<PAGE>
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of
the Securities Exchange Act of 1934
<TABLE>
<S> <C>
Filed by the Registrant /X/
Filed by a Party other than the Registrant / /
Check the appropriate box:
/X/ Preliminary Proxy Statement
/ / Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))
/ / Definitive Proxy Statement
/ / Definitive Additional Materials
/ / Soliciting Material Pursuant to Section 240.14a-11(c) or
Section 240.14a-12
GILEAD SCIENCES, INC.
-----------------------------------------------------------------------
(Name of Registrant as Specified In Its Charter)
</TABLE>
Payment of Filing Fee (Check the appropriate box)
<TABLE>
<S> <C> <C>
/X/ No fee required.
/ / $500 per each party to the controversy pursuant to Exchange Act
Rule 14a-6(i)(3).
/ / Fee computed on table below per Exchange Act Rules 14a-6(i)(4)
and 0-11.
(1) Title of each class of securities to which transaction
applies:
----------------------------------------------------------
(2) Aggregate number of securities to which transaction
applies:
----------------------------------------------------------
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the
amount on which the filing fee is calculated and state how
it was determined):
----------------------------------------------------------
(4) Proposed maximum aggregate value of transaction:
----------------------------------------------------------
(5) Total fee paid:
----------------------------------------------------------
/ / Fee paid previously with preliminary materials.
/ / Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the Form or
Schedule and the date of its filing.
(1) Amount Previously Paid:
----------------------------------------------------------
(2) Form, Schedule or Registration Statement No.:
----------------------------------------------------------
(3) Filing Party:
----------------------------------------------------------
(4) Date Filed:
----------------------------------------------------------
</TABLE>
<PAGE>
[GILEAD SCIENCES LOGO]
------------------------
NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD ON FEBRUARY 2, 2001
------------------------
TO THE STOCKHOLDERS OF GILEAD SCIENCES, INC.:
NOTICE IS HEREBY GIVEN that a Special Meeting of Stockholders of GILEAD
SCIENCES, INC., a Delaware corporation (the "Company"), will be held on Friday,
February 2, 2001, at 11:00 a.m. local time at the Hotel Sofitel, 223 Twin
Dolphin Drive, Redwood City, California to act on the following matter:
1. To approve an amendment to the Company's Certificate of Incorporation to
increase the authorized number of shares of Common Stock from 100,000,000
shares to 500,000,000 shares.
The foregoing item of business is more fully described in the Proxy
Statement accompanying this Notice.
The Board of Directors has fixed the close of business on December 8, 2000
as the record date for the determination of stockholders entitled to notice of
and to vote at this Special Meeting and at any adjournment or postponement
thereof.
By Order of the Board of Directors,
/s/ Mark L. Perry
Mark L. Perry
SECRETARY
Foster City, California
December 8, 2000
ALL STOCKHOLDERS ARE CORDIALLY INVITED TO ATTEND THE MEETING IN PERSON.
WHETHER OR NOT YOU EXPECT TO ATTEND THE MEETING, PLEASE COMPLETE, DATE, SIGN AND
RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE IN ORDER TO ENSURE YOUR
REPRESENTATION AT THE MEETING. A RETURN ENVELOPE (WHICH IS POSTAGE PREPAID IF
MAILED IN THE UNITED STATES) IS ENCLOSED FOR THAT PURPOSE. EVEN IF YOU HAVE
GIVEN YOUR PROXY, YOU MAY STILL VOTE IN PERSON IF YOU ATTEND THE MEETING. PLEASE
NOTE, HOWEVER, THAT IF YOUR SHARES ARE HELD OF RECORD BY A BROKER, BANK OR OTHER
NOMINEE AND YOU WISH TO VOTE AT THE MEETING, YOU MUST BRING TO THE MEETING A
LETTER FROM THE BROKER, BANK OR OTHER NOMINEE CONFIRMING YOUR BENEFICIAL
OWNERSHIP OF THE SHARES. ADDITIONALLY, YOU MUST OBTAIN FROM THE RECORD HOLDER A
PROXY ISSUED IN YOUR NAME.
