Document:

EX-10.1

 Exhibit 10.1 

Execution Version 

TRANSITION SERVICES AGREEMENT 

by and between 
 TOPAZ
POWER MANAGEMENT, LP 
 and 

PPL ENERGY SUPPLY, LLC 

dated as of 

May 4, 2015 

 TABLE OF CONTENTS 

ARTICLE I 
 DEFINITIONS AND
CONSTRUCTION 
  

							
	1.1		 Definitions
		 	1	  
	1.2		 Rules of Construction
		 	4	  
	
	 ARTICLE II

SERVICES
  
	   
   

	2.1		 Scope of Business Administration Services
		 	4	  
	2.2		 Performance of Business Administration Services
		 	4	  
	2.3		 Access
		 	5	  
	2.4		 Delegation of Authority
		 	5	  
	2.5		 Status of Provider as a Contractor
		 	5	  
	2.6		 Limitation on Business Administration Services
		 	5	  
	2.7		 Force Majeure
		 	6	  
	
	 ARTICLE III

TERM
  
	   
   

	3.1		 Term
		 	6	  
	3.2		 Extension of Business Administration Services
		 	7	  
	3.3		 Early Termination of Business Administration Services
		 	7	  
	3.4		 Effect of Expiration or Termination
		 	8	  
	
	 ARTICLE IV

FEES; INVOICES
  
	   
   

	4.1		Fees		 	9	  
	4.2		 Prepaid Amount
		 	10	  
	4.3		 Taxes
		 	10	  
	4.4		 Invoices
		 	10	  
	4.5		 Audit Rights
		 	11	  
	4.6		 Disputes
		 	11	  
	
	 ARTICLE V

PERSONNEL
  
	   
   

	5.1		 Removal for Cause
		 	12	  
	5.2		 Restrictions on Hiring
		 	12	  

  
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	5.3		 Employee Costs
		 	12	  
	5.4		 Offers of Employment by Recipient
		 	13	  
	5.5		 Onsite Integration
		 	13	  
	 5.6    
		 Updates to Exhibit C
		 	13	  

 ARTICLE VI 

REPRESENTATIONS AND WARRANTIES 
  

							
	6.1		 Representations and Warranties of Provider
		 	14	  
	 6.2    
		 Representations and Warranties of Recipient
		 	14	  

 ARTICLE VII 

INDEMNIFICATION, LIMITATION OF LIABILITY AND REMEDIES 
  

							
	7.1		 Disclaimer of Warranty
		 	14	  
	 7.2    
		 Indemnification by Provider
		 	15	  
	7.3		 Indemnification by Recipient
		 	15	  
	7.4		 Limitation of Liability
		 	15	  
	7.5		 Exclusive Remedies
		 	15	  
	7.6		 Expiration of Claims
		 	15	  
	7.7		 No Consequential Damages
		 	15	  

 ARTICLE VIII 

MISCELLANEOUS 
  

							
	8.1		 Notices
		 	16	  
	 8.2    
		 Confidentiality
		 	17	  
	8.3		 Books and Records
		 	18	  
	8.4		 Entire Agreement
		 	18	  
	8.5		 Expenses
		 	18	  
	8.6		 Waiver
		 	18	  
	8.7		 Amendment
		 	18	  
	8.8		 No Third Party Beneficiary
		 	18	  
	8.9		 Assignment; Binding Effect
		 	18	  
	8.10		 Invalid Provisions
		 	18	  
	8.11		 Counterparts; Facsimile
		 	19	  
	8.12		 Governing Law; Venue; and Jurisdiction
		 	19	  

  
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 Exhibits 
  

			
		
	Exhibit A		Business Administration Services
		
	Exhibit B		Delegation of Authority
		
	Exhibit C		Specified Persons Providing Business Administration Services
		
	Exhibit D		Employee Costs and Retention Payment

  
 iii 

 TRANSITION SERVICES AGREEMENT 

This Transition Services Agreement (“Agreement”), dated as of May 4, 2015 and (except with respect to
the Specified Provisions) effective as of the Closing (the “Effective Date”), is entered into by and between Topaz Power Management, LP, a Texas limited partnership (“Provider”) and PPL Energy Supply,
LLC, a Delaware limited liability company (“Recipient”).  
 RECITALS 

WHEREAS, subject to the terms and conditions of the Transaction Agreement, as part of the Closing Transactions on the Effective Date,
Raven Power Holdings LLC, Sapphire Power Holdings LLC and C/R Energy Jade, LLC will collectively contribute 100% of the equity interests in RJS Generation Holdings LLC, a Delaware limited liability company (“RJS
HoldCo”), to Talen Energy Corporation (“Talen”), a Delaware corporation; 

WHEREAS, as of the Effective Date, immediately prior to giving effect to the Closing Transactions under the Transaction Agreement, RJS
HoldCo will have owned, directly or indirectly, 100% of the equity interests of the Transferred Companies; and 
 WHEREAS, as
contemplated by Section 8.15 of the Transaction Agreement, Provider is willing to provide certain transition services on an interim basis to the Transferred Companies on the terms and subject to the conditions set forth herein. 

NOW, THEREFORE, in consideration of the premises and the mutual representations, warranties, covenants and agreements in this
Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows: 

ARTICLE I 

DEFINITIONS AND CONSTRUCTION 

1.1 Definitions. The following terms shall have the meanings ascribed to them in this Section 1.1. All capitalized
terms used but not otherwise defined herein shall have the meanings ascribed to such terms in the Transaction Agreement. 

“Active Management or Operation” shall mean, with respect to any facilities owned by any Person other
than the Transferred Companies, the active and ongoing management and/or operation (including the provision of Business Administration Services) of any such facility or its direct or indirect owner(s) by Provider following (a) the commencement
of the provision of management or operation services under an agreement with an unaffiliated third party or (b) the closing of the purchase by an Affiliate of Provider of any facility or any entity that directly or indirectly owns any facility.
 
 “Affected Specified Person” shall have the meaning set forth in Section 3.3(a). 

“Agreement” shall have the meaning set forth in the preamble. 

“Alternate Strategy” shall have the meaning set forth in Section 3.3(b). 

 “Applicable Standard of Care” shall have the meaning set forth in
Section 2.2. 
 “Audit Notice” shall have the meaning set forth in Section 4.5. 

“Benefits” shall have the meaning set forth on Exhibit D. 

“Bonus” shall have the meaning set forth on Exhibit D. 

“Business Administration Services” shall have the meaning set forth in Section 2.1. 

“Business Development Activities” shall mean any activity related to research and analysis of any
facility other than a facility owned, directly or indirectly, by a Transferred Company, including identification of potential targets, pre-bid/offer research and analysis, bid/offer preparation support, due diligence and pre-Closing integration.
 
 “Cause” shall have the meaning set forth in Section 5.1. 

“Confidential Information” shall have the meaning set forth in Section 8.2(a). 

“Default Rate” shall mean ten percent (10%) per annum. 

“Disclosing Party” shall have the meaning set forth in Section 8.2. 

“Effective Date” shall have the meaning set forth in the preamble. 

“Employee Costs” shall have the meaning set forth in Section 4.1(a)(i). 

“Fees” shall have the meaning set forth in Section 4.1(a). 

“Force Majeure Event” shall have the meaning set forth in Section 2.7. 

“Guidelines” shall have the meaning set forth in Section 2.4. 

“Key Employees” shall mean any Specified Person from time to time listed on Schedule 1 hereto, as
the same may be amended in accordance with the terms of this Agreement. 
 “Losses”
shall mean Liabilities, damages, penalties, judgments, awards, assessments, fines, penalties, obligations, deficiencies, amounts paid in settlement, Taxes, losses, costs and expenses (including reasonable attorneys’ fees and expenses) in any
case, whether arising under strict liability or otherwise. For all purposes in this Agreement, the terms “Loss” and “Losses” shall not include any Non-Reimbursable Damages. 

“Non-Reimbursable Damages” shall have the meaning set forth in Section 7.7. 

  
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 “Overhead Costs” shall mean all documented costs and
expenses for overhead of Provider, including office rent, vehicle leases, information technology services, software and software licenses, office communications, insurance, subscriptions and publications, professional dues and training, contractors
and consultants (to the extent engaged by Provider (x) in connection with the provision of the Business Administration Services pending determination of an Alternate Strategy following delivery of a Specified Person Notice in accordance with
Section 3.3 or (y) in accordance with an agreed-upon Alternate Strategy), outside legal services retained or engaged by Provider to support the administration of Provider in connection with the provision of the Business Administration
Services, office equipment, materials and supplies, business permits and other miscellaneous items, in each case consistent with past practice or as expressly contemplated by this Agreement. 

“Parties” means Provider and Recipient. 

“Permitted Purpose” shall have the meaning set forth in Section 8.2(a). 

“Prepaid Fee” shall have the meaning set forth in Section 4.2. 

“Provider” shall have the meaning set forth in the preamble. 

“Receiving Party” shall have the meaning set forth in Section 8.2(a). 

“Recipient” shall have the meaning set forth in the preamble. 

“Retention Payments” shall have the meaning set forth on Exhibit D. 

“Separation Agreement” shall mean that certain Separation Agreement, dated June 9, 2014, by and
between PPL Corporation, Talen Energy Holdings, Inc., Talen Energy Corporation, PPL Energy Supply, LLC, Raven Power Holdings LLC, C/R Energy Jade, LLC and Sapphire Power Holdings LLC. 

“Specified Person” means each employee of Provider from time to time identified on Exhibit C hereto. 

“Specified Person Notice” shall have the meaning set forth in Section 3.3(a). 

“Specified Provisions” means, collectively, Sections 3.1, 3.3, 3.4 (last sentence only),
5.4, 5.6, Article VIII (other than Section 8.3), the relevant definitions relating to the foregoing set forth in this Section 1.1, and Section 1.2  

“Supervising Representative” shall have the meaning set forth in Section 5.5. 

“Support Employee” shall mean any Specified Person who provides support services to Provider or its
Affiliates (thereby allowing Recipient to provide the Business Administration Services hereunder) and identified on Schedule 2 hereto, as the same may be amended in accordance with the terms of this Agreement. 

  
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 “Talen” shall have the meaning set forth in the Recitals. 

“Term” shall have the meaning set forth in Section 3.1. 

“Transaction Agreement” shall mean that certain Transaction Agreement, dated June 9, 2014, by and
between PPL Corporation, Talen Energy Holdings, Inc., Talen Energy Corporation, PPL Energy Supply, LLC, Talen Energy Merger Sub, Inc., C/R Energy Jade, LLC, Sapphire Power Holdings LLC and Raven Power Holdings LLC. 

“Transferred Companies” shall mean, collectively, the RJS Subsidiaries that become Subsidiaries of Talen
as of the Closing; provided that any Transferred Company for which all of the direct or indirect equity interests are sold by Talen to an unaffiliated third party after the Effective Date shall cease to be a Transferred Company as of the time
of such sale. 
 “Transition Services Period” shall mean, with respect to any Specified
Person, the period set forth next to such Specified Person’s name under the heading “Transition Services Period” on Exhibit C, as amended from time to time pursuant to this Agreement. 

“Willful Misconduct” shall mean a dereliction of duty or unlawful behavior committed voluntarily and intentionally.

