commences.
		
	V.
	TIME AND FORM OF SEVERANCE PAY BENEFIT

		
	(a)
	The Severance Pay Benefit (other than the Lump Sum Health Care Payment) for each Participant, other than a Participant whose Severance Pay Benefit is determined pursuant to Appendix D, shall be paid in equal periodic installments over the total number of weeks taken into account in calculating the Regular Earnings component of the Severance Pay Benefit to which such Participant is entitled.  Except as set forth below, such installments shall be payable over the applicable period on the regularly scheduled pay dates in effect for the Company's salaried employees, beginning with the first such pay date within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or beginning on such subsequent date thereafter as the Company may determine in its 

5

sole discretion, but in no event shall the first such installment be paid later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has  not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the first such installment of the Severance Pay Benefit shall be paid during the portion of that sixty (60)-day period that occurs in the second calendar year. 
		
	(b)
	For purposes of Section 409A of the Code, the Severance Pay Benefit payable pursuant to Section V(a) above shall be deemed to be a series of separate payments, with each installment of the Severance Pay Benefit to be treated as a separate payment.

		
	(c)
	The Severance Pay Benefit for each Participant whose Severance Pay Benefit is determined pursuant to Appendix D shall be paid in a lump sum on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such lump sum payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then such lump sum payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.

		
	(d)
	Notwithstanding any provision to the contrary in this Section V or any other Section of the Plan, other than Section V(e) and (f) below, no Severance Pay Benefit (or component thereof) that is deemed to constitute “nonqualified deferred compensation” within the meaning of and subject to Section 409A of the Code shall commence with respect to a Participant until the earlier of (i) the first day of the seventh (7th) month following the date of such Participant's Separation from Service or (ii) the date of his or her death, if  the Participant is deemed at the time of such Separation from Service to be a Specified Employee and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  Upon the expiration of the applicable deferral period, all payments deferred pursuant to this Section V(d), whether they were otherwise payable in installments or a lump sum, shall be paid in a lump sum to the Participant, and any remaining Severance Pay Benefit shall be paid in accordance with the schedule described in Section V(a) above or in a lump sum to the extent such Severance Pay Benefit is to be paid pursuant to Section V(c) above.  

		
	(e)
	Notwithstanding Section V(d), should a Participant who is a Specified Employee at the time of his or her Separation from Service become entitled to a General Severance Pay Benefit prior to the occurrence of a Change in Control, then the portion of that Severance Pay Benefit that does not exceed the dollar limit described below and is otherwise scheduled to be paid no later than the last day of the second calendar year following the calendar year in which his or her Separation from Service occurs will not be subject to any deferred commencement date under Section V(d) and shall be paid to such Participant as it becomes due under Section V(a), provided and only if such portion qualifies as an involuntary separation pay plan in accordance with the requirements set forth in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations.  For purposes of this Section V(e),  the applicable 

6

dollar limitation will be equal to two (2) times the lesser of (A) the Participant's annualized compensation (based on his or her annual rate of pay for the taxable year preceding the taxable year of his or her Separation from Service, adjusted to reflect any increase during that taxable year which was expected to continue indefinitely had such Separation from Service not occurred) or (B)  the compensation limit under Section 401(a)(17) of the Code as in effect in the year of the Separation from Service.  To the extent the portion of the Severance Pay Benefit to which such Participant would otherwise be entitled under Section V(a) during the deferral period under Section V(d) exceeds the foregoing dollar limitation, such excess shall be paid in a lump sum upon the expiration of that deferral period, in accordance with the payment delay provisions of  Section V(d), and the remainder of the Severance Pay Benefit (if any) shall be paid in accordance with the schedule described in Section V(a).  In no event, however, shall this Section V(e) be applicable to any Severance Pay Benefit (or any portion thereof) which does not qualify as an involuntary separation pay plan under Section 1.409A-(b)(9)(iii) of the Treasury Regulations.
		
	(f)
	Section V(d) shall not apply to the lump sum prepayment of COBRA Coverage Costs under Appendix A through D to the extent the dollar amount of that prepayment does not exceed the applicable dollar amount in effect under Section 402(g)(1)(B) of the Code for the calendar year in which the Participant's Separation form Service occurs.

		
	(g)
	Notwithstanding any other provision of the Plan to the contrary, no distribution shall be made from the Plan that would constitute an impermissible acceleration of payment as defined in Section 409A(3) of the Code and the Treasury Regulations thereunder.

		
	(h)
	No interest shall be paid on a Severance Pay Benefit required to be deferred in accordance with the foregoing.

		
	VI.
	DEATH OF A PARTICIPANT

If a Participant dies after qualifying for a Severance Pay Benefit but before such benefit is  completely paid, the balance of the Severance Pay Benefit shall be paid in a lump sum to the Participant's Beneficiary not later than the later of  (i) December 31 of the year in which the Participant's death occurred or (ii) the fifteenth (15th) day of the third (3rd) calendar month following the date of the Participant's death.
		
	VII.
	AMENDMENT AND TERMINATION

		
	(a)
	General Rule.

Although the Company expects to continue the Plan indefinitely, inasmuch as future conditions cannot be foreseen, (subject to Sections VII(b) and (c)) the Company reserves the right to amend or terminate the Plan at any time by action of its Board of Directors or by action of a committee or individual(s) acting pursuant to a valid delegation of authority of the Board of Directors.  However, no amendment or termination shall adversely affect the right of a Participant who incurs a Separation from Service prior to the date of such amendment or termination to:
		
	(i)
	receive the unpaid balance of any Severance Pay Benefit that has become payable in accordance with the foregoing provisions of the Plan, with such balance to be paid in accordance with the provisions of the Plan in effect immediately prior to such amendment or termination; or

		
	(ii)
	qualify for a Severance Pay Benefit upon the timely execution and delivery of the requisite 

7

Release after the date of such amendment or termination.
		
	(b)
	Restrictions on Amendments.

Notwithstanding Section VII(a) of the Plan, and except to the extent required to comply with applicable law, no termination of the Plan and no amendment described below shall be effective if adopted within six months before or at any time after the public announcement of an event or proposed transaction which would constitute a Change in Control (as such term is defined prior to such amendment); provided, however, that such an amendment or termination of the Plan may be effected, even if adopted after such a public announcement, if (a) the amendment or termination is adopted after any plans have been abandoned to cause the event or effect the transaction which, if effected, would have constituted the Change in Control, and the event which would have constituted the Change in Control has not occurred, and (b) within a period of six months after such adoption, no other event constituting a Change in Control has occurred, and no public announcement of a proposed transaction which would constitute a Change in Control has been made, unless thereafter any plans to effect the Change in Control have been abandoned and the event which would have constituted the Change in Control has not occurred.
The amendments prohibited by this Section VII(b) include any amendment which is executed (or would otherwise become effective) at the request of a third party who effectuates a Change in Control or any amendment which, if adopted and given effect would:
		
	(i)
	For any individual who is an Eligible Employee as of the Change in Control, deprive such individual of coverage under the Plan as in effect at the time of such amendment;

		
	(ii)
	Limit eligibility for or reduce the amount of any Severance Pay Benefit; or

		
	(iii)
	Amend Section VII, IX, or the definitions of the terms “Change in Control” or “Successors and Assigns” in Section XVII of the Plan.