<PAGE>
[GILEAD SCIENCES LOGO]
------------------------
PROXY STATEMENT
FOR SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD
FEBRUARY 2, 2001
------------------------
INFORMATION CONCERNING SOLICITATION AND VOTING
GENERAL
The enclosed proxy is solicited on behalf of the Board of Directors of
Gilead Sciences, Inc., a Delaware corporation (the "Company"), for use at the
Special Meeting of Stockholders to be held on Friday, February 2, 2001 at
11:00 a.m. local time (the "Special Meeting"), or at any adjournment or
postponement thereof, for the purpose set forth herein and in the accompanying
Notice of Special Meeting. The Special Meeting will be held at the Hotel
Sofitel, 223 Twin Dolphin Drive, Redwood City, California. The Company intends
to mail this proxy statement and accompanying proxy card on or about
December 28, 2000 to all stockholders entitled to vote at the Special Meeting.
SOLICITATION
The Company will bear the entire cost of solicitation of proxies, including
preparation, assembly, printing and mailing of this proxy statement, the proxy
and any additional information furnished to stockholders. Copies of solicitation
materials will be furnished to banks, brokerage houses, fiduciaries and
custodians holding in their names shares of Common Stock beneficially owned by
others to forward to such beneficial owners. The Company may reimburse persons
representing beneficial owners of Common Stock for their costs of forwarding
solicitation materials to such beneficial owners. Original solicitation of
proxies by mail may be supplemented by telephone, telegram or personal
solicitation by directors, officers or other regular employees of the Company
or, at the Company's request. No additional compensation will be paid to
directors, officers or other regular employees for such services, but a
third-party proxy solicitor to be determined by the Company will be paid its
customary fee, estimated to be about $6,000, for solicitation services.
VOTING RIGHTS AND OUTSTANDING SHARES
Only holders of record of Common Stock at the close of business on
December 8, 2000 (the "Record Date") will be entitled to notice of and to vote
at the Special Meeting. On the Record Date, the Company had 47,077,807 shares of
Common Stock outstanding and entitled to vote.
Each holder of record of Common Stock on such date will be entitled to one
vote for each share held on the matter to be voted upon at the Special Meeting.
All votes will be tabulated by the inspector of election appointed for the
meeting, who will separately tabulate affirmative and negative votes,
abstentions and broker non-votes. The affirmative vote of a majority of the
outstanding shares of Common Stock is required to approve Proposal 1, the only
matter to be voted on at the Special Meeting. For purposes of Proposal 1,
abstentions and broker non-votes will have the same effect as negative votes.
Broker non-votes will be counted towards a quorum, but will not be counted for
any purpose in determining whether a matter has been approved.
<PAGE>
REVOCABILITY OF PROXIES
Any person giving a proxy pursuant to this solicitation has the power to
revoke it at any time before it is voted. It may be revoked by filing with the
Secretary of the Company at the Company's principal executive office, 333
Lakeside Drive, Foster City, California 94404, a written notice of revocation or
a duly executed proxy bearing a later date, or it may be revoked by attending
the meeting and voting in person. Attendance at the meeting will not, by itself,
revoke a proxy.
STOCKHOLDER PROPOSALS
Pursuant to the Company's bylaws, a stockholder proposal or a nomination for
director intended to be presented at the Company's 2001 Annual Meeting of
Stockholders had to have been received by the Company no later than
November 15, 2000 in order to be included in the proxy statement and proxy
relating to that Annual Meeting. Proposals of stockholders not intended to be
included in the proxy statement and proxy must be received by the Company
between January 24, 2001 and February 23, 2001.