 1.2 Rules of Construction. The rules of construction set forth in Section 11.11 of the Transaction Agreement
are incorporated herein. 
 ARTICLE II 

SERVICES 
 2.1 Scope
of Business Administration Services. Provider will furnish to the Transferred Companies the services described in Exhibit A (the “Business Administration Services”) for the applicable term set forth next to
such Business Administration Service on Exhibit A, in each case as Exhibit A may be modified from time to time in accordance with the terms of this Agreement, including without limitation Section 3.3 below, and in
accordance with the Applicable Standard of Care, unless this Agreement is earlier terminated in accordance with its terms. Notwithstanding anything herein to the contrary, neither Provider nor any of its Affiliates shall be required to provide any
services to any Transferred Company other than the Business Administration Services. For the avoidance of doubt, Provider will not be required to furnish any Business Administration Services to any entity following the time that such entity ceases
to be a Transferred Company; provided, however, that Provider will use commercially reasonable efforts to furnish Business Administration Services to Recipient with respect to any such entity for a reasonable period of time following the date
that it ceases to be a Transferred Company, but solely to the extent such Business Administration Services relate to periods or activities prior to such entity ceasing to be a Transferred Company. 

2.2 Performance of Business Administration Services. Subject to the other terms of this Agreement, Provider covenants and agrees
that it shall, and shall cause the Specified Persons then employed or engaged by Provider to, perform the Business Administration Services in a manner (including quality) in all material respects substantially consistent with, and in no event more
extensive in type and scope than, the provision of similar or comparable services provided 

  
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by Provider to the Transferred Companies immediately prior to the date of the Transaction Agreement, taking into account any reduction in staffing levels at Provider during the Term in accordance
with or as contemplated by this Agreement (such standard of service, the “Applicable Standard of Care”). 

2.3 Access. Recipient agrees to, and to cause the Transferred Companies and their respective Affiliates to, (a) cooperate
with Provider, its Affiliates and their respective Representatives to facilitate the provision of the Business Administration Services and (b) provide Provider, its Affiliates and their respective Representatives in a timely manner with access
to the facilities, personnel, assets, systems, technologies and information, including data and technical information, of Recipient, the Transferred Companies and their respective Affiliates to the extent required or reasonably requested by Provider
for the provision of the Business Administration Services. To the extent any delay or failure of Recipient to comply with this Section 2.3 impairs or limits the ability of Provider to provide any of the Business Administration Services
in a commercially reasonable manner, Provider’s obligation to provide such Business Administration Services shall be delayed until Recipient permits such access. 

2.4 Delegation of Authority. During the Term and in connection with the Business Administration Services, Provider is hereby
authorized by Recipient to act for and on behalf of the Transferred Companies, in accordance with and subject to the delegation of authority guidelines set forth on Exhibit B (the “Guidelines”). To the extent Provider
is unable to provide any of the Business Administration Services in a commercially reasonable manner due to a failure of Recipient to approve any action as contemplated by the Guidelines, Provider’s obligation to provide such Business
Administration Services shall be delayed until Recipient provides such approval. Such Guidelines may be amended, supplemented, modified or revoked by Recipient at any time during the Term; provided, however, that any such amendment,
supplement, modification or revocation that could reasonably be expected to materially impede, hinder or restrict Provider’s ability to provide the Business Administration Services in a commercially reasonable manner, other than any such
amendments, supplements, modifications or revocations as are required by applicable Law or to comply with safety policies of Recipient, shall require the prior written consent of Provider, which consent shall not be unreasonably withheld,
conditioned or delayed. Recipient will provide Provider with prior written notice, in accordance with Section 8.1, of any proposed amendment, supplement, modification or revocation of the Guidelines, which shall become effective (and
Exhibit B deemed automatically amended) upon the date that is five (5) Business Days following the date that such written notice is deemed delivered pursuant to Section 8.1, unless, in circumstance where Provider’s
consent is required pursuant to this Section 2.4, Provider notifies Recipient in writing that it is not consenting. 

2.5 Status of Provider as a Contractor. Provider and Recipient expressly acknowledge that Provider, its Affiliates and their
respective Representatives are “independent contractors,” and nothing in this Agreement is intended and nothing shall be construed to create an employer/employee, partnership, association, joint venture, agency, trust or other similar
relationship between Provider, any Affiliate thereof or any of their respective Representatives, on the one hand, and Recipient, any Transferred Company or any of their respective Affiliates or Representatives, on the other hand. 

  
 5 

 2.6 Limitation on Business Administration Services.  

(a) Unless otherwise agreed in writing by the Parties, the Business Administration Services will only be used by Recipient in connection with
the internal business operations of the Transferred Companies. 
 (b) It is understood and agreed that Provider is not guaranteeing or
undertaking to procure any financial or other outcome with respect to the Transferred Companies, Recipient or any of their respective facilities or Assets. Provider shall not be responsible for the form, character, condition, genuineness,
sufficiency, value or validity of any of the property of Recipient, the Transferred Companies or any other Affiliate of Recipient, and Provider shall in no event have, assume or be responsible for any Liability, duty or obligation to Recipient, any
Transferred Company or any other Affiliate of Recipient other than as expressly provided for in this Agreement. 
 (c) Provider shall have
the authority and responsibility to elect the means, manner and method of performing the Business Administration Services, subject to the terms of this Agreement, including the Applicable Standard of Care. In providing the Business Administration
Services, Provider is not obligated to (i) maintain the employment of any Specified Person or any other Person, (ii) except to the extent mutually agreed in connection with an Alternate Strategy, to hire any additional employees or
independent contractors (iii) purchase, lease or license any additional equipment, materials or software or (iv) enter into any new Contract or extend or modify any existing Contract. 

2.7 Force Majeure. Neither Provider nor any of its Affiliates or Representatives shall be liable for any default or delay in the
performance of Provider’s obligations hereunder if such default or delay is caused by any cause beyond the reasonable control of Provider, including fire, flood, earthquake, elements of nature or acts of God, power or equipment failure, acts of
war, terrorism, riots, civil disorders, strikes, lockouts or labor difficulties (other than departures or leaves of absence addressed in Section 3.3(a)) or any compliance with applicable Laws (each, a “Force Majeure
Event”). Upon the occurrence of a Force Majeure Event, Provider will be excused from any further performance of any obligation so affected for so long as such circumstances prevail and a reasonable period of time thereafter. The
Provider shall give the Recipient prompt notice of any Force Majeure Event and shall use commercially reasonable efforts to remove or otherwise address the impediment to action and to resume performance of Provider’s affected obligations
hereunder as soon as practicable. The amount of Fees for which Recipient is responsible shall not be reduced in any respect to reflect any diminution in Business Administration Services provided to Recipient resulting from such Force Majeure Event.

 ARTICLE III 

TERM 
 3.1
Term. This Agreement (other than the Specified Provisions) shall commence on the Effective Date and shall terminate on the date that Provider is no longer obligated to provide any of the Business Administration Services pursuant to
Exhibit A (as amended pursuant to Section 3.2) unless this Agreement is terminated earlier upon the occurrence of the following (the “Term”): 

  
 6 

 (a) by mutual agreement of Provider and Recipient; 

(b) by Provider or Recipient, by notice to the other Party, if the other Party makes a general assignment for the benefit of creditors, or
files a voluntary petition in bankruptcy or for reorganization or rearrangement under the bankruptcy laws, or if a petition in bankruptcy is filed against such other Party and is not dismissed within 30 days after the filing, or if a receiver or
trustee is appointed for all or any Party of the property or assets of such other Party; 
 (c) by Provider, if Recipient fails to pay any
amount, not subject to dispute in accordance with Section 4.6, when due hereunder and such amount remains unpaid five (5) days after delivery of notice of such default; or 

(d) automatically, if the Transaction Agreement and/or the Separation Agreement is terminated and the Closing shall not have occurred. 

3.2 Extension of Business Administration Services. No later than sixty (60) days prior to the expiration date of a Business
Administration Service as set forth on Exhibit A (as amended pursuant to this Section 3.2), Recipient may request in writing that such Business Administration Service be extended for a thirty (30)-day period on the same terms and
conditions set forth herein (including terms and conditions with respect to pricing); provided, however that (x) any such extension shall be subject to Provider’s written consent, which consent shall not be unreasonably withheld,
conditioned or delayed and (y) no such extension shall be permitted to the extent it creates an obligation for Provider to furnish Business Administration Services after January 31, 2016; provided, further that if Provider does not
respond to Recipient’s request within five (5) Business Days of the delivery of such request, Provider shall be deemed to have consented to such extension. Exhibit A and Exhibit C shall each be deemed to be automatically
amended, without any further action on the part of either Party, to reflect the extension of any Business Administration Service in accordance with this Section 3.2.  

3.3 Early Termination of Business Administration Services.  

(a) Provider shall promptly (but in no event more than three (3) Business Days thereafter) notify Recipient in accordance with
Section 8.1 (each such notice, a “Specified Person Notice”) in the event that a Key Employee receives notice that any Specified Person (such affected Specified Person, an “Affected Specified
Person”) (i) has left (or intends to leave) the employment of, or has ceased to provide (or intends to cease to provide) services to, Provider or (ii) has given notice of, or has begun, a leave of absence (other than leaves
for scheduled vacation and short-term leave) or entered any other status as a result of which he or she is not actually providing or will not provide Business Administration Services as contemplated by this Agreement. Each Specified Person Notice
shall describe the anticipated duration, if known, of such departure or leave of absence and the anticipated impact on Provider’s ability to continue to provide any of the Business Administration Services then being provided or contemplated
thereafter to be provided in accordance with Exhibit A (as amended from time to time in accordance with this Agreement). For the avoidance of doubt, notwithstanding anything to the contrary in Section 2.7, none of the events
giving rise to a Specified Person Notice pursuant to this Section 3.3(a) shall constitute a Force Majeure Event. 

  
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 (b) To the extent that such Specified Person Notice describes an expected adverse impact on
Provider’s ability to provide any of the Business Administration Services, either Provider or Recipient may request (by written notice in accordance with Section 8.1 within five (5) Business Days of the date of the Specified
Person Notice) that the Parties work together in good faith to develop a mutually agreed-upon strategy for Provider to continue to provide the impacted Business Administration Services (an “Alternate Strategy”). It is
understood and acknowledged by the Parties that Provider may need to hire additional employees or independent contractors to provide all or a portion of the Business Administration Services in the event that any Specified Person becomes an Affected
Specified Person. Recipient hereby agrees to promptly execute and deliver any amendment to this Agreement reasonably requested by Provider to reflect the Alternate Strategy. 

(c) If (i) Provider and Recipient are unable to agree, acting reasonably, on an Alternate Strategy within ten (10) Business Days of
the date of a notice delivered by Provider or Recipient, as applicable, pursuant to Section 3.3(b) or (ii) neither Provider nor Recipient requests that the Parties agree upon an Alternate Strategy in accordance with
Section 3.3(b), then either Party may terminate the portion of the Business Administration Services previously performed by the Affected Specified Person; provided, however, that in no event shall Recipient have the right to
terminate any portion of the Business Administration Services provided by a Key Employee or a Support Employee. 
 (d) Exhibit A and
Exhibit C will be deemed to be automatically amended to reflect any agreed upon Alternate Strategy or the termination of Business Administration Services previously provided by an Affected Specified Person, in each case in accordance with
this Section 3.3. 
 (e) Except as expressly provided in this Agreement, the departure of any employee or contractor and
subsequent termination, in accordance with this Section 3.3, of the portion of the Business Administration Service performed by such employee or contractor shall not affect Provider’s obligation to provide, or Recipient’s
obligation to pay for, the remaining portion of the Business Administration Service not provided by the departed employee or independent contractor. 

