1995 Non-Employee Directors’ Stock Option Plan – Gilead Sciences Inc.
GILEAD SCIENCES, INC.
1995 NON-EMPLOYEE DIRECTORS' STOCK OPTION PLAN
ADOPTED ON NOVEMBER 27, 1995
APPROVED BY STOCKHOLDERS
ON APRIL 25, 1996
AMENDED ON JANUARY 26, 1999
APPROVED BY STOCKHOLDERS
ON _______________, 1999
TERMINATION DATE: NOVEMBER 26, 2005
1. PURPOSE.
(a) The purpose of the 1995 Non-Employee Directors' Stock Option
Plan (the 'Plan') is to provide a means by which each director of Gilead
Sciences, Inc. (the 'Company') who is not otherwise an employee of the
Company or of any Affiliate of the Company (each such person being hereafter
referred to as a 'Non-Employee Director') will be given an opportunity to
purchase stock of the Company.
(b) The word 'Affiliate' as used in the Plan means any parent
corporation or subsidiary corporation of the Company as those terms are
defined in Sections 424(e) and (f), respectively, of the Internal Revenue
Code of 1986, as amended from time to time (the 'Code').
(c) The Company, by means of the Plan, seeks to retain the services
of persons now serving as Non-Employee Directors of the Company, to secure
and retain
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the services of persons capable of serving in such capacity, and to provide
incentives for such persons to exert maximum efforts for the success of the
Company.
2. ADMINISTRATION.
(a) The Plan shall be administered by the Board of Directors of the
Company (the 'Board') unless and until the Board delegates administration to
a committee, as provided in subparagraph 2(b).
(b) The Board may delegate administration of the Plan to a committee
composed of not fewer than two (2) members of the Board (the 'Committee').
If administration is delegated to a Committee, the Committee shall have, in
connection with the administration of the Plan, the powers theretofore
possessed by the Board, subject, however, to such resolutions, not
inconsistent with the provisions of the Plan, as may be adopted from time to
time by the Board. The Board may abolish the Committee at any time and
revest in the Board the administration of the Plan.
3. SHARES SUBJECT TO THE PLAN.
(a) Subject to the provisions of paragraph 10 relating to
adjustments upon changes in stock, the stock that may be sold pursuant to
options granted under the Plan shall not exceed in the aggregate Five Hundred
Fifty Thousand (550,000) shares of the Company's common stock. If any option
granted under the Plan shall for any reason expire or otherwise terminate
without having been exercised in full, the stock not purchased under such
option shall again become available for the Plan.
(b) The stock subject to the Plan may be unissued shares or
reacquired shares, bought on the market or otherwise.
4. ELIGIBILITY.
Options shall be granted only to Non-Employee Directors of the Company.
5. NON-DISCRETIONARY GRANTS.
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(a) On January 2, 1996, each person who is then a Non-Employee
Director automatically shall be granted an option to purchase twenty-five
thousand (25,000) shares of common stock of the Company on the terms and
conditions set forth herein.
(b) Each person who is, after January 2, 1996, elected for the first
time to be a Non-Employee Director automatically shall, upon the date of
initial election to be a Non-Employee Director by the Board or stockholders
of the Company, be granted an option to purchase twenty-five thousand
(25,000) shares of common stock of the Company on the terms and conditions
set forth herein.
(c) On the one-year anniversary date of each Non-Employee Director's
initial grant under subparagraph 5(a) or 5(b) above, and on each one-year
anniversary date thereafter, each person who is then a Non-Employee Director
automatically shall be granted an option to purchase five thousand (5,000)
shares of common stock of the Company on the terms and conditions set forth
herein.
(d) In addition to the option grants described above, the
Chairperson of the Board, if he or she is a Non-Employee Director, or a
Non-Employee Director designated by the Board as a 'lead director' in
circumstances where there is no Chairperson or the Chairperson is an employee
of the Company, automatically shall be granted options to purchase: (i)
twenty thousand (20,000) shares of common stock of the Company, at the time
of his or her initial grant under subparagraph 5(a) or 5(b) above or upon
later election as Chairperson or designation as lead director; and (ii) four
thousand (4,000) shares of common stock of the Company at the time of each
annual grant under subparagraph 5(c) above, all such grants to be on the
terms and conditions set forth herein.