No person shall take any action that would directly or indirectly have the same effect as any of the prohibited amendments or termination described in this Section VII(b).
(c)    No Change in Payment Schedule.
Under no circumstances shall any amendment or termination of the Plan affect or modify the payment schedule in effect for a Participant's Severance Pay Benefit in a manner which would otherwise result in an impermissible acceleration or deferral of that payment schedule under Code Section 409A.
(d)    Amendments to Comply with Section 409A of the Code.
Notwithstanding any provision of Section VII to the contrary, the Company reserves the right, to the extent the Company deems necessary or advisable in its sole discretion, to unilaterally amend or modify this Plan as may be necessary to ensure the Severance Pay Benefits provided under this Plan are made in a manner that qualifies for exemption from, or otherwise complies with, Section 409A of the Code; provided, however, that the Company makes no representation that the Severance Pay Benefit provided under this Plan will be exempt from or comply with Section 409A of the Code and makes no undertaking to preclude Section 409A of the Code from applying to the Severance Pay Benefits provided under this Plan.
To the extent there is any ambiguity as to whether any provision of this Plan would otherwise 

8

contravene one or more requirements or limitations of Code Section 409A applicable to the Plan, such provision shall be interpreted and applied in a manner that does not result in a violation of the applicable requirements or limitations of Code Section 409A and the Treasury Regulations thereunder.
		
	VIII.
	NON-ALIENATION OF BENEFITS

To the full extent permitted by law and except as expressly provided in the Plan, no Severance Pay Benefit shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, or charge, and any attempt to do so shall be void.
		
	IX.
	SUCCESSORS AND ASSIGNS

The Plan shall be binding upon the Company, its Successors and Assigns.  Notwithstanding that the Plan may be binding upon such Successors and Assigns by operation of law, the Company shall require any Successor or Assign to expressly assume and agree to be bound by the Plan in the same manner and to the same extent that the Company would be if no succession or assignment had taken place.
		
	X.
	LEGAL CONSTRUCTION

This Plan is governed by and shall be construed in accordance with the Code and ERISA and, to the extent not preempted by ERISA, with the laws of the State of California.
		
	XI.
	ADMINISTRATION AND OPERATION OF THE PLAN

		
	(a)
	Plan Sponsor and Plan Administrator.

The Company is the “Plan Sponsor” and the “Plan Administrator” of the Plan as such terms are used in ERISA.
		
	(b)
	Administrative Power and Responsibility.

The Company in its capacity as Plan Administrator of the Plan is the named fiduciary that has the authority to control and manage the operation and administration of the Plan.  The Company shall make such rules, regulations, interpretations, and computations and shall take such other action to administer the Plan as it may deem appropriate.  The Company shall have the sole discretion to interpret the provisions of the Plan and to determine eligibility for benefits pursuant to the objective criteria set forth in the Plan.  In administering the Plan, the Company shall at all times discharge its duties with respect to the Plan in accordance with the standards set forth in section 404(a)(l) of ERISA.  The Company may engage the services of such persons or organizations to render advice or perform services with respect to its responsibilities under the Plan as it shall determine to be necessary or appropriate.  Such persons or organizations may include (without limitation) actuaries, attorneys, accountants and consultants.
		
	(c)
	Review Panel.

Upon receipt of a request for review, the Company shall appoint a Review Panel that shall consist of three or more individuals.  The Review Panel shall be the named fiduciary that shall have authority to act with respect to appeals from denial of benefits under the Plan.
		
	(d)
	Service in More Than One Fiduciary Capacity.

9

Any person or group of persons may serve in more than one fiduciary capacity with respect to the Plan.
		
	(e)
	Performance of Responsibilities.

The responsibilities of the Company under the Plan shall be carried out on its behalf by its officers, employees, and agents.  The Company may delegate any of its fiduciary responsibilities under the Plan to another person or persons pursuant to a written instrument that specifies the fiduciary responsibilities so delegated to each such person.
		
	(f)
	Employee Communications and Other Plan Activities.

In communications with its employees and in any other activities relating to the Plan, the Company shall comply with the rules, regulations, interpretations, computations, and instructions that were issued to administer the Plan.  With respect to matters relating to the Plan, directors, officers, and employees of the Company shall act on behalf or in the name of the Company in their capacity as directors, officers, and employees and not as individual fiduciaries.
		
	XII.
	CLAIMS, INQUIRIES AND APPEALS

		
	(a)
	Claims for Benefits and Inquiries.

All claims for benefits and all inquiries concerning the Plan or present or future rights to benefits under the Plan, shall be submitted to the Plan Administrator in writing and addressed as follows:  “Gilead Sciences, Inc., Plan Administrator under the Gilead Sciences, Inc. Severance Plan, 333 Lakeside Drive, Foster City, CA 94404 ” or such other location as communicated to the Participant.  A claim for benefits shall be signed by the Participant, or if a Participant is deceased, by such Participant's spouse or registered domestic partner, designated beneficiary or estate, as the case may be.
		
	(b)
	Denials of Claims.

In the event that any claim for benefits is denied, in whole or in part, the Plan Administrator shall notify the claimant in writing of such denial and of the right to a review thereof.  Such written notice shall set forth in a manner calculated to be understood by the claimant, specific reasons for such denial, specific references to the Plan provision on which such denial is based, a description of any information or material necessary to perfect the claim, an explanation of why such material is necessary, an explanation of the Plan's review procedure which includes information on how to appeal the denial and a statement regarding the claimant's right to bring a civil action under ERISA section 502(a) following an adverse benefit determination on review.  Such written notice shall be given to the claimant within 90 days after the Plan Administrator receives the claim, unless special circumstances require an extension of time of up to an additional 90 days for processing the claim.  If such an extension of time for processing is required, written notice of the extension shall be furnished to the claimant prior to the termination of the initial 90-day period.  This notice of extension shall indicate the special circumstances requiring the extension of time and the date by which the Plan Administrator expects to render its decision on the claim for benefits.  The claimant shall be permitted to appeal such denial in accordance with the Review Procedure set forth below.
		
	(c)
	Review Panel.

The Plan Administrator shall appoint a “Review Panel,” consisting of three or more individuals who 

10

may (but need not) be employees of the Company.  The Review Panel shall be the named fiduciary that has the authority to act with respect to any appeal from a denial of benefits.
		
	(d)
	Requests for a Review.

Any person whose claim for benefits is denied in whole or in part, or such person's duly authorized representative, may appeal from such denial by submitting a request for a review of the claim to the Review Panel within 60 days after receiving written notice of such denial from the Plan Administrator.  A request for review shall be in writing and shall be addressed as follows:  “Review Panel under the Gilead Sciences, Inc. Severance Plan, 333 Lakeside Drive, Foster City, CA 94404” or such other location as communicated to the Participant.  A request for review shall set forth all of the grounds on which it is based, all facts in support of the request and any other matters that the claimant deems pertinent.  As part of the review procedure, the claimant or the claimant's duly authorized representative may submit written comments, documents, records and other information related to the claim.  The Review Panel will consider all comments, documents, records and other information submitted by the claimant or the claimant's duly authorized representative relating to the claim, without regard to whether such information was submitted or considered in the initial benefit determination.  The claimant will be provided, upon request and free of charge, reasonable access to and copies of all documents, records or other information (all of which must not be privileged) relevant to the benefit claim.  The Review Panel may require the claimant to submit such additional facts, documents or other material as it may deem necessary or appropriate in making its review.
		
	(e)
	Decision on Review.

The Review Panel shall act on each request for review and notify the claimant within 60 days after receipt thereof unless special circumstances require an extension of time, up to an additional 60 days, for processing the request.  If such an extension for review is required, written notice of the extension shall be furnished to the claimant within the initial 60-day period.  The Review Panel shall give prompt, written notice of its decision to the claimant and to the Plan Administrator.  In the event that the Review Panel confirms the denial of the claim for benefits, in whole or in part, such notice shall set forth, in a manner calculated to be understood by the claimant, the specific reasons for such denial, specific references to the Plan provisions on which the decision is based, a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to the benefit claim, a statement describing any voluntary appeal procedures offered by the Plan and the claimant's right to obtain information about such procedures, and a statement informing the claimant of his or her right to bring a civil action under ERISA  section 502(a).
		
