Document:

Exhibit

Exhibit 10.26

May 21, 2019
Johanna Mercier
Dear Johanna,
Gilead Sciences, Inc. (“Gilead”) is pleased to offer you the position of Chief Commercial Officer (CCO) of Gilead. In this role you will report to Gilead’s Chief Executive Officer (“CEO”), Daniel O’Day, and will have responsibility for Gilead’s core commercial portfolio, not including Kite Pharma, Inc. You will join Gilead’s Leadership Team and be based in our Foster City, California headquarters. We would expect you to start on July 1, 2019 or such earlier date as may be agreed to by the CEO (such date, the “Start Date”). 
We are very excited about the possibility of you joining Gilead, and we look forward to working with you in our innovative company. The following outlines the specific terms of our offer:
Annual Compensation. Your base salary on an annualized basis will be $1,000,000, less taxes, payable bi-weekly.
You will be eligible to participate in Gilead’s annual corporate bonus program, including with respect to 2019. Your target bonus will be 100% of annual base salary. Based on your 2019 annualized base salary, your target bonus would be $1,000,000. Your actual bonus payout, which, for 2019, will be pro-rated based on the number of days between the Start Date and December 31, 2019, can range from 0% to 150% of this target based on the achievement of individual and corporate performance goals as established by the Compensation Committee (the “Compensation Committee”) of Gilead’s Board of Directors (the “Board”).
In addition to an initial equity award as described below, you will be eligible to participate in Gilead's annual equity award program, under which awards are typically granted in the first quarter of the year. For 2020, the aggregate target grant date value for your equity awards will be $3,500,000. Currently, 25% of the aggregate target value of such annual equity awards is comprised of stock options, 25% is comprised of restricted stock units (RSUs), and the remaining 50% is comprised of performance share unit awards (PSUs). The actual award breakdown will be determined by the Compensation Committee prior to grant, and the number of shares subject to each of these grants will be determined based on the assumptions used by Gilead at the time of grant to value equity awards for purposes of Gilead’s financial reporting. These awards will be subject to the standard terms utilized for grants to the Gilead Leadership Team. The target grant values and equity vehicles are reviewed on an annual basis and subject to change as determined by the Compensation Committee. 
New-Hire Equity Awards. You will be granted equity awards with an aggregate target grant date value of $5,500,000 following your Start Date (your “New-Hire Equity Awards”), in lieu of annual equity award grants for 2019. Your New Hire Equity Awards will be made under the Gilead Sciences, Inc. 2004 Equity Incentive Plan, as amended (the “Equity Incentive Plan”), with $2,000,000 of the awards granted in the form of restricted stock units (RSUs) intended to replace the value of unvested equity awards forfeited from your current employer, $1,750,000 granted in the form of stock options and $1,750,000 granted in the form of performance-based restricted stock unit awards (PBSUs). The actual number of shares subject to each of these grants will be determined based on the assumptions used by Gilead at the time of grant to value equity awards for purposes of Gilead’s financial reporting. Your New-Hire Equity Awards will be subject to the standard terms utilized for grants to the Gilead Leadership Team under the Equity Incentive Plan as approved by the Compensation Committee prior to the time of this offer, including the following:
		
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	The exercise price for your stock options will be no less than the fair market value per share of Gilead common stock on the grant date. The fair market value per share for that date will be determined in accordance with the provisions of the Equity Incentive Plan. You will be notified of the details after your options have been granted. Your options will vest and become exercisable for 25% of the option shares upon your completion of one year of employment with Gilead, measured from the grant date, and will vest and become exercisable for the balance of the option shares in a series of successive equal quarterly installments upon your completion of each successive three-month period of continued employment with 

Gilead over the next three years. The options will have a maximum term of ten years, subject to earlier termination upon or following your cessation of employment.
		
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	Your RSUs will vest, and the underlying shares of Gilead common stock issued to you, in a series of four successive annual installments upon your completion of each year of continued employment with Gilead over the four-year period measured from the award date. Each RSU that vests will entitle you to one share of Gilead common stock. 

		
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	Your PBSUs will vest based on the extent to which you attain the performance goal(s), as established for you within the first 90 days of your employment, and subject to your continued employment with Gilead until the completion of the applicable performance period. The performance period for the performance goal(s) will be set at the time the performance goal is established and approved by the Compensation Committee, and the combined performance period for all of your performance goals typically will not exceed five years. To the extent a performance goal is not attained within the established performance period for that performance goal, the PBSUs tied to that performance goal will be forfeited. For each PBSU that vests in accordance with such vesting provisions, you will receive one share of Gilead common stock following the completion of the applicable performance period and the Compensation Committee’s certification of the attained performance goals. In the event of your death or permanent disability, your PBSUs will be subject to pro-rated vesting. In each case, the issuance of vested shares will be subject to Gilead’s collection of all applicable withholding taxes.

Sign-On Bonus. To offset the value of your annual bonus and unvested equity awards forfeited from your current employer and to compensate for other economic consequences of accepting this offer, you will receive a one-time cash payment of $2,500,000 (the “Sign-On Bonus”). Your Sign-On Bonus will be paid to you in two equal installments. The first installment of $1,250,000 will be paid with your first payroll check subsequent to the Start Date and, subject to your continued employment, the second installment of $1,250,000 will paid with the first payroll check subsequent to the first anniversary of the Start Date. In the event that your employment is terminated by Gilead for Cause (as defined in the Equity Incentive Plan) or by you without Good Reason (as defined below), prior to your completion of one year of service, you will be required to repay the first installment of the Sign-On Bonus to Gilead. Your repayment obligation, if applicable, is due in full to Gilead within ninety days following your employment termination date.
In the event that, during your first two years with Gilead, your employment is terminated by Gilead without Cause (as defined in the Equity Incentive Plan) or if you voluntarily terminate for Good Reason (as defined below), you will become 100% vested in any of your remaining unvested New Hire Equity Awards and the full Sign-On Bonus, subject to your execution and non-revocation of a waiver and general release of claims within the time period specified by and in the form then provided by Gilead. In such circumstances, any unvested PBSUs granted as part of your New Hire Equity Awards will vest based on target performance and any stock options granted as part of your New Hire Equity Awards will remain exercisable until the first anniversary of your termination date. Any unpaid portion of the Sign-On Bonus will be paid to you within 60 days of such termination date. The stock options, RSUs and PBSUs will be subject, in all respects except as specifically set forth herein, to the terms and conditions of an award agreement that will be provided to you. 
As used in this letter, “Good Reason” means the occurrence of any of the following events or conditions: (i) an adverse change in your employment status, title, position or responsibilities as CCO (including reporting responsibilities); (ii) a reduction in your annual base compensation or any failure to pay you any compensation or benefits to which you are entitled within 30 days of the date due; (iii) a reduction in your target bonus or annual equity award opportunity prior to the first anniversary of the Start Date; or (iv) Gilead requires you to relocate to any place outside a 50 mile radius of the greater Foster City, California area, except for reasonably required travel on the business of Gilead or any subsidiary.