PROPOSAL 1
APPROVAL OF INCREASE IN NUMBER OF AUTHORIZED
SHARES OF COMMON STOCK
Gilead's board of directors has adopted, subject to stockholder approval, an
amendment to Gilead's amended and restated certificate of incorporation. This
amendment would increase the authorized number of shares of Gilead common stock
from 100,000,000 shares to 500,000,000 shares. These additional shares would be
used by Gilead for business and financial purposes, as described below. In
particular, subject to favorable market conditions and approval of this
proposal, Gilead plans to use a number of the additional shares for a stock
split that would be effected in the form of a stock dividend on all outstanding
shares of Gilead common stock. The board anticipates approving a two-for-one
split in January 2001, but the final decision on whether to implement a stock
split and on what the magnitude of the split should be, will be based on market
conditions and remains in the sole discretion of the board.
The objective of the stock split would be to proportionately lower the
market price of Gilead common stock. Such lower price would be expected to
increase the liquidity and broaden the marketability of Gilead's common stock.
The board may decide, in the best interests of Gilead and due to market
conditions or otherwise, not to effect the stock split. Therefore, no assurances
can be given that the board will effect this stock split even if this proposal
is adopted.
If the stock split is effected, each stockholder would receive, for each
share of Gilead common stock held by such stockholder on the record date as
would be established by the Board for the stock split, a dividend of Gilead
common stock. For example, if the board declares a two-for-one stock split, each
stockholder would receive one additional share for each share held. In addition,
Gilead's options, stock purchase rights and warrants would be proportionately
adjusted such that the number of shares underlying Gilead's outstanding options,
stock purchase rights and warrants would be increased (for example doubled in a
two-for-one stock split) and the exercise price would be reduced (for example
halved in a two-for-one stock split). The total number of shares remaining
available for grant under Gilead's equity incentive plans would also increase in
proportion to any stock split, but the relative percentage of shares authorized
for issuance under these plans compared to outstanding shares would not change.
As of December 8, 2000, there were 47,077,807 shares of common stock
outstanding and held by Gilead stockholders. In addition to these shares, as of
December 8, 2000 there were 9,241,837 shares of common stock reserved for
issuance under Gilead equity incentive plans, options and warrants. Of this
2
<PAGE>
number, 5,408,125 shares were reserved for issuance upon exercise of outstanding
options that were previously granted under Gilead's stock options plans,
3,169,827 shares were reserved for issuance upon exercise of options that may be
granted in the future under Gilead's stock options plans, 6,666 shares were
reserved for issuance upon exercise of outstanding options that were granted
outside of Gilead's stock option plans, 639,754 shares were reserved for
issuance under the Employee Stock Purchase Plan, and 17,465 shares were reserved
for issuance upon exercise of outstanding warrants. Of the above shares,
approximately 8,859,005 shares were reserved under plans approved by the
stockholders and approximately 382,832 shares were reserved under plans assumed
by the Company in connection with the acquisition of NeXstar Pharmaceuticals,
Inc. in 1999.
Other business and financial purposes for the additional shares include
future stock splits, raising capital, establishing strategic relationships,
acquisitions of other companies, businesses or products, and other transactions
that Gilead's board deems are in Gilead's best interest. The additional
authorized shares would enable Gilead to act quickly in response to appropriate
opportunities that may arise for these types of transactions, in most cases
without the necessity of obtaining further stockholder approval. Other than a
stock split, Gilead has no current plans, arrangements or understandings
regarding the additional shares that would be authorized pursuant to this
proposal.
The additional shares of common stock would have rights identical to the
currently outstanding Gilead common stock. Adoption of the proposed amendment
and any issuance of the common stock would not affect the rights of Gilead
stockholders except for effects incidental to increasing the number of shares of
the common stock outstanding. Incidental effects of the increase in the
outstanding number of shares may include dilution of the earnings per share and
voting rights of current holders of common stock. The proposed stock split would
dilute earnings per share but would not affect voting rights of current
stockholders as each stockholder would continue to hold the same percentage
interest in Gilead. If the amendment is adopted, it will become effective upon
filing of a certificate of amendment of Gilead's amended and restated
certificate of incorporation with the Secretary of State of Delaware, a form of
this certificate of amendment is attached to this proxy statement as Exhibit A.
