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TABLE OF
CONTENTS
TABLE OF
CONTENTS
Table of
Contents
Filed Pursuant to Rule 424(b)(5)
Registration Statement No. 333-242321
This preliminary prospectus supplement relates to an
effective registration statement under the Securities Act of 1933,
as amended, but is not complete and may be changed. This
preliminary prospectus supplement and the accompanying prospectus
are not an offer to sell these securities, and they are not
soliciting an offer to buy these securities in any jurisdiction
where the offer or sale is not permitted.
Subject to Completion, dated September 23,
2020
Preliminary
Prospectus Supplement
(To Prospectus dated August 7, 2020)

Gilead Sciences, Inc.
$
$ Floating Rate
Notes due
$ Floating Rate
Notes due
$ %
Senior Notes due
$ %
Senior Notes due
$ %
Senior Notes due
$ %
Senior Notes due
We
are offering
$ aggregate
principal amount of floating rate notes
due (the
" floating rate
notes"), $ aggregate
principal amount of floating rate notes
due (the
" floating rate
notes," and together with
the floating rate
notes, the
" floating rate
notes") and
$ aggregate
principal amount
of % senior notes
due (the
" fixed rate
notes"), $
aggregate principal amount
of % senior notes
due (the
" fixed rate
notes"), $ aggregate
principal amount
of % senior notes
due (the
" fixed rate notes")
and $ aggregate
principal amount
of % senior notes
due (the
" fixed rate notes,"
together with
the fixed rate
notes, the fixed
rate notes and
the fixed rate
notes, the " fixed
rate notes" and, together with the floating rate notes, the
"notes"). We will pay interest on the floating rate notes
on , ,
and of
each year, commencing
on ,
. We will pay
interest on the fixed rate notes
on and of
each year, commencing
on , .
The floating rate
notes will mature
on , ,
the floating notes
will mature on ,
,
the fixed rate notes
will mature on ,
,
the fixed rate notes
will mature on ,
the fixed rate notes
will mature
on , , and
the fixed rate
notes will mature
on , .
We
may redeem some or all of the fixed rate notes at any time and from
time to time at the applicable redemption price as further
described under "Description of the Notes—Optional Redemption." We
will not have the option to redeem
(i) the floating
rate notes, in whole or in part, prior to the maturity date or
(ii) the
floating
rate notes, in whole or in part, prior to the applicable Par Call
Date (as defined below). If a change of control triggering event as
described in this prospectus supplement under the heading
"Description of the Notes—Change of Control" occurs, we will be
required to offer to purchase the notes from the holders. We will
be required to redeem the floating rate notes,
the fixed rate
notes, the fixed
rate notes and
the fixed rate notes
under the circumstances and at the redemption prices described in
this prospectus supplement under the heading "Description of the
Notes—Special Mandatory Redemption."
The
notes will be our senior unsecured obligations and will rank
equally with all our other senior unsecured obligations from time
to time outstanding.
The
notes will not be listed on any securities exchange. There
currently are no public markets for the notes.
See
"Risk Factors" beginning on page S-11 of this prospectus
supplement to read about certain risks you should consider before
investing in the notes.
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Public
Offering Price(1) |
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Underwriting
Discount(2) |
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Proceeds to us,
(before expenses)(1) |
Per floating rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
Per floating rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
Per fixed rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
Per fixed rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
Per fixed rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
Per fixed rate
note
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% |
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% |
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% |
Total
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$ |
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$ |
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$ |
- (1)
- Plus accrued
interest, if any, from , 2020,
if settlement occurs after that date.
- (2)
- See "Underwriting
(Conflicts of Interest)" for a description of the compensation
payable to the underwriters.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus supplement or the accompanying
prospectus is truthful or complete. Any representation to the
contrary is a criminal offense.
The
notes will be delivered in book-entry form only through the
facilities of The Depository Trust Company for the accounts of its
participants, including Euroclear Bank S.A./N.V., as operator
of the Euroclear System, and Clearstream Banking, société anonyme,
on or about , 2020.
Joint Book-Running Managers
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Barclays |
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Wells Fargo Securities |
,
2020
Table of
Contents
TABLE OF CONTENTS
Prospectus Supplement
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About This Prospectus Supplement
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Where You Can Find More Information
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S-ii |
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Summary
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S-1 |
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Risk Factors
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S-11 |
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Forward-Looking Statements
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S-20 |
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Use of Proceeds
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S-21 |
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Capitalization
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S-22 |
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Description of the Notes
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S-23 |
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United States Federal Income Tax
Considerations
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S-45 |
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Underwriting (Conflicts of Interest)
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S-50 |
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Legal Matters
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S-56 |
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Experts
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S-56 |
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Prospectus
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About This Prospectus
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Where You Can Find More Information
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Forward-Looking Statements
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Gilead Sciences, Inc.
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Risk Factors
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Use of Proceeds
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Description of Securities
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Description of Debt Securities
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Description of Capital Stock
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Description of Depositary Shares
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Description of Warrants
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Description of Subscription Rights
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Description of Stock Purchase Contracts and Stock
Purchase Units
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Plan of Distribution
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Legal Matters
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Experts
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Table of
Contents
ABOUT THIS PROSPECTUS
SUPPLEMENT
This prospectus
supplement and the accompanying prospectus are part of a
registration statement that we filed with the Securities and
Exchange Commission (the "SEC") using a shelf registration process.
Under the shelf registration process, we may offer from time to
time (i) debt securities, (ii) common stock,
(iii) preferred stock, (iv) depositary receipts,
representing fractional shares of our preferred stock,
(v) warrants to purchase debt securities, preferred stock or
common stock, (vi) subscription rights to purchase debt
securities, preferred stock or common stock, (vii) stock
purchase contracts obligating holders to purchase from or sell to
us common stock or preferred stock at a future date or dates and
(viii) stock purchase units. In the accompanying prospectus,
we provide you with a general description of the securities we may
offer from time to time under our shelf registration statement. In
this prospectus supplement, we provide you with specific
information about the notes that we are selling in this offering.
Both this prospectus supplement and the accompanying prospectus
include important information about us, our debt securities and
other information you should know before investing. This prospectus
supplement also adds, updates and changes information contained in
the accompanying prospectus. You should read both this prospectus
supplement and the accompanying prospectus as well as the
additional information described under "Where You Can Find More
Information" included elsewhere in this prospectus supplement and
any free writing prospectus we have filed with the SEC relating to
this offering before investing in the notes. To the extent there is
a conflict between the information contained in this prospectus
supplement, on the one hand, and the information contained in the
accompanying prospectus or any document that has previously been
filed with the SEC and is incorporated into this prospectus by
reference, on the other hand, the information in this prospectus
supplement shall control.
Neither we nor
the underwriters have authorized anyone to provide you with
information other than that contained or incorporated by reference
in this prospectus supplement, the accompanying prospectus and any
free writing prospectus we have filed with the U.S. Securities and
Exchange Commission (the "SEC") relating to this offering. We take
no responsibility for, and can provide no assurance as to the
reliability of, any other information that others may give you.
Neither we nor the underwriters are making an offer to sell these
securities in any jurisdiction where the offer or sale is not
permitted. You should assume that the information contained in this
prospectus supplement, the accompanying prospectus, the documents
incorporated by reference and any free writing prospectus we have
filed with the SEC relating to this offering is accurate only as of
their respective dates. Our business, financial condition, results
of operations and prospects may have changed since those
dates.
In this
prospectus, except as otherwise indicated, "Gilead," the "Company,"
"we," "our," and "us" and similar terms refer to Gilead
Sciences, Inc. and its consolidated subsidiaries.
Disclosure
relating to Immunomedics, Inc., a Delaware corporation
("Immunomedics"), has been taken from its filings under the
Exchange Act.
It is expected
that delivery of the notes will be made against payment therefor on
or
about ,
2020, which is the fifth business day following the date of the
pricing of the notes ("T+5"). Under Rule 15c6-1 of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
trades in the secondary market generally are required to settle in
two business days unless the parties to that trade expressly agree
otherwise. Accordingly, purchasers who wish to trade the notes on
or after the date of pricing but prior to the closing date may be
required, by virtue of the fact that the notes initially will
settle in T+5, to specify an alternative settlement cycle at the
time of any such trade to prevent failed settlement and should
consult their own advisers.
S-i
Table of
Contents
WHERE YOU CAN FIND MORE
INFORMATION
We file annual,
quarterly and current reports, proxy statements and other
information with the SEC. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information
statements and other information we have filed electronically with
the SEC. These reports, proxy statements and other information can
also be read on our internet site at http://gilead.com. Information
on our website is not incorporated into this prospectus supplement
or the accompanying prospectus.
The SEC allows
us to "incorporate by reference" information into this prospectus
supplement, which means that we can disclose important information
to you by referring you to another document filed separately with
the SEC. The information incorporated by reference is deemed to be
part of this prospectus supplement and the accompanying prospectus,
except for any information superseded by information contained
directly in this prospectus supplement or any subsequently filed
document deemed incorporated by reference. This prospectus
supplement incorporates by reference the documents set forth below
that we have previously filed with the SEC:
- •
-
Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 (filed with the SEC on February 25,
2020);
- •
-
Definitive Proxy Statement on Schedule 14A (filed with the SEC
on March 24, 2020);
- •
- Quarterly Reports on
Form 10-Q (filed with the SEC on
May 6, 2020 and
August 6, 2020); and
- •
- Current Reports on
Form 8-K (filed with the SEC on
January 31, 2020,
March 2, 2020,
May 8, 2020,
June 16, 2020 and
September 14, 2020).
All documents
filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act, after the date of this prospectus supplement and
before the termination of the offering shall also be deemed to be
incorporated herein by reference. The most recent information that
we file with the SEC automatically updates and supersedes older
information. The information contained in any such filing will be
deemed to be a part of this prospectus supplement, commencing on
the date on which the document is filed.
We are not,
however, incorporating by reference any documents or portions
thereof, whether specifically listed above or filed in the future,
that are not deemed "filed" with the SEC, including our
compensation committee report, performance graph and the
certifications of our chief executive officer and chief financial
officer required by Rule 13a-14(b) or Rule 15d-14(b)
under the Exchange Act and Section 1350 of Chapter 63 of
Title 18 of the United States Code (included in or accompanying our
latest Annual Report on Form 10-K and subsequent Quarterly
Reports on Form 10-Q incorporated by reference herein) or any
information furnished pursuant to Items 2.02 or 7.01 of
Form 8-K or certain exhibits furnished pursuant to
Item 9.01 of Form 8-K.