Relocation Assistance. Because your role requires you to be based in our Foster City headquarters, Gilead will provide you with certain relocation benefits to support your work in Northern California. Subject to the following paragraph, Gilead will enroll you in our home marketing, Buyer Value Option (BVO) Program, administered by our relocation vendor, The MIGroup. Gilead, through The MIGroup, will cover all non-recurring transaction costs in connection with the sale of your current home and (if you so elect) purchase of a new home, for up to five years from your Start Date. This includes the real estate commission, typical seller closing costs, and typical purchase closing costs associated with the purchase of a new home. A complete policy will be provided to you by The MIGroup, subject to the terms hereof. The MIGroup also will arrange to have your household goods moved to your new location utilizing the company contracted carrier. 
Gilead will provide you with up to 12 months of temporary accommodations in a fully furnished corporate apartment. Gilead and its relocation vendors will assist you with the selection and billing for these accommodations. Following such period of temporary accommodations, to assist you when working in a significantly higher cost housing area compared to your previous housing area, you may elect to receive from Gilead either the mortgage subsidy or the rental subsidy described in the following two paragraphs. 
If you elect to purchase a home, Gilead will (as noted above) reimburse you for 100% of the transaction costs associated with your home purchase. All non-recurring transaction costs in connection with purchase of a new home will be covered by Gilead, through the MI Group. This includes the typical purchase closing costs associated with the purchase of a new home. A complete policy will be provided to you by The MIGroup. The new home purchase must be within five years of your Start Date. In addition, Gilead will provide you a mortgage subsidy. The subsidy is an amount of money to be used only to help you purchase a home in the new location by reducing the mortgage’s interest rate for a period of time so that you can transition into a higher cost area. You cannot use the mortgage subsidy for any purpose other than to reduce (temporarily) the interest rate on your loan. In order to be most tax advantageous to you, we will allow you to configure this subsidy in any manner you choose, provided it follows all legal guidelines for tax-favored treatment by Gilead. The mortgage subsidy is provided exclusively through The MIGroup for up to five years. The annual distribution is set on a reducing scale basis and the total subsidy amount is capped at $500,000.
Alternatively, if you elect to rent a home, Gilead will provide you with a rental subsidy. The Rental Subsidy Program (RSP) is provided for a maximum of 24 months and paid in two annual advance, lump sum installments. The first 12 month payment will be issued within 10 days of your request and the second 12 month payment will be paid on the first anniversary of your first payment. The RSP you are eligible for is limited to $100,000 annually. The RSP payments are considered taxable income and will be paid net of taxes.
You will be provided a miscellaneous relocation allowance of $20,000, paid net of taxes as soon as administratively possible. This is intended to cover miscellaneous expenses such as utilities installation, auto license and registration, and any other expenses not provided elsewhere under Gilead’s relocation policy.
If your employment should terminate within two years of your Start Date, the full cash amount of this relocation package including, but not limited to, any moving costs, temporary housing costs, transaction costs, lump sums and associated tax gross-ups accepted by you is due and payable to Gilead within 90 days after your last date of employment, except that you will have no such repayment obligation if your employment is terminated by Gilead without Cause (as defined in the Equity Incentive Plan) or by you for Good Reason (as defined above).
Additional Benefits. Gilead provides a comprehensive company-paid benefits package including health, dental, vision, life, and long-term disability insurance plans. You are eligible for health and welfare benefits if you are a full-time employee working 30 hours or more (unless otherwise specified). You will need to enroll for medical, dental and vision coverage within 31 days of your hire date, or you will not be eligible to enroll until the next open enrollment, unless you have a qualifying life event. Upon completion of enrollment within such 31 day period, your coverage begins effective as of your Start Date.

At the next enrollment date, you will be eligible to participate in our Employee Stock Purchase Plan (“ESPP”) that offers you the opportunity to contribute up to 15% of your earnings, up to the IRS maximum, through payroll deductions to purchase Gilead stock at 85% of the lower of the closing price at the date of enrollment or purchase. ESPP enrollment occurs two times a year.
Additionally, we offer a 401(k) plan, which provides you with the opportunity for Pre-tax, Roth After-tax and Additional After-tax savings by deferring from 1-50% of your annual salary, subject to IRS maximums. Gilead will match 100% of your Pre-tax and/or Roth After-tax contributions to the plan up to a maximum company contribution of $12,000 per year. More detailed information regarding your benefits will be provided at your New Employee Orientation, shortly after you begin employment.
As an employee, you are covered under Gilead’s Workers Compensation insurance policy. This policy applies to all employees who become ill or injured on the job. Gilead’s Workers Compensation carrier is XL Insurance America, Inc. Claims are handled by Sedgwick, a Third Party Administrator, at 1-855-336-0983.
You will be entitled to severance benefits in accordance with the terms and conditions of the Gilead Sciences, Inc. Severance Plan. A copy of this plan will be provided to you.
For your information, we have enclosed a Benefits Summary outlining Gilead's benefits programs. We will arrange for you to meet with a member of our benefits staff to review your benefits package and enroll in the various programs. Please note that, as an executive, you will not accrue paid time-off but will instead have the flexibility of taking time off at your discretion in accordance with the business needs of the corporation.
Additional Terms. All compensation provided to you, including any cash or equity-based compensation, will be subject to Gilead’s collection of the applicable withholding taxes, and unless otherwise specifically stated above, Gilead will not gross-up or make whole for any such taxes. 
Gilead intends to honor your ongoing confidentiality obligations and you agree to abide by Gilead’s strict company policy that prohibits any new employee from using or bringing with them from any prior employer any proprietary information, trade secrets, proprietary materials or processes of such former employers. Upon starting employment with Gilead, you will be required to sign Gilead’s Confidential Information and Inventions Agreement (“CIIA”) for Employees indicating your agreement with this policy. At the termination of your employment, you will be reminded of your continuing duties under the CIIA. Please read this policy and the CIIA carefully.
You and Gilead will also enter into Gilead’s standard form of indemnification agreement with its executive officers. During your employment with Gilead and for a period of not less than six (6) years after your employment with Gilead terminates, Gilead will cover you under directors and officers liability insurance in the same amount and to the same extent as Gilead covers its other executive officers and directors.
You will also be required to fill out the electronic Employment Eligibility Verification (Form I-9). This electronic form will be sent to you via email. On your first day of employment, please bring the necessary documents that establish your identity and employment eligibility.
You understand and agree that Gilead does not desire or intend to acquire from you any trade secrets or confidential proprietary information you may have acquired from others, including former employers. Therefore, you agree that during the term of your employment with Gilead, you will not bring to Gilead any such trade secrets or confidential proprietary information, nor will you use or disclose any trade secrets or confidential proprietary information of any former or concurrent employer, or any other person or entity with whom you have an agreement or to whom you owe a duty to keep such information in confidence.  Further, you agree and represent to Gilead by signing below that as of the Start Date you will not be subject to any other agreement or any other previous or existing business relationship which conflicts with or restricts the full performance of your duties and obligations to Gilead (including your duties and obligations under this or any other agreement) during the term of your employment, except for any agreements described on Attachment A. 

