Exhibit 10.27
GILEAD SCIENCES,
INC.
SEVERANCE PLAN
Adopted on March 23,
2004,
to be effective January 29,
2003
Amended and Restated on
May 9, 2006,
to be effective January 1,
2005
Amended and Restated on
May 8, 2007
to be effective May 8,
2007
Amended on February 8,
2008
to be effective January 1,
2008
Amended on May 7,
2008
to be effective May 7,
2008
Amended on December 15,
2008
to be effective January 1,
2009
TABLE OF CONTENTS
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I.
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INTRODUCTION
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1
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II.
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COMMENCEMENT OF
PARTICIPATION
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2
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III.
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TERMINATION OF
PARTICIPATION
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2
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IV.
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SEVERANCE PAY
BENEFIT
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2
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V.
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TIME AND FORM
OF SEVERANCE PAY BENEFIT
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5
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VI.
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DEATH OF A
PARTICIPANT
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7
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VII.
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AMENDMENT AND
TERMINATION
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7
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VIII.
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NON-ALIENATION
OF BENEFITS
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9
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IX.
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SUCCESSORS AND
ASSIGNS
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9
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X.
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LEGAL
CONSTRUCTION
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9
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XI.
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ADMINISTRATION
AND OPERATION OF THE PLAN
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10
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XII.
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CLAIMS,
INQUIRIES AND APPEALS
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11
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XIII.
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BASIS OF
PAYMENTS TO AND FROM PLAN
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13
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XIV.
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OTHER PLAN
INFORMATION
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13
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XV.
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STATEMENT OF
ERISA RIGHTS
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14
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XVI.
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AVAILABILITY OF
PLAN DOCUMENTS FOR EXAMINATION
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15
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XVII.
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DEFINITIONS
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15
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XVIII.
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EXECUTION
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20
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APPENDIX A
Chief Executive Officer Severance Benefits
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21
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APPENDIX B
Executive Vice President and Senior Vice President Severance
Benefits
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25
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APPENDIX C Vice
President and Senior Advisor Severance Benefits
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29
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APPENDIX D
Severance Benefits for Eligible Employees other than Chief
Executive Officer, Executive Vice President, Senior Vice President,
Vice President and Senior Advisor
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34
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i
GILEAD SCIENCES,
INC.
SEVERANCE PLAN
AND
SUMMARY PLAN
DESCRIPTION
(As Amended and Restated
Effective January 1, 2009)
The Gilead Sciences,
Inc. Severance Plan (the “Plan”) was originally adopted
by the Company effective January 29, 2003, and was
subsequently amended and restated effective January 1, 2005,
on May 9, 2006. The Plan was further amended and restated on
May 8, 2007 and subsequently amended in February and May 2008
in order to effect the following: (i) bring the Plan into
documentary compliance with Section 409A of the Code and the
final Treasury Regulations thereunder and (ii) incorporate
certain transitional relief in accordance with (A) Treasury
Notice 2005-1, Q&A-19, as modified by the preamble to the
proposed and the final regulations pursuant to Section 409A of
the Code, published in the Federal Register on October 4, 2005
and April 17, 2007, respectively, and (B) Treasury Notice
2007-86. This Plan and Summary Plan Description as so amended and
restated effects such full documentary compliance under
Section 409A of the Code and the applicable Treasury
Regulations, effective January 1, 2009, and replaces all
severance or similar plans or programs of the Company previously in
effect. The Company has no severance or similar plan or program
other than this Plan. 1
The May 7, 2008 restatement of
the Plan also revises the bonus component of the Severance Pay
Benefit formulas in Appendix A, Appendix B and Appendix C to comply
with Revenue Ruling 2008-13. Such amendment was effective as of
May 7, 2008.
The Plan was further amended on
December 15, 2008 to provide, effective as of January 1,
2009, that (i) the cash severance benefits to which
individuals covered by Appendix D may become entitled under the
Plan shall be paid in a lump sum and (ii) the COBRA coverage
costs that Participants may incur for the applicable period
specified in Appendix A, B, C or D following their termination of
employment shall be paid in the form of a lump sum prepayment,
subject to the Company’s collection of the applicable
withholding taxes.
The purpose of the Plan is to
provide a Severance Pay Benefit to certain Eligible Employees whose
employment with the Company terminates under certain prescribed
circumstances. The Company is the Plan Administrator for purposes
of the Employee Retirement Income Security Act of 1974, as amended
(“ERISA”). The Plan is intended to comply with the
requirements of Section 409A of the Code.
Capitalized terms used in this Plan
shall have the meaning set forth in Section XVII.
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1
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The Triangle Pharmaceuticals,
Inc. Severance Plan remained in effect until January 23, 2004
and provided benefits to employees of Triangle who were
involuntarily terminated.