We will provide
without charge upon written or oral request to each person,
including any beneficial owner, to whom a prospectus is delivered,
a copy of any or all of the documents which are incorporated by
reference into this prospectus supplement and the accompanying
prospectus but not delivered with this prospectus supplement and
the accompanying prospectus (other than exhibits to those documents
unless such exhibits are specifically incorporated by reference as
an exhibit in this prospectus supplement and the accompanying
prospectus). Requests should be directed to Gilead
Sciences, Inc., Attention: Investor Relations, 333 Lakeside
Drive, Foster City, California 94404, Telephone:
(650) 574-3000.
Immunomedics is
also subject to the information and reporting requirements of the
Exchange Act and files periodic reports and other information with
the SEC. These periodic reports and other information are available
by accessing the internet site of the SEC referred to
above.
S-ii
Table of
Contents
SUMMARY
This
summary highlights selected information more fully described
elsewhere in this prospectus supplement and the accompanying
prospectus. This summary does not contain all of the information
you should consider before investing in the notes. You should read
this prospectus supplement, the accompanying prospectus, any free
writing prospectus and the documents incorporated by reference
herein and therein carefully, especially the risks of investing in
the notes discussed in "Risk Factors" below and in the incorporated
documents.
Our Company
We are a
research-based biopharmaceutical company that discovers, develops
and commercializes innovative medicines in areas of unmet medical
need. With each new discovery and investigational drug candidate,
we strive to transform and simplify care for people with
life-threatening illnesses around the world. We have operations in
more than 35 countries worldwide, with headquarters in Foster City,
California. Our primary areas of focus include viral diseases,
inflammatory and fibrotic diseases and oncology. We seek to add to
our existing portfolio of products and product candidates through
our internal discovery and clinical development programs,
acquisitions, in-licensing, options and other strategic
collaborations.
Our portfolio
of marketed products includes AmBisome®, Atripla®, Biktarvy®,
Cayston®, Complera®/Eviplera®, Descovy®, Descovy for PrEP®,
Emtriva®, Epclusa®, Genvoya®, Harvoni®, Hepsera®, Letairis®,
Odefsey®, Ranexa®, Sovaldi®, Stribild®, Tecartus™, Truvada®,
Truvada for PrEP®, Tybost®, Veklury® (remdesivir), Vemlidy®,
Viread®, Vosevi®, Yescarta® and Zydelig®. The approval status of
Veklury (remdesivir) varies worldwide, and Veklury (remdesivir) is
not approved in the United States and is authorized for use under
an Emergency Use Authorization. We also sell and distribute
authorized generic versions of Epclusa and Harvoni in the United
States through our separate subsidiary, Asegua
Therapeutics, LLC. In addition, we sell and distribute certain
products through our corporate partners under collaborative
agreements.
We were
incorporated in Delaware on June 22, 1987. Our principal
executive offices are located at 333 Lakeside Drive, Foster City,
California 94404. The telephone number of our principal executive
offices is (650) 574-3000.
Recent Developments
Proposed Acquisition of Immunomedics, Inc.
On
September 13, 2020, we announced that we entered into an
Agreement and Plan of Merger (the "Merger Agreement") with
Immunomedics and Maui Merger Sub, Inc. ("Merger Sub"), a
Delaware corporation and our wholly owned subsidiary, pursuant to
which we will acquire Immunomedics (the "Acquisition").
We estimate the
aggregate amount of cash consideration required to consummate the
tender offer and the merger will be approximately $21 billion,
plus related fees and expenses. We currently anticipate financing
the Acquisition with cash on our balance sheet, a portion of the
net proceeds of the issuance of the notes offered hereby and up to
$1.0 billion of borrowings under available term loan
facilities (the "New Term Loan Facility"). The Acquisition is not
subject to a financing condition.
The Acquisition
is expected to be completed in the fourth quarter of 2020. However,
there can be no assurance as to when or whether the Acquisition
will be completed, whether the parties to the Merger Agreement will
amend the terms thereof or whether the Acquisition will be
completed on terms other than those set forth in the Merger
Agreement as in effect as of the date of this prospectus
supplement. Pursuant to the Merger Agreement as in effect as of the
date of this prospectus supplement, if the Offer is not completed
by March 31, 2021 (the "End Date"), the Merger
Agreement
S-1
Table of
Contents
may be terminated by
either Immunomedics or us, provided that if, on March 31,
2021, all of the conditions to the Offer, other than certain
conditions relating to approvals under applicable antitrust laws,
are satisfied, the End Date will automatically be extended until
June 13, 2021 and further provided that if on the End Date, so
extended, all of the conditions to the Offer, other than certain
conditions relating to approvals under applicable antitrust laws,
are satisfied, the End Date will automatically be extended until
September 13, 2021. The completion of this offering of notes
is not contingent on the consummation of the Acquisition nor our
entry into the New Term Loan Facility, nor is the Acquisition
contingent on this offering. See "Risk Factors—Risks Relating to
the Acquisition."
Immunomedics is
a leader in next-generation antibody-drug conjugate ("ADC")
technology, committed to help transform the lives of people with
hard-to-treat cancers. Immunomedics' proprietary ADC platform
centers on using a novel linker that does not require an enzyme to
release the payload to deliver an active drug inside the tumor cell
and the tumor microenvironment, thereby producing a bystander
effect. Trodelvy, Immunomedics' lead ADC, is the first ADC the FDA
has approved for the treatment of people with metastatic
triple-negative breast cancer ("TNBC") and is also the first
FDA-approved anti-Trop-2 ADC. This indication was approved under
accelerated approval based on tumor response rate and duration of
response, and continued approval for this indication may be
contingent upon verification and description of clinical benefit in
confirmatory trials. Trodelvy targets Trop-2, an epithelial antigen
expressed on many solid cancers, including TNBC. It is an ADC
comprising three parts: the anti-Trop-2 antibody, the SN-38 payload
(metabolite of irinotecan) and a linker. We believe the potential
to combine Trodelvy with checkpoint inhibitors in the frontline
setting in the future could provide patients with an alternative to
chemotherapy.
Pursuant to the
Merger Agreement, and upon the terms and subject to the conditions
thereof, we will commence a tender offer (the "Offer"), to purchase
all of the issued and outstanding shares (the "Shares") of common
stock, par value $0.01 per share, of Immunomedics at a price of
$88.00 per Share (the "Offer Price"), net to the seller in cash,
without interest and subject to any required withholding of
taxes.
The Offer will
initially remain open for a minimum of 20 business days from and
including the date of commencement of the Offer. If on or prior to
any then-scheduled expiration date of the Offer, any of the
conditions to the Offer have not been satisfied (unless such
condition is waivable by us and has been waived), we will extend
the Offer for additional periods of up to 10 business days to
permit the satisfaction of all Offer conditions.
Our obligation
to consummate the Offer is subject to the satisfaction or waiver of
customary conditions, including, among others, (i) there being
validly tendered and not validly withdrawn a number of Shares that,
considered together with all other Shares (if any) beneficially
owned by us and our affiliates, represent one more Share than 50%
of the total number of Shares outstanding at the expiration of the
Offer, (ii) the expiration or termination of the waiting
period applicable to the Offer under the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"),
and, if we and Immunomedics have entered into an agreement with any
governmental body regarding the timing of the consummation of the
Offer, that agreement permitting such consummation, (iii) the
absence of any judgment, restraining order, injunction or other
order preventing the consummation of the Offer or the merger or
subsequent integration in any jurisdiction in which we or
Immunomedics have material business operations and (iv) other
customary conditions set forth in the Merger Agreement.
S-2
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Following the
consummation of the Offer and subject to the terms and conditions
of the Merger Agreement, Merger Sub will merge with and into
Immunomedics pursuant to Section 251(h) of the General
Corporation Law of the State of Delaware (the "DGCL"), with
Immunomedics being the surviving corporation. At the effective time
of the merger, each Share (other than (i) Shares held by
Immunomedics (or held in Immunomedics' treasury), (ii) Shares
held by us or any of our direct or indirect wholly owned
subsidiaries and (iii) Shares held by stockholders who have
properly exercised and perfected their demands for appraisal of
such Shares in accordance with the DGCL and have neither
effectively withdrawn nor lost such rights as of the effective time
of the merger) will be converted into the right to receive an
amount in cash equal to the Offer Price, without interest and
subject to any required withholding of taxes.
A copy of the
Merger Agreement is included as an exhibit to our Current Report on
Form 8-K filed with the SEC on September 14, 2020, which
is incorporated by reference into this prospectus supplement. The
foregoing description of the Acquisition and the Merger Agreement
does not purport to be complete and is qualified in its entirety by
reference to such exhibit.
This offering
is not conditioned upon the completion of the Acquisition but, in
the event that the Acquisition is not consummated on or before
September 13, 2021, or the Merger Agreement is terminated at
any time prior thereto, we will be required to redeem in whole and
not in part the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes for a redemption price equal to 101% of the principal
amount of the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes, respectively, plus accrued and unpaid interest to, but
excluding, the date of redemption, if any. See "Description of the
Notes—Special Mandatory Redemption."
Financing of the Acquisition
We have
received term loan commitments of $1.0 billion in connection
with the New Term Loan Facility from a syndicate of lending
institutions (including affiliates of the underwriters). We expect
to finance the Acquisition with approximately $15.0 billion
cash on the balance sheet, the proceeds of this offering and up to
$1.0 billion of potential borrowings under the New Term Loan
Facility under a Term Loan Facility Credit Agreement that we may
enter into on or around the closing of the Acquisition. The terms
of the New Term Loan Facility are customary for facilities of this
type.
S-3
Table of
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The Offering
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Issuer
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Gilead Sciences, Inc., a Delaware corporation. |
Securities offered
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$ aggregate
principal amount of floating rate notes
due (the
" floating
rate notes").
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$ aggregate
principal amount of floating rate notes
due (the
" floating
rate notes").
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$ aggregate
principal amount
of %
senior notes
due (the
" fixed
rate notes").
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$ aggregate
principal amount
of %
senior notes
due (the
" fixed
rate notes").
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$ aggregate
principal amount
of %
senior notes
due (the
" fixed
rate notes").
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$ aggregate
principal amount
of %
senior notes
due (the
" fixed
rate notes").
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Maturity
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The floating
rate notes will mature
on , .
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The floating
rate notes will mature
on , .
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The fixed
rate notes will mature
on , .
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The fixed
rate notes will mature
on , .
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The fixed
rate notes will mature
on , .
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The fixed
rate notes will mature
on , .
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Interest payment dates
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We will pay interest on the floating rate notes
on ,
,
and of
each year, commencing
on , .
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We will pay interest on the fixed rate notes
on and of
each year, commencing
on ,
.
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Interest on each series of the notes will accrue
from ,
2020.
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Interest rate
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The floating rate notes will bear interest at a
floating rate equal to the benchmark which will initially be the
three-month LIBOR
plus %
with respect to
the floating
rate notes
and %
with respect to
the floating
rate notes. See "Description of the Notes—Floating Rate
Notes."