In the event of a claim against you by your current or former employer:  (i) arising out of or related to any agreement that purports to limit or restrict your ability to work for Gilead of the nature described on Attachment A, or (ii) otherwise by reason of your status as an officer or employee of Gilead, Gilead hereby agrees to indemnify and hold you harmless against, and directly to pay as incurred or advance the attorney’s fees and costs incurred in defending against the claim (with the legal counsel of your choice, subject to Gilead’s consent, which shall not be unreasonably withheld, and for avoidance of doubt Gilead consents to your retention of Sullivan & Cromwell LLP in connection with any such claim), and any amounts that you may be required to pay to your current or former employer in connection with such claim.  Gilead’s agreement to provide such indemnity and advancement is in addition to any obligations under Delaware law, its certificate of incorporation and bylaws, and the indemnification agreement referenced earlier in this letter and is subject to any applicable standard of conduct required under Delaware law.  Subject to the foregoing, Gilead’s agreement under this paragraph to provide indemnity and advancement is revocable upon notice by Gilead in the event that you have knowingly and intentionally breached any legal obligation to your current or former employer to an extent that would fall within the definition of Cause, including with respect to misuse or disclosure of any confidential, proprietary, or trade secret information, other than in connection with any purported noncompetition, nonsolicitation or nondisparagement obligation. 
If you are prevented from working for Gilead (i) for any period of time, (ii) in any particular location, or (iii) in any particular subject area or function, because of the enforcement or threatened enforcement of a written agreement between you and your current or former employer (or other legal restriction arising from your employment with your current or former employer), Gilead will use reasonable efforts to modify your job duties for such period of time as necessary during your employment with Gilead.  If Gilead determines that it is unable to modify your job duties in a manner such that you are eligible to perform your role while employed with Gilead, you understand and agree that you may be placed on a paid leave of absence for the period of time for which you are unable to proceed with your active employment with Gilead and shall be recalled to the position of CCO in accordance with this offer once any restrictions on your ability to perform services while employed with Gilead are abated or removed, and that any such action shall not constitute “Good Reason” under this letter.  During any such paid leave of absence, you will continue to receive your base salary, target bonus and annual equity award opportunity, and such paid leave of absence will not adversely affect (i) the vesting of any outstanding equity awards (including your New-Hire Equity Awards) or your Sign-On Bonus, provided that any performance conditions will be established so as to accommodate such leave of absence in a manner that does not materially diminish the compensation that would have been expected under the performance goals personal to you, or (ii) any other benefits provided under this offer; provided, however, that such amounts shall be offset by any amount paid to you by a former employer in satisfaction of any restrictive covenant period. 
Further, you agree and represent to Gilead by signing below that you have never been terminated, suspended, or otherwise disciplined by an employer or organization for conduct that was alleged to be in violation of that employer/organization’s personnel policies, including but not limited to policies concerning harassment, discrimination, or other misconduct. 
You agree by signing below that Gilead has made no other promises other than what is outlined in this letter. It contains the entire offer Gilead is making to you. In case of any conflict between this letter and the terms of any other letter or agreement, this letter will be controlling. Our agreement can only be modified by written agreement signed by you and Gilead’s representative. You also agree that should you accept a position at Gilead, the employment relationship is based on the mutual consent of the employee and Gilead. Accordingly, either you or Gilead can terminate the employment relationship at will, at any time, with or without cause or advance notice. You should also note that Gilead may modify wages and benefits from time to time at its discretion.
This offer of employment is effective for 10 days from the date of this letter. The offer is also contingent upon successful background and reference checks and Gilead’s review. If all of the foregoing is satisfactory, please sign and date within 10 days.

I am excited to have you join the Gilead Leadership Team as the new leader of Gilead’s commercial organization and look forward to working with you on the organization’s short and long-term success.

Sincerely,

Daniel O’Day
CEO and Chairman

Foregoing terms and conditions hereby accepted:
Signature:    /s/ Johanna Mercier                          
Name:      Johanna Mercier                                    
Date:       May 23rd 2019                                          

ATTACHMENT A
A Non-Compete/Non-Solicitation Agreement and General Release, dated Oct. 2, 2017, between Bristol-Myers Squibb Company (the “Current Employer”) and Johanna Mercier 
Equity award and other compensation agreements with the Current Employer which purport to impose noncompetition, nonsolicitation and/or nondisparagement obligations on Mercier for up to 12 months following termination of employment.Exhibit

Exhibit 10.27

GILEAD SCIENCES, INC.
GLOBAL STOCK OPTION AGREEMENT
RECITALS
A.    This Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company’s grant of an option to Optionee.
B.    All capitalized terms used but not otherwise defined in this Agreement shall have the meaning assigned to them in the attached Appendix.
NOW, THEREFORE, the Company hereby grants an option to Optionee upon the following terms and conditions: 
1.Grant of Option.  The Company hereby grants to Optionee an option to purchase shares of Common Stock under the Plan.  The Grant Date, the Option Shares, the Exercise Price, the Vesting Schedule and the Expiration Date are indicated on attached Schedule I to this Agreement. The option is a non-statutory option under the U.S. federal income tax laws. The remaining terms and conditions governing this option shall be as set forth in this Agreement.
2.    Option Term.  The term of this option shall commence on the Grant Date and continue to be in effect until the close of business on the last business day prior to the Expiration Date specified in attached Schedule I, unless sooner terminated in accordance with Paragraph 5 or 6 below.
3.    Transferability.  This option shall be neither transferable nor assignable by Optionee other than by will or the laws of inheritance following Optionee’s death and may be exercised, during Optionee’s lifetime, only by Optionee.  
4.    Dates of Exercise.  This option shall vest and become exercisable for the Option Shares in a series of installments in accordance with the Vesting Schedule set forth in attached Schedule I or as otherwise provided in Paragraph 5.  As the option vests and becomes exercisable for such installments, those installments shall accumulate, and the option shall remain exercisable for the accumulated installments until the last business day prior to the Expiration Date or any sooner termination of the option term under Paragraph 5 or 6 below.
5.    Cessation of Service.  The option term specified in Paragraph 2 above shall terminate (and this option shall cease to be outstanding) prior to the Expiration Date should any of the following provisions become applicable:
(a)    Except as otherwise expressly provided in subparagraphs (b) through (f) of this Paragraph 5, should Optionee cease to remain in Continuous Service for any reason while this option is outstanding, then Optionee shall have until the close of business on the last business day prior to the expiration of the earlier of (i) the expiration of the three (3)-month period measured from the date of such cessation of Continuous Service, or (ii) the Expiration Date, during which to exercise this option for any or all of the Option Shares for which this option is vested and exercisable 