	(f)
	Rules and Procedures.

The Review Panel shall establish such rules and procedures, consistent with the Plan and with ERISA, as it may deem necessary or appropriate in carrying out its responsibilities under this Section XII.  The Review Panel may require a claimant who wishes to submit additional information in connection with an appeal from the denial of benefits to do so at the claimant's own expense.
		
	(g)
	Exhaustion of Remedies.

No legal action for benefits under the Plan shall be brought unless and until the claimant:
		
	(i)
	has submitted a written claim for benefits in accordance with Section XII(a);

11

		
	(ii)
	has been notified by the Plan Administrator that the claim is denied;

		
	(iii)
	has filed a written request for a review of the claim in accordance with Section XII(d); and

		
	(iv)
	has been notified in writing that the Review Panel has affirmed the denial of the claim.

		
	XIII.
	BASIS OF PAYMENTS TO AND FROM PLAN

All Severance Pay Benefits under the Plan shall be paid by the Company.  The Plan shall be unfunded and benefits hereunder shall be paid only from the general assets of the Company.
		
	XIV.
	OTHER PLAN INFORMATION

		
	(a)
	Plan Identification Numbers.

The Employer Identification Number (EIN) assigned to the Plan Sponsor (Gilead Sciences, Inc.) by the Internal Revenue Service is 94-3047598.  The Plan Number (PN) assigned to the Plan by the Plan Sponsor pursuant to instructions of the Internal Revenue Service is 508.
		
	(b)
	Ending Date of the Plan's Fiscal Year.

The date of the end of the year for the purpose of maintaining the Plan's fiscal records is December 31.
		
	(c)
	Agent for the Service of Legal Process.

The agent for the service of legal process with respect to the Plan is the Secretary of Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404.  The service of legal process may also be made on the Plan by serving the Plan Administrator.
		
	(d)
	Plan Sponsor and Administrator.

The “Plan Sponsor” and the “Plan Administrator” of the Plan is Gilead Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404; 650-522-5800 or such other location as communicated to the Participant.  The Plan Administrator is the named fiduciary charged with responsibility for administering the Plan.
		
	XV.
	STATEMENT OF ERISA RIGHTS

As a participant in this Plan (which is a welfare plan sponsored by the Company), you are entitled to the following rights and protection under ERISA:
		
	(a)
	Examine, without charge, at the Plan Administrator's office and at other specified locations such as work sites, all Plan documents, collective bargaining agreements and copies of all documents filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure of the Employee Benefits Security Administration.

		
	(b)
	Obtain copies of all Plan documents and other Plan information upon written request to the Plan Administrator.  The Plan Administrator may make a reasonable charge for the copies.

		
	(c)
	In addition to creating rights for Plan Participants, ERISA imposes duties upon the people responsible for the operation of the employee benefit Plan.  The people who operate your Plan, called “fiduciaries” 

12

of the Plan, have a duty to do so prudently and in the interest of you and other Plan Participants and Beneficiaries.
		
	(d)
	No one, including your employer, your union, nor any other person, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a Plan benefit or exercising your rights under ERISA.  If your claim for a Plan benefit is denied in whole or in part, you must receive a written explanation of the reason for the denial.  You have the right to have the claim reviewed and reconsidered.

		
	(e)
	Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request materials from the Plan and do not receive them within 30 days, you may file suit in a federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Plan Administrator.  If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or federal court.  If it should happen that the Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a federal court.  The court will decide who should pay court costs and legal fees.  If you are successful, the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

		
	(f)
	If you have any questions about your Plan, you should contact the Plan Administrator.  If you have any questions about this statement or about your rights under ERISA, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Labor, listed in your telephone directory or the Division of Technical Assistance and Inquiries, Employee Benefits Security Administration, U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

		
	XVI.
	AVAILABILITY OF PLAN DOCUMENTS FOR EXAMINATION

ERISA requires Gilead Sciences, Inc., as the Plan Administrator of a benefit plan sponsored by the Company, to make available for your examination the Plan documents under which the Plan is established and operated.
The pertinent Plan documents include official Plan texts and any other documents under which the Plan is established or operated, and applicable collective bargaining agreements.
These Plan documents are available for your examination at the Plan Administrator's office, 333 Lakeside Drive, Foster City, CA 94404, and at certain other locations such as the Company's Human Resources offices.
		
	XVII.
	DEFINITIONS

		
	(a)
	“Affiliate” means a member of the Affiliated Group other than Gilead Sciences, Inc. and any Subsidiary.

		
	(b)
	“Affiliated Group” means the Company and each member of the group of commonly controlled corporations or other businesses that include the Company, as determined in accordance with Section 414(b) and (c) of the Code and the Treasury Regulations issued thereunder.

13

		
	(c)
	“Beneficiary” means the person or persons so designated by a Participant.  A Participant may change or revoke a designation of a Beneficiary at any time.  To be effective, any designation of a Beneficiary, or any change or revocation thereof, must be made in writing on the prescribed form and must be received by the Company (in a form acceptable to the Company) before the Participant's death.  If a Participant fails to make a valid designation of a Beneficiary, or if the validly designated Beneficiary is not living when a payment is to be made to such Beneficiary hereunder, the Participant's Beneficiary shall be the Participant's spouse or registered domestic partner if then living or, if not, the Participant's estate.

		
	(d)
	“Buyer” means an entity that purchases (or has purchased) some or all of the Affiliated Group's interest applicable to the operation in which the Participant is employed, or an entity that is a direct or indirect successor in ownership or management of the operation in which the Participant is employed.  Notwithstanding the above, Buyer shall not include the entity that effectuates a Change in Control.

		
	(e)
	“Change in Control” means an event which constitutes a change in control of the Company as defined in Section 2(i) of the Gilead Sciences, Inc. 2004 Equity Incentive Plan, as it may be amended from time to time or any successor to such provision.

		
	(f)
	“Code” means the Internal Revenue Code of 1986, as amended from time to time, and the regulations promulgated thereunder.

		
	(g)
	“Company” means Gilead Sciences, Inc.  Where the context requires, “Company” also includes its Subsidiaries, and any of their Successors and Assigns.

		
	(h)
	“Continuous Service” means the sum of the following:

		
	(i)
	Any period of time during which a person qualifies as an Eligible Employee or, having once so qualified, is on a leave of absence with pay, a paid vacation or holiday or is receiving benefits under the Company's short-term disability plan; or;

		
	(ii)
	Any other period that constitutes Continuous Service under written rules or procedures adopted from time to time by the Company, subject to such terms and conditions as the Company may establish; and any period of time while employed by the Company's Successor or Assigns that that would have constituted Continuous Service if the service had been with the Company prior to the Change in Control.

If an Eligible Employee's Continuous Service is interrupted and the Eligible Employee subsequently returns to a status that constitutes Continuous Service, such prior Continuous Service shall be disregarded for all purposes of the Plan. However, should  an Eligible Employee terminate employment under circumstances that do not result in his or her receipt of a Severance Pay Benefit under the Plan and such individual be reemployed by the Company (or any entity that is at the time a Subsidiary of the Company) within one year following his or her termination of Continuous Service without the receipt of a Severance Pay Benefit hereunder, then both his or her Continuous Service prior to such termination and the time period between the date of  such termination and the date of such subsequent reemployment will be considered Continuous Service. An Eligible Employee whose termination of employment and concurrent cessation of Continuous Service results in his or her receipt of a Severance Pay Benefit under the Plan shall not, upon his or her subsequent re-employment by the Company (or any entity that is at the time a Subsidiary of the Company), be entitled to any Continuous Service credit for any prior period of employment or service with the Company or any 

14

Subsidiary or for the bridge period between the period of such prior service and the date of his or her re-employment. 
		