Gilead could also use the additional shares of common stock to oppose a
hostile takeover attempt or delay or prevent changes in control or management of
Gilead. For example, without further stockholder approval, the board could sell
shares of common stock in a private transaction to purchasers who would oppose a
takeover or favor the current board. Although this proposal to increase the
authorized common stock has been prompted by business and financial
considerations and not by the threat of any known or threatened hostile takeover
attempt, stockholders should be aware that approval of this proposal could
facilitate future efforts by Gilead to deter or prevent changes in control of
Gilead, including transactions in which the stockholders might otherwise receive
a premium for their shares over then current market prices.
The affirmative vote of the holders of a majority of the outstanding shares
of Gilead common stock will be required to approve this amendment to Gilead's
Amended Restated Certificate of Incorporation, as amended. As a result,
abstentions and broker non-votes will have the same effect as negative votes.
THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS
THAT STOCKHOLDERS VOTE FOR PROPOSAL 1.
3
<PAGE>
SECURITY OWNERSHIP OF
CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
The following table sets forth certain information regarding the ownership
of the Company's Common Stock as of November 8, 2000 by: (1) each current
director; (2) each current executive officer named in the Summary Compensation
Table; (3) all executive officers and directors of the Company as a group; and
(4) all those known by the Company to be beneficial owners of more than five
percent of its Common Stock.
<TABLE>
<CAPTION>
BENEFICIAL
OWNERSHIP(1)
--------------------
NUMBER OF PERCENT
BENEFICIAL OWNER SHARES OF TOTAL
---------------- --------- --------
<S> <C> <C>
Wellington Management Company, LLP(2)....................... 6,149,472 13.1%
75 State Street
Boston, MA 02109
Fidelity Management & Research Company(3)................... 4,475,815 10.2%
82 Devonshire Street
Boston, MA 02109
John C. Martin(4)........................................... 404,523 *
Donald H. Rumsfeld(5)....................................... 163,432 *
Norbert W. Bischofberger(6)................................. 176,330 *
Mark L. Perry(7)............................................ 116,899 *
Etienne F. Davignon(8)...................................... 68,330 *
Gordon E. Moore(9).......................................... 68,231 *
James M. Denny(10).......................................... 47,850 *
George P. Shultz(11)........................................ 48,000 *
Paul Berg(12)............................................... 17,300 *
All executive officers and directors as a group (14 1,312,310 2.7%
persons)(13)..............................................
</TABLE>
------------------------
* Less than 1%.
(1) This table is based upon information supplied by the Company's directors,
officers, principal stockholders and Schedules 13D and 13G filed with the
Securities and Exchange Commission (the "SEC"). Unless otherwise indicated
in the footnotes to this table, and subject to community property laws
where applicable, each of the stockholders named in this table has sole
voting and investment power with respect to the shares indicated as
beneficially owned. Applicable percentages are based on 47,047,550 shares
of Common Stock outstanding on November 8, 2000.
(2) Based on a Schedule 13G filed with the SEC on February 9, 2000, The
Wellington Management Company, LLP ("WMC"), a registered investment
advisor, has beneficial ownership of and shared dispositive power over
6,149,472 shares of Common Stock at December 31, 1999. Such shares are
owned by numerous investment advisory clients of WMC, none of which is
known to have beneficial ownership of more than 5% of Common Stock. As of
December 31, 1999, WMC had shared voting power over 3,100,007 of the shares
for which it is deemed to have beneficial ownership.
4
<PAGE>
(3) Based on a Schedule 13G filed with the SEC on February 11, 2000, FMR Corp.
("FMR") indirectly held 4,795,166 shares of Common Stock at December 31,
1999. Fidelity Management & Research Company, a wholly owned subsidiary of
FMR and an investment advisor, was the beneficial owner of 4,475,815 shares
of Common Stock at December 31, 1999 as a result of acting as an investment
advisor to various investment companies. Fidelity Management Trust Company,
another wholly owned subsidiary of FMR and a bank, was the beneficial owner
of 310,751 shares of the outstanding Common Stock at December 31, 1999.