(e) In addition to the option grants described above, each
Non-Employee Director who serves on a standing committee of the Board
automatically shall be
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granted options to purchase: (i) one thousand (1,000) shares of common stock
of the Company, at the time of his or her initial grant under subparagraph
5(a) or 5(b) above or upon later election to each such committee, plus an
additional two thousand (2,000) shares of common stock of the Company at the
same time for the Chairperson of each such committee; and (ii) one thousand
(1,000) shares of common stock of the Company at the time of each annual
grant under subparagraph 5(c) above, plus an additional two thousand (2,000)
shares of common stock of the Company for the Chairperson of each such
committee, at the time of each annual grant, all such grants to be on the
terms and conditions set forth herein.
6. OPTION PROVISIONS.
Each option granted under the Plan shall be subject to the following
terms and conditions:
(a) The term of each option commences on the date it is granted and,
unless sooner terminated as set forth herein, expires on the date
('Expiration Date') ten (10) years from the date of grant. If the optionee's
service as a Non-Employee Director or employee of or consultant to the
Company or any Affiliate terminates for any reason or for no reason, the
option shall terminate on the earlier of the Expiration Date or the date
three (3) months following the date of termination of all such service;
PROVIDED, HOWEVER, that if such termination of service is due to the
optionee's death or permanent and total disability (within the meaning of
Section 422(c)(6) of the Code), the option shall terminate on the earlier of
the Expiration Date or one (1) year following the date of the optionee's
death or permanent and total disability. In any and all circumstances, an
option may be exercised following termination of the optionee's service as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate only as to that number of shares as to which it was exercisable on
the date of termination of all
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such service under the provisions of subparagraph 6(e).
(b) The exercise price of each option shall be one hundred percent
(100%) of the fair market value of the stock subject to such option on the
date such option is granted.
(c) Payment of the exercise price of each option is due in full in
cash upon any exercise when the number of shares being purchased upon such
exercise is less than 1,000 shares; but when the number of shares being
purchased upon an exercise is 1,000 or more shares, the optionee may elect to
make payment of the exercise price under one of the following alternatives:
(i) Payment of the exercise price in cash at the time of
exercise; or
(ii) Provided that at the time of the exercise the Company's
common stock is publicly traded and quoted regularly in the Wall Street
Journal, payment by delivery of shares of common stock of the Company already
owned by the optionee, held for the period required to avoid a charge to the
Company's reported earnings, and owned free and clear of any liens, claims,
encumbrances or security interests, which common stock shall be valued at its
fair market value on the date preceding the date of exercise; or
(iii) Payment by a combination of the methods of payment
specified in subparagraphs 6(c)(i) and 6(c)(ii) above.
Notwithstanding the foregoing, this option may be exercised pursuant to
a program developed under Regulation T as promulgated by the Federal Reserve
Board which results in the receipt of cash (or check) by the Company prior to
the issuance of shares of the Company's common stock.
(d) An option shall not be transferable except by will or by the
laws of descent
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and distribution, or pursuant to a qualified domestic relations order
satisfying the requirements of Rule 16b-3 under the Securities Exchange Act
of 1934, as amended ('Rule 16b-3') and shall be exercisable during the
lifetime of the person to whom the option is granted only by such person (or
by his guardian or legal representative) or transferee pursuant to such an
order. Notwithstanding the foregoing, the optionee may, by delivering
written notice to the Company in a form satisfactory to the Company,
designate a third party who, in the event of the death of the optionee, shall
thereafter be entitled to exercise the option.
(e) The option shall become exercisable in installments over a
period of five (5) years from the date of grant at the rate of five percent
(5%) in equal quarterly installments commencing on the date three (3) months
after the date of grant of the option, provided that the optionee has, during
the entire period prior to such vesting date, continuously served as a
Non-Employee Director or employee of or consultant to the Company or any
Affiliate of the Company, whereupon such option shall become fully
exercisable in accordance with its terms with respect to that portion of the
shares represented by that installment.
(f) The Company may require any optionee, or any person to whom an
option is transferred under subparagraph 6(d), as a condition of exercising
any such option: (i) to give written assurances satisfactory to the Company
as to the optionee's knowledge and experience in financial and business
matters; and (ii) to give written assurances satisfactory to the Company
stating that such person is acquiring the stock subject to the option for
such person's own account and not with any present intention of selling or
otherwise distributing the stock. These requirements, and any assurances
given pursuant to such requirements, shall be inoperative if (i) the issuance
of the shares upon the exercise of the option has been registered under a
then-currently-
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effective registration statement under the Securities Act of 1933, as amended
(the 'Securities Act'), or (ii), as to any particular requirement, a
determination is made by counsel for the Company that such requirement need
not be met in the circumstances under the then-applicable securities laws.
(g) Notwithstanding anything to the contrary contained herein, an
option may not be exercised unless the shares issuable upon exercise of such
option are then registered under the Securities Act or, if such shares are
not then so registered, the Company has determined that such exercise and
issuance would be exempt from the registration requirements of the Securities
Act.