	(i)
	“Determination Date” means each December 31.

		
	(j)
	“Eligible Employee” means any common law employee on the U.S. dollar payroll of the Company or any Subsidiary who (i) is not on the payroll of  a person other than the Company or such Subsidiary and is for any reason deemed by the Company or any Subsidiary to be a common law employee of the Company or such Subsidiary; (ii) is not considered by the Company or any Subsidiary in its sole discretion to be an independent contractor, regardless of whether the individual is in fact a common law employee of the Company or such Subsidiary; and (iii) who at the time of his or her Separation from Service with the Company or such Subsidiary is not on a Leave of Absence Without Pay.  An individual's status as an Eligible Employee shall be determined by the Company in its sole discretion, and such determination shall be conclusively binding on all persons.  Notwithstanding the foregoing, “Eligible Employee” does not include an employee or former employee of an entity the stock or assets of which are acquired by the Company or any Subsidiary, unless and until the Company's management determines that the Plan shall be applicable to such employees or former employees.

		
	(k)
	“Employer Group” means the Company and each other member of the group of commonly controlled corporations or other businesses that include the Company, as determined in accordance with Sections 414(b) and (c) of the Code and the  Treasury Regulations thereunder, except that in applying Sections 1563(1), (2) and (3) of the Code for purposes of determining the controlled group of corporations under Section 414(b), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in such sections, and in applying Section 1.414(c)-2 of the Treasury Regulations for purposes of determining trades or businesses that are under common control for purposes of Section 414(c), the phrase “at least 50 percent” shall be used instead of “at least 80 percent” each place the latter phrase appears in Section  1.414(c)-2 of the Treasury Regulations.

		
	(l)
	 “Employee” means an individual for so long as he or she is in the employ of at least one member of the Employer Group, subject to the control and direction of the employer entity as to both the work to be performed and the manner and method of performance.

		
	(m)
	“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time-to-time.

		
	(n)
	“Family Leave” means a leave under the Company's family leave policy.

		
	(o)
	“Leave of Absence Without Pay” means a leave of absence without pay under the Company's leave of absence policy.

		
	(p)
	“Outsourcing Supplier” means an entity to whom the Company outsources a function performed by Eligible Employees where the Company agrees with such entity in the outsourcing agreement that it will offer jobs to current Eligible Employees performing that function for the Company.

		
	(q)
	“Participant” means any Eligible Employee who has commenced participation in the Plan pursuant to Section II and whose participation has not terminated pursuant to Section III.

		
	(r)
	“Plan” means the Gilead Sciences, Inc. Severance Plan.

		
	(s)
	“Plan Administrator” means the Company.

15

		
	(t)
	“Regular Earnings” means straight-time wages or salary paid to a Participant by any entity within the Employer Group for working a regular work schedule or for a leave of absence with pay, and shall include any amount that is contributed to any employee benefit plan on behalf of the Participant by any entity within the Employer Group under a salary reduction agreement entered into pursuant to such plan and that is excluded from the Participant's gross income under section 125, 132(f), or 402(g) of the Code.

		
	(u)
	“Release” means a Release in the form prescribed by the Company in its sole discretion, pursuant to which the Participant shall waive all employment-related claims in connection with his or her employment with the Employer Group and the termination of that employment, other than claims for benefits under the actual terms of an employee benefit plan and worker's compensation.  For employees subject to the Age Discrimination in Employment Act, such Release shall be structured so as to comply with the requirements of the Older Workers' Benefit Protection Act, 29 U.S.C. § 626(f).  The form of Release may vary among categories of employees and from employee to employee within any category of employees.

		
	(v)
	“Severance Pay Benefit” means a benefit provided by the Plan, as determined pursuant to Section IV.

		
	(w)
	“Specified Employee” shall mean a “key employee” (within the meaning of that term under Code Section 416(i)).  Effective as of January 1, 2005, a Specified Employee is an Eligible Employee who, at any time during the twelve (12)-month period ending with the applicable Determination Date, is:

		
	(i)
	An officer of the Company or any other member of the Affiliated Group having aggregate annual compensation from the Company and/or one or more other members of the Affiliated Group greater than the compensation limit in effect at the time under Section 416(i)(1)(A)(i) of the Code, provided that no more than fifty officers of the Company shall be determined to be Specified  Employees as of any Determination Date;

		
	(ii)
	A five percent owner of the Company or any other member of the Affiliated Group; or

		
	(iii)
	A one percent owner of the Company or any other member of the Affiliated Group who has aggregate annual compensation from the Company and/or one or more other members of the Affiliated Group of more than $150,000.

If an Eligible Employee is determined to be a Specified Employee on a Determination Date, then such Eligible Employee shall be considered a Specified Employee for purposes of the Plan during the period beginning on the first April 1 following the Determination Date and ending on the next March 31.
For purposes of determining an officer's compensation when identifying Specified Employees, compensation is defined in accordance with Treas. Reg. §1.415(c)-2(a), without applying any safe harbor, special timing or other special rules described in Treas. Reg. §§ 1.415(c)-2(d), 2(e) and 2(g).
		
	(x)
	“Subsidiary” means any corporation with respect to which Gilead Sciences, Inc., one or more Subsidiaries, or Gilead Sciences, Inc., together with one or more Subsidiaries, own not less than 80% of the total combined voting power of all classes of stock entitled to vote, or not less than 80% of the total value of all shares of all outstanding classes of stock.

		
	(y)
	“Successors and Assigns” means a corporation or other entity acquiring all or substantially all the assets and business of the Company (including the Plan) whether by operation of law or otherwise.

16

		
	(z)
	“Separation from Service” means the Participant's cessation of Employee status.  For purposes of the Plan, a Separation from Service shall be determined in accordance with the following standards:

A Separation from Service will not be deemed to have occurred if the Participant continues to provide services to one or more members of the Employer Group (whether as a common-law employee or non-employee consultant or contractor) at an annual rate that amounts to 50% or more of the services rendered, on average, during the immediately preceding 36-months of employment with the Employer Group (or if employed by the Employer Group less than 36 months, such lesser period).
A Separation from Service will be deemed to have occurred if the Participant's service with the Employer Group (whether as a common-law employee or non-employee consultant or contractor) is permanently reduced to an annual rate that amounts to 20% or less of the services rendered, on average, during the immediately preceding 36 months of employment with the Employer Group (or if employed by the Employer Group less than 36 months, such lesser period).
If such services are permanently reduced to more than 20% but less than 50% of the average over the prior 36 months (or lesser period), a Separation from Service may be deemed to occur based on the facts and circumstances, including, but not limited to, whether the Participant is treated as an employee for other purposes, such as participation in employee benefit programs, and whether the Participant is able to perform services for other unrelated entities.
In addition to the foregoing, a Separation from Service will not be deemed to have occurred while the Participant is on military leave, sick leave, or other bona fide leave of absence if the period of such leave does not exceed six months or any longer period for which such Participant's right to reemployment with one or more members of the Employer Group is provided either by statute or contract; provided, however, that in the event of a Participant's leave of absence due to any medically determinable physical or mental impairment that can be expected to result in death or to last for a continuous period of not less than six (6) months and that causes such individual to be unable to perform his or her duties as an Employee, no Separation from Service shall be deemed to occur during the first twenty-nine (29) months of such leave.  If the period of leave exceeds six (6) months (or twenty-nine (29) months in the event of disability as indicated above) and the Participant's right to reemployment is not provided either by statute or contract, then such Participant will be deemed to have a Separation from Service on the first day immediately following the expiration of such six (6)-month or twenty-nine (29)-month period.
This definition of Separation from Service shall not be interpreted as limiting the right of the Company or any other member of the Employer Group to terminate the employment of an individual while on military leave, sick leave or other bona fide leave of absence, to the extent permissible under applicable law.
		