3.4 Effect of Expiration or Termination. Except as expressly provided herein, the provisions of Article VII and
Article VIII, and those provisions necessary to interpret and apply them, shall survive the termination or expiration of this Agreement. Upon the expiration of this Agreement or if this Agreement is earlier terminated pursuant to
Section 3.1, there will be no liability or obligation on the part of Provider or Recipient (or any of their respective Affiliates and Representatives) hereunder, except that (a) Recipient shall continue to be obligated to pay
Provider for services rendered by Provider or its Affiliates on or prior to the last day of the Term, (b) each Party shall pay any amounts outstanding and payable by it hereunder as of the date of termination, and (c) claims made pursuant
to Article VII shall survive termination of the Agreement for the period set forth in Article VII. Upon the termination of this Agreement for any reason, (i) Recipient will, and will cause the Transferred Companies to, discontinue
all use of the Business Administration Services and will destroy, erase or return to Provider all copies of Provider’s or any of Provider’s Affiliates’ software or confidential or other proprietary information in Recipient’s
possession, custody or control and (ii) Provider will, and will cause its  

  
 8 

 
Affiliates to, destroy, erase or return to Recipient all copies of Recipient’s or any of Recipient’s Affiliates’ software or confidential or other proprietary information in
Provider’s possession, custody or control. Notwithstanding the foregoing, in the event this Agreement is terminated pursuant to Section 3.1(d), the provisions of this Agreement shall not survive and the Parties will have no
liability or continuing obligations of any kind hereunder. 
 ARTICLE IV 

FEES; INVOICES 
 4.1
Fees.  
 (a) In consideration of Provider’s performance of the Business Administration Services, Recipient shall
reimburse Provider on a monthly basis for its actual cost, with no margin or profit, for the following (collectively, the “Fees”): 

(i) Subject to any reduction pursuant to Section 4.1(b)(i), 100% of the salary, hourly pay (including overtime pay), Bonus and
Benefits costs, and all other employee- or labor-related costs (including payroll taxes, but not including Retention Payments, which are addressed in Section 4.1(a)(ii)) associated with the Business Administration Services (collectively,
“Employee Costs”); provided, however, that the Fees shall not include Employee Costs for any Specified Person following the expiration of the Transition Services Period for such Specified Person. 

(ii) 100% of the Retention Payments for the employees listed on Exhibit C as of the Effective Date. Notwithstanding anything to the
contrary in this Article IV, the Retention Payments shall be payable by Recipient as follows: 
 (A) with respect to each individual
for whom the Transition Service Period (as reflected on Exhibit C as of the Effective Date) will conclude prior to January 31, 2016, one (1) month prior to the completion of the applicable Transition Services Period as amended
pursuant to Section 3.2; 
 (B) with respect to any other individual, on December 31, 2015; 

(C) For the avoidance of doubt, Recipient will not be obligated to pay any Retention Payment for any employee who voluntarily resigns or who
is terminated for Cause from the employment of Provider prior to being entitled to receive such Retention Payment pursuant to Sections 4.1(b)(ii)(A) or (B); and 

(D) In the event that Recipient pays any Retention Payments with respect to an employee who voluntarily resigns or who is terminated for
Cause from the employment of Provider prior to the completion of the applicable Transition Services Period (as reflected on Exhibit C as of the Effective Date), the amount of such Retention Payments shall be credited to Recipient on the next
invoice. 
 (iii) Subject to any reduction pursuant to Section 4.1(b)(ii), 100% of Provider’s Overhead Costs. 

  
 9 

 (iv) 100% of reasonable out of pocket costs, fees and expenses directly incurred by Provider
solely in connection with the provision of the Business Administration Services, including travel and lodging (but not including Employee Costs, Retention Payments or Overhead Costs, which are covered by Sections 4.1(a)(i)-(iii)). 

(b) The Fees shall be reduced as follows: 

(i) the portion of the Fees constituting Employee Costs shall be reduced by the sum of the product of (A) the total Employee Costs for
each Specified Person during the invoice period multiplied by (B) the percentage of such Specified Person’s aggregate hours worked during the invoice period that was dedicated to Provider’s Business Development Activities or
the Active Management or Operation of facilities. 
 (ii) the portion of the Fees constituting Overhead Costs shall be reduced by the
product of (A) the total Overhead Costs during the invoice period multiplied by (B) the percentage of the aggregate hours worked by all Specified Persons during the invoice period that was dedicated to the Active Management or
Operation of facilities. 
 (c) During the Term, Provider shall maintain its books and records in a manner sufficient to enable the
allocation of costs and expenses between the Business Administration Services provided under this Agreement and any other services or activities of Provider and, for the avoidance of doubt, notwithstanding anything to the contrary contained herein,
the Fees shall not include any costs or expenses of such other services or activities of Provider. 
 4.2 Prepaid Amount. To
the extent Provider has not delivered such information prior to the date hereof, Provider will deliver to Recipient a good faith estimate of the Fees for the first month of the Term (such amount, the “Prepaid Fee”). Upon the
later to occur of (i) the date that is five (5) Business Days after the date that Recipient delivers its good faith estimate of the Prepaid Fee or (ii) the commencement of the Term, Recipient shall pay the Prepaid Fee to Provider.
During the Term, Provider may, but shall have no obligation to, draw on the Prepaid Fee to satisfy any obligations of Recipient under this Agreement.  

4.3 Taxes. If, during the Term, any state, provincial, local or federal authority shall impose a tax on the Business
Administration Services rendered to Recipient by Provider hereunder, Recipient agrees to promptly pay or remit to Provider the amount of such tax. 

4.4 Invoices.  

(a) Subject to Section 4.1(a)(ii) and Section 4.2, Provider shall invoice Recipient on a monthly basis for all Fees.
Each monthly invoice shall include, without limitation, the invoice period, the Fees (as reduced pursuant to Section 4.1(b)), a brief description of the Business Administration Services provided and any adjustments pursuant to
Sections 4.5 or 4.6. The monthly invoice for the last month of the Term shall include a credit to Recipient for any undrawn amount of the Prepaid Fee. 

(b) Fees shall be payable by Recipient within fifteen (15) days after Recipient’s receipt of an invoice in accordance with the
wiring instructions provided by Provider 

  
 10 

 
to Recipient. If Recipient fails to pay any Fees within such time period (except as permitted by the ultimate sentence of this Section 4.4(b), interest shall accrue on the unpaid
portion from the date that payment was due until the date of payment at the Default Rate. Recipient will promptly (but no later than thirty (30) days following the date of the applicable invoice) provide written notice to Provider regarding any
amount of an invoice that is disputed in good faith and the nature and basis for such dispute. Notwithstanding the foregoing, solely in the event that, in Recipient’s good faith judgment, any monthly invoice has been prepared with the
Applicable Standard of Care and Recipient disputes in good faith all or a portion of the amount of such invoice, Recipient may withhold the disputed amount of such invoice pending resolution of the dispute pursuant to Section 4.6. 

(c) Subject to any applicable Law, Provider shall furnish a reasonably detailed listing of all disbursements (other than disbursements related
to personnel) greater than or equal to $50,000 with each monthly invoice. 
 4.5 Audit Rights. During the Term, Recipient
shall have the right, but not the obligation, at its sole expense, to conduct or cause to be conducted a reasonable audit of the data, records or other pertinent information of Provider arising from or in connection with the provision of the
Business Administration Services at a mutually agreed upon time no later than twenty (20) Business Days following the date that notice of such request is delivered to Provider. Recipient shall conduct such an audit during normal business hours
and in such a manner as to minimize disruptions to the normal business operations of Provider and its Affiliates; provided, however, that (x) Provider shall not be required to provide information to Recipient or its Representatives that
would reasonably be expected to (i) result in the waiver or limitation of any attorney-client or other legal privilege available to Provider or its Affiliates, (ii) result in a breach of any confidentiality obligation of Provider or its
Affiliates to a third party or (iii) violate any applicable Law and (y) information provided by Provider to evidence or corroborate the allocation of costs and expenses between the Business Administration Services provided under this
Agreement and any other services or activities of Provider may be, as to such other services or activities of Provider, provided in redacted form to preserve the confidentiality or proprietary nature thereof. If Provider objects to the scope of any
audit requested, the Parties shall work together, in good faith, to mutually reach agreement on the proper scope of such audit. If an audit reveals an error in the amount of any invoice, Recipient shall promptly notify Provider in writing of such
error and provide supporting documentation (the “Audit Notice”). Provider will promptly provide written notice to Recipient of any dispute with respect to the Audit Notice, which dispute shall be resolved in accordance with
Section 4.6. Any undisputed portion of the amount set forth in the Audit Notice shall be credited to or payable by Recipient (as applicable) on the monthly invoice for the period in which the Audit Notice is delivered. 

 4.6 Disputes. In the event of a good-faith dispute as to the amount of any invoices or portions thereof submitted
by Provider to Recipient, or as to the amount of any error identified in an Audit Notice delivered by Recipient to Provider, the appropriate accounting representatives of each Party shall discuss the disputed items within five (5) Business Days
following receipt of such written notice of dispute. If the Party’s accounting representatives are unable to resolve the dispute within such five (5) Business Day period, the dispute will be referred to Jeremy McGuire (on behalf of
Recipient) and Charles Cook (on behalf of Provider), or other senior executives holding comparable positions, as determined by Provider and Recipient, respectively, who will  

  
 11 

 
work together in good faith to resolve the dispute within ten (10) Business Days following the date that the dispute is referred to them. Each Party shall promptly pay all outstanding
amounts determined in accordance with the resolution of the applicable dispute pursuant to this Section 4.6; provided, however, that any amounts owed to Recipient with respect to an Audit Notice shall be credited to Recipient on
the monthly invoice for the invoice period in which the dispute is resolved. If the Parties are unable to resolve the dispute in accordance with this Section 4.6, then each Party may exercise any remedies available to it with respect to
such dispute. 
 ARTICLE V 

PERSONNEL 
 5.1
Removal for Cause. During the Term, Recipient may, in good faith, require that Provider immediately remove any Specified Person from the provision of the Business Administration Services for Cause. For the purposes of this
Section 5.1, “Cause” shall mean the Specified Person’s: (a) material failure to perform the Business Administration Services for which he or she is responsible, which failure, if curable, remains uncured
for at least five (5) days after Recipient has provided Provider with written notice of such failure; (b) conviction, or plea of no contest to, any felony or crime involving moral turpitude that may reasonably be expected to affect his or
her ability to perform the Business Administration Services for which he or she is responsible; or (c) material failure to abide by material worksite policies applicable to any Transferred Company location where he or she performs Business
Administration Services, which failure, if curable, remains uncured for at least five (5) days after Recipient has provided Provider with written notice of such failure. Notwithstanding the foregoing, Recipient shall have no authority to
terminate any Specified Person’s employment with or engagement by Provider or any of its Affiliates. Any Specified Person who is removed from the provision of the Business Administration Services for Cause but whose employment is not terminated
shall be deemed to dedicate 100% of such Specified Person’s hours worked from and after the date of their removal for Cause to Provider’s Business Development Activities or the Active Management or Operation of facilities for purposes of
calculating Fees pursuant to Section 4.1. 
 5.2 Restrictions on Hiring. Other than the Specified Persons listed
on Exhibit C or individuals whose fees are included in Overhead Costs, and except as required by Law, Provider shall not hire or retain additional employees or independent contractors during the Term to perform the Business Administration
Services without the prior written consent of Recipient, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the foregoing, Provider may hire additional employees or independent contractors to replace any Key
Employee or Support Employee without the prior written consent of Recipient, and Exhibit C will be deemed to be automatically amended to reflect such replacement and associated costs without any further action of the Parties. 