Fidelity International Limited ("FIL"), an affiliate of FMR, provides
investment advisory and management services to a number of non-U.S.
investment companies and certain institutional investors. FIL was the
beneficial owner of 8,600 shares of the outstanding Common Stock at
December 31, 1999.
(4) Includes 362,825 shares subject to stock options exercisable within
60 days.
(5) Includes 15,854 shares held in a grantor annuity trust for which
Mr. Rumsfeld and Mr. Denny are co-donors and trustees and 68,200 shares
subject to stock options exercisable within 60 days.
(6) Includes 12,534 shares held in trust for which Dr. Bischofberger and his
wife are trustees, 400 shares held in account for Dr. Bischofberger's minor
children for which Dr. Bischofberger is the custodian and 145,500 shares
subject to stock options exercisable within 60 days.
(7) Includes 800 shares held in account for Mr. Perry's minor child for which
Mr. Perry is the custodian and 92,500 shares subject to stock options
exercisable within 60 days.
(8) Includes 35,000 shares subject to stock options exercisable within
60 days.
(9) Includes 51,566 shares subject to stock options exercisable within
60 days.
(10) Includes 47,850 shares subject to stock options exercisable within
60 days.
(11) Includes 38,000 shares subject to stock options exercisable within
60 days.
(12) Includes 17,300 shares subject to stock options exercisable within
60 days.
(13) Includes 1,030,948 shares subject to stock options exercisable within
60 days. See notes (4) through (12) above.
5
<PAGE>
EXECUTIVE COMPENSATION
COMPENSATION OF DIRECTORS
Each Non-Employee Director of the Company receives a fee of $1,000 for each
meeting attended. For the year ended December 31, 1999, the total compensation
paid to current non-employee directors was $26,000. The members of the Board of
Directors are also eligible for reimbursement for their expenses incurred in
connection with attendance at Board meetings in accordance with Company policy.
Each Non-Employee Director of the Company also receives stock option grants
under the 1995 Non-Employee Directors' Stock Option Plan ("Directors' Plan").
The Directors' Plan provides for non-discretionary grants of nonstatutory stock
options to Non-Employee Directors of the Company, on an automatic basis pursuant
to a pre-approved schedule. Options granted under the Directors' Plan are at
prices not less than fair value on the date of grant, become exercisable over a
period of five years in equal quarterly installments at the rate of 5% per
quarter and expire after ten years. Such vesting is conditioned upon continuous
service as a Non-Employee Director of or consultant to the Company. The exercise
price of options granted must be paid in cash or shares of Common Stock of the
Company at the time the option is exercised.
Each Non-Employee Director was granted as of January 2, 1996, or on such
later date as he or she is first elected to be a Non-Employee Director, an
option to purchase 25,000 shares of Common Stock of the Company (the "Initial
Grant"). Thereafter, on each anniversary date of a Non-Employee Director's
Initial Grant, the Non-Employee Director is automatically granted an option to
purchase 5,000 shares of Common Stock of the Company (the "Annual Grant"). A
Non-Employee Director who is also the Chairperson of the Board is granted an
option to purchase an additional 20,000 shares of Common Stock of the Company at
the time of his or her Initial Grant or later election as Chairperson, and an
additional 4,000 shares of Common Stock of the Company at the time of his or her
Annual Grant. Each Non-Employee Director who serves on a standing committee of
the Board is automatically granted an option to purchase an additional 1,000
shares of Common Stock of the Company at the time of his or her Initial Grant,
and an additional 1,000 shares of Common Stock of the Company at the time of his
or her Annual Grant, for each such committee. Each Non-Employee Director who
serves on a standing committee and who is also the Chairperson of that committee
is automatically granted an option to purchase an additional 2,000 shares of
Common Stock of the Company at the time of his or her Annual Grant. No other
options may be granted under the Directors' Plan.
During 1999, the Company granted options covering 46,000 shares to its
current Non-Employee Directors, at exercise prices ranging from $41.06 to $43.25
per share. Each option granted had an exercise price equal to the fair value of
the Common Stock of the Company on the date of grant.