	(aa)
	“2004 Equity Incentive Plan” means the Gilead Sciences, Inc. 2004 Equity Incentive Plan, as it may be amended from time to time or any successor to such provision.

		
	(ab)
	“Year of Continuous Service” means the number of days (as defined by the Company in written rules adopted by it from time to time) of Continuous Service, divided by 365.  A Participant's Severance Pay Benefit calculation shall include both full and any partial Years of Continuous Service.

		
	XVIII.
	EXECUTION

17

The Company has caused its duly-authorized officer to execute the foregoing Plan as amended and restated effective as of January 1, 2012.

GILEAD SCIENCES, INC.

    
By:     Kristen M. Metza

Senior Vice President, Human Resources

Date: ____________________, 2012

18

APPENDIX A

Chief Executive Officer
Severance Benefits

		
	A.
	Change in Control Severance Pay Benefit.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) in connection with a Separation from Service occurring either within the 24-month period following a Change in Control or within the applicable period, as specified in the definition thereof in Section 11(d) of the 2004 Equity Incentive Plan, that precedes such Change in Control (the “Change in Control Period”), the Severance Pay Benefit shall be:
		
	1.
	Three times annual Regular Earnings plus three times the average of the actual bonuses paid to the Participant (or otherwise earned but deferred in whole in part) under the Company's annual bonus plan applicable to the Participant for the three fiscal years (or such fewer number of complete fiscal years of employment) immediately preceding the fiscal year in which the Participant's employment terminates.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to thirty-six (36) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. .  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1)of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such 

19

withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 12 months following the date of Separation from Service.

		
	4.
	Subject to the limitation set forth in section A.5 of this Appendix A, an additional payment in an amount such that after payment by the Participant of all taxes (including, without limitation, any income and employment taxes and any interest and penalties imposed thereon) and the excise tax imposed on such additional payment pursuant to Section 4999 of the Code, there remains an amount equal to the excise tax imposed pursuant to Section 4999 of the Code on the Severance Pay Benefit and any other payment in the nature of compensation that constitutes a “parachute payment” under Section 280G of the Code (the “Excise Tax”).  All calculations required pursuant to this provision shall be performed by an independent registered public company accounting firm retained by the Company for such purpose and shall be based on information supplied by the Company and the Participant.  For any parachute payments occurring at the time of the Change in Control, the relevant calculations shall be completed within ten (10) business days after the effective date of such Change in Control, and for any parachute payments attributable to the Participant's Separation from Service, the calculations shall be completed within ten (10) business days after the effective date of such Separation from Service.  Such calculations shall be conclusive and binding on all interested persons.  The additional payment resulting from such calculations shall be made to the Participant within ten (10) business days following the completion of such calculations or (if later) at the time the related Excise Tax is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be greater than the Excise Tax liability taken into account for purposes of the additional payment initially made to the Participant pursuant to the preceding provisions of this section A.4, then within forty-five (45) days following that Final Determination, the Participant shall notify the Company of such determination, and a new Excise Tax calculation based upon that Final Determination shall be made within the next forty-five (45) days.  The Company shall make a supplemental tax gross up payment (as calculated in the same manner as the initial payment hereunder) to the Participant attributable to that excess Excise Tax liability within ten (10) business days following the completion of the applicable calculations or (if later) at the time such excess tax liability is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be less than the Excise Tax liability taken into account for purposes of the additional payment made to him or her pursuant to the preceding provisions of this section A.4, then the Participant shall refund to the Company, promptly upon receipt, any federal or state tax refund attributable to the Excise Tax overpayment.  For purposes of this section A.4, a “Final Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed to by both the Participant and the Company (such agreement by the Company to be not unreasonably withheld) or (ii) sustained by a court of competent jurisdiction in a decision with which the Participant and the Company concur or with respect to which the period within which an appeal may be filed has lapsed without a notice of appeal being filed.  Notwithstanding anything to the contrary in the foregoing, the additional payment and any supplemental payments under this section A.4 shall be subject to the hold-back provisions of Section V(d) of the Plan, to the extent those payments relate to any amounts and benefits provided hereunder that constitute parachute payments attributable to the Participant's Separation from Service.  In addition, such additional payment and any supplemental payments 

20

shall in no event be made later than the end of the calendar year that follows the calendar year in which the related taxes are remitted to the appropriate tax authorities, or such other specified time or schedule that may be permitted under Section 409A of the Code.
		
	5.
	A Participant shall only be eligible for the additional payments provided by section A.4 above, if such Participant is, as of January 28, 2010, employed in a position with the Company that is covered under Appendicies A through C to the Plan.  If the Participant does not meet such eligibility standard, then any  Severance Pay Benefit to which he or she becomes entitled under the Plan as a result of a Separation from Service during the Change in Control Period, together with any other payment in the nature of compensation to which he or she may become entitled that constitutes a “parachute payment” under Section 280G of the Code, shall be subject to the following limitation (the “Benefit Limitation”): 

a.    If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, does not exceed in the aggregate 110% of the safe harbor amount allowable under Section 280G of the Code without triggering a parachute payment under Section 280G(b)(2)(A) of the Code (the “Safe Harbor Amount”), then the aggregate amount of the Severance Pay Benefit and such other payments shall be reduced to the extent (if any) necessary to assure that they do not exceed the Safe Harbor Amount.
b.     If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, exceeds in the aggregate 110% of the Safe Harbor Amount, then the Severance Pay Benefit and any other amounts in the nature of a parachute payment under Code Section 280G payable to the Participant shall be limited to the greater of (x) the Safe Harbor Amount or (y) the amount that yields the Participant the greatest after-tax aggregate amount of such Severance Pay Benefit and other payments due the Participant after taking into account any excise tax imposed on those amounts under Code Section 4999.
c.    All calculations required under this section A.5 shall be made by an independent registered public accounting firm (the “Auditor”) selected by the Company, and the fees of such Auditor shall be paid by the Company.  Unless the Participant agrees otherwise in writing, the Auditor selected by the Company shall be a nationally recognized United States registered public accounting firm that has not during the two years preceding the date of its selection, acted in any way on behalf of the Company.  The required calculations shall be provided to the Participant and the Company within ten (10) business days following the Participant's Separation from Service during the Change in Control Period under circumstances entitling the Participant to a Severance Pay Benefit under the Plan and within ten (10) days following the occurrence of any other event triggering a parachute payment for the Participant.
d.    If a reduction in the payments or benefits constituting a parachute payment under Code Section 280G is required pursuant to the Benefit Limitation imposed under this section A.5, then such reduction shall be effected in the following order: first, the Participant's salary and bonus continuation payments under section A.1 of this Appendix A to the Plan shall be reduced (with such reduction to be applied pro-rata to each such payment and without any change to the payment dates), then the amount of the Participant's Lump Sum Health Care 

21

Payment shall be reduced, and finally any  accelerated vesting of the Participant's equity awards under one or more of the Company's stock compensation plans, including (without limitation) the 2004 Equity Incentive Plan and any predecessor plans, shall be reduced (based on the amount of the parachute payment calculated for each such award in accordance with the Treasury Regulations under Code Section 280G), with such reduction to occur in the same chronological order in which those awards were made.
		
	B.
	Severance Pay Benefit.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) after completion of six or more months of Continuous Service in connection with a subsequent Separation from Service occurring at any time other than within the Change in Control Period as defined in paragraph A of the Appendix A, then the Severance Pay Benefit shall be:
		
	1.
	Two times annual Regular Earnings plus two times the average of the actual bonuses paid to the Participant (or otherwise earned but deferred in whole in part) under the Company's annual bonus plan applicable to the Participant for the three fiscal years (or such fewer number of complete fiscal years of employment) immediately preceding the fiscal year in which the Participant's employment terminates.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to twenty-four (24) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant 

22

shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 12 months following the date of Separation from Service.