 5.3 Employee Costs. During the Term, solely to the extent all or any portion of such additional costs are to be
included in the Fees, Provider shall not increase the salaries, wage rates, bonus opportunities or other compensation or benefits of any kind that are provided to any Specified Person above the types, amounts or levels that existed immediately prior
to the Effective Date, other than (i) as required by Law, (ii) pursuant to the terms of any Contracts or RJS Benefit Plans in effect as of the Effective Date (iii) merit increases consistent with past practice or (iv) benefits
provided pursuant to any new benefit plan which is in all material respects substantially the same in scope and benefit level as the equivalent plan previously provided by Provider to such Specified Person. 

  
 12 

 5.4 Offers of Employment by Recipient. Recipient (either directly or through an
Affiliate) shall have the right, but not the obligation, in its sole discretion, to offer to employ or to engage as an independent contractor one or more Specified Persons; provided, however, that Recipient hereby agrees to refrain from
making any offers of employment or engagement to any Key Employee until the expiration of the Term or the earlier termination of this Agreement pursuant to Section 3.1. Any such offer made by Recipient shall be in writing. Recipient
shall provide notice of any offer of employment made to a Specified Person at the time such offer is made. In the event that any such offer is declined, Recipient will promptly furnish Provider with a copy of such offer. In furtherance of the
foregoing, and solely to the extent permitted by applicable Law, Provider agrees to waive and release any Specified Person hired by Recipient in accordance with this Section 5.4 from any non-competition restrictions under any agreement
or other arrangement with Provider that would otherwise prevent them from accepting an offer of employment or engagement as an independent contractor from Recipient or its Affiliates.  

5.5 Onsite Integration. During the Term, Recipient shall have the right, but not the obligation, to designate one or more
representatives (the “Supervising Representatives”) to be present in the Austin, Texas office of Provider for the sole purpose of overseeing and facilitating the transition of the Business Administration Services from
Provider to Recipient; provided, however, that the presence of such Supervising Representatives shall only be allowed to the extent that it does not interfere with the ongoing business and operations of Provider. From time to time, Recipient
may designate additional personnel to visit the Austin Texas office for the purpose of facilitating the transition of the Business Administrative Services; provided, however, that (i) the presence of such personnel shall only be allowed
to the extent that it does not interfere with the ongoing business and operations of Provider and (ii) Recipient shall provide 48 hours’ advance notice to Provider prior to any visit by such additional personnel. Provider may limit the
presence of the Supervising Representatives pursuant to this Section 5.5 if it believes in good faith that such limitation is necessary or appropriate to: (i) protect any attorney-client privilege available to Provider or its
Affiliates, (ii) comply with any confidentiality obligation of Provider or its Affiliates to a third party, (iii) comply with applicable Law, or (iv) avoid or limit any competitive harm in any material respect to Provider. Any such
limitation will be reasonably constructed to achieve the aforementioned objectives, and Provider will use its reasonable efforts to ensure that the resulting arrangements continue to permit the oversight and facilitation of the transition of the
Business Administration Services from Provider to Recipient as fully as reasonably possible. Recipient will cause the Supervising Representative to abide by all safety and other workplace policies of Provider at all times when the Supervising
Representative is present at offices or other workplaces of Provider. 
 5.6 Updates to Exhibit C. Provider and
Recipient acknowledge and agree that Exhibit C shall be updated prior to the Effective Date to (a) remove any individual who, as of the Effective Date, has ceased to be employed or engaged by Provider, (b) add any employee of
Provider who, as of the Effective Date, is anticipated to be involved in the provision of Transition Services and (c) such other changes as are mutually agreed by Provider and Recipient, acting reasonably. 

  
 13 

 ARTICLE VI 

REPRESENTATIONS AND WARRANTIES 

6.1 Representations and Warranties of Provider. Provider hereby represents and warrants to Recipient that, as of the date
hereof: 
 (a) Provider is a limited partnership, duly organized, validly existing and in good standing under the laws of the
state of Texas; 
 (b) Provider has taken all necessary limited partnership action to authorize the execution and delivery of this Agreement
and the performance of its obligations hereunder; and 
 (c) There is no pending or, to the knowledge of Provider, threatened Action against
or affecting Provider or its property, which would reasonably be expected to have a material adverse effect on Provider’s ability to perform its obligations under this Agreement. 

6.2 Representations and Warranties of Recipient. Recipient hereby represents and warrants to Provider that, as of the date
hereof:  
 (a) Recipient is a limited liability company, duly organized, validly existing and in good standing under the laws
of the state of Delaware; 
 (b) Recipient has taken all necessary limited partnership action to authorize the execution and delivery of
this Agreement and the performance of its obligations hereunder; and 
 (c) There is no pending or, to the knowledge of Recipient,
threatened Action against or affecting Recipient or its property, which would reasonably be expected to have a material adverse effect on Recipient’s ability to perform its obligations under this Agreement. 

ARTICLE VII 

INDEMNIFICATION, LIMITATION OF LIABILITY AND REMEDIES 

7.1 Disclaimer of Warranty. EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, THE BUSINESS ADMINISTRATION SERVICES ARE PROVIDED
ON AN “AS IS” BASIS, AND PROVIDER DOES NOT MAKE ANY REPRESENTATION OR WARRANTY AS TO THE RESULTS OF ANY BUSINESS ADMINISTRATION SERVICES PROVIDED HEREUNDER AND HEREBY DISCLAIMS (ON ITS OWN BEHALF AND ON BEHALF OF ITS AFFILIATES AND THEIR
RESPECTIVE REPRESENTATIVES) ALL REPRESENTATIONS AND WARRANTIES, WHETHER EXPRESS, IMPLIED OR STATUTORY, WITH RESPECT TO ITS PERFORMANCE UNDER THIS AGREEMENT, INCLUDING ANY WARRANTY OF ADEQUACY, MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE.
EXCEPT AS OTHERWISE PROVIDED IN SECTION 7.2, PROVIDER’S SOLE AND EXCLUSIVE RESPONSIBILITY TO THE RECIPIENT AND ITS AFFILIATES, AND THEIR RESPECTIVE SUCCESSORS AND ASSIGNS, FOR ERRORS OR OMISSIONS IN THE TRANSITION SERVICES SHALL BE TO
FURNISH  

  
 14 

 
CORRECT INFORMATION OR RE-PERFORM THE RELEVANT SERVICES; PROVIDED, HOWEVER, THAT, IN NO EVENT SHALL THE FEES WITH RESPECT TO THE BUSINESS ADMINISTRATION SERVICES BEING RE-PERFORMED BE
REDUCED OR OTHERWISE MODIFIED. 
 7.2 Indemnification by Provider. To the extent not otherwise covered by proceeds of
insurance or recoveries from third parties actually received by Recipient or its Affiliates, Provider shall indemnify and hold harmless Recipient, its Affiliates and their respective Representatives from and against all Losses (including in respect
of any third party claim) arising out of or resulting from any gross negligence or Willful Misconduct on the part of Provider in its performance of the Business Administration Services (in each case, excluding any action taken or omitted to be taken
at the direction of Recipient or its Affiliates).  
 7.3 Indemnification by Recipient.
Recipient shall indemnify and hold harmless Provider, its Affiliates and their respective Representatives from and against all Losses (including in respect of any third party claim) arising out of, relating to or in connection
with:  
 (a) any act or omission of Provider, its Affiliates or any of their respective Representatives in the performance of
the Business Administration Services or of any duty, obligation or service under this Agreement (other than any Losses for which Provider has indemnified Recipient pursuant to Section 7.2); and 

(b) any breach of any obligation of Recipient under this Agreement. 

7.4 Limitation of Liability. In no event shall Provider, its Affiliates or any of their respective Representatives have any
liability to Recipient for damages with respect to any Losses of Recipient, regardless of whether such Losses are a result of or caused by the sole, joint or concurrent negligence, strict liability or other fault of Provider, its Affiliates or their
respective Representatives, including for any error in judgment or any act or omission, except as a result of the gross negligence or Willful Misconduct of Provider (in each case, excluding any action taken or omitted to be taken at the direction of
Recipient or its Affiliates).  
 7.5 Exclusive Remedies. Except in the case of fraud, the remedies of this
Article VII are the sole and exclusive remedies of Recipient to any Losses arising out of related to this Agreement or the performance of the Business Administration Services. 

7.6 Expiration of Claims. All claims for damages brought by either Party against the other (excluding claims for damages brought
by third parties against the Party seeking reimbursement for such claim, and claims for payment for services rendered) must be brought within one (1) year after the termination of this Agreement. 

7.7 No Consequential Damages. Neither Party to this Agreement nor any of their Affiliates or respective Representatives shall be
liable for any loss of profits or anticipated revenues, loss of business, cost of capital, loss of use or of data, loss of goodwill, loss of opportunity, interruption of business, or for indirect, special, punitive, exemplary, incidental,
consequential or indirect damages of any kind (“Non-Reimbursable Damages”), whether under this Agreement or otherwise, in connection with the performance of either Party under this Agreement, even if such Party or any of its
Affiliates or Representatives has been advised of the possibility of such damages, except with respect to a third party claim for which any Person is entitled to indemnification hereunder. 

  
 15 

 ARTICLE VIII 

MISCELLANEOUS 
 8.1
Notices. 
 (a) Unless this Agreement specifically requires otherwise, any notice, demand or request provided for in this Agreement,
or served, given or made in connection with it, shall be in writing and shall be deemed properly served, given or made if delivered in person or sent by facsimile or sent by registered or certified mail, postage prepaid, or by a nationally
recognized overnight courier service that provides a receipt of delivery, in each case, to the Parties to this Agreement at the addresses specified below: 

If to Recipient, to: 
 Talen
Energy Corporation 
 835 Hamilton Street 

Allentown, PA 18101 
 Attention:
Dustin Wertheimer 
 Facsimile: (610) 774-3839 

with a copy to (which shall not constitute notice): 

Talen Energy Corporation 
 835
Hamilton Street 
 Allentown, PA 18101 

Attention: Joseph Waala 

Facsimile: (610) 774-2755 
 If to
Provider, to: 
 Topaz Power Management, LP 

2901 Via Fortuna Drive, Building 6, Suite 650 

Austin, Texas 78746-7574 

Attention: Janet Jamieson 

Facsimile: (512) 314-8699 
 with a
copy to (which shall not constitute notice): 
 Vinson & Elkins LLP 

1001 Fannin Street, Suite 2500 

Houston, Texas 77002-6760 

Attention: Trina Chandler 

Facsimile: (713) 615-5088 

  
 16 

 (b) Notice given by personal delivery, mail or overnight courier pursuant to this
Section 8.1 shall be effective upon physical receipt. Notice given by facsimile or email pursuant to this Section 8.1 shall be effective as of the date of confirmed delivery if delivered before 5:00 p.m. Central Time on
any Business Day or the next succeeding Business Day if confirmed delivery is after 5:00 p.m. Central Time on any Business Day or during any non-Business Day. 