 

at the time of Optionee’s cessation of Continuous Service.  Upon the expiration of such limited exercise period, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.
(b)    In the event Optionee ceases Continuous Service by reason of his or her death while this option is outstanding, then any unvested portion of this option shall immediately vest in full as of the date of Optionee’s death, subject to the execution and non-revocation by the personal representative of Optionee’s estate of a general release of claims against the Company in the form provided by the Company and within the timeframes specified therein.  Thereafter, this option may be exercised, for any or all of the Option Shares subject thereto, by (i) the personal representative of Optionee’s estate or (ii) the person or persons to whom the option is transferred pursuant to Optionee’s will or the laws of inheritance following Optionee’s death.  Any such right to exercise this option shall lapse, and this option shall cease to be outstanding, upon the close of business on the last business day prior to the earlier of (A) the expiration of the twelve (12)-month period measured from the date of Optionee’s death or (B) the Expiration Date.  Upon the expiration of such limited exercise period, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.
(c)    Should Optionee cease Continuous Service by reason of Disability while this option is outstanding, then any unvested portion of this option shall immediately vest in full as of the date of Optionee’s cessation of Continuous Service, subject to the execution and non-revocation by Optionee (or his personal representative) of a general release of claims against the Company in the form provided by the Company and within the timeframes specified therein.  Thereafter, Optionee shall have until the close of business on the last business day prior to the earlier of (i) expiration of the twelve (12)-month period measured from the date of such cessation of Continuous Service, or (ii) the Expiration Date,  during which to exercise this option for any or all of the Option Shares subject thereto.  Upon the expiration of such limited exercise period, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.
(d)    Should Optionee’s Continuous Service be terminated by the Company without Cause or should Optionee resign for Good Reason, then any unvested portion of this option shall immediately vest in full as of the date of Optionee’s cessation of Continuous Service, subject to the execution and non-revocation by Optionee of a general release of claims against the Company in the form provided by the Company and within the timeframes specified therein.  Thereafter, Optionee shall have until the close of business on the last business day prior to the expiration of the earlier of (i) the expiration of the three (3)-month period measured from the date of such cessation of Continuous Service, or (ii) the Expiration Date, during which to exercise this option for any or all of the Option Shares subject thereto; provided, however, that should (i) Optionee cease Continuous Service after completion of at least three (3) years of Continuous Service and (ii) the sum of Optionee’s attained age and completed years of Continuous Service at the time of such cessation of service equals or exceeds seventy (70) years, then Optionee shall have until the close of business on the last business day prior to the earlier of: (A) expiration of the sixty (60)-month period measured from the date of such cessation of Continuous Service, or (B) the Expiration Date, during which to exercise this option for any or all of the Option Shares subject thereto. 

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Notwithstanding the foregoing, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Optionee’s jurisdiction that would likely result in the favorable treatment applicable to the option pursuant to this subparagraph (d) being deemed unlawful and/or discriminatory, then the Company will not apply the favorable treatment at the time of Optionee’s cessation of Continuous Service, and the option will be treated as set forth in the other subparagraphs of this Paragraph 5, as applicable. 
(e)    The applicable period of post-service exercisability in effect pursuant to the foregoing provisions of this Paragraph 5 shall automatically be extended by an additional period of time equal in duration to any interval within such post-service exercise period during which the exercise of this option or the immediate sale of the Option Shares acquired under this option cannot be effected in compliance with applicable federal, state and foreign securities laws, but in no event shall such an extension result in the continuation of this option beyond the close of business on the last business day prior to the Expiration Date.
(f)    Should Optionee’s Continuous Service be terminated for Cause (or for a reason that is comparable to termination for Cause under employment laws in the jurisdiction where Optionee is employed or the terms of Optionee’s employment agreement, if any), or should Optionee engage in any other conduct, while in Continuous Service or following cessation of Continuous Service, that is materially detrimental to the business or affairs of the Company (or any Related Entity), as determined in the sole discretion of the Administrator, then this option, whether or not vested and exercisable at the time, shall terminate immediately and cease to be outstanding.
(g)    During the limited period of post-service exercisability provided under this Paragraph 5, this option may not be exercised in the aggregate for more than the number of Option Shares for which this option is at the time vested and exercisable (after giving effect to any accelerated vesting pursuant hereto).  Except to the extent (if any) specifically authorized by the Administrator pursuant to an express written agreement with Optionee, this option shall not vest or become exercisable for any additional Option Shares, whether pursuant to the normal Vesting Schedule set forth in attached Schedule I or the special vesting acceleration provisions of this Paragraph 5 or Paragraph 6 below, following Optionee’s cessation of Continuous Service.  Upon the expiration of such limited exercise period or (if earlier) upon the close of business on the last business day prior to the Expiration Date, this option shall terminate and cease to be outstanding for any exercisable Option Shares for which the option has not otherwise been exercised.
6.    Special Acceleration of Option.
(a)    This option, to the extent outstanding at the time of an actual Change in Control but not otherwise fully exercisable, shall automatically accelerate so that this option shall, immediately prior to the effective date of such Change in Control, become exercisable for all of the Option Shares at the time subject to this option and may be exercised for any or all of those Option Shares as fully vested shares of Common Stock.  However, this option shall not become exercisable on such an accelerated basis if and to the extent: (i) this option is to be assumed by the successor corporation (or parent thereof) or is otherwise to continue in full force and effect pursuant to the terms of the Change in Control transaction, (ii) this option is to be replaced with an economically-equivalent substitute equity award or (iii) this option is to be replaced with a cash retention program 