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Interest on the floating rate notes will be reset
quarterly on each interest payment date. Interest on the floating
rate notes will not be less than zero. See "Description of the
Notes—Floating Rate Notes."
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The fixed
rate notes will bear interest
at %
per year,
the fixed
rate notes will bear interest
at %
per year,
the fixed
rate notes will bear interest
at %
per year and
the fixed
rate notes will bear interest
at %
per year.
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S-4
Table of
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Optional redemption
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The fixed rate notes will be redeemable at any
time and from time to time prior to the applicable Par Call Date,
in whole or in part and at our option, at a redemption price
described herein under "Description of the Notes—Optional
Redemption." On or after the applicable Par Call Date, we may
redeem
the floating
rate notes,
the fixed
rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes at any time, in whole or in part and at our option, at a
redemption price equal to 100% of the principal amount of such
notes.
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We do not have the right to redeem
the floating
rate notes prior to the maturity date of such notes.
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We will pay accrued interest on the notes redeemed
to, but not including, the redemption date. See "Description of the
Notes—Optional Redemption."
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Special mandatory redemption
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In the event that the Acquisition is not consummated
on or before September 13, 2021 or the Merger Agreement is
terminated any time prior thereto, we will be required to redeem
the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes, in whole and not in part, for a redemption price equal
to 101% of the principal amount of such notes, plus accrued and
unpaid interest to, but excluding, the date of redemption, if any.
See "Description of the Notes—Special Mandatory
Redemption."
|
|
|
The fixed
rate notes are not subject to the special mandatory redemption
provision described under "Description of the Notes—Special
Mandatory Redemption."
|
Change of control offer
|
|
If we experience a "Change of Control Triggering
Event" (as defined in "Description of the Notes—Change of
Control"), we will be required to offer to purchase the notes at a
purchase price equal to 101% of their principal amount, plus
accrued and unpaid interest to the date of repurchase. See
"Description of the Notes—Change of Control."
|
Certain covenants
|
|
The indenture governing the notes contains certain
restrictions, including a limitation that restricts our ability and
the ability of certain of our subsidiaries to create or incur
secured indebtedness, enter into sale and leaseback transactions
and consolidate, merge or transfer all or substantially all of our
assets and the assets of our subsidiaries. See "Description of the
Notes—Certain Covenants."
|
Events of default
|
|
An "Event of Default" under the indenture in respect
of the notes of a particular series is:
|
|
|
•
default for 30 days in payment of interest on the notes of
such series;
|
|
|
•
default in payment of principal or any premium on the notes of
such series;
|
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|
|
|
|
|
•
failure by us for 90 days after notice to us to comply
with any of our other agreements in the applicable indenture for
the benefit of holders of the notes of such series;
|
|
|
•
certain events of bankruptcy, insolvency or reorganization;
and
|
|
|
•
the occurrence with respect to any debt of the Company
individually or in the aggregate in excess of $150,000,000 of
(i) an event of default that results in such debt becoming due
and payable prior to its scheduled maturity (after giving effect to
any applicable grace period) or (ii) the failure to make any
payment when due (including any applicable grace period), which
results in the acceleration of the maturity of such debt, in each
case without such acceleration having been rescinded, annulled or
otherwise cured.
|
|
|
See "Description of the Notes—Events of
Default."
|
Ranking
|
|
The notes will be our senior unsecured obligations
and will rank equally with all our other senior unsecured
obligations, including all other unsubordinated securities issued
under the indenture governing the notes, from time to time
outstanding. The indenture governing the notes provides for the
issuance by us from time to time of senior unsecured indebtedness
in an unlimited amount. See "Description of the
Notes—Ranking."
|
Form and denomination
|
|
The notes of each series will be issued in fully
registered form in denominations of $2,000 and in integral
multiples of $1,000 in excess thereof.
|
DTC eligibility
|
|
The notes of each series will be represented by
global certificates deposited with, or on behalf of, The Depository
Trust Company, which we refer to as DTC, or its nominee. See
"Description of the Notes—Book-Entry; Delivery and Form of
Notes."
|
Use of proceeds
|
|
We estimate that the net proceeds from this
offering, after deducting underwriters' discounts and estimated
offering expenses payable by us, will be approximately
$ billion.
We intend to use (i) the net proceeds from the offering of the
floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes, together with any net proceeds from the New Term Loan
Facility and cash on our balance sheet, to pay the cash
consideration for the Acquisition and to pay related fees and
expenses and (ii) the net proceeds from the offering of
the notes
to repay
$ million
in aggregate principal amount of our 4.50% Senior Notes due 2021
and
$ million
in aggregate principal amount of our 4.40% Senior Notes due 2021.
This offering is not conditioned upon the completion of the
Acquisition, which, if completed, will occur subsequent to the
closing of this offering. See "Use of Proceeds."
|
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|
|
|
Risk factors
|
|
You should carefully read and consider the
information set forth in the section entitled "Risk Factors" of
this prospectus supplement and the risk factors set forth in our
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020, incorporated herein by reference, before
investing in the notes.
|
No listing of the notes
|
|
We do not intend to apply to list any series of
notes on any securities exchange or to have any series of notes
quoted on any automated quotation system.
|
Re-opening of the notes
|
|
We may from time to time, without the consent of the
holders of such series of notes, create and issue further notes of
such series having the same terms and conditions in all respects as
the notes of such series being offered hereby, except for the issue
date, the public offering price and, in some cases, the date of the
first payment of interest thereon. Additional notes issued in this
manner will be consolidated with, and will form a single
series with, the applicable series of notes being offered
hereby.
|
Governing law
|
|
The notes and the indenture governing the notes will
be governed by and construed in accordance with the laws of the
State of New York.
|
Trustee, calculation agent, registrar and paying
agent
|
|
Wells Fargo Bank, National Association.
|
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Table of
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Summary Consolidated Financial
Data
The following
summary consolidated financial data for the six months ended
June 30, 2020 and 2019 are derived from our unaudited
condensed consolidated financial statements. The following summary
consolidated financial data for the years ended December 31,
2019, 2018 and 2017 are derived from our audited consolidated
financial statements. The summary consolidated financial data
should be read in conjunction with (i) our consolidated
financial statements, and the related notes thereto, as provided in
our
Annual Report on Form 10-K for the year ended
December 31, 2019, (ii) our condensed consolidated
financial statements and the related notes thereto, as provided in
our
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020 and (iii) the sections entitled
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" as provided in our
Annual Report on Form 10-K for the year ended
December 31, 2019 and our
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020, each of which is incorporated by reference
into this prospectus supplement. Our historical results are not
necessarily indicative of our future results and our interim
results are not necessarily indicative of results to be expected
for the full year ending December 31, 2020, or any other
period.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six months ended
June 30, |
|
Year ended December 31, |
|
(in
millions)
|
|
2020 |
|
2019 |
|
2019 |
|
2018 |
|
2017 |
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Consolidated statement of operations
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total revenue(1)
|
|
$ |
10,691 |
|
$ |
10,966 |
|
$ |
22,449 |
|
$ |
22,127 |
|
$ |
26,107 |
|
Total costs and expenses
|
|
|
11,272 |
|
|
6,299 |
|
|
18,162 |
|
|
13,927 |
|
|
11,983 |
|
Income (loss) from operations(1)(6)
|
|
|
(581 |
) |
|
4,667 |
|
|
4,287 |
|
|
8,200 |
|
|
14,124 |
|
Provision for income taxes(2)
|
|
|
838 |
|
|
917 |
|
|
(204 |
) |
|
2,339 |
|
|
8,885 |
|
Net income (loss) attributable to
Gilead(1)(2)(3)(6)
|
|
|
(1,788 |
) |
|
3,855 |
|
|
5,386 |
|
|
5,455 |
|
|
4,628 |
|
Consolidated statement of cash flows
data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net cash provided by operating
activities(7)
|
|
|
4,002 |
|
|
3,919 |
|
|
9,144 |
|
|
8,400 |
|
|
11,898 |
|
Net cash (used in) provided by investing
activities
|
|
|
(5,367 |
) |
|
(6,407 |
) |
|
(7,817 |
) |
|
14,355 |
|
|
(16,069 |
) |
Net cash (used in) provided by financing
activities
|
|
|
(3,485 |
) |
|
(4,223 |
) |
|
(7,634 |
) |
|
(12,318 |
) |
|
3,393 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, |
|
|
|
June 30,
2020 |
|
|
|
2019 |
|
2018 |
|
2017 |
|
|
|
(unaudited)
|
|
|
|
|
|
|
|
Consolidated balance sheet data:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash, cash equivalents and marketable
securities(4)(6)
|
|
$ |
21,190 |
|
$ |
25,840 |
|
$ |
31,512 |
|
$ |
36,694 |
|
Working capital(2)(3)(4)(5)(6)
|
|
|
14,079 |
|
|
20,537 |
|
|
25,231 |
|
|
20,188 |
|
Total assets(4)(5)(6)
|
|
|
55,934 |
|
|
61,627 |
|
|
63,675 |
|
|
70,283 |
|
Other long-term obligations(5)
|
|
|
1,018 |
|
|
1,009 |
|
|
1,040 |
|
|
558 |
|
Long-term debt, including current
portion(4)
|
|
|
24,102 |
|
|
24,593 |
|
|
27,322 |
|
|
33,542 |
|
Retained earnings(1)(2)(3)(5)(6)
|
|
|
14,445 |
|
|
19,388 |
|
|
19,024 |
|
|
19,012 |
|
Total stockholders' equity(1)(2)(3)(5)(6)
|
|
|
18,142 |
|
|
22,650 |
|
|
21,534 |
|
|
20,501 |
|
- (1)
- In 2018, we adopted
Accounting Standards Update No. 2014-09 (Topic 606) "Revenue
from Contracts with Customers" using the modified retrospective
method. As such, results for reporting periods beginning after
January 1, 2018 are presented under Topic 606, while prior
period amounts are not adjusted and continue to be reported in
accordance with our historical accounting under Topic 605 "Revenue
Recognition."
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- (2)
- In December 2019, we
recorded a deferred tax benefit of $1.2 billion related to
intangible asset transfers from a foreign subsidiary to Ireland and
the United States. In 2018, we recorded a deferred tax charge of
$588 million related to a transfer of acquired intangible
assets from a foreign subsidiary to the United States. In December
2017, we recorded an estimated $5.5 billion net charge related
to the enactment of the Tax Cuts and Jobs Act ("Tax Reform"). Tax
Reform also lowered the corporate tax rate in the United States
from 35% to 21% effective for tax years beginning after
December 31, 2017. See Note 19. Income Taxes of the Notes
to Consolidated Financial Statements included in Item 8 in our
Annual Report on Form 10-K for the year ended
December 31, 2019 for additional details.