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1
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II.
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COMMENCEMENT OF
PARTICIPATION
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An Eligible Employee shall commence
participation in the Plan upon the later of
(i) January 29, 2003 or (ii) his or her date of
hire.
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III.
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TERMINATION OF
PARTICIPATION
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A Participant’s participation
in the Plan shall terminate upon the occurrence of the earliest of
the following:
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(a)
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The
Participant’s employment terminates without meeting the
requirements of Section IV(a)(i)(1).
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(b)
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The
Participant’s employment terminates with a provision of
Section IV(a)(ii) being applicable.
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(c)
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The Participant
fails to meet the requirements of Section IV(a)(i)(2).
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(d)
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The Participant
has received a complete distribution of his or her Severance Pay
Benefit.
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(e)
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The Participant
ceases to be an Eligible Employee (other than by reason of
termination of his or her employment with the Company).
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IV.
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SEVERANCE PAY
BENEFIT
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(a)
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Eligibility for
Severance Pay Benefit
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(i)
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Subject to
Section IV(a)(ii), a Participant shall be eligible for a Severance
Pay Benefit only if the Participant meets the requirements of
Section IV(a)(i)(1) and Section IV(a)(i)(2).
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(1)
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The Participant
incurs a Separation from Service as a result of an involuntary
termination of his or her Employee status by the Company because of
a Company-wide or departmental reorganization or a significant
restructuring of the Participant’s job duties; provided,
however, that a Participant’s Employee status shall also be
deemed to have been involuntarily terminated by the Company if he
or she resigns because of (A) a transfer to a new work
location that is more than 50 miles from his or her previous work
location, and (B) in the case of a Participant whose Severance
Pay Benefit is determined with reference to Appendix A, B or C, a
Constructive Termination (as defined in Section 11(d) of the
2004 Equity Incentive Plan) in conjunction with a Change in Control
and within the time specified in Appendix A, B or C, as
applicable.
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2
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(2)
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The Participant
executes the Release within the time frame prescribed therein, but
in no event later than the forty-fifth (45th) day following
his or her Separation from Service, and the period (if any such
period is prescribed in the Release) for revoking the execution of
the Release under the Older Workers’ Benefit Protection Act,
29 U.S.C. § 626(f), expires without the Participant’s
revocation of such Release.
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Under no circumstances shall a
Participant be eligible for a Severance Pay Benefit under the Plan
if he or she terminates Employee status for the purpose of
accepting employment with the entity that effectuates a Change in
Control, its subsidiaries or affiliates.
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(ii)
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Notwithstanding
Section IV(a)(i), a Participant shall be disqualified from
receiving a Severance Pay Benefit upon the occurrence of any of the
following:
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(1)
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The Participant
voluntarily terminates Employee status for any reason prior to the
termination date set by the Company;
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(2)
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The
Participant’s Employee status is terminated by death or for
cause (including, without limitation, gross misconduct or
dereliction of duty) or for failure to meet performance goals or
objectives as determined by the Company;
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(3)
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If the
Participant is receiving short-term sick leave benefits on the date
his or her Employee status terminates, the Participant fails to
execute and deliver to the Company, within thirty (30) days
after his or her Separation from Service, a written waiver of any
short-term sick leave benefits that might otherwise be payable
after such termination of Employee status;
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(4)
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The Participant
terminates Employee status in order to accept employment with an
organization that is wholly or partly owned (directly or
indirectly) by the Company or an Affiliate;
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(5)
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The Participant
accepts any job with a Buyer or Outsourcing Supplier;
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(6)
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The Participant
is offered full-time employment with a Buyer or Outsourcing
Supplier at a new work location 50 miles or less from his or her
previous work location with the Company and taking such position
would not result in a reduction in his or her Regular
Earnings;
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(7)
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Except in the
case of a Severance Pay Benefit payable on account of a Change in
Control of the Company, the Participant received a severance
benefit in connection with an acquisition effected by the Company
within 24 months prior to his or her Separation from Service;
or
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3
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(8)
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Except for a
Severance Pay Benefit payable on account of a Change in Control of
the Company, the Participant has not completed six months of
Continuous Service as of the date of his or her termination of
Employee status; provided, however, that, effective May 8,
2007, such service requirement shall not be applicable to Employees
who are Vice Presidents or in Grades 21 through 34.
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The business decisions that may
result in a Participant qualifying for a Severance Pay Benefit are
decisions to be made by the Company in its sole discretion. In
making these decisions, similarly situated organizations,
locations, functions, classifications, and/or Participants need not
be treated in the same manner. Each Participant remains an employee
at will, and the date selected by the Company to terminate the
Participant’s Employee status is within its sole
discretion.