8.2 Confidentiality.  

(a) During the Term and thereafter, the Parties hereto shall, and shall instruct their respective Representatives to, maintain in confidence
and not disclose or use the other Party’s financial, technical, sales, marketing, development, personnel, and other information, records, or data, including, without limitation, customer lists, supplier lists, trade secrets, designs, product
formulations, product specifications or any other proprietary or confidential information, however recorded or preserved, whether written or oral (any such information, “Confidential Information”). Each Party shall use the
same degree of care, but no less than reasonable care, to protect the other Party’s Confidential Information as it uses to protect its own Confidential Information of like nature. Unless otherwise authorized in any other agreement between the
Parties, any Party receiving any Confidential Information of the other Party (the “Receiving Party”) may use Confidential Information only for the purposes of fulfilling its obligations under this Agreement or to enforce its
rights under this Agreement (collectively, the “Permitted Purpose”). Any Receiving Party may disclose such Confidential Information only to its Representatives who have a need to know such information for the Permitted
Purpose and who have been advised of the terms of this Section 8.2 and the Receiving Party shall be liable for any breach of these confidentiality provisions by such persons; provided, however, that any Receiving Party may
disclose such Confidential Information to the extent such Confidential Information is required to be disclosed by an Order of a Governmental Authority, in which case the Receiving Party shall promptly notify, to the extent possible, the disclosing
Party (the “Disclosing Party”), and take reasonable steps, at the request and expense of the Disclosing Party, to assist in contesting such Order, minimizing any required disclosure, and protecting the Disclosing Party’s
rights prior to any required disclosure, and in which case the Receiving Party shall only disclose such Confidential Information that it is advised by its counsel that it is legally bound to disclose under such Order. 

(b) Notwithstanding the foregoing, “Confidential Information” shall not include any information that the Receiving Party can
demonstrate: (i) was publicly known at the time of disclosure to it, or has become publicly known through no act of the Receiving Party or its Representatives in breach of this Section 8.2; (ii) to the knowledge of the
Receiving Party, was rightfully received from a third party without a duty of confidentiality; (iii) was legally known by the Receiving Party prior to disclosure by the Disclosing Party; or (iv) was developed by it independently without
any reliance on the Confidential Information. 
 (c) Upon demand by the Disclosing Party at any time, or upon expiration or earlier
termination of this Agreement, the Receiving Party shall promptly return or destroy, at the Disclosing Party’s option, all Confidential Information. If such Confidential Information is destroyed, an authorized officer of the Receiving Party
shall certify to such destruction in writing. 

  
 17 

 8.3 Books and Records. Upon the earlier to occur of
(a) the expiration of the Term or (b) the earlier termination of this Agreement pursuant to Section 3.1, Provider shall use commercially reasonable efforts to promptly deliver any books and records of the Transferred Companies
maintained by Provider in connection with the Business Administration Services that are in its possession; provided, that delivery of the foregoing to the offices of any Transferred Company shall be deemed sufficient to satisfy this
requirement. 
 8.4 Entire Agreement. This Agreement (together with Section 8.15(b) of the Transaction
Agreement), including all exhibits and attachments hereto, contains the sole and entire agreement between the Parties hereto with respect to the subject matter hereof and supersedes all prior discussions and agreements between the Parties with
respect to the subject matter hereof.  
 8.5 Expenses. Except as otherwise expressly provided in this
Agreement, whether or not the transactions contemplated hereby are consummated, each Party will pay its own costs and expenses incurred in anticipation of, relating to and in connection with the negotiation and execution of this Agreement and the
transactions contemplated hereby. 
 8.6 Waiver. Any term or condition of this Agreement may be waived at any
time by the Party that is entitled to the benefit thereof, but no such waiver shall be effective unless set forth in a written instrument duly executed by or on behalf of the Party waiving such term or condition. No waiver by any Party of any term
or condition of this Agreement, in any one or more instances, shall be deemed to be or construed as a waiver of the same or any other term or condition of this Agreement on any future occasion. All remedies, either under this Agreement or by Law or
otherwise afforded, will be cumulative and not alternative. 
 8.7 Amendment. This Agreement may be amended,
supplemented or modified only by a written instrument duly executed by or on behalf of each Party. 
 8.8 No Third Party
Beneficiary. The terms and provisions of this Agreement are intended solely for the benefit of the Parties and their respective successors or permitted assigns, and it is not the intention of the Parties to confer third-party beneficiary
rights upon any other Person. 
 8.9 Assignment; Binding Effect. Neither this Agreement nor any right, interest
or obligation hereunder may be assigned by any Party without the prior written consent of the other Party, and any attempt to do so will be void, except for assignments and transfers by operation of Law. This Agreement is binding upon, inures to the
benefit of and is enforceable by the Parties and their respective successors and permitted assigns. 
 8.10 Invalid
Provisions. If any provision of this Agreement is held to be illegal, invalid or unenforceable under any present or future Law, and if the rights or obligations of any Party under this Agreement will not be materially and adversely affected
thereby, such provision will be fully severable, this Agreement will be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a part hereof, the remaining provisions of this Agreement will remain in full
force and effect and will not be affected by the illegal, invalid or unenforceable provision or by its severance herefrom and in lieu of such illegal, invalid or 

  
 18 

 
unenforceable provision, there will be added automatically as a part of this Agreement a legal, valid and enforceable provision as similar in terms to such illegal, invalid or unenforceable
provision as may be possible. 
 8.11 Counterparts; Facsimile. This Agreement may be executed in any number of counterparts,
each of which will be deemed an original, but all of which together will constitute one and the same instrument. Any facsimile copies hereof or signature hereon shall, for all purposes, be deemed originals. 

8.12 Governing Law; Venue; and Jurisdiction. 

(a) This Agreement and all issues and questions concerning the construction, validity, enforcement and interpretation of this Agreement (and
all schedules, annexes and exhibits hereto) shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any choice or conflict of law provision or rule (whether of the State of Delaware or any
other jurisdiction) that would cause the application of the laws of any jurisdiction other than the State of Delaware. 
 (b) Except as
provided in Section 4.6, each of the Parties irrevocably and unconditionally agrees that any Action with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in
respect of this Agreement and the rights and obligations arising hereunder brought by any other Party or Parties or their respective successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state
appellate court therefrom within the State of Delaware (or, if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). 

(c) Each of the Parties hereby irrevocably submits with regard to any such Action for itself and in respect of its property, generally and
unconditionally, to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any Action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts.
Each of the Parties hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any Action with respect to this Agreement, (i) any claim that it is not personally subject to the
jurisdiction of the above named courts for any reason other than the failure to serve in accordance with this Section 8.12, (ii) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any
legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (iii) to the fullest extent permitted by the applicable
Law, any claim that (x) the Action in such court is brought in an inconvenient forum, (y) the venue of such Action is improper or (z) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. 

(d) EACH OF THE PARTIES IRREVOCABLY WAIVES ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT OR
THE TRANSACTIONS CONTEMPLATED HEREBY. 
 [signature page follows] 

  
 19 

 IN WITNESS WHEREOF, each Party hereto has caused this Agreement to be executed on its behalf, all
on the day and year first above written. 
  

			
	PPL ENERGY SUPPLY, LLC
		
	By:		 /s/ Clarence J. Hopf, Jr.

	Name:		 Clarence J. Hopf, Jr.

	Title:		 Senior Vice President - Fossil & Hydro Generation

	
	TOPAZ POWER MANAGEMENT, LP
		
	By:		 /s/ Charles C. Cook

	Name:		 Charles C. Cook

	Title:		 President & Chief Executive Officer

 [Signature Page to Transition Services Agreement]Ex. 10.39 Performance Share Award Agreement - TSR Goal Non-US

Exhibit 10.39

TSR PERFORMANCE GOAL

GILEAD SCIENCES, INC.
PERFORMANCE SHARE AWARD AGREEMENT
FOR NON-U.S. PARTICIPANTS
RECITALS
A.    Gilead Sciences, Inc. (the “Company”) has implemented the Gilead Sciences, Inc. 2004 Equity Incentive Plan, as amended (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 Company.
B.    This Agreement is executed pursuant to, and is intended to carry out the purposes of, the Plan in connection with the Company’s issuance of shares of Common Stock to Participant thereunder.
C.    All capitalized terms in this Performance Share Award Agreement for Non-U.S. Participants (this “Agreement”) shall have the meaning assigned to them herein or in the attached Appendix A.   Capitalized terms not defined herein or in the attached Appendix A shall have the meanings assigned to them in the Plan.
NOW, THEREFORE, it is hereby agreed as follows:
1.Grant of Performance Shares.  The Company hereby awards to Participant, as of the Award Date indicated below, an award (the “Award”) of Performance Shares under the Plan.  This Agreement provides the Participant with the right to receive one or more shares of Common Stock on the designated issuance date for those shares, based upon the extent to which each Performance Share vests pursuant to the terms hereof.  The Target Shares subject to this Award, the applicable performance-vesting and Continuous Service vesting requirements for this Award, the date or dates on which the shares of Common Stock that vest hereunder shall become issuable and the remaining terms and conditions governing this Award, including the applicable vesting acceleration provisions, shall be as set forth in this Agreement.
AWARD SUMMARY
	
		
	Participant
	[FIRST NAME MIDDLE NAME LAST NAME]

	Award Date:
	[GRANT DATE]

1

Exhibit 10.39

	
		
	Target Number of Performance Shares:
	The actual number of shares of Common Stock that may become issuable pursuant to the Performance Shares subject to this Agreement shall be determined in accordance with the performance-vesting and Continuous Service vesting provisions of attached Schedule I. For purposes of the applicable calculations under Schedule I, the target number of Performance Shares to be utilized is [SHARES] shares (the “Target Shares”).     

	

Vesting Schedule:
	Vesting Requirements. The Performance Shares shall be subject to the performance-vesting and Continuous Service vesting requirements set forth in attached Schedule I and shall vest on the Certification Date (as defined in Appendix A). 
Change in Control Vesting.  The shares of Common Stock underlying the Performance Shares may also vest on an accelerated basis in accordance with the applicable provisions of Paragraph 4 of this Agreement should a Change in Control occur after the start but prior to the completion of the Performance Period applicable to the Performance Shares. 