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of the successor corporation which preserves the spread existing at the time of the Change in Control on any Option Shares for which this option is not otherwise at that time vested and exercisable (the excess of the Fair Market Value of those Option Shares over the aggregate Exercise Price payable for such shares) and provides for the subsequent vesting and concurrent payout of that spread in accordance with the same Vesting Schedule for those Option Shares as set forth in attached Schedule I or Paragraph 5 above.  Notwithstanding the foregoing, no such cash retention program shall be established for this option (or any other option granted to Optionee under the Plan) to the extent such program would otherwise be deemed to constitute a deferred compensation arrangement subject to the requirements of Code Section 409A and the Treasury Regulations thereunder.
(b)     Immediately following the consummation of the Change in Control, this option shall terminate and cease to be outstanding, except to the extent assumed by the successor corporation (or parent thereof) or otherwise continued in effect pursuant to the terms of the Change in Control transaction.
(c)    If this option is assumed in connection with a Change in Control or otherwise continued in effect, then this option shall be appropriately adjusted, immediately after such Change in Control, to apply to the number and class of securities into which the shares of Common Stock subject to this option would have been converted in consummation of such Change in Control had those shares actually been outstanding at the time. Appropriate adjustments shall also be made to the Exercise Price, provided the aggregate Exercise Price shall remain the same.  To the extent the actual holders of the Company’s outstanding Common Stock receive cash consideration for their Common Stock in consummation of the Change in Control, the successor corporation may, in connection with the assumption or continuation of this option but subject to the Administrator’s approval, substitute one or more shares of its own common stock with a fair market value equivalent to the cash consideration paid per share of Common Stock in such Change in Control, provided such common stock is readily tradable on an established U.S. securities exchange or market. 
(d)    If this option is assumed or otherwise continued in effect in connection with a Change in Control or replaced with an economically-equivalent equity award or a cash retention program in accordance with Paragraph 6(a) above, then:
(i)    the option (or such economically equivalent award) shall vest and become immediately exercisable for all of the Option Shares or other securities at the time subject to the option (or such award) and may, within the applicable exercise period under Paragraph 5, be exercised for any or all of those Option Shares or other securities as fully vested shares or securities, or
(ii)    the balance credited to Optionee under any cash retention program established in accordance with Paragraph 6(a) shall immediately be paid to Optionee in a lump sum, subject to the Company’s collection of all applicable Withholding Taxes; 
if, within 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 

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termination of that definitive agreement without the consummation of such Change in Control or (ii) the expiration of the Applicable Acceleration Period following the consummation of such Change in Control, Optionee’s Continuous Service is terminated by the Company without Cause, by Optionee for Good Reason, or by reason of Optionee’s death or Disability. 
(e)    This Agreement shall not in any way affect the right of the Company 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.
7.    Adjustment in Option 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, or other change affecting the outstanding Common Stock as a class without the Company’s receipt of consideration, or should the value of 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 and proportional adjustments shall be made by the Administrator to (i) the total number and/or class of securities subject to this option and (ii) the Exercise Price. The adjustments shall be made in such manner as the Administrator deems appropriate in order to reflect such change and thereby prevent the dilution or enlargement of benefits hereunder, and those adjustments shall be final, binding and conclusive upon Optionee and any other person or persons having an interest in the option. In the event of any Change in Control transaction, the adjustment provisions of Paragraph 6(c) above shall be controlling.
8.    Stockholder Rights.  The holder of this option shall not have any stockholder rights including voting, dividend or liquidation rights, with respect to the Option Shares until such person shall have exercised the option, paid the Exercise Price and become a holder of record of the purchased shares.
9.    Manner of Exercising Option.
(a)    In order to exercise this option with respect to all or any part of the Option Shares for which this option is at the time exercisable, Optionee (or any other person or persons exercising the option) must take the following actions:
(i)    Execute and deliver to the Company a Notice of Exercise as to the Option Shares for which the option is exercised or comply with such other procedures as the Company may establish for notifying the Company, either directly or through an on-line internet transaction with a brokerage firm authorized by the Company to effect such option exercises, of the exercise of this option for one or more Option Shares.
(ii)    Pay the aggregate Exercise Price for the purchased shares in one or more of the following forms:
(A)    cash or check made payable to the Company; or

5

 

(B)    through a special sale and remittance procedure pursuant to which Optionee (or any other person or persons exercising the option) shall concurrently provide irrevocable instructions (i) to a brokerage firm (reasonably satisfactory to the Company for purposes of administering such procedure in accordance with the Company’s pre-clearance/pre-notification policies) to effect the immediate sale of all or a sufficient portion of the purchased shares so that such brokerage firm can remit to the Company, on the settlement date, sufficient funds out of the resulting sale proceeds to cover the aggregate Exercise Price payable for all the purchased shares plus all applicable Withholding Taxes and (ii) to the Company to deliver the purchased shares directly to such brokerage firm on such settlement date.
Except to the extent the sale and remittance procedure is utilized in connection with the option exercise, payment of the Exercise Price must accompany the Notice of Exercise (or other notification procedure) delivered to the Company in connection with the option exercise.
(iii)    Furnish to the Company appropriate documentation that the person or persons exercising the option (if other than Optionee) have the right to exercise this option.
(iv)    Make appropriate arrangements with the Company (or the Employer) for the satisfaction of all applicable Withholding Taxes. 
(b)    As soon as practical after the Exercise Date, the Company shall issue to or on behalf of Optionee (or any other person or persons exercising this option) the purchased Option Shares, subject to appropriate restrictions, if any.
(c)    In no event may this option be exercised for any fractional shares.
10.    Responsibility for Taxes.  
(a)    Optionee acknowledges that, regardless of any action the Company and/or the Employer take with respect to any or all Withholding Taxes, the ultimate liability for all Withholding Taxes is and remains Optionee’s responsibility and may exceed the amount actually withheld by the Company or the Employer.  Optionee further acknowledges that the Company and/or the Employer (i) make no representations or undertakings regarding the treatment of any Withholding Taxes in connection with any aspect of the option, including the grant, vesting or exercise of the options, the subsequent sale of any shares of Common Stock acquired at exercise and the receipt of any dividends; and (ii) do not commit to, and are under no obligation to, structure the terms of the grant or any aspect of the option to reduce or eliminate Optionee’s liability for Withholding Taxes or achieve any particular tax result.  Further, if Optionee is subject to Withholding Taxes in more than one jurisdiction, Optionee acknowledges that the Company and/or the Employer (or former employer, as applicable) may be required to withhold or account for Withholding Taxes in more than one jurisdiction.  