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(b)
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Amount of
Severance Pay Benefit
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(i)
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Subject to
Section IV(b)(ii), the Severance Pay Benefit payable to a
Participant shall be as set forth in the applicable
Appendix:
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(1)
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Appendix A
– Chief Executive Officer.
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(2)
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Appendix B
– Executive Vice Presidents and Senior Vice
Presidents.
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(3)
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Appendix C
– Vice Presidents and Senior Advisors
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(4)
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Appendix D
– All Eligible Employees not covered by Appendix A, B, or
C.
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Senior Advisors covered under
Appendix C shall only be eligible for a Severance Pay Benefit in
connection with a Change in Control.
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(ii)
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Notwithstanding
Section IV(b)(i), the total Severance Pay Benefit otherwise payable
to a Participant under the Plan shall be subject to reduction (but
not below zero) as follows:
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(1)
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If a
Participant is reemployed by the Company or an Affiliate within the
number of weeks after his or her Separation from Service that is
equal to the number of weeks taken into consideration in
calculating the Severance Pay Benefit, the total Severance Pay
Benefit payable to such Participant shall be reduced to the dollar
amount that the Participant’s Regular Earnings would have
been for the period from the date of termination to the date of
reemployment. In all cases, the reduced benefit will be based on
the Participant’s Regular Earnings used to calculate such
Participant’s Severance Pay Benefit under the Plan. A
Participant will be considered “reemployed” under the
Plan for purposes of the foregoing repayment provision if he or she
is rehired as an Employee or if he or she is retained at a Company
facility as or through a contractor for more than a full-time
equivalent of more than 45 work days.
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(2)
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If a
Participant is employed by a Buyer or Outsourcing Vendor within the
number of weeks after his or her Separation from Service that is
equal to the number of weeks taken into consideration in
calculating the Severance Pay Benefit, the total Severance Pay
Benefit payable to such Participant shall be reduced to the dollar
amount that the Participant’s Regular Earnings would have
been for the period from the date of termination to the date of
employment with the Buyer or Outsourcing Vendor.
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Section IV(b)(ii)(2) may be waived
in writing by the Company in its sole discretion.
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(3)
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By severance
pay or other similar benefits payable under any other plan or
policy of the Company or an Affiliate or government required
payment (other than unemployment compensation under United States
law), including, but not limited to, any benefit enhancement
program adopted as part of a pension plan, but only to the extent
the time and form of such alternative payments do not otherwise
result in an impermissible acceleration or deferral under Code
Section 409A of the Severance Pay Benefit payable under this
Plan.
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(4)
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By any amounts
payable pursuant to the Worker Adjustment and Retraining
Notification Act (“WARN”) or any other similar federal,
state or local statute.
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(5)
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By the amount
of any indebtedness owed to the Company, but only to the extent
such offset would not otherwise contravene any applicable
limitations of Code Section 409A.
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(c)
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Repayment of
the Severance Pay Benefit
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If the Participant has received
payment under the Plan in excess of the Severance Pay Benefit, as
reduced in accordance with Section IV(b)(ii), the Participant must
agree as a condition of reemployment that such excess will be
repaid to the Company within sixty (60) days after the date
his or her reemployment commences.
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V.
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TIME AND FORM
OF SEVERANCE PAY BENEFIT
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(a)
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The Severance Pay Benefit for
each Participant, other than a Participant whose Severance Pay
Benefit is determined pursuant to Appendix D, shall be paid in
equal periodic installments over the total number of weeks taken
into account in determining the amount of the Severance Pay Benefit
to which such Participant is entitled. Except as set forth below,
such installments shall be payable over the applicable period on
the regularly scheduled pay dates in effect for the Company’s
salaried employees, beginning with the first such pay date within
the sixty (60)-day period measured from the date of his or her
Separation from Service on which both (A) the Release
delivered by the Participant in accordance with Section IV(a)(i)(2)
is effective following the expiration of any applicable revocation
period and (B) any waiver required of the Participant pursuant
to
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Section IV(a)(ii)(3) is delivered to
the Company, but in no event shall the first such installment be
paid later than the last day of such sixty (60)-day period,
provided such Release and waiver have each been delivered to the
Company within the required time period following the
Participant’s Separation from Service, as set forth in
Section IV, and have not been revoked.
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(b)
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For purposes of
Section 409A of the Code, the Severance Pay Benefit payable
pursuant to Section V(a) above shall be deemed to be a series of
separate payments, with each installment of the Severance Pay
Benefit to be treated as a separate payment.