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

1.    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.
2.    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 Company’s collection of the applicable Withholding Taxes. 
(b)    Notwithstanding the foregoing, in the event that any dividend or other distribution is declared and paid on shares of Common Stock after the Award Date, but prior to the complete settlement, cancellation or forfeiture of this Award, the Participant shall be entitled to receive, upon settlement of this Award, an amount (the “phantom dividend equivalent amount”) equal to the dividends or other distributions that would have been paid or issued on the number of shares of Common Stock actually vested and issuable to Participant pursuant to this Award.  The 

2

Exhibit 10.39

phantom dividend equivalent amount shall be calculated by the Administrator in its discretion and need not be adjusted for interest, earnings or assumed reinvestment.  The phantom dividend equivalent amount shall be distributed to Participant concurrently with the issuance of the vested shares to which those phantom dividend equivalents relate, and may be paid and distributed in the same form the actual dividend or distribution was paid to the holders of the Common Stock or in such other form as the Administrator deems appropriate.  Each such distribution of phantom dividend equivalents shall be subject to the Company’s collection of any Withholding Taxes applicable to that distribution.  The Administrator shall have the sole discretion to determine the dollar value of any dividend or distribution paid other than in the form of cash, and its determination shall be controlling.  No phantom dividend equivalent amount shall be paid or distributed on shares of Common Stock under this Award that are forfeited or that otherwise are not vested and issued or issuable under this Award. 
3.    Change in Control.  The following provisions shall apply only to the extent a Change in Control is consummated prior to the Certification Date and shall have no force or effect if the effective date of the Change in Control occurs after the Certification Date:
(a)    Should (i) the Change in Control occur within the first twelve (12) months of the Performance Period and (ii) Participant remains 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 Target Shares subject to this Award, without any measurement of Performance Goal attainment to date and without regard to the Continuous Service vesting provisions.
(b)    Should (i) the Change in Control occur at any time on or after the completion of the first twelve (12) months of the Performance Period but prior to the Certification Date and (ii) Participant remains 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 Target Shares subject to this Award or (ii) the actual number of Performance-Qualified Shares determined by multiplying (A) the Target Shares subject to this Award by (B) the applicable percentage (determined in accordance with the payout slope set forth in attached Schedule I) for the level at which the TSR Performance Goal is attained over an abbreviated Performance Period ending with the close of the Company’s fiscal quarter coincident with or immediately preceding the effective date of the Change in Control, in either case, without regard to the Continuous Service vesting requirements.
(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 as a result of Retirement, death, or Permanent Disability) other than for Cause (or similar reasons comparable to Cause under employment laws in the jurisdiction where Participant is employed or under the terms of Participant’s employment agreement, if any) 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 termination of the definitive agreement without the consummation of such Change in Control or 

3

Exhibit 10.39

(ii) the expiration of the Applicable Acceleration Period following the consummation of such Change in Control.
(d)    Should Participant cease Continuous Service during the Performance Period by reason of death or Permanent Disability and a Change in Control subsequently occurs prior to the Certification Date, 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 Target 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 Performance Period (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 such Performance Period ending with the earlier of (i) the effective date of the Change in Control or (ii) the last day of the abbreviated Performance Period (if any) taken into account under clause (ii) of Paragraph 4(b), which shall be settled and paid as provided in subparagraph (f) of this Paragraph 4 in lieu of any issuance of shares pursuant to Schedule I.
(e)    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 Performance Period but prior to the Certification Date and a Change in Control subsequently occurs prior to the Certification Date, 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 Target 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 such 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 such Performance Period ending with the earlier of (i) the effective date of the Change in Control or (ii) the last day of the abbreviated Performance Period (if any) taken into account under clause (ii) of Paragraph 4(b), which shall be settled and paid as provided in subparagraph (f) of this Paragraph 4 in lieu of any issuance of shares pursuant to Schedule I.  Notwithstanding the foregoing, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant’s jurisdiction that would likely result in the favorable retirement treatment that applies to this grant under the Plan being deemed unlawful and/or discriminatory, then the Company will not apply the favorable retirement treatment provided in this subparagraph.
(f)    The number of shares of Common Stock in which Participant vests 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 Company in consummation of the Change in Control, and such consideration shall be distributed to Participant on the earlier of (i) the tenth (10th) business day 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 6 in the absence of such Change in Control.  Each issuance 

4

Exhibit 10.39

or distribution made under this Paragraph 4(f) shall be subject to the Company’s collection of the applicable Withholding Taxes.
(g)    Except for the actual number of shares of Common Stock in which Participant vests in accordance with this Paragraph 4, 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.
(h)    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.
4.    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 Company’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.  The determination of the Administrator shall be final, binding and conclusive.  In the event of any Change in Control transaction, the provisions of Paragraph 4 shall also be applicable.
5.    Issuance or Distribution of Vested Shares or Other Amounts.
(a)    Except as otherwise provided in Paragraph 4 or Paragraph 7, the shares of Common Stock in which Participant vests pursuant to the performance-vesting and Continuous Service vesting provisions of attached Schedule I shall be issued in accordance with the following provisions:  
-    The issuance of the shares of Common Stock shall be effected during the period beginning on the first (1st) business day of February of the calendar year in which the Performance Period ends and ending no later than March 15 of that calendar year.

(b)    The Company 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 Schedule I and shall concurrently settle with Participant any dividend equivalent amount with respect to those shares as provided in Paragraph 3.  
(c)    Except as otherwise provided in Paragraph 4, no shares of Common Stock shall be issued prior to the Certification Date.  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.

5

Exhibit 10.39

(d)    Regardless of any action the Company and/or the Employer may 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 Company and/or the Employer.  Participant 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 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 dividend equivalent amount provided pursuant to Paragraph 3 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 is or becomes subject to Withholding Taxes in more than one jurisdiction, Participant acknowledges that the Company and/or the Employer (or former employer, as applicable) may withhold or account for Withholding Taxes in more than one jurisdiction.  
(e)    The Company shall collect, and Participant hereby authorizes the Company to collect, the Withholding Taxes with respect to the shares of Common Stock issued under this Agreement (including any shares of Common Stock issued in settlement of any dividend equivalent amount as provided in Paragraph 3) through an automatic share withholding procedure pursuant to which the Company 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 Company otherwise decides no longer to utilize such method and provides Participant with notice to such effect.  
(f)    If the Share Withholding Method is to be utilized for the collection of Withholding Taxes, then the Company 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, including maximum applicable rates, as determined by the Company in its sole discretion.  If the maximum rate is used, any over-withheld amount will be refunded to Participant in cash by the Company or Employer (with no entitlement to the Common Stock equivalent) or if not refunded, Participant may seek a refund from the local tax authorities.  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 Company 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 Company’s electronic mail system) in the event the Company no longer intends to utilize the Share Withholding Method. Should any 

6

Exhibit 10.39

shares of Common Stock become issuable under the Award (including any shares of Common Stock issued in settlement of any dividend equivalent amount as provided in Paragraph 3) at a time when the Share Withholding Method is not being utilized by the Company, 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 Company’s designated broker to cover the Withholding Tax liability estimated by the Company to be applicable to such issuance. Participant shall, promptly upon request from the Company, execute (whether manually or through electronic acceptance) an appropriate sales authorization (in form and substance reasonably satisfactory to the Company) 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 Company 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 Company’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 Company 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 Company 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 a wire transfer of funds from Participant to the Company 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 Company 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 Company shall collect the Withholding Taxes with respect to any dividend equivalent amount as provided in Paragraph 3 that is 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 Company deems appropriate, in its sole discretion.
(j)    Notwithstanding the foregoing provisions of Paragraphs 6(d) through 6(i), the employee portion of the federal, state and local employment taxes required to be withheld by the Company 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 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 Company a check 

7

Exhibit 10.39

payable to its order (or a wire transfer of funds to the Company ) 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 6(j) shall be applicable only to the extent necessary to comply with the applicable tax withholding requirements of Code Section 3121(v).
Except as otherwise provided in Paragraph 4 or this Paragraph 6, the settlement of all Performance Shares or Performance-Qualified Shares which vest under the Award shall be made solely in shares of Common Stock.
6.    Special Deferral Election.      Provided Participant is a U.S. tax resident and Participant timely submits a properly completed deferral election in a form provided by the Company, any shares of Common Stock that become issuable pursuant to this Agreement shall be distributed in accordance with the terms of such deferral election, subject to Participant’s satisfaction of any applicable Withholding Taxes under Paragraph 6.    
7.    Leaves of Absence.  For purposes of 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 Permanent Disability. 
8.    Compliance with Laws and Regulations.  The issuance of shares of Common Stock pursuant to the Award shall be subject to compliance by the Company and Participant with all Applicable Laws relating thereto.
9.    Nature of Grant.  In accepting the grant, Participant 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;

8

Exhibit 10.39

(b)    the grant of the Award is voluntary and occasional and does not create any contractual or other right to receive future grants of Awards, or benefits in lieu of Awards, even if Awards have been granted in the past; 
(c)    all decisions with respect to future Awards or other grants, if any, will be at the sole discretion of the Company;
(d)    Participant is voluntarily participating in the Plan; 
(e)    the Award and the shares of Common Stock subject to the Award are not intended to replace any pension rights or compensation;
(f)    the Award and the shares of Common Stock subject to the Award, and the income and value of same, are not part of normal or expected compensation for any purpose, including, without limitation, calculating any severance, resignation, termination, redundancy, dismissal, end-of-service payments, bonuses, long-service awards, pension or retirement or welfare benefits or similar payments; 
(g)    the future value of the underlying shares of Common Stock is unknown, indeterminable and cannot be predicted with certainty; 
(h)    no claim or entitlement to compensation or damages shall arise from forfeiture of the Award resulting from the termination of Participant’s Continuous Service (for any reason whatsoever, whether or not later found to be invalid or in breach of employment laws in the jurisdiction where Participant is employed or the terms of Participant’s employment agreement, if any), and in consideration of the grant of the Award to which Participant is otherwise not entitled, Participant irrevocably agrees never to institute any claim against the Company, any Related Entity or the Employer, waives Participant’s ability, if any, to bring any such claim, and releases the Company, any Related Entity and the Employer 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, Participant shall be deemed irrevocably to have agreed not to pursue such claim and agreed to execute any and all documents necessary to request dismissal or withdrawal of such claim; 
(i)    unless otherwise provided in the Plan or by the Company in its discretion, the Award and the benefits evidenced by this Agreement do not create any entitlement to have the Award 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 shares of the Company; and
(j)    neither the Company, the Employer nor any Related Entity shall be liable for any foreign exchange rate fluctuation between Participant’s local currency and the United States Dollar that may affect the value of the Award or of any amounts due to Participant pursuant to the settlement of the Award or the subsequent sale of any shares of Common Stock acquired upon settlement.