7. COVENANTS OF THE COMPANY.
(a) During the terms of the options granted under the Plan, the
Company shall keep available at all times the number of shares of stock
required to satisfy such options.
(b) The Company shall seek to obtain from each regulatory commission
or agency having jurisdiction over the Plan such authority as may be required
to issue and sell shares of stock upon exercise of the options granted under
the Plan; PROVIDED, HOWEVER, that this undertaking shall not require the
Company to register under the Securities Act either the Plan, any option
granted under the Plan, or any stock issued or issuable pursuant to any such
option. If, after reasonable efforts, the Company is unable to obtain from
any such regulatory commission or agency the authority which counsel for the
Company deems necessary for the lawful issuance and sale of stock under the
Plan, the Company shall be relieved from any liability for failure to issue
and sell stock upon exercise of such options.
8. USE OF PROCEEDS FROM STOCK.
Proceeds from the sale of stock pursuant to options granted under the
Plan shall
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constitute general funds of the Company.
9. MISCELLANEOUS.
(a) Neither an optionee nor any person to whom an option is
transferred under subparagraph 6(d) shall be deemed to be the holder of, or
to have any of the rights of a holder with respect to, any shares subject to
such option unless and until such person has satisfied all requirements for
exercise of the option pursuant to its terms.
(b) Throughout the term of any option granted pursuant to the Plan,
the Company shall make available to the holder of such option, not later than
one hundred twenty (120) days after the close of each of the Company's fiscal
years during the option term, upon request, such financial and other
information regarding the Company as comprises the annual report to the
stockholders of the Company provided for in the Bylaws of the Company and
such other information regarding the Company as the holder of such option may
reasonably request.
(c) Nothing in the Plan or in any instrument executed pursuant
thereto shall confer upon any Non-Employee Director any right to continue in
the service of the Company or any Affiliate or shall affect any right of the
Company, its Board or stockholders or any Affiliate to terminate the service
of any Non-Employee Director with or without cause.
(d) No Non-Employee Director, individually or as a member of a
group, and no beneficiary or other person claiming under or through him,
shall have any right, title or interest in or to any option reserved for the
purposes of the Plan except as to such shares of common stock, if any, as
shall have been reserved for him pursuant to an option granted to him.
(e) In connection with each option made pursuant to the Plan, it
shall be a
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condition precedent to the Company's obligation to issue or transfer shares
to a Non-Employee Director, or to evidence the removal of any restrictions on
transfer, that such Non-Employee Director make arrangements satisfactory to
the Company to insure that the amount of any federal or other withholding tax
required to be withheld with respect to such sale or transfer, or such
removal or lapse, is made available to the Company for timely payment of such
tax.
(f) As used in this Plan, 'fair market value' means, as of any date,
the value of the common stock of the Company determined as follows:
(i) If the common stock is listed on any established stock
exchange or a national market system, including without limitation the
National Market System of the National Association of Securities Dealers,
Inc. Automated Quotation ('NASDAQ') System, the Fair Market Value of a share
of common stock shall be the closing sales price for such stock (or the
closing bid, if no sales were reported) as quoted on such system or exchange
(or the exchange with the greatest volume of trading in common stock) on the
last market trading day prior to the day of determination, as reported in the
Wall Street Journal or such other source as the Board deems reliable;
(ii) If the common stock is quoted on the NASDAQ System (but
not on the National Market System thereof) or is regularly quoted by a
recognized securities dealer but selling prices are not reported, the Fair
Market Value of a share of common stock shall be the mean between the bid and
asked prices for the common stock on the last market trading day prior to the
day of determination, as reported in the Wall Street Journal or such other
source as the Board deems reliable;
(iii) In the absence of an established market for the common
stock, the Fair Market Value shall be determined in good faith by the Board.
10. ADJUSTMENTS UPON CHANGES IN STOCK.
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(a) If any change is made in the stock subject to the Plan, or
subject to any option granted under the Plan (through merger, consolidation,
reorganization, recapitalization, stock dividend, dividend in property other
than cash, stock split, liquidating dividend, combination of shares, exchange
of shares, change in corporate structure or otherwise), the Plan and
outstanding options will be appropriately adjusted in the class(es) and
maximum number of shares subject to the Plan and the class(es) and number of
shares and price per share of stock subject to outstanding options.