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(c)
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The Severance
Pay Benefit for each Participant whose Severance Pay Benefit is
determined pursuant to Appendix D shall be paid in a lump sum on
the first regularly scheduled pay date for the Participant’s
former job and location that occurs within the sixty (60)-day
period measured from the date of his or her Separation from Service
on which both (A) the Release delivered by the Participant in
accordance with Section IV(a)(i)(2) is effective following the
expiration of any applicable revocation period and (B) any
waiver required of the Participant pursuant to Section IV(a)(ii)(3)
is delivered to the Company, but in no event shall such lump sum
payment be made later than the last day of such sixty (60)-day
period provided such Release and waiver have each been delivered to
the Company within the required time period following the
Participant’s Separation from Service, as set forth in
Section IV, and have not been revoked.
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(d)
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Notwithstanding
any provision to the contrary in this Section V or any other
Section of the Plan, other than Section V(e) and (f) below, no
Severance Pay Benefit that is deemed to constitute
“nonqualified deferred compensation” within the meaning
of and subject to Section 409A of the Code shall commence with
respect to a Participant until the earlier of (i) the first
day of the seventh (7th) month following the date of such
Participant’s Separation from Service or (ii) the date
of his or her death, if the Participant is deemed at the time of
such Separation from Service to be a Specified Employee
and such delayed commencement is otherwise required
in order to avoid a prohibited distribution under Code
Section 409A(a)(2). Upon the expiration of the applicable
deferral period, all payments deferred pursuant to this Section
V(d) shall be paid in a lump sum to the Participant, and any
remaining Severance Pay Benefit shall be paid in accordance with
the schedule described in Section V(a) above or in a lump sum to
the extent such Severance Pay Benefit is to be paid pursuant to
Section V(c) above.
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(e)
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Notwithstanding Section V(d),
should a Participant who is a Specified Employee at the time of his
or her Separation from Service become entitled to a General
Severance Pay Benefit prior to the occurrence of a Change in
Control, then the portion of that Severance Pay Benefit that does
not exceed the dollar limit described below and is otherwise
scheduled to be paid no later than the last day of the second
calendar year following the calendar year in which his or her
Separation from Service occurs will not be subject to any deferred
commencement date under Section V(c) and shall be paid to such
Participant as it becomes due under Section V(a), provided
and only if such portion
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qualifies as an involuntary
separation pay plan in accordance with the requirements set forth
in Section 1.409A-1(b)(9)(iii) of the Treasury Regulations.
For purposes of this paragraph (iii), the applicable dollar
limitation will be equal to two (2) times the lesser of
(A) the Participant’s annualized compensation (based on
his or her annual rate of pay for the taxable year preceding the
taxable year of his or her Separation from Service, adjusted to
reflect any increase during that taxable year which was expected to
continue indefinitely had such Separation from Service not
occurred) or (B) the compensation limit under
Section 401(a)(17) of the Code as in effect in the year of the
Separation from Service. To the extent the portion of the Severance
Pay Benefit to which such Participant would otherwise be entitled
under Section V(a) during the deferral period under Section V(c)
exceeds the foregoing dollar limitation, such excess shall be paid
in a lump sum upon the expiration of that deferral period, in
accordance with the payment delay provisions of Section V(c), and
the remainder of the Severance Pay Benefit (if any) shall be paid
in accordance with the schedule described in Section V(a). In no
event, however, shall this Section V(d) be applicable to any
Severance Pay Benefit (or any portion thereof) which does not
qualify as an involuntary separation pay plan under
Section 1.409A-(b)(9)(iii) of the Treasury
Regulations.
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(f)
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Section V(d)
shall not apply to the lump sum prepayment of COBRA Coverage Costs
under Appendix A through D to the extent the dollar amount of that
prepayment does not exceed the applicable dollar amount in effect
under Section 402(g)(1)(B) of the Code for the calendar year
in which the Participant’s Separation form Service
occurs.
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(g)
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Notwithstanding
any other provision of the Plan to the contrary, no distribution
shall be made from the Plan that would constitute an impermissible
acceleration of payment as defined in Section 409A(3) of the
Code and the Treasury Regulations thereunder.
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(h)
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No interest
shall be paid on a Severance Pay Benefit required to be deferred in
accordance with the foregoing.
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VI.
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DEATH OF A
PARTICIPANT
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If a Participant dies after
qualifying for a Severance Pay Benefit but before such benefit is
completely paid, the balance of the Severance Pay Benefit shall be
paid in a lump sum to the Participant’s Beneficiary not later
than the later of (i) December 31 of the year in which
the Participant’s death occurred or (ii) the fifteenth
(15th) day of the third (3rd) calendar month following
the date of the Participant’s death.
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VII.
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AMENDMENT AND
TERMINATION
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Although the Company expects to
continue the Plan indefinitely, inasmuch as future conditions
cannot be foreseen, (subject to Sections VII(b) and (c)) the
Company reserves the right to amend or terminate the Plan at any
time by action of its board of directors or by action of a
committee or individual(s) acting pursuant to a valid delegation
of
7
authority of the board of directors.
