8-KLeadership ChangesExhibits & Filings

GILEAD SCIENCES, INC. 8-K Report, Executive Changes (Feb 1, 2010)

Filed February 1, 2010For Securities:GILD

Summary

Gilead Sciences, Inc. (GILD) filed an 8-K on February 1, 2010, reporting on key corporate governance and executive compensation matters. The most significant event detailed is the appointment of Per Wold-Olsen to the Board of Directors, effective January 28, 2010. Mr. Wold-Olsen, who previously consulted for the company on developing world access, will serve on the Scientific Committee and received a pro-rated equity grant and cash retainer for his new role. The filing also outlines amendments to the company's Severance Plan, primarily limiting eligibility for Section 280G Gross-Up Payments to specific employees and introducing benefit reduction provisions for others in the event of a change in control. Additionally, the report details the 2009 bonus awards and 2010 base salaries for named executive officers, along with the grant of stock options and performance share awards, the latter tied to relative Total Stockholder Return (TSR) and revenue growth over a three-year period.

Key Highlights

  • 1Appointment of Per Wold-Olsen to the Board of Directors and Scientific Committee.
  • 2Per Wold-Olsen received a pro-rated equity grant (options and RSUs) and cash retainer.
  • 3Amendment to the Severance Plan, limiting 280G Gross-Up Payment eligibility and introducing benefit reduction provisions.
  • 4Disclosure of 2009 bonus awards and 2010 base salaries for named executive officers.
  • 5Grant of stock options with an exercise price of $47.51 per share to executive officers.
  • 6Grant of performance share awards to executive officers, contingent on relative TSR and revenue growth over three years (2010-2012).
  • 7Details on vesting schedules and payout multipliers for performance share awards based on percentile rankings relative to the AMEX Biotech-Pharmaceutical Index.

Frequently Asked Questions

Per Wold-Olsen was appointed to the Board of Directors and the Scientific Committee of Gilead Sciences, Inc. on January 28, 2010. He previously served as Chairman of the company's Health Policy Advisory Board and provided consulting services on developing world access.

The Severance Plan was amended to limit eligibility for Section 280G Gross-Up Payments to participants currently meeting eligibility standards based on their employment positions. For other participants, severance benefits in connection with a change in control will be subject to reduction provisions to ensure they do not exceed allowable limits under Section 280G of the Internal Revenue Code, or are structured to provide the greatest after-tax benefit.

Executive officers received stock options with an exercise price of $47.51, vesting over five years. They also received performance share awards, which can convert into actual shares based on Gilead's Total Stockholder Return (TSR) and revenue growth relative to the AMEX Biotech-Pharmaceutical Index over a three-year period (2010-2012). Payouts range from 0% to 200% of the awarded shares depending on performance against the peer group.

The filing details the 2009 bonus amounts and 2010 base salaries for named executive officers, including John C. Martin (Chairman and CEO), John F. Milligan (President and COO), Norbert W. Bischofberger (EVP, R&D and CSO), Kevin Young (EVP, Commercial Operations), Gregg H. Alton (EVP, Corporate and Medical Affairs), and Robin L. Washington (SVP and CFO). For example, John C. Martin received a $2,187,500 bonus for 2009 and a $1,350,000 base salary for 2010.