- (3)
- Investments in equity
securities, other than equity method investments, for which we have
not elected the fair value method of accounting, are recorded at
fair market value, if fair value is readily determinable and,
beginning January 1, 2018, unrealized gains and losses are
included in Other income (expense), net on our Consolidated
Statements of Income. For periods presented prior to
January 1, 2018, unrealized gains and losses were included in
accumulated other comprehensive income as a separate component of
stockholders' equity.
- (4)
- In the quarter ended
March 31, 2020, we repaid $500 million principal amount
of our senior unsecured notes at maturity. In 2019, we repaid
$2.8 billion principal amount of our senior unsecured notes at
maturity. In 2018, we repaid $1.8 billion principal amount of
our senior unsecured notes at maturity and repaid $4.5 billion
of term loans borrowed in connection with our acquisition of Kite
Pharma, Inc. In 2017, in connection with the acquisition of
Kite Pharma, Inc., we issued $3.0 billion aggregate
principal amount of senior unsecured notes and borrowed
$6.0 billion aggregate principal amount under our term loan
facility credit agreement, of which $1.5 billion was repaid in
2017.
- (5)
- In 2019, we adopted
Accounting Standards Update No. 2016-02 (Topic 842) "Leases,"
which requires lessees to recognize right-of-use assets and lease
liabilities for operating leases with a lease term greater than one
year. We adopted Topic 842 using the modified retrospective method.
As such, results for reporting periods beginning after
January 1, 2019 are presented under Topic 842, while
prior period amounts are not adjusted and continue to be reported
in accordance with our historical accounting under Topic 840
"Leases." See Note 1. Organization and Summary of Significant
Accounting Policies and Note 13. Leases of the Notes to
Consolidated Financial Statements included in Item 8 in our
Annual Report on Form 10-K for the year ended
December 31, 2019 for additional details.
- (6)
- On April 7,
2020, we acquired all of the then issued and outstanding common
stock of Forty Seven, Inc., a clinical-stage immuno-oncology
company focused on developing therapies targeting cancer immune
evasion pathways and specific cell targeting approaches, for total
consideration of $4.7 billion, net of acquired cash. At the
acquisition date, we recorded a $4.5 billion charge
representing an acquired IPR&D asset with no alternative future
use. See Note 6. Acquisition, Collaborations and Other
Arrangements of the Notes to Condensed Consolidated Financial
Statements included in our Form 10-Q for the quarter ended
June 30, 2020 for additional details. In August 2019, we
closed an Option, License and Collaboration Agreement and a
Subscription Agreement, each with Galapagos NV ("Galapagos"),
pursuant to which the parties entered into a global collaboration
that covers Galapagos' then current and future product portfolio
(other than filgotinib). Upon closing, we paid $5.05 billion
for the license and option rights and 6.8 million new ordinary
shares of Galapagos at a subscription price of €140.59 per share.
The $1.13 billion equity investment, which included an
issuance discount of $63 million calculated based on
Galapagos' closing stock price on the date of closing of the
Subscription Agreement and the subscription price of €140.59 per
share, was recorded in Other long-term assets on our Condensed
Consolidated Balance Sheets. The remaining $3.92 billion of
the payment was recorded within Research and development expense on
our Condensed Consolidated Statements of Operations.
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We have elected
the fair value option to account for our equity investment in
Galapagos whereby the investment is marked to market through
earnings in each reporting period based on the market price of
Galapagos shares. See Note 11. Collaborations and Other
Arrangements of the Notes to Consolidated Financial Statements
included in our Form 10-K for the year ended December 31,
2019 for additional details.
- (7)
- Starting in 2019,
up-front and milestone payments related to collaborative and other
arrangements are classified as cash flows from investing activities
in our Consolidated Statements of Cash Flows. Comparative prior
year amounts were not material and were not reclassified to
investing activities from operating activities.
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RISK FACTORS
Investing
in the notes involves a high degree of risk. You should carefully
consider the risks described below and all of the information
contained or incorporated by reference in this prospectus
supplement and the accompanying prospectus before deciding whether
to purchase the notes. In addition, you should carefully consider,
among other things, the matters discussed under "Risk Factors" in
our
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020 and in other documents that we subsequently
file with the SEC, all of which are incorporated by reference into
this prospectus supplement. The risks and uncertainties described
below or in the documents incorporated by reference herein are not
the only risks and uncertainties we face. Additional risks and
uncertainties of which we are unaware, or that we currently deem
immaterial, also may become material factors that affect us. If any
of the following risks or those incorporated by reference herein
occurs or intensifies, our business, financial condition or results
of operations could be materially and adversely affected. If this
were to happen, the value of the notes could decline significantly,
and you may lose some or all of your investment. In connection with
the forward-looking statements in this prospectus supplement, you
should also carefully review the cautionary statements under
"Forward-Looking Statements."
Risks Related to this Offering and the Notes
The notes are obligations exclusively of the Company and not of its
subsidiaries, and payment to holders of the notes will be
structurally subordinated to the claims of our subsidiaries'
creditors.
The notes are
obligations exclusively of Gilead Sciences, Inc., and are not
guaranteed by any of its subsidiaries. As a result, our debt is
"structurally subordinated" to all existing and future debt, trade
creditors, and other liabilities of our subsidiaries. Our rights,
and hence the rights of our creditors, to participate in any
distribution of assets of any subsidiary upon its liquidation or
reorganization or otherwise would be subject to the prior claims of
that subsidiary's creditors, except to the extent that our claims
as a creditor of such subsidiary may be recognized. The indenture
governing the notes does not restrict our or our subsidiaries'
ability to incur unsecured indebtedness, to pay dividends or make
distributions on, or redeem or repurchase our equity securities, or
to engage in highly leveraged transactions that would increase the
level of our indebtedness. As of June 30, 2020, our
subsidiaries had approximately $4.1 billion of outstanding
indebtedness and other obligations (excluding intercompany
liabilities), which consists primarily of accounts payable and
accrued liabilities.
The notes will be effectively junior to secured indebtedness that
we may issue in the future.
The notes are
unsecured. As of the date hereof, we had no secured debt
outstanding. Holders of our secured debt that we may issue in the
future may foreclose on the assets securing such debt, reducing the
cash flow from the foreclosed property available for payment of
unsecured debt, including the notes. Holders of our secured debt
also would have priority over unsecured creditors in the event of
our bankruptcy, liquidation or similar proceeding. As a result, the
notes will be effectively junior to any secured debt that we may
issue in the future.
We may be unable to redeem the floating rate notes,
the fixed
rate notes,
the
fixed rate notes and
the fixed
rate notes in the event of a special mandatory
redemption.
In the event
that the Acquisition is not consummated on or before
September 13, 2021 or the Merger Agreement is terminated any
time prior thereto, we must redeem the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes at a redemption price equal to 101% of the aggregate
principal amount of such notes, plus accrued and unpaid interest
thereon from the date of initial issuance to, but excluding, the
special mandatory redemption date. See "Description of the
Notes—Special Mandatory Redemption." We are not obligated to place
the proceeds from the sale of the notes in escrow prior to
consummation of the Acquisition or to provide a
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security interest in
those proceeds, and there are no restrictions on our use of these
proceeds during such time. Accordingly, we will need to fund any
special mandatory redemption using proceeds that we have
voluntarily retained or from other sources of liquidity. In the
event of a special mandatory redemption, we may not have sufficient
funds to redeem any or all of the notes.
In the event of a special mandatory redemption, holders of the
floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes may not obtain their expected return on such
notes.
The Acquisition
is subject to various closing conditions, many of which are beyond
our control. If we are unable to consummate the Acquisition on or
before September 13, 2021 or the Merger Agreement is
terminated any time prior thereto and we redeem the applicable
notes pursuant to the special mandatory redemption provisions of
the indenture, holders of such notes may not obtain their expected
return on such notes and may not be able to reinvest the proceeds
from such special mandatory redemption in an investment that
results in a comparable return. In addition, as a result of the
special mandatory redemption provisions of the applicable notes,
the trading prices of such notes may not reflect the financial
results of our business or macroeconomic factors.
Holders of
notes will have no rights under the special mandatory redemption
provisions of the indenture if Acquisition is consummated on or
before September 13, 2021. In addition, holders of the notes
will not have any right to require us to repurchase their notes if,
between the closing of this offering and the consummation of the
Acquisition, we or Immunomedics experience any changes, including
any material changes, in our respective businesses or financial
condition (other than a change of control triggering event with
respect to us), or if the terms of the Merger Agreement change,
including in material respects.
We may not be able to repurchase all of the notes upon a Change of
Control Triggering Event.
As described
under "Description of the Notes—Change of Control," we will be
required to offer to repurchase the notes upon the occurrence of a
Change of Control Triggering Event. We may not have sufficient
funds to repurchase the notes in cash at that time or have the
ability to arrange financing on acceptable terms.
Redemption may adversely affect your return on the fixed rate
notes.
The fixed rate
notes are redeemable at our option at any time, and therefore we
may choose to redeem such notes at times when prevailing interest
rates are relatively low. As a result, you may not be able to
reinvest the proceeds you receive from the redemption of such notes
in a comparable security at an effective interest rate as high as
the interest rate on your notes being redeemed.
An increase in interest rates could result in a decrease in the
relative value of the fixed rate notes.
In general, as
market interest rates rise, notes bearing interest at a fixed rate
generally decline in value because the premium, if any, over market
interest rates will decline. Consequently, if you purchase the
fixed rate notes and market interest rates increase, the market
values of your fixed rate notes may decline. We cannot predict the
future level of market interest rates.
There are limited covenants in the indenture governing the notes
and the terms of the notes do not prohibit us from taking other
action that could negatively impact holders of the
notes.
We are not
restricted under the terms of the notes or the indenture governing
the notes from incurring additional indebtedness or issuing
preferred equity. The terms of the indenture limit our ability to
create, grant or incur liens or enter into sale and leaseback
transactions. However, these limitations are subject to numerous
exceptions. See "Description of the Notes—Certain Covenants."
In
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addition, the notes do
not require us to achieve or maintain any minimum financial results
relating to our financial position or results of operations. Our
ability to recapitalize, incur additional debt, secure existing or
future debt or take a number of other actions that are not limited
by the terms of the indenture and the notes, including repurchasing
indebtedness or capital stock or paying dividends, could have the
effect of diminishing our ability to make payments on the notes
when due.
Our financial performance and other factors could adversely impact
our ability to make payments on the notes.
Our ability to
make scheduled payments with respect to our indebtedness, including
the notes, will depend on our financial and operating performance,
which in turn are subject to prevailing economic conditions and to
financial, business and other factors beyond our
control.
There are no public markets for the notes.
The notes are
new issues of securities for which there currently are no trading
markets. As a result, we can give no assurances that any markets
will develop for the notes or that you will be able to sell the
notes. If any of the notes are traded after their initial issuance,
they may trade at a discount from their initial offering prices.