However, no amendment or termination shall adversely affect the
right of a Participant who incurs a Separation from Service prior
to the date of such amendment or termination to:
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(i)
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receive the
unpaid balance of any Severance Pay Benefit that has become payable
in accordance with the foregoing provisions of the Plan, with such
balance to be paid in accordance with the provisions of the Plan in
effect immediately prior to such amendment or termination;
or
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(ii)
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qualify for a
Severance Pay Benefit upon the timely execution and delivery of the
requisite Release after the date of such amendment or
termination.
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(b)
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Restrictions on
Amendments.
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Notwithstanding Section VII(a) of
the Plan, and except to the extent required to comply with
applicable law, no termination of the Plan and no amendment
described below shall be effective if adopted within six months
before or at any time after the public announcement of an event or
proposed transaction which would constitute a Change in Control (as
such term is defined prior to such amendment); provided, however,
that such an amendment or termination of the Plan may be effected,
even if adopted after such a public announcement, if (a) the
amendment or termination is adopted after any plans have been
abandoned to cause the event or effect the transaction which, if
effected, would have constituted the Change in Control, and the
event which would have constituted the Change in Control has not
occurred, and (b) within a period of six months after such
adoption, no other event constituting a Change in Control has
occurred, and no public announcement of a proposed transaction
which would constitute a Change in Control has been made, unless
thereafter any plans to effect the Change in Control have been
abandoned and the event which would have constituted the Change in
Control has not occurred.
The amendments prohibited by this
Section VII(b) include any amendment which is executed (or would
otherwise become effective) at the request of a third party who
effectuates a Change in Control or any amendment which, if adopted
and given effect would:
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(i)
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Deprive any
individual who is an Eligible Employee as of the Change in Control
of coverage under the Plan as in effect at the time of such
amendment;
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(ii)
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Limit
eligibility for or reduce the amount of any Severance Pay Benefit;
or
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(iii)
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Amend Section
VII, IX, or the definitions of the terms “Change in
Control” or “Successors and Assigns” in Section
XVII of the Plan.
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No person shall take any action that
would directly or indirectly have the same effect as any of the
prohibited amendments or termination described in this Section
VII(b).
8
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(c)
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No Change in
Payment Schedule
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Under no circumstances shall any
amendment or termination of the Plan affect or modify the payment
schedule in effect for a Participant’s Severance Pay Benefit
in a manner which would otherwise result in an impermissible
acceleration or deferral of that payment schedule under Code
Section 409A.
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(d)
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Amendments to
Comply with Section 409A of the Code.
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Notwithstanding any provision of
Section VII to the contrary, the Company reserves the right, to the
extent the Company deems necessary or advisable in its sole
discretion, to unilaterally amend or modify this Plan as may be
necessary to ensure the Severance Pay Benefits provided under this
Plan are made in a manner that qualifies for exemption from, or
otherwise complies with, Section 409A of the Code; provided,
however, that the Company makes no representation that the
Severance Pay Benefit provided under this Plan will be exempt from
or comply with Section 409A of the Code and makes no
undertaking to preclude Section 409A of the Code from applying
to the Severance Pay Benefits provided under this Plan.
To the extent there is any ambiguity
as to whether any provision of this Plan would otherwise contravene
one or more requirements or limitations of Code Section 409A
applicable to the Plan, such provision shall be interpreted and
applied in a manner that does not result in a violation of the
applicable requirements or limitations of Code Section 409A
and the Treasury Regulations thereunder.
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VIII.
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NON-ALIENATION
OF BENEFITS
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To the full extent permitted by law
and except as expressly provided in the Plan, no Severance Pay
Benefit shall be subject to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, or charge, and any
attempt to do so shall be void.
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IX.
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SUCCESSORS AND
ASSIGNS
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The Plan shall be binding upon the
Company, its Successors and Assigns. Notwithstanding that the Plan
may be binding upon such Successors and Assigns by operation of
law, the Company shall require any Successor or Assign to expressly
assume and agree to be bound by the Plan in the same manner and to
the same extent that the Company would be if no succession or
assignment had taken place.
This Plan is governed by and shall
be construed in accordance with the Code and ERISA and, to the
extent not preempted by ERISA, with the laws of the State of
California.
9
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XI.
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ADMINISTRATION
AND OPERATION OF THE PLAN
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(a)
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Plan Sponsor
and Plan Administrator.
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The Company is the “Plan
Sponsor” and the “Plan Administrator” of the Plan
as such terms are used in ERISA.
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(b)
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Administrative
Power and Responsibility.