23

APPENDIX B

Executive Vice President and
Senior Vice President
Severance Benefits

		
	A.
	Change in Control Severance Pay Benefit. 

If a Severance Pay Benefit becomes  payable under Section IV(a)(i) in connection with a Separation from Service occurring either within the 18-month period following a Change in Control or within the applicable period, as specified in the definition thereof in Section 11(d) of the 2004 Equity Incentive Plan, that precedes such  Change in Control (the “Change in Control Period”), the Severance Pay Benefit shall be:
		
	1.
	2.5 times annual Regular Earnings, plus 2.5 times the average of the actual bonuses paid to the Participant (or otherwise earned but deferred in whole in part) under the Company's annual bonus plan applicable to the Participant for the three fiscal years (or such fewer number of complete fiscal years of employment) immediately preceding the fiscal year in which the Participant's employment terminates.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to thirty (30) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant 

24

shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 6 months following the date of Separation from Service.

		
	4.
	Subject to the limitation set forth in section A.5 of this Appendix B, an additional payment in an amount such that after payment by the Participant of all taxes (including, without limitation, any income and employment taxes and any interest and penalties imposed thereon) and the excise tax imposed on such additional payment pursuant to Section 4999 of the Code, there remains an amount equal to the excise tax imposed pursuant to Section 4999 of the Code on the Severance Pay Benefit and any other payment in the nature of compensation that constitutes a “parachute payment” under Section 280G of the Code (the “Excise Tax”).  All calculations required pursuant to this provision shall be performed by an independent registered public company accounting firm retained by the Company for such purpose and shall be based on information supplied by the Company and the Participant.  For any parachute payments occurring at the time of the Change in Control, the relevant calculations shall be completed within ten (10) business days after the effective date of such Change in Control, and for any parachute payments attributable to the Participant's Separation from Service, the calculations shall be completed within ten (10) business days after the effective date of such Separation from Service.  Such calculations shall be conclusive and binding on all interested persons.  The additional payment resulting from such calculations shall be made to the Participant within ten (10) business days following the completion of such calculations or (if later) at the time the related Excise Tax is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be greater than the Excise Tax liability taken into account for purposes of the additional payment initially made to the Participant pursuant to the preceding provisions of this section A.4, then within forty-five (45) days following that Final Determination, the Participant shall notify the Company of such determination, and a new Excise Tax calculation based upon that Final Determination shall be made within the next forty-five (45) days.  The Company shall make a supplemental tax gross up payment (as calculated in the same manner as the initial payment hereunder) to the Participant attributable to that excess Excise Tax liability within ten (10) business days following the completion of the applicable calculations or (if later) at the time such excess tax liability is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be less than the Excise Tax liability taken into account for purposes of the additional payment made to him or her pursuant to the preceding provisions of this section A.4, then the Participant shall refund to the Company, promptly upon receipt, any federal or state tax refund attributable to the Excise Tax overpayment.  For purposes of this section A.4, a “Final Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed to by both the Participant and the Company (such agreement by the Company to be not unreasonably withheld) or (ii) sustained by a court of competent jurisdiction in a decision with which the Participant and the Company concur or with respect to which the period within which an appeal may be filed has lapsed without a notice of appeal being filed.  Notwithstanding anything to the contrary in the foregoing, the additional payment and any supplemental payments under this section A.4 shall be subject to the hold-back provisions of Section V(d) of the Plan, to the extent those payments relate to any amounts and benefits provided hereunder that constitute parachute payments attributable to the Participant's 

25

Separation from Service.  In addition, such additional payment and any supplemental payments shall in no event be made later than the end of the calendar year that follows the calendar year in which the related taxes are remitted to the appropriate tax authorities, or such other specified time or schedule that may be permitted under Section 409A of the Code.
		
	5.
	A Participant shall only be eligible for the additional payments provided by section A.4 above, if such Participant is, as of January 28, 2010, employed in a position with the Company that is covered under Appendicies A through C to the Plan.  If the Participant does not meet such eligibility standard, then any  Severance Pay Benefit to which he or she becomes entitled under the Plan as a result of a Separation from Service during the Change in Control Period, together with any other payments in the nature of compensation to which he or she may become entitled that constitute a “parachute payment” under Section 280G of the Code, shall be subject to the following limitation (the “Benefit Limitation”): 

a.    If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, does not exceed in the aggregate 110% of the safe harbor amount allowable under Section 280G of the Code without triggering a parachute payment under Section 280G(b)(2)(A) of the Code (the “Safe Harbor Amount”), then the aggregate amount of the Severance Pay Benefit and such other payments shall be reduced to the extent (if any) necessary to assure that they do not exceed the Safe Harbor Amount.
b.     If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, exceeds in the aggregate 110% of the Safe Harbor Amount, then the Severance Pay Benefit and any other amounts in the nature of a parachute payment under Code Section 280G payable to the Participant shall be limited to the greater of (x) the Safe Harbor Amount or (y) the amount that yields the Participant the greatest after-tax aggregate amount of such Severance Pay Benefit and other payments due the Participant after taking into account any excise tax imposed on those amounts under Code Section 4999.
c.    All calculations required under this section A.5 shall be made by an independent registered public accounting firm (the “Auditor”) selected by the Company, and the fees of such Auditor shall be paid by the Company.  Unless the Participant agrees otherwise in writing, the Auditor selected by the Company shall be a nationally recognized United States registered public accounting firm that has not during the two years preceding the date of its selection, acted in any way on behalf of the Company.  The required calculations shall be provided to the Participant and the Company within ten (10) business days following the Participant's Separation from Service during the Change in Control Period under circumstances entitling the Participant to a Severance Pay Benefit under the Plan and within ten (10) days following the occurrence of any other event triggering a parachute payment for the Participant.
d.    If a reduction in the payments or benefits constituting a parachute payment under Code Section 280G is required pursuant to the Benefit Limitation imposed under this section A.5, then such reduction shall be effected in the following order: first, the Participant's salary and bonus continuation payments under section A.1 of this Appendix B to the Plan shall be reduced (with such reduction to be applied pro-rata to each such payment and without 

26

any change to the payment dates), then the amount of the Participant's Lump Sum Health Care Payment shall be reduced, and finally any  accelerated vesting of the Participant's equity awards under one or more of the Company's stock compensation plans, including (without limitation) the 2004 Equity Incentive Plan and any predecessor plans, shall be reduced (based on the amount of the parachute payment calculated for each such award in accordance with the Treasury Regulations under Code Section 280G), with such reduction to occur in the same chronological order in which those awards were made.
		
	B.
	Severance Pay Benefit.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) after completion of six or more months of Continuous Service in connection with a subsequent Separation from Service occurring at any time other than within the Change in Control Period as defined in paragraph A of this Appendix B, then the Severance Pay Benefit shall be:
		
	1.
	1.5 times annual Regular Earnings plus 1.0 times the average of the actual bonuses paid to the Participant (or otherwise earned but deferred in whole in part) under the Company's annual bonus plan applicable to the Participant for the three fiscal years (or such fewer number of complete fiscal years of employment) immediately preceding the fiscal year in which the Participant's employment terminates.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to eighteen (18) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion,  but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant 

27

shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 6 months following the date of Separation from Service.