Future trading prices of the notes will depend on many factors,
including prevailing interest rates, the market for similar
securities, general economic conditions, our financial condition
and performance, as well as other factors. Accordingly, you may be
required to bear the financial risk of an investment in the notes
for an indefinite period of time. We do not intend to apply for
listing or quotation of the notes on any securities exchange or
automated quotation system, respectively.
Our credit ratings may not reflect all risks of your investment in
the notes.
Our credit
ratings are an assessment by rating agencies of our ability to pay
our debts when due. Consequently, real or anticipated changes in
our credit ratings will generally affect the market value of the
notes. These credit ratings may not reflect the potential impact of
risks relating to structure or marketing of the notes. Agency
ratings are not a recommendation to buy, sell or hold any security
and may be revised or withdrawn at any time by the issuing
organization. An agency's rating should be evaluated independently
of any other agency's rating.
Risks Related to the Floating Rate Notes
The risk
factors below contain certain capitalized terms which are defined
under "Description of the Notes—Floating Rate Notes."
The floating rate notes bear additional risks.
The floating
rate notes bear interest at a floating rate, and accordingly carry
significant risks not associated with conventional fixed rate debt
securities. These risks include fluctuation of the interest rates
and the possibility that you will receive an amount of interest
that is lower than expected. We have no control over a number of
matters, including economic, financial and political events, that
are important in determining the existence, magnitude and longevity
of these risks and their results.
Uncertainty relating to the calculation of LIBOR and other
reference rates and their potential discontinuance may materially
adversely affect the value of the floating rate
notes.
National and
international regulators and law enforcement agencies have
conducted investigations into a number of rates or indices which
are deemed to be "reference rates." Actions by such regulators and
law enforcement agencies may result in changes to the manner in
which certain reference rates are determined, their discontinuance,
or the establishment of alternative reference rates. In particular,
on
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July 27, 2017,
the Chief Executive of the U.K. Financial Conduct Authority (the
"FCA"), which regulates LIBOR, announced that the FCA will no
longer persuade or compel banks to submit rates for the calculation
of LIBOR after 2021. On June 23, 2020, the U.K. Government
announced its intention to amend the U.K.'s regulatory framework
for benchmarks to ensure the FCA has the appropriate powers to
manage and direct any wind-down period prior to an eventual LIBOR
cessation. These new regulatory powers would enable the FCA to
direct a methodology change for LIBOR. Such announcements indicate
that the continuation of LIBOR on the current basis cannot and will
not be guaranteed after 2021. Notwithstanding the foregoing, it
appears highly likely that LIBOR will be discontinued or modified
by 2021, which is prior to the maturity date of the floating rate
notes.
At this time,
it is not possible to predict the effect that these developments,
any discontinuance, modification or other reforms to LIBOR or any
other reference rate, or the establishment of alternative reference
rates may have on LIBOR, other benchmarks or floating rate debt
securities, including the floating rate notes. Uncertainty as to
the nature of such potential discontinuance, modification,
alternative reference rates or other reforms may materially
adversely affect the trading market for securities linked to such
benchmarks, including the floating rate notes. Furthermore, the use
of alternative reference rates or other reforms could cause the
interest rate calculated for the floating rate notes to be
materially different than expected.
If it is
determined that LIBOR has been discontinued and an alternative
reference rate for three-month LIBOR is used as described in
"Description of the Notes—Floating Rate Notes", we (or our
Designee)) may make certain adjustments to such rate, including
applying a spread thereon or with respect to the business day
convention, interest determination dates and related provisions and
definitions, to make such alternative reference rate comparable to
three-month LIBOR, in a manner that is consistent with
industry-accepted practices or applicable regulatory or legislative
actions or guidance for such alternative reference rate. See
"Description of the Notes—Floating Rate Notes." Any of the
specified methods of determining floating rate alternative
reference rates or the permitted adjustments to such rates may
result in interest payments on your floating rate notes that are
lower than or that do not otherwise correlate over time with the
payments that would have been made on the floating rate notes if
published LIBOR had continued to be available. Other floating rate
debt securities issued by other issuers, by comparison, may be
subject in similar circumstances to different procedures for the
establishment of alternative reference rates. Any of the foregoing
may have a material adverse effect on the amount of interest
payable on your floating rate notes, or the market liquidity and
market value of your floating rate notes.
Interest on the floating rate notes will be calculated using a
Benchmark Replacement selected by us or our Designee if a Benchmark
Transition Event occurs.
As described in
detail in the section "Description of the Notes—Floating Rate
Notes—Effect of Benchmark Transition Event" (the "benchmark
transition provisions"), if during the term of the floating rate
notes, we (or our Designee) determine that a Benchmark Transition
Event and its related Benchmark Replacement Date have occurred with
respect to LIBOR (or the then-current Benchmark, as applicable), we
(or our Designee) in our sole discretion will select a Benchmark
Replacement as the base rate in accordance with the benchmark
transition provisions. The Benchmark Replacement will include a
spread adjustment and technical, administrative or operational
changes described in the benchmark transition provisions may be
made to the interest rate determination if we (or our Designee)
determine in our sole discretion they are required.
Our interests
(or those of our Designee) in making the determinations described
above may be adverse to your interests as a holder of the floating
rate notes. The selection of a Benchmark Replacement, and any
decisions made by us (or our Designee) in connection with
implementing a Benchmark Replacement with respect to the floating
rate notes, could result in adverse consequences to the applicable
interest rate on the floating rate notes, which could adversely
affect the return on,
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value of and market
for such securities. Further, there is no assurance that the
characteristics of any Benchmark Replacement will be similar to
LIBOR or that any Benchmark Replacement will produce the economic
equivalent of LIBOR.
The Secured Overnight Financing Rate ("SOFR") is a relatively new
market index and as the related market continues to develop, there
may be an adverse effect on the return on or value of the floating
rate notes.
If a Benchmark
Transition Event and its related Benchmark Replacement Date occur,
then the rate of interest on the floating rate notes will be
determined using SOFR (unless a Benchmark Transition Event and its
related Benchmark Replacement Date also occur with respect to the
Benchmark Replacements that are linked to SOFR, in which case the
rate of interest will be based on the next-available Benchmark
Replacement). In the following discussion of SOFR, when we refer to
SOFR-linked notes or debt securities, we mean the floating rate
notes at any time when the rate of interest on those notes or debt
securities is or will be determined based on SOFR.
The Benchmark
Replacements specified in the benchmark transition provisions
include Term SOFR, a forward-looking term rate which will be based
on the Secured Overnight Financing Rate. Term SOFR is currently
being developed under the sponsorship of the Federal Reserve Bank
of New York (the "NY Federal Reserve"), and there is no assurance
that the development of Term SOFR will be completed. If a Benchmark
Transition Event and its related Benchmark Replacement Date occur
with respect to LIBOR and, at that time, a form of Term SOFR has
not been selected or recommended by the Federal Reserve Board, the
NY Federal Reserve, a committee thereof or successor thereto, then
the next-available Benchmark Replacement under the benchmark
transition provisions will be used to determine the amount of
interest payable on the Floating Rate Notes for the next applicable
interest period and all subsequent interest periods (unless a
Benchmark Transition Event and its related Benchmark Replacement
Date occur with respect to that next-available Benchmark
Replacement).
These
replacement rates and adjustments may be selected or formulated by
(i) the Relevant Governmental Body (such as the Alternative
Reference Rates Committee of the NY Federal Reserve), (ii) the
International Swaps and Derivatives Association, Inc. or
(iii) in certain circumstances, us (or our Designee). In
addition, the benchmark transition provisions expressly authorize
us (or our Designee) to make Benchmark Replacement Conforming
Changes with respect to, among other things, the determination of
interest periods and the timing and frequency of determining rates
and making payments of interest. The application of a Benchmark
Replacement and Benchmark Replacement Adjustment, and any
implementation of Benchmark Replacement Conforming Changes, could
result in adverse consequences to the amount of interest payable on
the floating rate notes, which could adversely affect the return
on, value of and market for the floating rate notes. Further, there
is no assurance that the characteristics of any Benchmark
Replacement will be similar to the then-current Benchmark that it
is replacing, or that any Benchmark Replacement will produce the
economic equivalent of the then-current Benchmark that it is
replacing.
The NY Federal
Reserve began to publish SOFR in April 2018. Although the NY
Federal Reserve has also begun publishing historical indicative
SOFR going back to 2014, such prepublication historical data
inherently involves assumptions, estimates and approximations. You
should not rely on any historical changes or trends in SOFR as an
indicator of the future performance of SOFR. Since the initial
publication of SOFR, daily changes in the rate have, on occasion,
been more volatile than daily changes in comparable benchmark or
market rates. As a result, the return on and value of SOFR-linked
debt securities may fluctuate more than floating rate debt
securities that are linked to less volatile rates.
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Also, since
SOFR is a relatively new market index, SOFR-linked debt securities
likely will have no established trading market when issued, and an
established trading market may never develop or may not be very
liquid. Market terms for debt securities indexed to SOFR, such as
the spread over the index reflected in interest rate provisions,
may evolve over time, and trading prices of the floating rate notes
may be lower than those of later-issued SOFR-linked debt securities
as a result. Similarly, if SOFR does not prove to be widely used in
securities like the floating rate notes, the trading price of those
securities may be lower than those of debt securities linked to
rates that are more widely used. Debt securities indexed to SOFR
may not be able to be sold or may not be able to be sold at prices
that will provide a yield comparable to similar investments that
have a developed secondary market, and may consequently suffer from
increased pricing volatility and market risk.
The NY Federal
Reserve notes on its publication page for SOFR that use of SOFR is
subject to important limitations, indemnification obligations and
disclaimers, including that the NY Federal Reserve may alter the
methods of calculation, publication schedule, rate revision
practices or availability of SOFR at any time without notice. There
can be no guarantee that SOFR will not be discontinued or
fundamentally altered in a manner that is materially adverse to you
as a holder of floating rate notes. If the manner in which SOFR is
calculated is changed or if SOFR is discontinued, that change or
discontinuance may result in a reduction or elimination of the
amount of interest payable on the floating rate notes and a
reduction in their trading prices.
The amount of interest payable on the floating rate notes is set
only once per period based on the three-month LIBOR on the interest
determination date, which may fluctuate
significantly.
In the past,
the level of three-month LIBOR has experienced significant
fluctuations. You should note that historical levels, fluctuations
and trends of three-month LIBOR are not necessarily indicative of
future levels. Any historical upward or downward trend in
three-month LIBOR is not an indication that three-month LIBOR is
more or less likely to increase or decrease at any time during a
floating rate interest period, and you should not take the
historical levels of three-month LIBOR as an indication of its
future performance. You should further note that although actual
three-month LIBOR on an interest payment date or at other times
during an interest period may be higher than three-month LIBOR on
the applicable interest determination date, you will not benefit
from three-month LIBOR at any time other than on the interest
determination date for such interest period. As a result, changes
in three-month LIBOR may not result in a comparable change in the
market value of the floating rate notes.