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(b)    Prior to the relevant taxable event, Optionee agrees to make arrangements satisfactory to the Company and/or the Employer to satisfy all Withholding Taxes.  In this regard, Optionee authorizes the Company and/or the Employer, or their respective agents, at their discretion, to satisfy the obligations with regard to all Withholding Taxes by one or a combination of the following: 
(i)    withholding from any wages or other cash compensation paid to Optionee by the Company and/or the Employer; or
(ii)    withholding from the proceeds of the sale of shares of Common Stock acquired upon exercise of the option.  
Depending on the withholding method, the Company may withhold or account for Withholding Taxes by considering applicable minimum statutory withholding amounts or other applicable withholding rates, including maximum applicable rates, in which case Optionee will receive a refund of any over-withheld amount in cash and will have no entitlement to the Common Stock equivalent. Optionee shall pay to the Company and/or the Employer any amount of Withholding Taxes that the Company and/or the Employer may be required to withhold as a result of Optionee’s participation in the Plan that cannot be satisfied by the means previously described.  The Company may refuse to deliver any purchased Option Shares or the proceeds of the sale of shares if Optionee fails to comply with Optionee’s obligations in connection with the Withholding Taxes.  
11.    Compliance with Laws and Regulations.
(a)    The exercise of this option and the issuance of the Option Shares upon such exercise shall be subject to compliance by the Company and Optionee with all Applicable Laws relating thereto, as determined by counsel for the Company.
(b)    The inability of the Company to obtain approval from any regulatory body having authority deemed by the Company to be necessary to the lawful issuance and sale of any Common Stock pursuant to this option shall relieve the Company of any liability with respect to the non-issuance or sale of the Common Stock as to which such approval shall not have been obtained.  The Company, however, shall use its reasonable best efforts to obtain all such approvals.
12.    Insider Trading Restrictions/Market Abuse Laws.  Optionee acknowledges that, depending on Optionee’s country, Optionee may be subject to insider trading restrictions and/or market abuse laws, which may affect Optionee’s ability to acquire or sell shares of Common Stock or rights to shares of Common Stock (e.g., options) under the Plan during such times as Optionee is considered to have “inside information” regarding the Company (as defined by the laws in Optionee’s country).  Any restrictions under these laws or regulations are separate from and in addition to any restrictions that may be imposed under any applicable insider trading policy of the Company.  Optionee acknowledges that it is Optionee’s responsibility to comply with any applicable restrictions, and Optionee should speak to his or her personal advisor on this matter.

7

 

13.    Successors and Assigns.  Except to the extent otherwise provided in Paragraphs 3 and 6 above, the provisions of this Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns and Optionee, Optionee’s assigns, the legal representatives, heirs and legatees of Optionee’s estate.
14.    Notices.  Any notice required to be given or delivered to the Company under the terms of this Agreement shall be in writing and addressed to the Company at its principal corporate offices.  Any notice required to be given or delivered to Optionee shall be in writing and addressed to Optionee at the most current address then indicated for Optionee on the Company’s employee records or shall be delivered electronically to Optionee through the Company’s electronic mail system or through an on-line brokerage firm authorized by the Company to effect option exercises through the internet.  All notices shall be deemed effective upon personal delivery or delivery through the Company’s electronic mail system or upon deposit in the U.S. or local country mail, postage prepaid and properly addressed to the party to be notified.
15.    Construction.  This Agreement and the option 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 this option.
16.    Governing Law and Venue.  
(a)    The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to Delaware’s conflict-of-laws rules.
(b)    For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this option and this Agreement, the parties hereby submit to and consent to the exclusive jurisdiction of the State of California and agree that such litigation shall be conducted only in the courts of San Mateo County, California, or the federal courts for the Northern District of California, and no other courts where the grant of this option is made and/or to be performed. 
17.    Severability.  The provisions of this Agreement are severable and if any one or more provisions are determined to be illegal or otherwise unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.
18.    Waiver.  Optionee acknowledges that a waiver by the Company of breach of any provision of this Agreement shall not operate or be construed as a waiver of any other provision of this Agreement, or of any subsequent breach by Optionee or other Optionees.
19.    Excess Shares.  If the Option Shares covered by this Agreement exceed, as of the Grant Date, the number of shares of Common Stock which may without stockholder approval be issued under the Plan, then this option shall be void with respect to those excess shares, unless 

8

 

stockholder approval of an amendment sufficiently increasing the number of shares of Common Stock issuable under the Plan is obtained in accordance with the provisions of the Plan.  In no event shall the option be exercisable with respect to any of the excess Option Shares unless and until such stockholder approval is obtained. 
20.    Leaves of Absence.  The following provisions shall govern leaves of absence, except to the extent the application of such provisions to Optionee would contravene employment laws in the jurisdiction where Optionee is employed or the terms of Optionee’s employment agreement, if any.
(a)    For purposes of this Agreement, Optionee’s Continuous Service shall not be deemed to cease during any period for which Optionee is on a military leave, sick leave or other personal leave approved by the Company.  However, Optionee shall not receive any Continuous Service credit, for purposes of vesting in this option and the Option Shares pursuant to the Vesting Schedule set forth in attached Schedule I, for any period of such leave of absence, except to the extent otherwise required by employment laws in the jurisdiction where Optionee is employed or the terms of Optionee’s employment agreement, if any or pursuant to the following policy:
-    Optionee shall receive Continuous Service credit for such vesting purposes for (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), but in no event beyond the expiration date of such leave of absence.
(b)    In no event shall Optionee be deemed to remain in Continuous Service at any time after the earlier of (i) the expiration date of his or her leave of absence, unless Optionee returns to active Continuous Service on or before that date, or (ii) the date Optionee’s Continuous Service actually terminates by reason of his or her voluntary or involuntary termination or by reason of his or her death or Disability.
21.    Acknowledgment of Nature of Plan and Option.  In accepting the option, Optionee acknowledges, understands and agrees that:
(a)the Plan is established voluntarily by the Company, it is discretionary in nature, and it may be modified, amended, suspended or terminated by the Company at any time, to the extent permitted by the Plan;
(b)the option is voluntary and occasional and does not create any contractual or other right to receive future grants of options, or benefits in lieu of options, even if options have been granted in the past;
(c)all decisions with respect to future options, if any, will be at the sole discretion of the Company;
(d)the option grant and Optionee’s participation in the Plan shall not create a right to employment or be interpreted as forming an employment or service contract with the 

9

 