28

APPENDIX C

Vice President and Senior Advisor
Severance Benefits

		
	A.
	Change in Control Severance Pay Benefit - For All Vice Presidents and Senior Advisors.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) in connection with a Separation from Service occurring either within the 12-month period following a Change in Control or within the applicable period, as specified in the definition thereof in Section 11(d) of the 2004 Equity Incentive Plan, that precedes such Change in Control (the “Change in Control Period”), the Severance Pay Benefit shall be:
		
	1.
	1.5 times annual Regular Earnings, plus 1.5 times the average of the actual bonuses paid to the Participant (or otherwise earned but deferred in whole in part) under the Company's annual bonus plan applicable to the Participant for the three fiscal years (or such fewer number of complete fiscal years of employment) immediately preceding the fiscal year in which the Participant's employment terminates.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to eighteen (18) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such 

29

withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 6 months following the date of Separation from Service.

		
	4.
	Subject to the limitation set forth in section A.5 of this Appendix C, an additional payment in an amount such that after payment by the Participant of all taxes (including, without limitation, any income and employment taxes and any interest and penalties imposed thereon) and the excise tax imposed on such additional payment pursuant to Section 4999 of the Code, there remains an amount equal to the excise tax imposed pursuant to Section 4999 of the Code on the Severance Pay Benefit and any other payment in the nature of compensation that constitutes a “parachute payment” under Section 280G of the Code (the “Excise Tax”).  All calculations required pursuant to this provision shall be performed by an independent registered public company accounting firm retained by the Company for such purpose and shall be based on information supplied by the Company and the Participant.  For any parachute payments occurring at the time of the Change in Control, the relevant calculations shall be completed within ten (10) business days after the effective date of such Change in Control, and for any parachute payments attributable to the Participant's Separation from Service, the calculations shall be completed within ten (10) business days after the effective date of such Separation from Service.  Such calculations shall be conclusive and binding on all interested persons.  The additional payment resulting from such calculations shall be made to the Participant within ten (10) business days following the completion of such calculations or (if later) at the time the related Excise Tax is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be greater than the Excise Tax liability taken into account for purposes of the additional payment initially made to the Participant pursuant to the preceding provisions of this section A.4, then within forty-five (45) days following that Final Determination, the Participant shall notify the Company of such determination, and a new Excise Tax calculation based upon that Final Determination shall be made within the next forty-five (45) days.  The Company shall make a supplemental tax gross up payment (as calculated in the same manner as the initial payment hereunder) to the Participant attributable to that excess Excise Tax liability within ten (10) business days following the completion of the applicable calculations or (if later) at the time such excess tax liability is remitted to the appropriate tax authorities.  In the event that the Participant's actual Excise Tax liability is determined by a Final Determination to be less than the Excise Tax liability taken into account for purposes of the additional payment made to him or her pursuant to the preceding provisions of this section A.4, then the Participant shall refund to the Company, promptly upon receipt, any federal or state tax refund attributable to the Excise Tax overpayment.  For purposes of this section A.4, a “Final Determination” means an audit adjustment by the Internal Revenue Service that is either (i) agreed to by both the Participant and the Company (such agreement by the Company to be not unreasonably withheld) or (ii) sustained by a court of competent jurisdiction in a decision with which the Participant and the Company concur or with respect to which the period within which an appeal may be filed has lapsed without a notice of appeal being filed.  Notwithstanding anything to the contrary in the foregoing, the additional payment and any supplemental payments under this section A.4 shall be subject to the hold-back provisions of Section V(d) of the Plan, to the extent those payments relate to any amounts and benefits provided hereunder that constitute parachute payments attributable to the Participant's Separation from Service.  In addition, such additional payment and any supplemental payments 

30

shall in no event be made later than the end of the calendar year that follows the calendar year in which the related taxes are remitted to the appropriate tax authorities, or such other specified time or schedule that may be permitted under Section 409A of the Code.
		
	5.
	A Participant shall only be eligible for the additional payments provided by section A.4 above, if such Participant is, as of January 28, 2010, employed in a position with the Company that is covered under Appendicies A through C to the Plan.  If the Participant does not meet such eligibility standard, then any  Severance Pay Benefit to which he or she becomes entitled under the Plan as a result of a Separation from Service during the Change in Control Period, together with any other payment in the nature of compensation to which he or she may become entitled that constitutes a “parachute payment” under Section 280G of the Code, shall be subject to the following limitation (the “Benefit Limitation”): 

a.    If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, does not exceed in the aggregate 110% of the safe harbor amount allowable under Section 280G of the Code without triggering a parachute payment under Section 280G(b)(2)(A) of the Code (the “Safe Harbor Amount”), then the aggregate amount of the Severance Pay Benefit and such other payments shall be reduced to the extent (if any) necessary to assure that they do not exceed the Safe Harbor Amount.
b.     If the parachute value of the Severance Pay Benefit and the other payments, as calculated in accordance with the parachute payment determination and valuation provisions of Section 280G of the Code and the applicable Treasury Regulations thereunder, exceeds in the aggregate 110% of the Safe Harbor Amount, then the Severance Pay Benefit and any other amounts in the nature of a parachute payment under Code Section 280G payable to the Participant shall be limited to the greater of (x) the Safe Harbor Amount or (y) the amount that yields the Participant the greatest after-tax aggregate amount of such Severance Pay Benefit and other payments due the Participant after taking into account any excise tax imposed on those amounts under Code Section 4999.
c.    All calculations required under this section A.5 shall be made by an independent registered public accounting firm (the “Auditor”) selected by the Company, and the fees of such Auditor shall be paid by the Company.  Unless the Participant agrees otherwise in writing, the Auditor selected by the Company shall be a nationally recognized United States registered public accounting firm that has not during the two years preceding the date of its selection, acted in any way on behalf of the Company.  The required calculations shall be provided to the Participant and the Company within ten (10) business days following the Participant's Separation from Service during the Change in Control Period under circumstances entitling the Participant to a Severance Pay Benefit under the Plan and within ten (10) days following the occurrence of any other event triggering a parachute payment for the Participant.
d.    If a reduction in the payments or benefits constituting a parachute payment under Code Section 280G is required pursuant to the Benefit Limitation imposed under this section A.5, then such reduction shall be effected in the following order: first, the Participant's salary and bonus continuation payments under section A.1 of this Appendix C to the Plan shall be reduced (with such reduction to be applied pro-rata to each such payment and without any change to the payment dates), then the amount of the Participant's Lump Sum Health 

31

Care Payment shall be reduced, and finally any  accelerated vesting of the Participant's equity awards under one or more of the Company's stock compensation plans, including (without limitation) the 2004 Equity Incentive Plan and any predecessor plans, shall be reduced (based on the amount of the parachute payment calculated for each such award in accordance with the Treasury Regulations under Code Section 280G), with such reduction to occur in the same chronological order in which those awards were made.
		
	B.
	Severance Pay Benefit for Vice Presidents with at least Six Months of Continuous Service.

For Vice Presidents who have completed six or more months of Continuous Service at the time they become eligible for a severance benefit under Section IV (a)(i), if the Severance Pay Benefit becomes payable in connection with a Separation from Service occurring at any time other than the Change in Control Period as defined in paragraph A of this Appendix C, then the Severance Pay Benefit shall be: 
		
	1.
	1.0 times annual Regular Earnings.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to twelve (12) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii)  such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.

32

		
	3.
	Outplacement services for 6 months following the date of Separation from Service.

		
	C.
	Severance Pay Benefit for Vice Presidents with less than Six Months of Continuous Service.

For Vice Presidents who have not completed six or more months of Continuous Service but are otherwise eligible for a severance benefit under Section IV(a)(i), if the Severance Pay Benefit becomes payable in connection with a Separation from Service occurring at any time other than the Change in Control Period as defined in paragraph A of this Appendix C, then the Severance Pay Benefit shall be: 
		
	1.
	4 months of Regular Earnings.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in an amount equal to four (4) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of such termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump

 Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	3.
	Outplacement services for 1 month following the date of Separation from Service.