Risks Related to the Acquisition
Completion of the Acquisition is subject to conditions and if these
conditions are not satisfied or waived, the Acquisition will not be
completed.
The obligations
of us and Immunomedics to complete the merger are subject to the
satisfaction or waiver (to the extent permitted under applicable
law) of certain conditions, including our acceptance for payment of
all Shares validly tendered (and not validly withdrawn) pursuant to
the Offer (which is conditioned on, among other things, the
expiration or termination of the applicable waiting period under
the HSR Act), and if we and Immunomedics have entered into an
agreement with any governmental body regarding the timing of the
consummation of the Offer, such agreement permitting such
consummation and the absence of a judgment, restraining order,
injunction or other order in any jurisdiction in which we or
Immunomedics has material business operations preventing the merger
or other legal requirement in any jurisdiction in which we or
Immunomedics has material business operations prohibiting the
consummation of the merger . Our obligation to accept Shares for
payment in the Offer is subject to, among other things, the
accuracy of Immunomedics' representations and warranties under the
Merger Agreement (subject to the materiality standards set forth in
the Merger Agreement) and the performance by Immunomedics of its
obligations under the Merger Agreement.
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We and Immunomedics
may terminate the Merger Agreement upon mutual consent, and either
we or Immunomedics may, subject to certain exceptions set forth in
the Merger Agreement, terminate the Merger Agreement if the
Acquisition has not been consummated on or before the End
Date.
The failure to
satisfy all of the required conditions could delay the completion
of the Acquisition for a significant period of time or prevent it
from occurring. If the Acquisition is not completed, our ongoing
business may be materially adversely affected and, without
realizing any of the benefits of having completed the Acquisition,
we will be subject to a number of risks, including the
following:
- •
- the market price of
our common stock could decline;
- •
- time and resources,
financial and other, committed by our management to matters
relating to the Acquisition could otherwise have been devoted to
pursuing other beneficial opportunities for our company;
- •
- we may experience
negative reactions from the financial markets or from our customers
or employees; and
- •
- we will be required
to pay our respective costs relating to the Acquisition, including
legal, accounting, financial advisory, financing and printing fees,
whether or not the Acquisition is completed.
Obtaining required regulatory approvals may prevent or delay
consummation of the Offer or the merger or reduce the anticipated
benefits of the Acquisition or may require changes to the structure
or terms of the Acquisition.
Consummation of
the Offer is conditioned upon, among other things, the expiration
or termination of the waiting period applicable to the Offer under
the HSR Act, and if we and Immunomedics have entered into an
agreement with any governmental body regarding the timing of the
consummation of the Offer, such agreement permitting such
consummation. At any time before or after the Offer is consummated,
governmental authorities, including the Department of Justice, the
Federal Trade Commission or U.S. state Attorneys General, could
take action under the antitrust laws in opposition to the
Acquisition, including seeking to enjoin completion of the
Acquisition, imposing additional requirements, limitations or costs
on the Acquisition, condition completion of the Acquisition upon
the divestiture of assets of Gilead, Immunomedics, our or its
subsidiaries or impose restrictions on our post-acquisition
operations. These could negatively affect our results of operations
and financial condition following completion of the Acquisition.
Any such requirements or restrictions may delay or prevent
consummation of the Offer (which could result in a special
mandatory redemption of the notes as discussed herein) or may
reduce the anticipated benefits of the Acquisition, which could
also have a material adverse effect on our business, cash flows,
financial condition and results of operations. No assurance can be
given that the required regulatory approvals will be obtained or
that the required conditions to closing will be satisfied, and,
even if all such approvals are obtained and the conditions are
satisfied, no assurance can be given as to the terms, conditions
and timing of the approvals.
Immunomedics will be subject to business uncertainties and
contractual restrictions while the Acquisition is
pending.
Uncertainty
about the effect of the Acquisition on employees and customers may
have an adverse effect on Immunomedics. These uncertainties may
impair Immunomedics' ability to retain and motivate key personnel
and could cause entities dealing with Immunomedics to defer
entering into contracts with Immunomedics or making other decisions
concerning Immunomedics or seek to change existing business
relationships with Immunomedics. If the Acquisition is completed,
such changes could negatively affect the revenues, earnings and
cash flows of our company. In addition, if key employees depart
because of uncertainty about their future roles, Immunomedics and
our business could be
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harmed. These risks
may be exacerbated by delays or other adverse developments with
respect to the completion of the Acquisition.
Increased leverage may harm our financial condition and results of
operations.
As of
June 30, 2020, we had approximately $24.1 billion of
total debt on a consolidated basis (and would have had
approximately
$ billion
of total debt on a consolidated basis after giving effect to this
offering and any borrowings under the New Term Loan Facility prior
to the closing of the Acquisition). We expect our indebtedness to
increase materially in connection with the Acquisition. In addition
to issuing the notes offered hereby, we may borrow up to
$1.0 billion under the New Term Loan Facility to fund the
Acquisition. We and our subsidiaries may incur additional
indebtedness in the future and, subject to limitations on the
amount of secured indebtedness we may incur as described under
"Description of the Notes," the indenture governing the notes will
not restrict us from incurring indebtedness in the future. This
increase and any future increase in our level of indebtedness will
have several important effects on our future operations, including,
without limitation:
- •
- we will have
additional cash requirements in order to support the payment of
interest on our outstanding indebtedness;
- •
- increases in our
outstanding indebtedness and leverage may increase our
vulnerability to adverse changes in our business;
- •
- our ability to obtain
additional financing for working capital, capital expenditures,
general corporate and other purposes may be reduced;
- •
- our flexibility in
planning for, or reacting to, changes in our business and our
industry may be reduced; and
- •
- our flexibility to
make acquisitions and develop new products may be
limited.
Integrating Immunomedics may be more difficult, costly or time
consuming than we anticipate and we may not realize the intended
benefits of the acquired business of
Immunomedics.
Immunomedics
has operated, and until the completion of the Acquisition, will
continue to operate independently of us, with its own business,
corporate culture, locations, employees and systems. The success of
the Acquisition, including anticipated benefits, will depend, in
part, on our ability to successfully combine and integrate our
business with the business of Immunomedics.
As a result of
the Acquisition, we will operate our existing business, along with
the business of Immunomedics, as one combined organization
utilizing common information and communication systems, operating
procedures, financial controls and human resources practices. There
may be substantial difficulties, costs and delays involved in the
integration of our business with Immunomedics, including as a
result of challenges relating to the diversion of management's
attention from our ongoing business, the possibility of faulty
assumptions underlying expectations regarding the integration
process, retaining and attracting business and operational
relationships, eliminating duplicative operations and inconsistent
standards and procedures and increased or unforeseen liabilities or
costs relating to the Acquisition or the Immunomedics business. If
we experience difficulties with the integration process, the
anticipated benefits of the Acquisition may not be realized fully
or at all, or may take longer to realize than expected, which could
materially and adversely affect our business, financial condition
and results of operations.
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Immunomedics has a limited history of commercializing drugs, and
risks and uncertainties related to their business and industry may
cause the company to underperform relative to
expectations.
Immunomedics
has a limited history of commercializing drugs, which makes it
difficult to evaluate the success of its current business and
assess the company's future viability. In addition, Immunomedics
has incurred significant research and development and other
expenses related to its ongoing operations and has incurred
significant operating losses since formation. We anticipate that
Immunomedics will continue to incuroperating losses in the future
as a result of continued expenditures related to the
commercialization of its lead product candidate and additional
research and development expenditures related to the development
and regulatory approval of its other existing and future product
candidates. Following the consummation of the Acquisition we expect
to invest significant time, resources and capital to support the
company's expenditures and on-going operations until it reaches
commercial viability, which may not occur for a significant amount
of time or at all. Such investments would reduce our cash available
for operations and other uses and divert significant attention of
management that may otherwise be focused on development of our
existing business. If Immunomedics is unable to obtain approval for
its product candidates and effectively commercialize its product
candidates, we may not realize any benefit from the Acquisition,
resulting in possible impairments or other charges or losses which
may materially affect our results of operations and financial
condition.
Additionally,
the business operations of Immunomedics differs somewhat from our
business operations, and the combined business will have a
different business mix than our business prior to the Acquisition,
presenting different operational risks and challenges. Certain
risks associated with the biotechnology and pharmaceutical industry
and business described in our public filings may become more
significant following consummation of the Acquisition. We expect to
rely on the experience and expertise of Immunomedics' key personnel
in the development and commercialization of its product candidates.
If we were to lose the services of a significant portion of this
team, this line of business and our financial results could be
adversely affected. The Immunomedics business may also face
additional risks, including risks relating to (i) the
company's ability to advance a novel therapy for cancer treatment
through regulatory approval, development of a safe and effective
therapy, sourcing and manufacturing, physician and patient
education and commercialization, (ii) competition with
companies with more experience and resources in the ADC space and
with companies developing other novel targeted therapies for
cancers and (iii) maintaining and obtaining intellectual
property protection for its product candidates. Any or all of these
risks described herein or in our public filings could materially
harm the Immunomedics business, which may materially and adversely
affect our business, results of operation and financial
condition.
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FORWARD-LOOKING STATEMENTS
This prospectus
supplement and the documents incorporated by reference contain
forward-looking statements regarding future events and our future
results that are subject to the safe harbors created under the
Securities Act of 1933, as amended (the "Securities Act"), and the
Exchange Act. Words such as "expect," "anticipate," "target,"
"goal," "project," "hope," "intend," "plan," "believe," "seek,"
"estimate," "continue," "may," "could," "should," "might," and
variations of such words and similar expressions are intended to
identify such forward-looking statements. In addition, any
statements other than statements of historical fact are
forward-looking statements, including statements regarding the
Offer and the merger, any anticipated benefits from the
Acquisition, overall trends, operating cost and revenue trends,
liquidity and capital needs, collaboration and licensing
arrangements, statements regarding the anticipated future impact on
our business of the ongoing coronavirus disease 2019 ("COVID-19")
and related public health measures, statements regarding the
development, manufacturing and distribution of remdesivir as a
treatment for COVID-19 in certain markets and other statements of
expectations, beliefs, future plans and strategies, anticipated
events or trends and similar expressions. We have based these
forward-looking statements on our current expectations about future
events. These statements are not guarantees of future performance
and involve risks, uncertainties and assumptions that are difficult
to predict. Our actual results may differ materially from those
suggested by these forward-looking statements for various reasons,
including those identified below under "Risk Factors" in this
prospectus supplement and in our
Annual Report on Form 10-K for the year ended
December 31, 2019 and our Quarterly Reports on
Form 10-Q for the quarters ended
March 31, 2020 and
June 30, 2020 (as such risk factors may be updated from
time to time in our public filings). Given these risks and
uncertainties, you are cautioned not to place undue reliance on
forward-looking statements. The forward-looking statements included
in this prospectus supplement are made only as of the date hereof
unless otherwise specified. Except as required under federal
securities laws and the rules and regulations of the SEC, we do not
undertake, and specifically decline, any obligation to update any
of these statements or to publicly announce the results of any
revisions to any forward-looking statements after the distribution
of this report, whether as a result of new information, future
events, changes in assumptions or otherwise.