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The Company in its capacity as Plan
Administrator of the Plan is the named fiduciary that has the
authority to control and manage the operation and administration of
the Plan. The Company shall make such rules, regulations,
interpretations, and computations and shall take such other action
to administer the Plan as it may deem appropriate. The Company
shall have the sole discretion to interpret the provisions of the
Plan and to determine eligibility for benefits pursuant to the
objective criteria set forth in the Plan. In administering the
Plan, the Company shall at all times discharge its duties with
respect to the Plan in accordance with the standards set forth in
section 404(a)(l) of ERISA. The Company may engage the services of
such persons or organizations to render advice or perform services
with respect to its responsibilities under the Plan as it shall
determine to be necessary or appropriate. Such persons or
organizations may include (without limitation) actuaries,
attorneys, accountants and consultants.
Upon receipt of a request for
review, the Company shall appoint a Review Panel that shall consist
of three or more individuals. The Review Panel shall be the named
fiduciary that shall have authority to act with respect to appeals
from denial of benefits under the Plan.
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(d)
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Service in More
Than One Fiduciary Capacity.
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Any person or group of persons may
serve in more than one fiduciary capacity with respect to the
Plan.
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(e)
|
Performance of
Responsibilities.
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The responsibilities of the Company
under the Plan shall be carried out on its behalf by its officers,
employees, and agents. The Company may delegate any of its
fiduciary responsibilities under the Plan to another person or
persons pursuant to a written instrument that specifies the
fiduciary responsibilities so delegated to each such
person.
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(f)
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Employee
Communications and Other Plan Activities.
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In communications with its employees
and in any other activities relating to the Plan, the Company shall
comply with the rules, regulations, interpretations, computations,
and instructions that were issued to administer the Plan. With
respect to matters relating
10
to the Plan, directors, officers,
and employees of the Company shall act on behalf or in the name of
the Company in their capacity as directors, officers, and employees
and not as individual fiduciaries.
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XII.
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CLAIMS,
INQUIRIES AND APPEALS
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(a)
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Claims for
Benefits and Inquiries.
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All claims for benefits and all
inquiries concerning the Plan or present or future rights to
benefits under the Plan, shall be submitted to the Plan
Administrator in writing and addressed as follows: “Gilead
Sciences, Inc., Plan Administrator under the Gilead Sciences, Inc.
Severance Plan, 333 Lakeside Drive, Foster City, CA 94404 “
or such other location as communicated to the Participant. A claim
for benefits shall be signed by the Participant, or if a
Participant is deceased, by such Participant’s spouse or
registered domestic partner, designated beneficiary or estate, as
the case may be.
In the event that any claim for
benefits is denied, in whole or in part, the Plan Administrator
shall notify the claimant in writing of such denial and of the
right to a review thereof. Such written notice shall set forth in a
manner calculated to be understood by the claimant, specific
reasons for such denial, specific references to the Plan provision
on which such denial is based, a description of any information or
material necessary to perfect the claim, an explanation of why such
material is necessary, an explanation of the Plan’s review
procedure which includes information on how to appeal the denial
and a statement regarding the claimant’s right to bring a
civil action under ERISA section 502(a) following an adverse
benefit determination on review. Such written notice shall be given
to the claimant within 90 days after the Plan Administrator
receives the claim, unless special circumstances require an
extension of time of up to an additional 90 days for processing the
claim. If such an extension of time for processing is required,
written notice of the extension shall be furnished to the claimant
prior to the termination of the initial 90-day period. This notice
of extension shall indicate the special circumstances requiring the
extension of time and the date by which the Plan Administrator
expects to render its decision on the claim for benefits. The
claimant shall be permitted to appeal such denial in accordance
with the Review Procedure set forth below.
The Plan Administrator shall appoint
a “Review Panel,” consisting of three or more
individuals who may (but need not) be employees of the Company. The
Review Panel shall be the named fiduciary that has the authority to
act with respect to any appeal from a denial of
benefits.
11
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(d)
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Requests for a
Review.
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Any person whose claim for benefits
is denied in whole or in part, or such person’s duly
authorized representative, may appeal from such denial by
submitting a request for a review of the claim to the Review Panel
within 60 days after receiving written notice of such denial from
the Plan Administrator. A request for review shall be in writing
and shall be addressed as follows: “Review Panel under the
Gilead Sciences, Inc. Severance Plan, 333 Lakeside Drive, Foster
City, CA 94404” or such other location as communicated to the
Participant. A request for review shall set forth all of the
grounds on which it is based, all facts in support of the request
and any other matters that the claimant deems pertinent. As part of
the review procedure, the claimant or the claimant’s duly
authorized representative may submit written comments, documents,
records and other information related to the claim. The Review
Panel will consider all comments, documents, records and other
information submitted by the claimant or the claimant’s duly
authorized representative relating to the claim, without regard to
whether such information was submitted or considered in the initial
benefit determination. The claimant will be provided, upon request
and free of charge, reasonable access to and copies of all
documents, records or other information (all of which must not be
privileged) relevant to the benefit claim. The Review Panel may
require the claimant to submit such additional facts, documents or
other material as it may deem necessary or appropriate in making
its review.