As of December 8, 2000, options to purchase a total of 355,000 shares of
Common Stock of the Company were outstanding under the Directors' Plan.
6
<PAGE>
COMPENSATION OF EXECUTIVE OFFICERS
SUMMARY OF COMPENSATION
The following table shows, for the years ended December 31, 1999, 1998 and
1997, certain compensation awarded or paid to, or earned by, the Company's Named
Executive Officers:
SUMMARY COMPENSATION TABLE
<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
------------
ANNUAL COMPENSATION SHARES
YEAR ENDED -------------------- UNDERLYING
NAME AND PRINCIPAL POSITION DECEMBER 31, SALARY(1) BONUS OPTIONS(2)
--------------------------- ------------ --------- -------- ------------
<S> <C> <C> <C> <C>
John C. Martin.................................. 1999 $387,681 $250,000 100,000
President and Chief Executive Officer 1998 $354,375 $150,000 65,000
1997 $326,667 $150,000 75,000
Jeffrey W. Bird(3).............................. 1999 $247,073 $140,000 60,000
Former Senior Vice President, Business
Operations 1998 $222,750 $100,000 65,000
1997 $187,917 $100,000 40,000
Norbert W. Bischofberger(4)..................... 1999 $247,075 $140,000 60,000
Executive Vice President, Research and 1998 $222,752 $115,000 55,000
Development 1997 $199,583 $ 75,000 40,000
Howard S. Jaffe(5).............................. 1999 $290,368 $175,000 40,000
Former Senior Vice President, Drug Development 1998 $278,461 $100,000 35,000
1997 $269,167 $100,000 40,000
Mark L. Perry (6)............................... 1999 $275,514 $140,000 60,000
Executive Vice President, Operations 1998 $253,125 $100,000 55,000
1997 $244,458 $ 75,000 40,000
</TABLE>
------------------------
(1) Includes amounts earned but deferred at the election of the Named Executive
Officers pursuant to the Company's 401(k) employee savings and retirement
plan.
(2) The Company has not granted any stock appreciation rights, has not made any
long-term incentive plan awards and did not make any restricted stock grants
to the Named Executive Officers during the periods covered.
(3) Dr. Bird resigned as Senior Vice President, Business Operations effective
April 12, 2000. While he will continue to provide certain services to the
Company under the terms of a consulting agreement, he is no longer an
executive officer or an employee of the Company as of the effective date of
his resignation.
(4) Dr. Bischofberger was named Executive Vice President, Research and
Development in November 2000. Dr. Bischofberger had served as Senior Vice
President, Research and Development since January 2000, and prior to that
served as Senior Vice President, Research.
(5) Dr. Jaffe became a part-time employee of the Company effective January 1,
2000. Dr. Jaffe's title is Senior Medical Advisor and he is also a member of
the Company's Scientific Advisory Board. As of January 1, 2000, Dr. Jaffe is
no longer an executive officer of the Company.
(6) Mr. Perry was named Executive Vice President, Operations in November 2000.
Mr. Perry had served as Senior Vice President, Operations since
February 2000, and prior to that served as Senior Vice President, Chief
Financial Officer and General Counsel. Mr. Perry continues to serve as
Corporate Secretary.
7
<PAGE>
STOCK OPTION GRANTS IN LAST FISCAL YEAR
As of December 8, 2000, options to purchase a total of 4,621,629 shares of
Common Stock had been granted and remained outstanding under the 1991 Stock
Option Plan, and options to purchase 2,974,827 shares of Common Stock remained
available for grant thereunder. In addition, as of such date, options to
purchase a total of 48,664 shares of Common Stock were outstanding under the
Company's 1987 Stock Option Plan, options to purchase 350,767 shares of Common
Stock were outstanding under NeXstar 1993 Incentive Stock Option Plan, options
to purchase 28,279 shares of Common Stock were outstanding under the
Vestar, Inc. 1988 Stock Option Plan and options to purchase 6,666 shares of
Common Stock were outstanding pursuant to certain option grants made outside of
the Company's option plans.