Company, the Employer or any Related Entity and shall not interfere with the ability of the Company, the Employer or any Related Entity, as applicable, to terminate Optionee’s employment or service relationship (if any);
(e)Optionee’s participation in the Plan is voluntary;
(f)the option and the Option Shares, and the income and value of same, are not intended to replace any pension rights or compensation;
(g)the option and the Option Shares, and the income and value of same, are not part of normal or expected compensation for purposes of calculating any severance, resignation, termination, redundancy, dismissal, end of service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments;
(h)the future value of the Option Shares is unknown, indeterminable and cannot be predicted with any certainty; 
(i)if the Option Shares do not increase in value, the option will have no value;
(j)if Optionee exercises his or her option and obtains the Option Shares, the value of those Option Shares acquired upon exercise may increase or decrease in value, even below the Exercise Price;
(k)no claim or entitlement to compensation or damages shall arise from forfeiture of the option resulting from termination of Optionee’s Continuous Service by the Employer or the Company (or any Related Entity) (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Optionee is employed or the terms of Optionee’s employment agreement, if any), and in consideration of the Award to which Optionee is not otherwise entitled, Optionee irrevocably agrees never to institute any claim against the Company, the Employer or any Related Entity, waives his or her ability, if any, to bring any such claim and releases the Company, the Employer and any Related Entity from any such claim; if, notwithstanding the foregoing, any such claim is allowed by a court of competent jurisdiction, then, by participating in the Plan, Optionee shall be deemed irrevocably to have agreed not to pursue such claim and agrees to execute any and all documents necessary to request dismissal or withdrawal of such claim;
(l)unless otherwise agreed with the Company in writing, the option and the Option Shares, and the income and value of same, are not granted as consideration for, or in connection with, any service Optionee may provide as a director of the Company or a Related Entity;
(m)unless otherwise provided in the Plan or by the Company in its discretion, the option and the benefits evidenced by this Agreement do not create any entitlement to have the option or any such benefits transferred to, or assumed by, another company nor to be exchanged, cashed out or substituted for, in connection with any corporate transaction affecting the Option Shares; and

10

 

(n)the following provisions apply only if Optionee is providing services outside the United States:
(i)    the option and the Option Shares, and the income and value of same, are not part of normal or expected compensation or salary for any purpose;
(ii)    Optionee acknowledges and agrees that neither the Company, the Employer nor any Related Entity shall be liable for any foreign exchange rate fluctuation between Optionee’s local currency and the United States Dollar that may affect the value of the option or of any amounts due to Optionee pursuant to the exercise of the option or the subsequent sale of any Option Shares acquired upon exercise.
22.    No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Optionee’s participation in the Plan or Optionee’s acquisition or sale of the Option Shares.  Optionee is hereby advised to consult with his or her personal tax, legal and financial advisors regarding his or her participation in the Plan before taking any action related to the Plan.
23.    Data Privacy.  
(a)    Optionee hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Optionee’s personal data as described in this Agreement and any other option grant materials by and among, as applicable, the Employer, the Company and any Related Entity for the exclusive purpose of implementing, administering and managing Optionee’s participation in the Plan.
(b)    Optionee understands that the Company and the Employer may hold certain personal information about Optionee, including, but not limited to, Optionee’s name, home address and telephone number, email address, date of birth, social insurance number, passport number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all options or any other entitlement to shares of stock awarded, cancelled, exercised, vested, unvested or outstanding in Optionee’s favor, for the exclusive purpose of implementing, administering and managing the Plan (“Data”).  
(c)    Optionee understands that Data will be transferred to E*TRADE Financial Services, Inc. or such other stock plan service provider as may be selected by the Company in the future, which is assisting the Company with the implementation, administration and management of the Plan. Optionee understands that the recipients of the Data may be located in the United States, or elsewhere, and that the recipients’ country (e.g., the United States) may have different data privacy laws and protections than Optionee’s country.  Optionee understands that if Optionee resides outside the United States, Optionee may request a list with the names and addresses of any potential recipients of the Data by contacting Optionee’s local human resources representative.  Optionee authorizes the Company, E*TRADE Financial Services, Inc. and any other possible recipients which may assist the Company (presently or in the future) with 

11

 

implementing, administering and managing the Plan to receive, possess, use, retain and transfer the Data, in electronic or other form, for the sole purpose of implementing, administering and managing Optionee’s participation in the Plan.  Optionee understands that Data will be held only as long as is necessary to implement, administer and manage Optionee’s participation in the Plan.  Optionee understands that if Optionee resides outside the United States, Optionee may, at any time, view Data, request additional information about the storage and processing of Data, require any necessary amendments to Data or refuse or withdraw the consents herein, in any case without cost, by contacting in writing Optionee’s local human resources representative.  Further, Optionee understands that Optionee is providing the consents herein on a purely voluntary basis.  If Optionee does not consent, or if Optionee later revokes his or her consent, Optionee’s employment status or service with the Employer will not be affected; the only consequence of refusing or withdrawing Optionee’s consent is that the Company would not be able to grant Optionee options or other equity awards or administer or maintain such awards.  Therefore, Optionee understands that refusing or withdrawing Optionee’s consent may affect Optionee’s ability to participate in the Plan.  
24.    Plan Prospectus.  The official prospectus for the Plan is available on the Company’s intranet at: GNet > Employee Resources > Stock Awards > Plan Documents.   Optionee may also obtain a printed copy of the prospectus by contacting Stock Plan Services at stockplanservices@gilead.com.
25.    Language.  If Optionee has received this Agreement or any other document related to the Plan translated into a language other than English and if the meaning of the translated version is different than the English version, the English version will control.  
26.    Electronic Delivery and Acceptance.  The Company may, in its sole discretion, decide to deliver any documents related to current or future participation in the Plan by electronic means.  Optionee hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through the electronic acceptance procedure established and maintained by the Company or a third party designated by the Company.
27.    Optionee Acceptance.  Optionee must accept the terms and conditions of this Agreement either electronically through the electronic acceptance procedure established by the Company or through a written acceptance delivered to the Company in a form satisfactory to the Company.  In no event shall this option be exercised in the absence of such acceptance.  An exercise of any portion of the shares subject to this Option shall be deemed to be an acceptance by Optionee of the terms and conditions of this Agreement.
28.    Foreign Account / Assets Reporting.  Depending upon the country to which laws Optionee is subject, Optionee may have certain foreign asset and/or account reporting requirements that may affect Optionee’s ability to acquire or hold shares of Common Stock under the Plan or cash received from participating in the Plan (including from any dividends or sale proceeds arising from the sale of shares of Common Stock) in a brokerage or bank account outside Optionee’s country of residence.  Optionee’s country may require that he or she report such accounts, assets or transactions to the applicable authorities in Optionee’s country.  Optionee is responsible 

12

 

for knowledge of and compliance with any such regulations and should speak with his or her own personal tax, legal and financial advisors regarding same.  
29.    Addendum. Notwithstanding any provision herein, Optionee’s participation in the Plan shall be subject to any additional terms and conditions as set forth in the Addendum for Optionee’s country of residence, if any.  Moreover, if Optionee relocates to one of the countries included in the Addendum, the special terms and conditions for such country will apply to Optionee, to the extent the Company determines that the application of such terms and conditions is necessary for legal or administrative reasons.  The Addendum constitutes part of this Agreement.
30.    Imposition of Other Requirements.  The Company reserves the right to impose other requirements on Optionee’s participation in the Plan, on the option and on any shares of Common Stock acquired under the Plan, to the extent the Company determines it is necessary or advisable for legal or administrative reasons, and to require Optionee to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.