(b) In the event of: (1) a merger or consolidation in which the
Company is not the surviving corporation; (2) a reverse merger in which the
Company is the surviving corporation but the shares of the Company's common
stock outstanding immediately preceding the merger are converted by virtue of
the merger into other property, whether in the form of securities, cash or
otherwise; or (3) any other capital reorganization in which more than fifty
percent (50%) of the shares of the Company entitled to vote are exchanged,
the time during which options outstanding under the Plan may be exercised
shall be accelerated and the options terminated if not exercised prior to
such event.
11. AMENDMENT OF THE PLAN.
(a) The Board at any time, and from time to time, may amend the
Plan, PROVIDED, HOWEVER, that the Board shall not amend the plan more than
once every six (6) months, with respect to the provisions of the Plan which
relate to the amount, price and timing of grants, other than to comport with
changes in the Code, the Employee Retirement Income Security Act, or the
rules thereunder. Except as provided in paragraph 10 relating to adjustments
upon changes in stock, no amendment shall be effective unless approved by the
stockholders of the Company within twelve (12) months before or after the
adoption of the amendment, where the amendment will:
(i) Increase the number of shares which may be issued under
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the Plan;
(ii) Modify the requirements as to eligibility for
participation in the Plan (to the extent such modification requires
stockholder approval in order for the Plan to comply with the requirements of
Rule 16b-3); or
(iii) Modify the Plan in any other way if such modification
requires stockholder approval in order for the Plan to comply with the
requirements of Rule 16b-3 or Section 162(m) of the Internal Revenue Code.
(b) Rights and obligations under any option granted before any
amendment of the Plan shall not be impaired by such amendment unless (i) the
Company requests the consent of the person to whom the option was granted and
(ii) such person consents in writing.
12. TERMINATION OR SUSPENSION OF THE PLAN.
(a) The Board may suspend or terminate the Plan at any time. Unless
sooner terminated, the Plan shall terminate on November 26, 2005. No options
may be granted under the Plan while the Plan is suspended or after it is
terminated.
(b) Rights and obligations under any option granted while the Plan
is in effect shall not be impaired by suspension or termination of the Plan,
except with the consent of the person to whom the option was granted.
(c) The Plan shall terminate upon the occurrence of any of the
events described in Section 10(b) above.
13. EFFECTIVE DATE OF PLAN; CONDITIONS OF EXERCISE.
(a) The Plan shall become effective upon adoption by the Board of
Directors, subject to the condition subsequent that the Plan is approved by
the stockholders of the Company.
(b) No option granted under the Plan shall be exercised or
exercisable unless
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and until the condition of subparagraph 13(a) above has been met.
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GILEAD SCIENCES, INC.
NONSTATUTORY STOCK OPTION
_____________________________, Optionee:
GILEAD SCIENCES, INC. (the 'Company'), pursuant to its 1995 Non-Employee
Directors' Stock Option Plan (the 'Plan'), has this day granted to you, the
optionee named above, an option to purchase shares of the common stock of the
Company (the 'Common Stock'). This option is not intended to qualify and will
not be treated as an 'incentive stock option' within the meaning of Section 422
of the Internal Revenue Code of 1986, as amended from time to time (the 'Code').
The details of your option are as follows:
1. The total number of shares of Common Stock subject to this option
is (________). Subject to the limitations contained herein, this option shall
be exercisable with respect to each installment shown below on or after the
date of earliest exercise (vesting) applicable to such installment, as
follows:
NUMBER OF SHARES (INSTALLMENT) DATE OF EARLIEST EXERCISE (VESTING)
2. (a) The exercise price of this option is $____________
(____________ Dollars and ________ cents) per share.
(b) Payment of the exercise price is due in full in cash upon
exercise of all or any part of each installment which has become exercisable
by you when the number of shares being purchased is less than 1,000 shares;
when the number of shares being purchased is 1,000 or more shares, you may
elect to make payment of the exercise price under one of the following
alternatives, all as set forth more fully in the Plan: (i) in cash upon
exercise; (ii) provided that the Company's stock is publicly traded, payment
by delivery of shares of Common Stock already owned by you, free and clear of
any liens; or (iii) payment by a combination of the methods set forth in
clauses (i) and (ii). Notwithstanding the foregoing, this option may be
exercised pursuant to a program developed under Regulation T as promulgated
by the Federal Reserve Board which results in the receipt of cash (or check)
by the Company prior to the issuance of Common Stock.
3. In no event may this option be exercised for any number of shares
which would require the issuance of anything other than whole shares.
4. Notwithstanding anything to the contrary contained herein, this
option may not be exercised unless the shares issuable upon exercise of this
option are then registered under the Securities Act of 1933 (the 'Securities
Act') or, if such shares are not then so registered, the Company has
determined that such exercise and issuance would be exempt from the
registration requirements of the Securities Act.