The Review Panel shall act on each
request for review and notify the claimant within 60 days after
receipt thereof unless special circumstances require an extension
of time, up to an additional 60 days, for processing the request.
If such an extension for review is required, written notice of the
extension shall be furnished to the claimant within the initial
60-day period. The Review Panel shall give prompt, written notice
of its decision to the claimant and to the Plan Administrator. In
the event that the Review Panel confirms the denial of the claim
for benefits, in whole or in part, such notice shall set forth, in
a manner calculated to be understood by the claimant, the specific
reasons for such denial, specific references to the Plan provisions
on which the decision is based, a statement that the claimant is
entitled to receive, upon request and free of charge, reasonable
access to and copies of all documents, records and other
information relevant to the benefit claim, a statement describing
any voluntary appeal procedures offered by the Plan and the
claimant’s right to obtain information about such procedures,
and a statement informing the claimant of his or her right to bring
a civil action under ERISA section 502(a).
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(f)
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Rules and
Procedures.
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The Review Panel shall establish
such rules and procedures, consistent with the Plan and with ERISA,
as it may deem necessary or appropriate in carrying out its
responsibilities under this Section XII. The Review Panel may
require a claimant who wishes to submit additional information in
connection with an appeal from the denial of benefits to do so at
the claimant’s own expense.
12
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(g)
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Exhaustion of
Remedies.
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No legal action for benefits under
the Plan shall be brought unless and until the claimant:
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(i)
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has submitted a
written claim for benefits in accordance with Section
XII(a);
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(ii)
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has been
notified by the Plan Administrator that the claim is
denied;
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(iii)
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has filed a
written request for a review of the claim in accordance with
Section XII(d); and
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(iv)
|
has been
notified in writing that the Review Panel has affirmed the denial
of the claim.
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XIII.
|
BASIS OF
PAYMENTS TO AND FROM PLAN
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All Severance Pay Benefits under the
Plan shall be paid by the Company. The Plan shall be unfunded and
benefits hereunder shall be paid only from the general assets of
the Company.
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XIV.
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OTHER PLAN
INFORMATION
|
|
(a)
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Plan
Identification Numbers.
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The Employer Identification Number
(EIN) assigned to the Plan Sponsor (Gilead Sciences, Inc.) by the
Internal Revenue Service is 94-3047598. The Plan Number (PN)
assigned to the Plan by the Plan Sponsor pursuant to instructions
of the Internal Revenue Service is 508.
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(b)
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Ending Date of
the Plan’s Fiscal Year.
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The date of the end of the year for
the purpose of maintaining the Plan’s fiscal records is
December 31.
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(c)
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Agent for the
Service of Legal Process.
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The agent for the service of legal
process with respect to the Plan is the Secretary of Gilead
Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404. The
service of legal process may also be made on the Plan by serving
the Plan Administrator.
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(d)
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Plan Sponsor
and Administrator.
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The “Plan Sponsor” and
the “Plan Administrator” of the Plan is Gilead
Sciences, Inc., 333 Lakeside Drive, Foster City, CA 94404;
650-522-5800 or such other location as communicated to the
Participant. The Plan Administrator is the named fiduciary charged
with responsibility for administering the Plan.
13
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XV.
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STATEMENT OF
ERISA RIGHTS
|
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(a)
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As a
participant in this Plan (which is a welfare plan sponsored by the
Company), you are entitled to the following rights and protection
under ERISA:
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|
(b)
|
Examine,
without charge, at the Plan Administrator’s office and at
other specified locations such as work sites, all Plan documents,
collective bargaining agreements and copies of all documents filed
by the Plan with the U.S. Department of Labor and available at the
Public Disclosure of the Employee Benefits Security
Administration.
|
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(c)
|
Obtain copies
of all Plan documents and other Plan information upon written
request to the Plan Administrator. The Plan Administrator may make
a reasonable charge for the copies.
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(d)
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In addition to
creating rights for Plan Participants, ERISA imposes duties upon
the people responsible for the operation of the employee benefit
Plan. The people who operate your Plan, called
“fiduciaries” of the Plan, have a duty to do so
prudently and in the interest of you and other Plan Participants
and Beneficiaries.
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(e)
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No one,
including your employer, your union, nor any other person, may fire
you or otherwise discriminate against you in any way to prevent you
from obtaining a Plan benefit or exercising your rights under
ERISA. If your claim for a Plan benefit is denied in whole or in
part, you must receive a written explanation of the reason for the
denial. You have the right to have the claim reviewed and
reconsidered.
