Employment Agreement - Gilead Sciences Inc. and Michael L. Riordan



                          [GILEAD SCIENCES LETTERHEAD]
 
                                                                 October 1, 1996
 
Michael L. Riordan, M.D.
360 Forest Avenue, No. 604
Palo Alto, California 94301
 
Dear Dr. Riordan:
 
    This letter agreement sets forth the terms upon which you will continue as
an employee of Gilead Sciences, Inc. (the 'Company') during the period from
October 1, 1996 through December 31, 1998.
 
I.  OCTOBER 1, 1996 THROUGH DECEMBER 31, 1996.  You will become a part-time
    employee on October 1, 1996 and continue in such capacity through December
    31, 1996, as provided below:
 
    A.  TERMS OF EMPLOYMENT.
 
       1.  TITLE AND DUTIES:  Your title and duties will remain the same. You
           will reduce your time commitment to approximately fifty percent (50%)
           of full-time employment.
 
       2.  SALARY:  You will receive fifty percent (50%) of your current base
           salary.
 
       3.  BONUS:  You will be eligible for a bonus for the calendar year ending
           December, 1996 in the full amount for the second and third quarters
           of the year and one-half ( 1/2) for the fourth quarter (I.E.,
           five-eighths ( 5/8) of the full annual bonus), as determined by the
           Board of Directors at its July 1997 meeting in accordance with
           current policies.
 
       4.  HEALTH AND LIFE INSURANCE; FACILITIES:  You will receive all life and
           disability insurance, hospitalization and major medical, dental and
           other employee benefit plans offered by the Company to its full-time
           employees, at levels maintained for you prior to October 1, 1996. You
           will be provided with part-time secretarial and office support.
 
       5.  DEATH OR DISABILITY:  In the event of your death or disability, your
           options will vest as provided therein.
 
       6.  OPTIONS:  Your existing options will continue to vest during this
           period.
 
II. 1997-1998.  During the period commencing on January 1, 1997 through December
    31, 1998, your employment will continue as follows:
 
    A.  TERMS OF EMPLOYMENT.
 
       1.  DUTIES:  You will continue as a part-time employee, serving at the
           Chief Executive Officer's request and direction at times and for
           periods mutually agreed to by you and the Chief Executive Officer.
 
       2.  SALARY:  You will be paid $5,000 per month.
 
       3.  BONUS:  You will not be eligible for a bonus for calendar years 1997
           or 1998.
 
       4.  HEALTH AND LIFE INSURANCE; FACILITIES:  You will receive life and
           disability insurance, hospitalization and major medical, dental and
           other employee benefit plans offered by the Company to its full-time
           employees, at levels maintained for you prior to October 1, 1996. You
           will be provided with part-time secretarial and office support.
 
       5.  NONCOMPETITION AGREEMENT:  You agree not to compete with the Company
           during a two year period commencing on January 1, 1997 and ending on
           December 31, 1998, as provided below:
 
           A.  SCOPE OF NON-COMPETITION COVENANT:  You shall not, directly or
               indirectly, without the prior written consent of the Company,
               own, manage, operate, join, control, finance or

Michael L. Riordan, M.D.
October 1, 1996
Page 2
 
               participate in the ownership, management, operation, control or
               financing of, or be connected as an officer, director, employee,
               partner, principal, agent, representative, consultant, licensor,
               licensee or otherwise with, any business or enterprise in the
               world which is engaged in the biotechnology or pharmaceutical
               business.
 
           B.  EXCEPTION:  You shall be permitted to (i) invest in any business
               solely as a passive investor, up to five percent (5%) of the
               publicly traded equity securities of such business, or (ii) be
               employed by a business or enterprise that is engaged primarily in
               a business other than the biotechnology or pharmaceutical
               business if you do not apply your expertise at such business or
               enterprise to that part of such business or enterprise that is or
               could be competitive with the biotechnology or pharmaceutical
               business.
 
       6.  OPTIONS:  Your existing options will continue to vest during this
           period. At the end of the two year period, the Board would consider
           whether the exercise period for vested but unexercised options should
           be extended in light of the contributions made by Dr. Riordan to the
           Company.
 
       7.  TERMINATION:  In the event of your violation of the noncompetition
           provisions contained in Section (II)(A)(5) above, the vesting of your
           options will cease and the Company could terminate your employment or
           compensation or seek injunctive relief.
 
III. BOARD SERVICE.  From October 1, 1996 through December 31, 1998, you will
    continue serving on the Board of Directors, subject to termination at the
    discretion of the Board of Directors. Your sole compensation for serving on
    the Board of Directors during the two year period will be the salary and
    benefits described in Sections (I)(A)(1-5) and (II)(A)(1-4) above. If
    elected thereafter, you will be entitled to standard, independent director
    compensation.
 
    A.  The benefits described in Sections I and II will continue even if you
       are not serving on the Board of Directors, so long as you do not violate
       the non-competition provisions contained in Section (II)(A)(5) above and
       remain available to assist the Chief Executive Officer as provided in
       Section (II)(A)(1).
 
IV. GOVERNING LAW.  This Letter Agreement shall be construed in accordance with,
    and governed in all respects by, the laws of the State of California
    (without giving effect to principles of conflicts of law).
 
    Please evidence your acceptance of the terms of this Letter Agreement by
executing this Letter Agreement below and returning the executed Letter
Agreement to the undersigned.
 
                                Very truly yours,
 
                                GILEAD SCIENCES, INC.
 
                                By:              /s/ JOHN C. MARTIN
                                     ------------------------------------------
                                                   John C. Martin
                                        PRESIDENT AND CHIEF EXECUTIVE OFFICER
 
I hereby accept, and agree to
be bound by, the terms of this
Letter Agreement:
 
    /s/ MICHAEL L. RIORDAN
------------------------------
   Michael L. Riordan, M.D.