5. The term of this option commences on the date hereof and, unless
sooner terminated as set forth below or in the Plan, terminates on
________________ (which date shall be ten (10) years from the date this
option is granted). In no event may this option be exercised on or after the
date on which it terminates. This option shall terminate prior to the
expiration of its term as follows: three (3) months after the termination of
your service as a non-employee director or employee of or consultant to the
Company or an affiliate of the Company (as defined in the Plan), for any
reason or for no reason, unless:
(a) such termination of service is due to your permanent and
total disability (within the meaning of Section 422 (c)(6) of the Code), in
which event the option shall terminate on the earlier of the termination date
set forth above or one (1) year following such permanent and total disability;
(b) such termination of service is due to your death, in which
event the option shall terminate on the earlier of the termination date set
forth above or one (1) year after your death; or
(c) exercise of the option within three (3) months after such
termination of service would result in liability under Section 16(b) of the
Securities Exchange Act of 1934 (the 'Exchange Act'), in which case the
option will terminate on the earlier of (i) the termination date set forth
above, (ii) the tenth (10th) day after the last date upon which exercise
would result in such liability, or (iii) six (6) months and ten (10) days
after such termination of service.
However, this option may be exercised following such termination of
service only as to that number of shares as to which it was exercisable on
the date of such termination under the provisions of paragraph 1 of this
option.
6. This option may be exercised, to the extent specified above, by
delivering a notice of exercise together with the exercise price to the
Secretary of the Company, or to such other person as the Company may
designate, during regular business hours, together with such additional
documents as the Company may then require pursuant to subparagraph 6(f) of
the Plan.
7. This option is not transferable except by will, by the laws of
descent and distribution or pursuant to a qualified domestic relations order
satisfying the requirements of Rule 16b-3 of the Exchange Act, and is
exercisable during your life only by you or a transferee pursuant to a
qualified domestic relations order. Notwithstanding the foregoing, you may,
by delivering written notice to the Company in a form satisfactory to the
Company, designate a third party who, in the event of your death, shall
thereafter be entitled to exercise this option.
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8. This option is not an employment or consulting agreement and
nothing in this option shall be deemed to create in any way whatsoever any
obligation on your part to continue in the service of the Company, or of the
Company to continue your service with the Company.
9. Any notices provided for in this option or the Plan shall be
given in writing and shall be deemed effectively given upon receipt or, in
the case of notices delivered by the Company to you, five (5) days after
deposit in the United States mail, postage prepaid, addressed to you at the
address specified below or at such other address as you hereafter designate
by written notice to the Company.
10. This option is subject to all the provisions of the Plan, a copy
of which is attached hereto and its provisions are hereby made a part of this
option, including without limitation the provisions of paragraph 6 of the
Plan relating to option provisions, and is further subject to all
interpretations, amendments, rules and regulations which may from time to
time be promulgated and adopted pursuant to the Plan. In the event of any
conflict between the provisions of this option and those of the Plan, the
provisions of the Plan shall control.
Dated ________________, 19___
Very truly yours,
GILEAD SCIENCES, INC.
By: __________________________
John C. Martin
President and Chief Executive Officer
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The undersigned:
(a) Acknowledges receipt of the foregoing option and understands that
all rights and liabilities with respect to this option are set forth in the
option and the Plan; and
(b) Acknowledges that as of the date of grant of this option, it sets
forth the entire understanding between the undersigned optionee and the
Company and its affiliates regarding the acquisition of stock in the Company
and supersedes all prior oral and written agreements on that subject with the
exception of any stock options previously granted to the optionee by the
Company, and the following agreements only [if none, so state]:
NONE _________________
(Initial)
OTHER _________________________________________________________
_________________________________________________________
_________________________________________________________
_________________________________________________________
_______________________________________________
Optionee
Address: _______________________________________________
_______________________________________________
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NOTICE OF EXERCISE
Gilead Sciences, Inc.
333 Lakeside Drive Date of
Foster City, CA 94404 Exercise: _____________________
Attn: Corporate Secretary
Ladies and Gentlemen:
This constitutes notice under my Nonstatutory Stock Option that I elect to
purchase the number of shares for the price set forth below.
Stock Option dated: ____________________________________
Number of shares as to
which option is exercised: ____________________________________
Certificates to be
issued in name of: ____________________________________
Total exercise price: $____________________________________
Cash payment delivered
herewith: $____________________________________
Value of stock payment
delivered herewith: $____________________________________
By this exercise, I agree to provide such additional documents as you may
require pursuant to the terms of the 1995 Non-Employee Directors' Stock
Option Plan.
Very truly yours,
Signature: ________________________________
Printed Name: ________________________________
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