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(f)
|
Under ERISA,
there are steps you can take to enforce the above rights. For
instance, if you request materials from the Plan and do not receive
them within 30 days, you may file suit in a federal court. In such
a case, the court may require the Plan Administrator to provide the
materials and pay you up to $110 a day until you receive the
materials, unless the materials were not sent because of reasons
beyond the control of the Plan Administrator. If you have a claim
for benefits which is denied or ignored, in whole or in part, you
may file suit in a state or federal court. If it should happen that
the Plan fiduciaries misuse the Plan’s money, or if you are
discriminated against for asserting your rights, you may seek
assistance from the U.S. Department of Labor, or you may file suit
in a federal court. The court will decide who should pay court
costs and legal fees. If you are successful, the court may order
the person you have sued to pay these costs and fees. If you lose,
the court may order you to pay these costs and fees, for example,
if it finds your claim is frivolous.
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|
(g)
|
If you have any
questions about your Plan, you should contact the Plan
Administrator. If you have any questions about this statement or
about your rights under ERISA, you should contact the nearest
office of the Employee Benefits Security Administration, U.S.
Labor, listed in your telephone directory or the Division of
Technical Assistance and Inquiries, Employee Benefits Security
Administration, U.S. Department of Labor, 200 Constitution Avenue
N.W., Washington, D.C. 20210. You may also obtain certain
publications about your rights and responsibilities under ERISA by
calling the publications hotline of the Employee Benefits Security
Administration.
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14
|
XVI.
|
AVAILABILITY OF
PLAN DOCUMENTS FOR EXAMINATION
|
ERISA requires Gilead Sciences,
Inc., as the Plan Administrator of a benefit plan sponsored by the
Company, to make available for your examination the Plan documents
under which the Plan is established and operated.
The pertinent Plan documents include
official Plan texts and any other documents under which the Plan is
established or operated, and applicable collective bargaining
agreements.
These Plan documents are available
for your examination at the Plan Administrator’s office, 333
Lakeside Drive, Foster City, CA 94404, and at certain other
locations such as the Company’s Human Resources
offices.
|
(a)
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“Affiliate” means a member of the
Affiliated Group other than Gilead Sciences, Inc. and any
Subsidiary.
|
|
(b)
|
“Affiliated Group” means the Company
and each member of the group of commonly controlled corporations or
other businesses that include the Company, as determined in
accordance with Section 414(b) and (c) of the Code and
the Treasury Regulations issued thereunder.
|
|
(c)
|
“Beneficiary” means the person or
persons so designated by a Participant. A Participant may change or
revoke a designation of a Beneficiary at any time. To be effective,
any designation of a Beneficiary, or any change or revocation
thereof, must be made in writing on the prescribed form and must be
received by the Company (in a form acceptable to the Company)
before the Participant’s death. If a Participant fails to
make a valid designation of a Beneficiary, or if the validly
designated Beneficiary is not living when a payment is to be made
to such Beneficiary hereunder, the Participant’s Beneficiary
shall be the Participant’s spouse or registered domestic
partner if then living or, if not, the Participant’s
estate.
|
|
(d)
|
“Buyer” means an entity that
purchases (or has purchased) some or all of the Affiliated
Group’s interest applicable to the operation in which the
Participant is employed, or an entity that is a direct or indirect
successor in ownership or management of the operation in which the
Participant is employed. Notwithstanding the above, Buyer shall not
include the entity that effectuates a Change in Control.
|
|
(e)
|
“Change
in Control” means an event which constitutes a change in
control of the Company as defined in Section 2(i) of the
Gilead Sciences, Inc. 2004 Equity Incentive Plan, as it may be
amended from time to time or any successor to such
provision.
|
|
(f)
|
“Code” means the Internal Revenue
Code of 1986, as amended from time to time, and the regulations
promulgated thereunder.
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15
|
(g)
|
“Company” means Gilead Sciences,
Inc. Where the context requires, “Company” also
includes its Subsidiaries, and any of their Successors and
Assigns.
|
|
(h)
|
“Continuous Service” means the sum
of the following:
|
|
|
(i)
|
Any period of
time during which a person qualifies as an Eligible Employee or,
having once so qualified, is on a leave of absence with pay, a paid
vacation or holiday or is receiving benefits under the
Company’s short-term disability plan; or;
|
|
|
(ii)
|
Any other
period that constitutes Continuous Service under written rules or
procedures adopted from time to time by the Company, subject to
such terms and conditions as the Company may establish; and any
period of time while employed by the Company’s Successor or
Assigns that that would have constituted Continuous Service if the
service had been with the Company prior to the Change in
Control.
|
If an Eligible Employee’s
Continuous Service is interrupted and the Eligible Employee
subsequently retu