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USE OF PROCEEDS
We estimate
that the net proceeds from this offering, after deducting
underwriters' discounts and estimated offering expenses payable by
us, will be approximately
$ billion.
We intend to use (i) the net proceeds from the offering of the
floating rate notes,
the fixed
rate notes, the
fixed
rate notes and
the fixed
rate notes, together with any net proceeds from the New Term Loan
Facility and cash on our balance sheet, to pay the cash
consideration for the Acquisition and to pay related fees and
expenses and (ii) the net proceeds from the offering of
the fixed
rate notes to repay
$ million
in aggregate principal amount of our 4.50% Senior Notes due 2021
and
$ million
in aggregate principal amount of our 4.40% Notes due 2021 . Pending
that application of funds, we intend to invest the net proceeds
from this offering in United States government obligations, bank
deposits or other secure, short-term investments. The net proceeds
from this offering will not be deposited in an escrow account, and
you will not receive a security interest in such
proceeds.
As described
above, the net proceeds from the offering of
the notes
will be used to repay
$ million
in aggregate principal amount of our 4.50% Senior Notes due 2021
and
$ million
in aggregate principal amount of our 4.40% Notes due 2021. One or
more of the underwriters for this offering and/or their affiliates
may hold positions in our 4.50% Senior Notes due 2021 or our 4.40%
Notes due 2021, and to the extent that net proceeds from the
offering of
the fixed
rate notes is used to repay such indebtedness held by any of the
underwriters or their affiliates, they will receive proceeds from
this offering through the repayment of that indebtedness. If the
amount of such proceeds so received by any underwriter or its
affiliates is 5% or more of the net proceeds of this offering (not
including the underwriting discount), such underwriter would be
deemed to have a conflict of interest within the meaning of
Financial Industry Regulatory Authority, Inc. ("FINRA")
Rule 5121. In such event, this offering would be conducted in
compliance with FINRA Rule 5121 and such underwriter would not
be permitted to make sales in this offering to any discretionary
account without the prior written approval of the customer.
Pursuant to that rule, the appointment of a "qualified independent
underwriter" would not be required in connection with this
offering, as the notes are "investment grade rated" (as defined in
FINRA Rule 5121). See "Underwriting (Conflicts of
Interest)—Other Relationships" and "Underwriting (Conflicts of
Interest)—Conflicts of Interest."
This offering
is not conditioned upon the completion of the Acquisition which, if
completed, will occur subsequent to the closing of this offering.
However, in the event that the Acquisition is not consummated on or
before September 13, 2021 or the Merger Agreement is
terminated at any time prior thereto, we will be required to redeem
in whole and not in part the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes for a redemption price equal to 101% of the principal
amount of such notes, plus accrued and unpaid interest to, but
excluding, the date of redemption, if any. See "Description of the
Notes—Special Mandatory Redemption." There can be no assurance that
the Acquisition will be consummated.
The fixed
rate notes are not subject to the special mandatory redemption
provision described under "Description of the Notes—Special
Mandatory Redemption."
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CAPITALIZATION
The following
table sets forth our cash, cash equivalents and marketable
securities and our capitalization as of June 30, 2020 and as
adjusted to give effect to this offering and any borrowings under
the New Term Loan Facility as described under "Use of Proceeds."
This table should be read in conjunction with "Management's
Discussion and Analysis of Financial Condition and Results of
Operations" and the condensed consolidated financial statements and
notes thereto included in our
Quarterly Report on Form 10-Q for the quarter ended
June 30, 2020, which is incorporated by reference into
this prospectus supplement.
|
|
|
|
|
|
|
|
|
|
As of June 30, 2020 |
|
(in
millions, except per share amounts)
|
|
Actual |
|
As Adjusted |
|
Cash, cash equivalents and marketable
securities
|
|
$ |
21,190 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Long-term debt:
|
|
|
|
|
|
|
|
2.55% Senior Unsecured Notes due September
2020(1)
|
|
|
2,000 |
|
|
|
|
4.50% Senior Unsecured Notes due April
2021
|
|
|
999 |
|
|
|
|
4.40% Senior Unsecured Notes due December
2021
|
|
|
1,249 |
|
|
|
|
1.950% Senior Unsecured Notes due March
2022
|
|
|
499 |
|
|
|
|
3.250% Senior Unsecured Notes due September
2022
|
|
|
998 |
|
|
|
|
2.500% Senior Unsecured Notes due September
2023
|
|
|
747 |
|
|
|
|
3.70% Senior Unsecured Notes due April
2024
|
|
|
1,745 |
|
|
|
|
3.500% Senior Unsecured Notes due February
2025
|
|
|
1,746 |
|
|
|
|
3.650% Senior Unsecured Notes due March
2026
|
|
|
2,735 |
|
|
|
|
2.950% Senior Unsecured Notes due March
2027
|
|
|
1,246 |
|
|
|
|
4.600% Senior Unsecured Notes due September
2035
|
|
|
991 |
|
|
|
|
4.000% Senior Unsecured Notes due September
2036
|
|
|
741 |
|
|
|
|
5.65% Senior Unsecured Notes due December
2041
|
|
|
996 |
|
|
|
|
4.80% Senior Unsecured Notes due April
2044
|
|
|
1,734 |
|
|
|
|
4.500% Senior Unsecured Notes due February
2045
|
|
|
1,732 |
|
|
|
|
4.750% Senior Unsecured Notes due March
2046
|
|
|
2,218 |
|
|
|
|
4.150% Senior Unsecured Notes due March
2047
|
|
|
1,726 |
|
|
|
|
Floating Rate Notes
due offered
hereby
|
|
|
— |
|
|
|
|
Floating Rate Notes
due offered
hereby
|
|
|
— |
|
|
|
|
%
Senior Notes
due offered
hereby
|
|
|
— |
|
|
|
|
%
Senior Notes
due offered
hereby
|
|
|
— |
|
|
|
|
%
Senior Notes
due offered
hereby
|
|
|
— |
|
|
|
|
New Term Loan Facility(2)
|
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
Total long-term debt
|
|
|
24,102 |
|
|
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
Preferred stock, $0.001 par value; 5 shares
authorized; none outstanding
|
|
|
— |
|
|
|
|
Common stock, $0.001 par value; shares authorized of
5,600 at June 30, 2020; shares issued and outstanding of 1,254
and 1,266, respectively, at June 30, 2020(2)
|
|
|
1 |
|
|
|
|
Additional paid-in capital
|
|
|
3,511 |
|
|
|
|
Accumulated other comprehensive income
|
|
|
70 |
|
|
|
|
Retained earnings
|
|
|
14,445 |
|
|
|
|
|
|
|
|
|
|
|
|
Total Gilead stockholders' equity
|
|
|
18,027 |
|
|
|
|
Noncontrolling interest
|
|
|
115 |
|
|
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
$ |
18,142 |
|
|
|
|
|
|
|
|
|
|
|
|
Total capitalization
|
|
$ |
42,244 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
- (1)
- The 2.55% Senior
Unsecured Notes due September 2020 were fully paid at maturity on
September 1, 2020.
- (2)
- The amount under the
New Term Loan Facility shown in the table above is based on the
expected borrowings to be drawn prior to the closing of the
Acquisition.
- (3)
- The common stock
shown in the table above is based on an aggregate of
1,254 million shares of common stock outstanding as of
June 30, 2020 and excludes 141.9 million shares of common
stock reserved for issuances under our equity incentive plans as of
such date. In addition, the common stock shown, as adjusted, does
not reflect repurchases of common stock by us since June 30,
2020.
S-22
Table of
Contents
DESCRIPTION OF THE NOTES
The following
description of the particular terms of the notes offered by this
prospectus supplement adds information to the description of the
general terms and provisions of debt securities under the heading
"Description of Debt Securities" in the accompanying prospectus. As
used under "Summary—The Offering" and under this heading,
"Description of the Notes," all references to "we," "us," "our,"
"Gilead" and the "Company" refer solely to Gilead
Sciences, Inc. and not its subsidiaries. The following summary
of provisions of the indenture and the notes does not purport to be
complete and is subject to, and qualified in its entirety by
reference to, all of the provisions of the indenture and the notes,
including definitions therein of certain terms.
General
We will issue
$ in
initial aggregate principal amount of Floating Rate Notes
due (the
" floating
rate notes"),
$ in
initial aggregate principal amount of Floating Rate Notes
due
(the
" floating
rate notes," and, together with
the
floating rate notes, the "floating rate notes"),
$ in
initial aggregate principal amount
of % Senior Notes
due (the
" fixed
rate notes"),
$ in
initial aggregate principal amount
of % Senior Notes
due (the
" fixed
rate notes"),
$ in
initial aggregate principal amount
of % Senior Notes
due (the
" fixed
rate notes") and
$ in
initial aggregate principal amount
of % Senior Notes
due
(the
" fixed
rate notes," and, together with
the fixed
rate notes and
the fixed
rate notes, the "fixed rate notes" and the fixed rate notes
together with the floating rate notes, the "notes").
Each series of
the notes will be issued as separate series of debt securities
pursuant to an indenture, dated as of March 30, 2011, between
us and Wells Fargo Bank, National Association, as trustee for the
notes. We will issue each series of notes under a supplement to
such indenture to be dated as of the closing date of this offering,
setting forth the specific terms applicable to the notes.
The floating
rate notes will mature
on ,
the floating
rate notes will mature
on ,
the fixed
rate notes will mature
on ,
the fixed
rate notes will mature
on ,
the fixed
rate notes will mature
on and
the
fixed rate notes will mature
on .
We will issue the notes only in book-entry form, in denominations
of $2,000 and integral multiples of $1,000 in excess
thereof.
Except as
described in this prospectus supplement or the accompanying
prospectus, the indenture for the notes does not contain any
covenants or other provisions designed to protect holders of the
notes against a reduction in our creditworthiness in the event of a
highly leveraged transaction nor does the indenture for the notes
prohibit other transactions that might adversely affect holders of
the notes, including the incurrence of additional
indebtedness.