9

Exhibit 10.39

10.    No Advice Regarding Grant.  The Company is not providing any tax, legal or financial advice, nor is the Company making any recommendations regarding Participant’s participation in the Plan, or Participant’s acquisition or sale of the underlying shares of Common Stock.  Participant is hereby advised to consult with Participant’s own personal tax, legal and financial advisors regarding Participant’s participation in the Plan before taking any action related to the Plan.
11.    Data Privacy.  Participant hereby explicitly and unambiguously consents to the collection, use and transfer, in electronic or other form, of Participant’s personal data as described in this Agreement and any other Award grant materials by and among, as applicable, the Employer, the Company and any Related Entity for the exclusive purpose of implementing, administering and managing Participant’s participation in the Plan.
Participant understands that the Company and the Employer may hold certain personal information about Participant, including, but not limited to, Participant’s name, home address and telephone number, date of birth, social insurance number or other identification number, salary, nationality, job title, any shares of stock or directorships held in the Company, details of all Awards or any other entitlement to shares of stock awarded, canceled, exercised, vested, unvested or outstanding in Participant’s favor (“Data”), for the exclusive purpose of implementing, administering and managing the Plan.  
Participant 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.  Participant 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 Participant’s country.  Participant understands that Participant may request a list with the names and addresses of any potential recipients of the Data by contacting Participant’s local human resources representative.  Participant authorizes the Company, E*TRADE Financial Services, Inc. and any other possible recipients which may assist the Company (presently or in the future) with 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 Participant’s participation in the Plan.  Participant understands that Data will be held only as long as is necessary to implement, administer and manage Participant’s participation in the Plan.  Participant understands that Participant 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 Participant’s local human resources representative.  Further, Participant understands that Participant is providing the consents herein on a purely voluntary basis. If Participant does not consent, or if Participant later seeks to revoke Participant’s consent, Participant’s employment status or service and career with the Employer will not be adversely affected; the only adverse consequence of refusing or withdrawing Participant’s consent is that the Company would not be able to grant Participant equity awards or administer or maintain such awards. Therefore, Participant understands that refusing or 

10

Exhibit 10.39

withdrawing Participant’s consent may affect Participant’s ability to participate in the Plan.  For more information on the consequences of Participant’s refusal to consent or withdrawal of consent, Participant understands that Participant may contact Participant’s local human resources representative.
12.        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 Participant shall be in writing and addressed to Participant at the most current address then indicated for Participant on the Company’s employee records or shall be delivered electronically to Participant through the Company’s electronic mail system or through an on-line brokerage firm authorized by the Company to effect sales of the Common Stock issued hereunder.  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. mail or equivalent foreign mail service, postage prepaid and properly addressed to the party to be notified.
13.    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 Company and its successors and assigns and Participant,  the legal representatives, heirs and legatees of Participant’s estate.
14.    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 shares of Common Stock underlying 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 shares of Common Stock, 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 shares of Common Stock underlying this Award, whether by reason of a deferral election that satisfies the requirements of Paragraph 7 above or the pro-rata Continuous Service vesting provisions of this Agreement, then the following provisions shall apply with respect to those shares, notwithstanding anything to the contrary set forth herein: 
-    None of those shares of Common Stock or other amounts which become issuable or distributable with respect to those shares 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 

11

Exhibit 10.39

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 (15th) day of the third (3rd) calendar month following the date of such Separation from Service.
-    None of those shares of Common Stock or other amounts which become issuable or distributable with respect to those shares 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 (1st) day of the seventh (7th) month following the date of Participant’s Separation 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 Company, and such delayed commencement is otherwise required in order to avoid a prohibited distribution under Code Section 409A(a)(2).  The deferred shares of Common Stock or other distributable amount shall be issued or distributed in a lump sum on the first (1st) day of the seventh (7th) month following the date of Participant’s Separation from Service or, if earlier, the first (1st) day of the month immediately following the date the Company receives proof of Participant’s death.
-    No amounts that vest and become payable under Paragraph 4 of this Agreement with respect to those shares of Common Stock 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 of Common Stock to which those amounts pertain would have become issuable in accordance with the provisions of Paragraph 6(a) of this Agreement. 
-    If a deferral election under Paragraph 7 of this Agreement is in effect with respect to any shares of Common Stock underlying this Award, no amounts that vest and become payable under Paragraph 4 with respect to those shares by reason of a Change in Control shall be distributed to Participant at the time of that Change in Control unless the 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 of Common Stock to which those amounts pertain would have become issuable in accordance with Participant’s deferral election under Paragraph 7 of this Agreement. 
15.    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 

12

Exhibit 10.39

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.
16.    Governing Law/Venue.  The interpretation, performance and enforcement of this Agreement shall be governed by the laws of the State of Delaware without resort to that State’s conflict-of-laws rules.  For purposes of any action, lawsuit or other proceedings brought to enforce this Agreement or otherwise relating to or arising from this Agreement, the parties hereby submit to and consent to the sole and exclusive jurisdiction of the courts of San Mateo County, California, or the federal courts for the United States for the Northern District of California, and no other courts, where this grant is made and/or to be performed.
17.    Employment.  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 Employer 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 or similar reasons comparable to Cause under employment laws in the jurisdiction where Participant is employed or under the terms of Participant’s employment agreement, if any.
18.    Plan Prospectus.  The official prospectus for the Plan is available on the Company’s intranet at: Stock section on HRconnect.  Participant may also obtain a printed copy of the prospectus by contacting Stock Plan Services at stockplanservices@gilead.com.
19.    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.  Participant hereby consents to receive such documents by electronic delivery and agrees to participate in the Plan through an on-line or electronic system established and maintained by the Company or a third party designated by the Company.
20.    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.
21.    Waiver.  Participant 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 of this Agreement.
22.    Language.  If Participant 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.
23.    Insider Trading Restrictions/Market Abuse Laws.  Participant acknowledges that, depending on Participant’s country of residence, Participant may be subject to insider trading restrictions and/or market abuse laws, which may affect Participant’s ability to 

13

Exhibit 10.39

acquire or sell shares or rights to shares (e.g., Performance Shares) under the Plan during such times as Participant is considered to have “inside information” regarding the Company (as defined by the laws in Participant’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.  Participant acknowledges that it is Participant’s responsibility to comply with any applicable restrictions, and Participant is advised to speak to his or her personal advisor on this matter.
24.    Foreign Account / Assets Reporting.  Depending upon the country to which laws Participant is subject, Participant may have certain foreign asset and/or account reporting requirements that may affect Participant’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 dividend equivalent amounts received as provided in Paragraph 3 or sale proceeds arising from the sale of shares) in a brokerage or bank account outside Participant’s country of residence.  Participant’s country may require that he or she report such accounts, assets or transactions to the applicable authorities in Participant’s country.  Participant is responsible for knowledge of and compliance with any such regulations and is advised to speak with his or her own personal tax, legal and financial advisors regarding same.  
25.    Addendum.  Notwithstanding any provisions in this Agreement, the Award shall be subject to any special terms and conditions set forth in any addendum, to this Agreement (the “Addendum”) for Participant’s country.  Moreover, if Participant relocates to one of the countries included in the Addendum, the special terms and conditions for such country will apply to Participant, to the extent the Company determines that the application of such terms and conditions is necessary or advisable for legal or administrative reasons.  The Addendum constitutes part of this Agreement.
26.    Imposition of Other Requirements.  The Company reserves the right to impose other requirements on Participant’s participation in the Plan, on the Award 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 Participant to sign any additional agreements or undertakings that may be necessary to accomplish the foregoing.
27.    Participant Acceptance.  Participant 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 any shares of Common Stock be issued (or other securities or property distributed) under this Agreement in the absence of such acceptance.  By accepting the Award, Participant agrees that this Award is granted under and governed by the terms and conditions of the Plan and this Agreement, including the terms and conditions set forth in any Addendum to this Agreement for Participant’s country.  Participant has reviewed the Plan and this Agreement in their entirety, has had an opportunity to obtain the advice of counsel prior to accepting this Agreement and fully understands all provisions of the Plan and Agreement.

14

Exhibit 10.39

    
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:      Kathryn Watson
Title:   Senior Vice President

PARTICIPANT

                        

_______________________________
Signature

15

Exhibit 10.39

ADDENDUM
TO THE
PERFORMANCE SHARE AWARD AGREEMENT
FOR NON-U.S. PARTICIPANTS
Terms and Conditions
This Addendum includes special terms and conditions applicable to Participant if Participant resides in one of the countries covered by this Addendum.  These terms and conditions are in addition to or, if so indicated, in place of, the terms and conditions set forth in the Agreement.  Capitalized terms used but not defined herein shall have the meanings given to such terms in Appendix A.  Capitalized terms not defined herein or in the attached Appendix A shall have the meanings assigned to them in the Plan.
If Participant is a citizen or resident of a country other than the one in which Participant is currently working, transfers employment after the Award is granted or is considered a resident of another country for local law purposes, the Company shall have the sole discretion to determine to what extent the terms and conditions in this Addendum shall apply to Participant.
Notifications
This Addendum also includes notifications of which Participant should be aware with respect to participation in the Plan.  The information contained in these notifications is based on the exchange control, securities and other laws in effect in the countries to which this Addendum refers as of January 2015.  Such laws are often complex and change frequently.  As a result, the Company strongly recommends that Participant not rely on the notifications herein as the only source of information relating to the consequences of participation in the Plan because the information may be out of date at the time Participant acquires shares of Common Stock or sells shares acquired under the Plan.
In addition, the notifications are general in nature and may not apply to Participant’s particular situation, and the Company is not in a position to assure Participant of any particular result.  Accordingly, Participant is strongly advised to seek appropriate professional advice as to how the relevant laws in Participant’s country may apply to Participant’s situation.
UNITED KINGDOM
Terms and Conditions
The following supplements the Withholding Taxes provisions contained in the Issuance or Distribution of Vested Shares or Other Amounts paragraph of the Agreement:
Withholding Taxes

16

Exhibit 10.39

If payment or withholding of any income tax due is not made within ninety (90) days of the end of the U.K. tax year in which the event giving rise to the income tax liability occurs or such other period specified in section 222(1)(c) of the U.K. Income Tax (Earnings and Pensions) Act 2003 (the “Due Date”), the amount of any uncollected income tax shall constitute a loan owed by Participant to the Employer, effective on the Due Date.  Participant agrees that the loan will bear interest at the then-current HM Revenue and Customs (“HMRC”) official rate and it will be immediately due and repayable, and the Company and/or the Employer may recover it at any time thereafter by any of the means referred to in the Issuance or Distribution of Vested Shares or Other Amounts paragraph of the Agreement.
Notwithstanding the foregoing, if Participant is a director or executive officer (as within the meaning of Section 13(k) of the 1934 Act), the terms of this provision will not apply to Participant.  In the event that Participant is a director or executive officer, as defined above, and income taxes are not collected from or paid by Participant by the Due Date, the amount of any uncollected income tax may constitute a benefit to Participant on which additional income tax and National Insurance Contributions (“NICs”) may be payable.  Participant will be responsible for reporting and paying any income tax due on this additional benefit directly to HMRC under the self-assessment regime and for reimbursing the Company and/or the Employer for the value of any employee NICs due on this additional benefit, which the Company and/or the Employer may recover at any time thereafter by any of the means referred to in the Issuance or Distribution of Vested Shares or Other Amounts paragraph of the Agreement.

17

Exhibit 10.39

APPENDIX A 
 
DEFINITIONS
The following definitions shall be in effect under the Agreement:
C.    Applicable Laws shall mean the legal requirements relating to the Plan and the Awards under applicable provisions of U.S. federal securities laws, state corporate and securities laws, the Code, the rules of any applicable stock exchange, and the securities, tax and exchange control laws, rules, regulations, and requirements of any non-U.S. jurisdiction applicable to Awards granted to residents therein.
D.    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.
E.    Certification Date shall mean the date following the completion of the Performance Period on which the Administrator certifies the attained level of the TSR Performance Goal for such Performance Period.
F.    Change in Control shall mean a change in ownership or control of the Company effected through the consummation of any of the following transactions:
(iv)    a merger, consolidation or other reorganization approved by the Company’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 Company’s outstanding voting securities immediately prior to such transaction;
(v)    a sale, transfer or other disposition of all or substantially all of the Company’s assets;
(vi)    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 

A-1

Exhibit 10.39

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; or
(vii)    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 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.  Should such holding company structure or other Parent entity be established for the Company, then subparagraph (iv) shall be applied solely to the board of directors of that holding company or Parent entity. 
C.    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.
D.    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, 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 Company or any Related Entity or (ii) the entity for which Participant is performing such services ceases to remain a Related Entity of the Company, even though Participant may subsequently continue to perform services for that entity. The Administrator shall have the exclusive discretion to determine when Participant ceases Continuous Service for purposes of the Award.
E.    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.  
F.    Employer shall mean the Related Entity employing Participant.