The Company grants both incentive stock options and nonstatutory stock
options to its executive officers under the 1991 Stock Option Plan. The
following tables show, for the year ended December 31, 1999 (the "Last Fiscal
Year"), certain information regarding options granted to, exercised by, and held
at year-end by the Named Executive Officers:
<TABLE>
<CAPTION>
POTENTIAL REALIZABLE VALUE AT
NUMBER OF % OF TOTAL ASSUMED ANNUAL RATES OF
SECURITIES OPTIONS EXERCISE STOCK PRICE APPRECIATION FOR
UNDERLYING GRANTED TO OR BASE OPTION TERM(3)
OPTIONS EMPLOYEES PRICE EXPIRATION -----------------------------
GRANTED(1) IN 1999(2) PER SHARE DATE 5% 10%
---------- ---------- --------- ---------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Martin............... 100,000 6.71% $58.375 07/21/09 $3,669,901 $9,299,518
Jeffrey W. Bird.............. 60,000 4.03% $58.375 07/21/09 $2,201,941 $5,579,711
Norbert W. Bischofberger..... 60,000 4.03% $58.375 07/21/09 $2,201,941 $5,579,711
Mark L. Perry................ 60,000 4.03% $58.375 07/21/09 $2,201,941 $5,579,711
Howard S. Jaffe.............. 40,000 2.69% $58.375 07/21/09 $1,467,961 $3,719,807
</TABLE>
------------------------
(1) The terms of such options, which include both incentive and nonstatutory
stock options, are consistent with those of options granted to other
employees under the 1991 Stock Option Plan. The options vest at the rate of
20% after one year and 5% per quarter thereafter during the optionee's
employment. Subject to certain exceptions, the maximum term of options
granted under the 1991 Stock Option Plan is ten years.
(2) Based on options to purchase 1,489,494 shares of Common Stock granted to
employees, including executive officers, for the year ended December 31,
1999.
(3) The potential realizable value is based on the term of the option at the
date of the grant (10 years). It is calculated by assuming that the stock
price on the date of grant appreciates at the indicated annual rate,
compounded annually for the entire term, and that the option is exercised
and sold on the last day of the option term for the appreciated stock price.
Actual gains, if any, are dependent on the actual future performance of the
Company's Common Stock and the timing of exercise and sale transactions by
the holder. There can be no assurance that the amounts reflected in this
table, or that any gains, will be achieved.
8
<PAGE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL YEAR-END OPTION
VALUES
<TABLE>
<CAPTION>
NUMBER OF SECURITIES
UNDERLYING UNEXERCISED VALUE OF UNEXERCISED IN-THE-
OPTIONS AT MONEY OPTIONS AT
SHARES DECEMBER 31, 1999(#)(2) DECEMBER 31, 1999(3)
ACQUIRED VALUE --------------------------- -----------------------------
NAME ON EXERCISE(#) REALIZED(1) EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
---- -------------- ----------- ----------- ------------- ------------- -------------
<S> <C> <C> <C> <C> <C> <C>
John C. Martin.............. 26,000 $1,009,526 331,575 238,750 $12,177,251 $3,958,563
Jeffrey W. Bird............. -- -- 97,947 141,750 $ 3,538,384 $2,256,250
Norbert W. Bischofberger.... -- -- 125,949 138,250 $ 4,577,945 $2,240,813
Howard S. Jaffe............. 48,865 $1,544,642 76,550 122,850 $ 2,548,863 $2,651,888
Mark L. Perry............... 15,000 $ 611,563 105,750 134,250 $ 3,936,063 $1,993,313
</TABLE>
------------------------
(1) Represents the fair value of the aggregate amount of Common Stock on the
date of exercise (based on the closing sales price reported on the Nasdaq
Stock Market or the actual sales price if the shares were sold by the
optionee) less the exercise price, and does not necessarily indicate that
the shares were sold by the optionee.
(2) Includes both in-the-money and out-of-the-money options.
(3) Fair value of the Company's Common Stock at December 31, 1999 ($54.125,
based on the closing sales price reported on the Nasdaq Stock Market), less
the exercise price.