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IN WITNESS WHEREOF, the Company 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:
	Kathryn Watson

	Title:
	EVP, Human Resources

    

PARTICIPANT:  ______________________________
By:        Daniel O’Day       
    
Date:                ______________________________
 

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APPENDIX
The following definitions shall be in effect under the Agreement:
A.    Addendum shall mean the addendum to this Agreement setting forth special terms and conditions for Optionee’s country.
B.    Administrator shall mean the Compensation Committee of the Board (or a subcommittee thereof) acting in its capacity as administrator of the Plan.
C.    Agreement shall mean this Global Stock Option Agreement.
D.    Applicable Acceleration Period shall have the meaning assigned to such term in Section 2(b) of the Plan and shall be determined on the basis of Optionee’s status on the Change in Control date.
E.    Applicable Laws shall mean the legal requirements related to the Plan and the option 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 options granted to residents therein.
F.    Board shall mean the Company’s Board of Directors.
G.    Cause shall have the meaning given to the term “Cause” in that certain letter agreement entered into between the Company and Optionee dated November 30, 2018.
H.    Change in Control shall mean a change in ownership or control of the Company effected through the consummation of any of the following transactions:
(i)    a sale, transfer or other disposition of all or substantially all of the Company’s assets;
(ii)    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 Company 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 Company) 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 Company’s outstanding securities (as measured in terms of the power 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 Company or the acquisition of outstanding securities held by one or more of the Company’s existing stockholders 

A-1

 

or an acquisition, consolidation or other reorganization to which the Company is a party; or
(iii)    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) above 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 Company’s incorporation or to create a holding company structure pursuant to which the Company 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 Company’s outstanding voting securities immediately prior to the formation of such entity.
I.    Code shall mean the U.S. Internal Revenue Code of 1986, as amended.
J.    Common Stock shall mean shares of the Company’s common stock.
K.    Company 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. 
L.    Consultant shall mean any person, including an advisor, who is compensated by the Company 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.
M.    Continuous Service shall mean the performance of services for the Company 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, Optionee shall be deemed to cease Continuous Service immediately upon the occurrence of either of the following events: (i) Optionee no longer performs services in any of the foregoing capacities for the Company or any Related Entity or (ii) the entity for which Optionee is performing such services ceases to remain a Related Entity of the Company, even though Optionee may subsequently continue to perform services for that entity.  Subject to the foregoing, the Administrator shall have the exclusive discretion to determine when Optionee ceases Continuous Service for purposes of the option. 
N.    Director shall mean a member of the Board.

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O.    Disability shall have the meaning given to the term “Disability” in that certain letter agreement entered into between the Company and Optionee dated November 30, 2018.
P.    Employee shall mean an individual who is in the employ of the Company (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.
Q.    Employer shall mean the Company or the Related Entity employing or retaining Optionee.  
R.    Exercise Date shall mean the date on which the option shall have been exercised in accordance with Paragraph 9 of the Agreement.
S.    Exercise Price shall mean the exercise price payable per Option Share as specified in attached Schedule I.
T.    Expiration Date shall mean the date specified on attached Schedule I for measuring the maximum term for which the option may remain outstanding. 
U.    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.
V.    Good Reason shall have the meaning given to the term “Good Reason” in that certain letter agreement entered into between the Company and Optionee dated November 30, 2018.
W.    Grant Date shall mean the date on which the option is granted, as specified on attached Schedule I. 
X.    1934 Act shall mean the U.S. Securities Exchange Act of 1934, as amended from time to time.
Y.    Non-Statutory Option shall mean an option not intended to satisfy the requirements of Code Section 422.
Z.    Notice of Exercise shall mean the notice of option exercise in the form authorized by the Company.
AA.    Option Shares shall mean the number of shares of Common Stock subject to the option as specified in attached Schedule I.

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BB.    Optionee shall mean the person identified in attached Schedule I to whom the option is granted pursuant to the Agreement.
CC.    Parent shall mean a “parent corporation,” whether now existing or hereafter established, as defined in Section 424(e) of the Code.
DD.    Plan shall mean the Company’s 2004 Equity Incentive Plan, as amended from time to time.
EE.        Related Entity shall mean (i) any Parent or Subsidiary of the Company and (ii) any corporation in an unbroken chain of corporations beginning with the Company and ending with the corporation in the chain for which Optionee provides services as an Employee, Director or Consultant, provided each corporation in such chain owns securities representing at least twenty percent (20%) of the total outstanding voting power of the outstanding securities of another corporation or entity in such chain and there is a legitimate non-tax business purpose for making this option grant to Optionee.  
FF.        Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.
GG.    Subsidiary shall mean a “subsidiary corporation,” whether now existing or hereafter established, as defined in Section 424(f) of the Code.
HH.    Vesting Schedule shall mean the schedule set forth in attached Schedule I, pursuant to which the option is to vest and become exercisable for the Option Shares in a series of installments over Optionee’s period of Continuous Service.
II.        Withholding Taxes shall mean any and all income tax (including U.S.  federal, state, and local tax and/or foreign income taxes) and the employee portion of the federal, state, local and/or foreign employment taxes (including social insurance, payroll tax, payment on account or other tax-related items) required or permitted to be withheld by the Company and/or the Employer in connection with any taxable event attributable to the option or Optionee’s participation in the Plan. 

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SCHEDULE I
OPTION GRANT SPECIFICS

Name of Optionee:   Daniel O’Day    
Grant Date:  March 1, 2019
Total Number of Option Shares: 231,280
Exercise Price:  $66.01
Vesting Schedule:
	
				
	Shares
	Vest Type
	Full Vest Date
	Expiration Date

	57,820
	On Vest Date
	01-MAR-20
	01-MAR-29

	173,460
	Quarterly
	01-MAR-23
	01-MAR-29

The option will vest and become exercisable for the number of Option Shares noted on the first line above on the first anniversary of the Grant Date, as noted by the date listed under “Full Vest Date.”  With respect to each subsequent line, the option will vest and become exercisable for the listed Option Shares in equal quarterly installments, beginning one quarter after the Full Vest Date on the previous line and ending on the corresponding Full Vest Date for the listed Option Shares at issue.  Fractional shares will be rounded down to the nearest whole number.

A-6

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