A-2

Exhibit 10.39

G.    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.
H.    1934 Act shall mean the U.S. Securities Exchange Act of 1934, as amended from time to time.
I.    Parent shall mean any corporation (other than the Company) in an unbroken chain of corporations ending with the Company, provided each corporation in the unbroken chain (other than the Company) 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.
J.    Participant shall mean the person to whom the Award is made pursuant to the Agreement.
K.    Performance Goal shall mean the total shareholder return performance goal specified on attached Schedule I (the “TSR Performance Goal”) that must be attained in order to satisfy the performance-vesting requirement for the shares of Common Stock subject to this Award.  
L.    Performance Period shall mean the period specified on attached Schedule I over which the attainment of the TSR Performance Goal is to be measured.
M.    Performance-Qualified Shares shall mean the maximum number of Shares in which Participant can vest based on the level at which the Performance Goal for the Performance Period is attained and shall be calculated in accordance with the provisions of attached Schedule I.  In no event shall the number of such Performance-Qualified Shares exceed two hundred percent (200%) of the Target Shares set forth in Paragraph 1 of this Agreement, as such number may be adjusted from time to time pursuant to the provisions of Paragraph 6 of this Agreement. Each Performance-Qualified Share that vests pursuant to the terms of the Award shall entitle Participant to receive one share of Common Stock.
N.    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.  The Administrator shall have the exclusive discretion to determine when Permanent Disability has occurred for purposes of this Agreement.
O.    Qualifying Change in Control shall mean a change in control of ownership of the Company effected by one or more of the following transactions:

A-3

Exhibit 10.39

(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 Company; 
(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 Company, as determined in accordance with Section 1.409A-3(i)(5)(v) of the Treasury Regulations, (ii) a change in the effective control 

A-4

Exhibit 10.39

of the Company, 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 portion of the assets of the Company, as determined in accordance with Section 1.409A-3(i)(5)(vii) of the Treasury Regulations.  

P.    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 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.
Q.    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.
R.    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 Company and any Parent or Subsidiary and any other corporation or business controlled by, controlling or under common control with, 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.  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.
S.    Stock Exchange shall mean the American Stock Exchange, the Nasdaq Global or Global Select Market or the New York Stock Exchange.
T.    Subsidiary shall mean any corporation (other than the Company) in an unbroken chain of corporations beginning with the Company, provided each corporation (other than the last corporation) in the unbroken chain owns, at the time of the determination, stock possessing fifty 

A-5

Exhibit 10.39

percent (50%) or more of the total combined voting power of all classes of stock in one of the other corporations in such chain.
U.    Withholding Taxes shall mean any and all income taxes (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, fringe benefits tax, payment on account or other tax-related items) required to be withheld by the Company and/or the Employer in connection with any taxable or tax withholding event, as applicable, attributable to the Award or Participant’s participation in the Plan.

A-6

Exhibit 10.39

SCHEDULE I
PERFORMANCE GOAL AND PERFORMANCE PERIOD  
PERFORMANCE PERIOD
The measurement period for the Performance Shares shall be the three (3)-year period beginning February 1, 2015 and ending January 31, 2018 (the “Performance Period”).
PERFORMANCE GOAL FOR PERFORMANCE VESTING
Performance Goal  – Total Shareholder Return: The performance-vesting requirement for the Performance Shares subject to this Award shall be tied to the percentile level at which the total shareholder return (including stock price appreciation and reinvestment of any cash dividends or other stockholder distributions) to the Company’s stockholders over the Performance Period stands in relation to the total shareholder return realized for that period by the companies comprising the following three subsets of the S&P Healthcare Index: Biotechnology, Pharmaceuticals and Health Care Equipment (collectively the “S&P Healthcare Sub-Index”).  
For such purpose, the total shareholder return (“TSR”) shall be determined pursuant to the following formula:
TSR  =  (Ending Stock Price* - Beginning Stock Price**) + Reinvested Dividends***                                Beginning Stock Price**
*  Ending Stock Price is the average daily closing price per share of the Common Stock calculated for the last sixty (60) consecutive trading days within the Performance Period.
**  Beginning Stock Price is the average daily closing price per share of the Common Stock calculated for the last sixty (60) consecutive trading days immediately preceding the commencement of the Performance Period.
*** Reinvested Dividends shall be calculated by multiplying (i) the aggregate number of shares (including fractional shares) that could have been purchased during the Performance Period had each cash dividend paid on a single share during that period been immediately reinvested in additional shares (or fractional shares) at the closing selling price per share of the Common Stock on the applicable dividend payment date by (ii) the average daily closing price per share calculated for the last sixty (60) consecutive trading days within the Performance Period.
Each of the foregoing amounts shall be equitably adjusted for stock splits, stock dividends, recapitalizations and other similar events affecting the shares in question without the issuer’s receipt of consideration.
For each company in the S&P Healthcare Sub-Index, the TSR with respect to its common stock shall be calculated in the same manner as for the Common Stock.
In addition, the following parameters shall be in effect for purposes of measuring the total shareholder return for the S&P Healthcare Sub-Index:
-    a company will be included in the S&P Healthcare Sub-Index only if that company is in existence both at the start of the Performance Period and at the end of the Performance Period, and the stock price performance of any company that is 

Schedule I-1

Exhibit 10.39

acquired, or otherwise ceases to exist as an independent publicly-owned entity, during the Performance Period shall not be taken into account in determining the relative total shareholder return of the companies comprising the S&P Healthcare Sub-Index for the Performance Period; 
-    any distribution (other than a regular cash dividend), whether in cash, securities (other than shares of the distributing company’s common stock) or other property, made during the Performance Period by a company included in the S&P Healthcare Sub-Index for that period shall be treated in the same manner as a regular cash dividend paid by such distributing company (in an amount per share of the distributing company’s common stock deemed equal to the cash amount or the fair market value of the securities or other property distributed per share of the distributing company’s common stock) that is immediately reinvested in the distributing company’s common stock; provided and only if the amount distributed per share of the distributing company’s common stock (as determined in the manner set forth herein) is at least ten percent (10%) of the closing price per share of the distributing company’s common stock on the effective date of such distribution; otherwise, such distribution shall not be taken in effect in calculating the relative total shareholder return of the companies comprising the S&P Healthcare Sub-Index; and     
-    any spin-off distribution of shares of the common stock of one or more subsidiaries or other affiliated entities that is made during the Performance Period by a company included in the S&P Healthcare Sub-Index for that period shall be treated in the same manner as a regular cash dividend paid by that distributing company (in an amount per share of the distributing company’s common stock deemed equal to the fair market value of the common stock (or fractional share thereof) of the spun-off entity distributed per share of the distributing company’s common stock) that is immediately reinvested in the distributing company’s common stock; provided and only if the amount distributed per share of the distributing company’s common stock (as determined in the manner set forth herein) is at least ten percent (10%) of the closing price per share of the distributing company’s common stock on the effective date of such distribution; otherwise, such spin-off distribution shall not be taken in effect in calculating the relative total shareholder return of the companies comprising the S&P Healthcare Sub-Index.     
For purposes of measuring the total shareholder return of the Company for the Performance Period, the foregoing parameters governing distributions and spin-off transactions shall also apply to any distribution (other than a regular cash dividend) or spin-off transaction that is effected by the Company during the Performance Period.
Should a Change in Control occur during the Performance Period, then the attained level of the Performance Goal shall be determined in accordance with the applicable Change in Control provisions of Paragraph 4 of this Agreement. 
Performance-Qualified Shares: Within thirty-five (35) days after the completion of the Performance Period, the Administrator shall determine and certify the actual level at which the TSR Performance Goal is attained. The actual number of Performance-Qualified Shares that results from such certification may range from 0% to 200% of the Target Shares subject to this Award, as such number may be adjusted from time to time pursuant to the provisions of Paragraph 5 of this Agreement.  The actual percentage shall be determined on the basis of the percentile level at which the Administrator 

Schedule I-2

Exhibit 10.39

certifies that the TSR Performance Goal has been attained in relation to the total shareholder return realized for that period by the companies comprising the S&P Healthcare Sub-Index; provided, however, that (i) the maximum number of shares of Common Stock that may qualify as Performance-Qualified Shares may not exceed 200% of the Target Shares, as such number may be adjusted from time to time pursuant to the provisions of Paragraph 5 of this Agreement, and (ii) in no event shall the number of shares of Common Stock that may qualify as Performance-Qualified Shares pursuant to the Relative TSR Payout Slope below exceed 100% of the Target Shares (as such number may be adjusted from time to time pursuant to the provisions of Paragraph 5 of this Agreement) if the Company’s absolute TSR for the Performance Period is negative.
Payout Slope for Determining Number of Performance-Qualified Shares Based on Attained Levels of TSR Performance Goal:  The number of shares of Common Stock that may qualify as Performance-Qualified Shares on the basis of the certified percentile level of TSR Performance Goal attainment shall be calculated by multiplying the Target Shares (as such number may be adjusted from time to time pursuant to the provisions of Paragraph 5 of this Agreement) by the applicable percentage determined in accordance with the following payout slope for the TSR Performance Goal (with appropriate straight-line interpolation for any attained percentile level within two designated percentile levels in such slope): 

Schedule I-3

Exhibit 10.39

TOTAL SHAREHOLDER RETURN PAYOUT SLOPE 

Payout Slope Details

	
			
	Percentile
	% of Target

	0
	0
	%

	10th
	0
	%

	20th
	0
	%

	30th
	25
	%

	40th
	63
	%

	50th
	100
	%

	60th
	125
	%

	70th
	150
	%

	80th
	175
	%

	81st
	200
	%

	90th
	200
	%

	100th
	200
	%

Schedule I-4

Exhibit 10.39

CONTINUOUS SERVICE VESTING REQUIREMENT FOR 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 in accordance with the performance vesting provisions of this Schedule I shall be tied to his or her completion of the following Continuous Service vesting requirements: 
-    If Participant remains in Continuous Service through the Certification Date, Participant shall vest in one-hundred percent (100%) of the Performance-Qualified Shares certified by the Administrator for the Performance Period.
-    If Participant’s Continuous Service terminates prior to the Certification Date by reason of death or Permanent Disability, then Participant shall, following the completion of the Performance Period and the Certification Date, vest in that number of shares of Common Stock (if any) determined by multiplying the number of Performance-Qualified Shares, based on the actual level at which the TSR Performance Goal is attained and certified for the Performance Period, by a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in the 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 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 Performance Period but prior to the Certification Date, then Participant shall, following the completion of the Performance Period and the Certification Date, vest in that number of shares of Common Stock (if any) determined by multiplying the number of Performance-Qualified Shares, based on the actual level at which the TSR Performance Goal is attained and certified for the Performance Period, by a fraction, the numerator of which is the number of months of Continuous Service actually completed by Participant in such 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 Performance Period.  Notwithstanding the foregoing, if the Company receives an opinion of counsel that there has been a legal judgment and/or legal development in Participant’s jurisdiction that would likely result in the favorable retirement treatment that applies to this grant under the Plan being deemed unlawful and/or discriminatory, then the Company will not apply the favorable retirement treatment provided in this subparagraph.
-    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 Performance Period but prior to the Certification Date 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 number of 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 Performance 

Schedule I-5

Exhibit 10.39

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

Schedule I-6

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