Senior Advisors shall not be entitled to any benefits under Sections B and C of this Appendix C.

33

APPENDIX D

Severance Benefits for Eligible Employees
other than Chief Executive Officer,
Executive Vice President, Senior Vice President,
Vice President and Senior Advisor

This Appendix is effective for covered individuals who cease Employee status on or after May 8, 2007, unless they have a pre-existing contract providing a different level of severance pay.

		
	A.
	Change in Control Severance Pay Benefit.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) in connection with a Separation from Service occurring within the 12-month period following a Change in Control (the “Change in Control Period”), then regardless of the period of Continuous Service the Severance Pay Benefit shall be:
		
	1.
	Eligible Employees in Grades 31 through 34:

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 52 weeks of Regular Earnings and a minimum of 22 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph A.1.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured 

34

from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	c.
	Outplacement services for 6 months following the date of Separation from Service.

		
	2.
	Eligible Employees in Grades 25 through 30:

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 39 weeks of Regular Earnings and a minimum of 13 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph A.2.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred 

35

payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	c.
	Outplacement services for 3 months following the date of Separation from Service.

		
	3.
	Eligible Employees in Grades 21 through 24:

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 26 weeks of Regular Earnings and a minimum of 9 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph A.3.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's 

36

collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	c.
	Outplacement services for 1week following the date of Separation from Service.

		
	B.
	General Severance Pay Benefit.

If a Severance Pay Benefit becomes payable under Section IV(a)(i) after completion of six or more months of Continuous Service in connection with a subsequent Separation from Service occurring at any time other than within the Change in Control Period as defined in paragraph A of this Appendix D, then the Severance Pay Benefit shall be: 
		
	1.
	Eligible Employees in Grades 31 through 34.

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 39 weeks of Regular Earnings and a minimum of 13 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph B.1.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds 

37

the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	c.
	Outplacement services for 3 months following the date of Separation from Service.

		
	1.
	Eligible Employees in Grades 25 through 30:

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 39 weeks of Regular Earnings and a minimum of 13 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph B.2.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii)  such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year. Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only 

38

the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.
		
	c.
	Outplacement services for 3 months following the date of Separation from Service.

		
	2.
	Eligible Employees in Grades 21 through 24:

		
	a.
	Three weeks of Regular Earnings times Years of Continuous Service, with a maximum of 26 weeks of Regular Earnings and a minimum of 9 weeks of Regular Earnings.

		
	b.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the dollar amount determined by multiplying (A) the number of months (rounded up to the next whole month) in the applicable severance pay period determined for the Participant in accordance with Paragraph B.3.a above by (B) the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs. The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.

39

		
	c.
	Outplacement services for 1 week following the date of Separation from Service.

		
	C.
	General Severance Pay Benefit Without Six Months of Continuous Service.

For Eligible Employees in Grades 21 through 34 who have not completed six or more months of Continuous Service but are eligible for a severance benefit under Section IV(a)(i), if the Severance Pay Benefit becomes payable in connection with a Separation from Service occurring at any time other than within the Change Control Period as defined in paragraph A of this Appendix D, then the Severance Pay Benefit shall be:

		
	1.
	4 weeks of Regular Earnings.

		
	2.
	A lump sum cash payment (the “Lump Sum Health Care Payment”) in the  amount equal to one (1) times the amount by which (i) the monthly cost that would be payable by the Participant, as measured as of the date of his or her termination of employment, to obtain continued medical care coverage for the Participant and  his or her spouse and eligible dependents under the Company's employee group health plan, pursuant to their COBRA rights, at the level in effect for each of them on the date of the Participant's termination of employment exceeds (ii) the monthly amount payable at such time by a similarly-situated executive whose employment with the Company has not terminated to obtain group health care coverage at the same level.  The Company shall pay the Lump Sum Health Care Payment to the Participant on the first regularly scheduled pay date for the Participant's former job and location that occurs within the sixty (60)-day period measured from the date of his or her Separation from Service on which both (A) the Release delivered by the Participant in accordance with Section IV(a)(i)(2) of the Plan is effective following the expiration of the applicable maximum review and revocation periods and (B) any waiver required of the Participant pursuant to Section IV(a)(ii)(3) of the Plan has been delivered on a timely basis to the Company and in the case of such waiver the thirty (30)-day maximum delivery period has expired, or on such subsequent date thereafter as the Company may determine in its sole discretion, but in no event shall such payment be made later than the last day of such sixty (60)-day period, provided (i) such Release and waiver have each been delivered to the Company within the required time period following the Participant's Separation from Service, as set forth in Section IV, (ii) such Release has not been revoked and (iii) should such sixty (60)-day period measured from the date of the Participant's Separation from Service extend over two calendar years, then the Lump Sum Health Care Payment shall be made during  the portion of that sixty (60)-day period that occurs in the second calendar year.  Notwithstanding the foregoing, the Lump Sum Health Care Payment shall be subject to the deferred payment provisions of Section V(d) of the Plan, to the extent such payment exceeds the applicable dollar amount under section 402(g)(1) of the Code for the year in which the Participant's Separation from Service occurs.  The Lump Sum Health Care Payment shall constitute taxable income to the Participant and shall be subject to the Company's collection of all applicable withholding taxes, and the Participant shall receive only the portion of the Lump Sum Health Care Payment remaining after such withholding taxes have been collected.  It shall be the sole responsibility of the Participant and his or her spouse and eligible dependents to obtain actual COBRA coverage under the Company's group health care plan.

		
	3.
	Outplacement services for 1 week following the date of Separation from Service.

40

TABLE OF CONTENTS

	
				
	I.
	INTRODUCTION
	1
	

	 
	 
	 

	II.
	COMMENCEMENT OF PARTICIPATION
	2
	

	 
	 
	 

	III.
	TERMINATION OF PARTICIPATION
	2
	

	 
	 
	 

	IV.
	SEVERANCE PAY BENEFIT
	3
	

	 
	 
	 

	V.
	TIME AND FORM OF SEVERANCE PAY BENEFIT
	6
	

	 
	 
	 

	VI.
	DEATH OF A PARTICIPANT
	8
	

	 
	 
	 

	VII.
	AMENDMENT AND TERMINATION
	8
	

	 
	 
	 

	VIII.
	NON-ALIENATION OF BENEFITS
	10
	

	 
	 
	 

	IX.
	SUCCESSORS AND ASSIGNS
	10
	

	 
	 
	 

	X.
	LEGAL CONSTRUCTION
	10
	

	 
	 
	 

	XI.
	ADMINISTRATION AND OPERATION OF THE PLAN
	10
	

	 
	 
	 

	XII.
	CLAIMS, INQUIRIES AND APPEALS
	12
	

	 
	 
	 

	XIII.
	BASIS OF PAYMENTS TO AND FROM PLAN
	14
	

	 
	 
	 

	XIV.
	OTHER PLAN INFORMATION
	14
	

	 
	 
	 

	XV.
	STATEMENT OF ERISA RIGHTS
	14
	

	 
	 
	 

	XVI.
	AVAILABILITY OF PLAN DOCUMENTS FOR EXAMINATION
	15
	

	 
	 
	 

	XVII.
	DEFINITIONS
	16
	

	 
	 
	 

	XVIII.
	EXECUTION
	21
	

	
			
	APPENDIX A  Chief Executive Officer Severance Benefits
	22
	

	 
	 

	APPENDIX B  Executive Vice President and Senior Vice President Severance Benefits
	28
	

	 
	 

	APPENDIX C  Vice President and Senior Advisor Severance Benefits
	34
	

	 
	 

	APPENDIX D  Severance Benefits for Eligible Employees other than Chief Executive Officer, Executive Vice President, Senior Vice President, Vice President and Senior Advisor
	37
	

41

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