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
The Company's Compensation Committee consists of Gordon E. Moore (Chairman),
Paul Berg and James M. Denny. None of the members of the Compensation Committee
is currently or has been, at any time since the Company's formation, one of the
Company's officers or employees.
During 1999, the Company paid an aggregate of $6,747,923 to PharmaResearch
Corporation, a contract research organization. James M. Denny, a member of the
Compensation Committee, is a Senior Advisor to William Blair Capital Partners
LLC, which manages William Blair Capital Fund V, which owns a controlling
interest (45% of the voting stock) in PharmaResearch Corporation. Mr. Denny is
not involved in the supervision of the operations of PharmaResearch Corporation.
PharmaResearch Corporation provided services to the Company prior to William
Blair Capital Fund V's investment.
By Order of the Board of Directors
/s/ MARK L. PERRY
Mark L. Perry
SECRETARY
December 8, 2000
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EXHIBIT A
CERTIFICATE OF AMENDMENT
OF THE
AMENDED AND RESTATED
CERTIFICATE OF INCORPORATION
OF
GILEAD SCIENCES, INC.
John C. Martin and Mark L. Perry do hereby certify as follows:
ONE: The name of the corporation is Gilead Sciences, Inc.
TWO: The date on which the Amended and Restated Certificate of Incorporation
of the corporation was filed with the Secretary of State of the State of
Delaware was January 29, 1992. A Certificate of Amendment to the Amended and
Restated Certificate of Incorporation was filed with the Secretary of State of
the State of Delaware on July 29, 1999.
THREE: They are duly elected and acting President and Secretary,
respectively of Gilead Sciences, Inc., a Delaware corporation.
FOUR: The Board of Directors of the corporation, acting in accordance with
the provisions of Section 242 of the General Corporation Law of the State of
Delaware, adopted resolutions to amend the Amended and Restated Certificate of
Incorporation of the corporation in the following form:
Article V shall be amended and restated to read in its entirety as follows:
"V
A. This corporation is authorized to issue two classes of stock to be
designated, respectively, 'Common Stock' and 'Preferred Stock.' The total
number of shares which the corporation is authorized to issue is five
hundred five million (505,000,000) shares. Five hundred million
(500,000,000) shares shall be Common Stock, each having a par value of
one-tenth of one cent ($.001). Five million (5,000,000) shares shall be
Preferred Stock, each having a par value of one-tenth of one cent ($.001).
B. The Preferred Stock may be issued from time to time in one or more
series. The Board of Directors is hereby authorized, by filing a certificate
pursuant to the Delaware General Corporation Law, to fix or alter from time
to time the designation, powers, preferences and rights or the shares of
each such series and the qualifications, limitations or restrictions
thereof, including without limitation the dividend rights, dividend rate,
conversion rights, voting rights, rights and terms of redemption (including
sinking fund provisions), redemption price or prices, and the liquidation
preferences of any wholly unissued series of Preferred Stock, and to
establish from time to time the number of shares constituting any such
series and the designation thereof, or any of them (a "Preferred Stock
Designation"); and to increase or decrease the number of shares of that
series then outstanding. In case the number of shares of any series shall be
decreased in accordance with the foregoing sentence, the shares constituting
such decrease shall resume the status that they had prior to the adoption of
the resolution originally fixing the number of shares of such series."
FIVE: Thereafter, pursuant to a resolution of the Board of Directors, this
Certificate of Amendment was submitted to the stockholders of the corporation
for their approval and was duly adopted in accordance with the provision of
Section 242 of the General Corporation Law of the State of Delaware.
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SIX: All stock provisions of the Amended and Restated Certificates of
Incorporation shall remain in full force and effect.
IN WITNESS WHEREOF, Gilead Sciences, Inc. has caused this Certificate of
Amendment to be signed by its President and attested to by its Secretary this
day of February , 2001.
GILEAD SCIENCES, INC.
------------------------------------
John C. Martin
PRESIDENT
ATTEST:
----------------------------------------
Mark L. Perry
SECRETARY
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