Floating Rate Notes
The floating
rate notes will bear interest for each interest period at a rate
calculated by the calculation agent, which will initially be Wells
Fargo Bank, National Association. So long as the floating rate
notes remain outstanding, there will at all times be a calculation
agent. If Wells Fargo Bank, National Association is unable or
unwilling to continue to act as the calculation agent, we will
appoint another leading commercial or investment bank to act as
calculation agent in its place.
"Business
Day" means any day, other than a Saturday
or Sunday, that is not a day on which banking institutions are
authorized or required by law or regulation to close in the City of
New York, and "London Business
Day" means any day on which dealings in
deposits in U.S. dollars are transacted in the London interbank
market.
S-23
Table of
Contents
The interest
rate on the floating rate notes for a particular interest period
will be a per annum rate equal to the Benchmark (as defined
herein), which will initially be three-month LIBOR (as defined
herein), plus % with
respect to
the floating
rate notes and %
with respect to
the floating
rate notes, accruing from
,
2020 and reset quarterly, determined as provided below.
Interest on the
floating rate notes will be payable quarterly in arrears on
each ,
,
and
(each
a "floating rate interest payment date"), commencing
on ,
2020, subject to adjustment as provided below if any such date is
not a Business Day, and at maturity.
The
"interest period" applicable to the floating rate notes will be the period
commencing on the applicable floating rate interest payment date
(or, in the case of the initial interest period, commencing
on ,
2020) to, but excluding, the next succeeding floating rate interest
payment date, and in the case of the last such interest period,
from, and including, the floating rate interest payment date
immediately preceding the maturity date for the floating rate notes
to, but excluding, such maturity date. The initial interest period
applicable to the floating rate notes is from, and including,
,
2020 to, but excluding,
,
2020.
The interest on
the floating rate notes will be reset on the first day of each
interest period other than the initial interest period (each, an
"interest reset date"), subject to adjustment as provided below if
any such date is not a Business Day.
"LIBOR"
means the rate determined in accordance with the following
provisions:
(a) With
respect to a LIBOR Interest determination date, LIBOR will be the
rate for deposits in U.S. dollars having a maturity of three
months, commencing on the first day of the applicable interest
period immediately following that LIBOR Interest determination
date, that appears on the display on Bloomberg page BBAM (as
defined below) or, if such page is not available, on the Reuters
Screen LIBOR01 Page (as defined below), in each case as of
11:00 A.M., London time, on that LIBOR Interest determination
date.
(b) If
LIBOR cannot be determined as described above, LIBOR will be
determined as follows:
(1) Except
as provided in clause (2) below, we will select four major
reference banks (which may include one or more of the underwriters
or their affiliates) in the London interbank market and will
request the principal London office of each of those four selected
banks to provide the calculation agent with such bank's quotation
of the rate at which three-month U.S. dollar deposits, commencing
on the second London Business Day immediately following such LIBOR
Interest determination date, are offered to prime banks in the
London interbank market at approximately 11:00 A.M., London
time, on such LIBOR Interest determination date and in a principal
amount of not less than $1,000,000 that is representative for a
single transaction in such market at such time. The calculation
agent shall not be obligated to solicit quotations or other rate
information from the selected banks or any other bank or
source.
a) If
at least two such quotations are provided, then LIBOR for such
LIBOR Interest determination date will be the arithmetic mean of
such quotations as provided to the calculation agent.
b) If
fewer than two quotations are provided to the calculation agent,
then LIBOR for such LIBOR Interest determination date will be the
arithmetic mean of the rates quoted as of approximately
11:00 A.M. in the City of New York on such LIBOR Interest
determination date by three major banks (which may include one or
more of the underwriters or their affiliates) in the
S-24
Table of
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City of New York
selected by us for three-month U.S. dollar loans, commencing on the
second London Business Day immediately following such LIBOR
Interest determination date, and in a principal amount of not less
than $1,000,000 that is representative for a single transaction in
such market at such time; provided, however, that if the banks
selected as aforesaid by us are not quoting as mentioned in this
sentence, the rate of interest in effect for the applicable period
will be the same as the interest rate in effect for the immediately
preceding interest period.
(2) Notwithstanding
clause (1) above, if we or our Designee (as defined below)
determine on or prior to the relevant LIBOR Interest determination
date that a Benchmark Transition Event and its related Benchmark
Replacement Date (each, as defined herein) have occurred with
respect to LIBOR (or the then-current Benchmark, as applicable),
then the provisions set forth below under "Effect of Benchmark
Transition Event", which is referred to as the benchmark transition
provisions, will thereafter apply to all determinations of the rate
of interest payable on the floating rate notes. In accordance with
the benchmark transition provisions, after a Benchmark Transition
Event and its related Benchmark Replacement Date have occurred, the
amount of interest that will be payable for each interest period
will be an annual rate equal to the sum of the Benchmark
Replacement (as defined herein) and the margin specified in this
prospectus supplement. However, if we or our Designee determine
that a Benchmark Transition Event and its related Benchmark
Replacement Date have occurred with respect to the then-current
Benchmark, but for any reason the Benchmark Replacement has not
been determined as of the relevant LIBOR Interest determination
date, the interest rate for the applicable interest period will be
equal to the interest rate for the immediately preceding interest
period, as determined by us or our Designee.
"Bloomberg
page BBAM" means the display that appears
on Bloomberg L.P.'s page "BBAM" or any page as may replace
such page or such service (or any successor service) for the
purpose of displaying the London Interbank Offered rate for U.S.
dollar deposits.
"Reuters
Screen LIBOR01 Page" means the display
designated as Reuters page "LIBOR01" on the Reuters 3000 Xtra, or
such other page as may replace the LIBOR01 page on that service or
such other service as may be nominated for the purpose of
displaying rates or prices comparable to the London Interbank
Offered rate for U.S. dollar deposits by ICE Benchmark
Administration Limited ("IBA") or its successor or such other
entity assuming the responsibility of IBA or its successor in
calculating the London Interbank Offered rate in the event IBA or
its successor no longer does so.
"LIBOR
Interest determination date" means the
second London Business Day preceding each interest reset
date.
If any interest
reset date for the floating rate notes would otherwise be a day
that is not a Business Day with respect to the floating rate notes,
such interest reset date will be the next succeeding day that is a
Business Day with respect to the floating rate notes, except that
if the Business Day is in the next succeeding calendar month, the
interest reset date will be the immediately preceding day that is a
Business Day with respect to the floating rate notes.
If any floating
rate interest payment date (other than an interest payment date
occurring on the maturity date) falls on a day that is not a
Business Day with respect to the floating rate notes, such interest
payment date will be the following day that is a Business Day with
respect to the floating rate notes, except that, if the Business
Day is in the next succeeding calendar month, the floating rate
interest payment date shall be the immediately preceding day that
is a Business Day with respect to the floating rate notes (in each
case, resulting in a corresponding adjustment to the number of days
in the applicable interest period). If the maturity of the floating
rate notes falls on a day that is not a Business Day with respect
to the floating rate notes, the payment of principal and interest
may be made on the next succeeding Business Day with respect to the
floating rate notes, and no interest on that payment shall accrue
for the period from and after such maturity.
S-25
Table of
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The interest
payable on the floating rate notes on any floating rate interest
payment date will be paid to the persons in whose name the floating
rate notes are registered at the close of business
on ,
,
or
,
as the case may be, immediately preceding the applicable floating
rate interest payment date (whether or not such record date is a
Business Day); provided, however, that interest payable at maturity
of the floating rate notes shall be payable to the persons to whom
principal shall be payable, subject to DTC's applicable
procedures.
With respect to
the floating rate notes, accrued interest is calculated by
multiplying the face amount by an accrued interest factor. The
accrued interest factor is computed by adding the interest factor
calculated for each day from the date of issue, or from, and
including, the last date to which interest has been paid or duly
provided for, to, but excluding, the date for which accrued
interest is being calculated. The "interest factor" for each day is
computed by dividing the interest rate applicable to that day by
360.
All percentages
resulting from any calculation of the interest rate on the floating
rate notes will be rounded to the nearest one millionth of a
percentage point with five ten millionths of a percentage point
rounded upwards (e.g., 9.8765445% (or .098765445) would be
rounded to 9.876545% (or .09876545)), and all dollar amounts used
in or resulting from such calculation on the floating rate notes
will be rounded to the nearest cent (with one-half cent being
rounded upwards).
Any such
calculation by the calculation agent shall be conclusive and
binding on us, the Trustee and the holders of the floating rate
notes absent manifest error. Upon request from any holder of the
floating rate notes, the calculation agent will provide such holder
with the interest rate in effect for the floating rate notes for
the current interest period and, if it has been determined, the
interest rate to be in effect for the next interest period. Neither
the Trustee nor the calculation agent (if not the Trustee) shall
have any liability or responsibility for any information used in
determining or calculating any interest rate or any adverse result
due to a discontinuation of, or the unavailability of, LIBOR, the
Benchmark or any other indexed rate. Neither the Trustee nor the
calculation agent (if not the Trustee) shall be under any duty or
obligation other than those expressly set forth in the governing
transaction documents, and neither the Trustee nor the calculation
agent (if not the Trustee) shall be liable or responsible for any
inability, failure or delay on its part to perform any of its
duties set forth herein as a result of the unavailability of LIBOR
(or the Benchmark or any other indexed rate) and the absence of a
designated Benchmark Replacement, including as a result of any
inability, delay, actions or omissions on the part of any other
transaction party in providing any direction, instruction, notice
or information required or contemplated by the terms hereof and
reasonably required for the performance of such duties. Neither the
Trustee nor the calculation agent (if not the Trustee) shall be
bound to follow or agree to any amendment or supplement of the
governing transaction documents that would increase, change or
affect the duties, obligations or liabilities of the calculation
agent (including without limitation the imposition or expansion of
discretionary authority), or reduce, eliminate, limit or otherwise
change any right, privilege or protection of the calculation agent,
or would otherwise adversely affect the calculation agent, in each
case in its reasonable judgment, without such party's prior express
written consent.
In addition to
any other protections or indemnities granted to the Trustee or any
paying agent, neither the Trustee, nor any paying agent shall have
any liability or responsibility for the failure of any party to
calculate or determine the Benchmark or relevant interest rate or
for the failure to pay interest or any other amounts due in
connection with the Notes as a result of the failure of the
relevant parties to calculate or determine the Benchmark or
relevant interest rate or provide such information and calculations
to the Trustee or paying agent. Furthermore, neither the Trustee,
the calculation agent nor any paying agent shall have any liability
or responsibility to monitor any Benchmark, relevant interest rate
or any underlying index in connection with interest on the Notes or
the calculation thereof.
S-26
Table of
Contents
The interest
rate on the floating rate notes will in no event be higher than the
maximum rate permitted by New York law, as the same may be modified
by United States law of general application, or lower than
0.00%.
Effect of Benchmark Transition Event
Benchmark
Replacement. If we
(or our designee, which may be (i) the calculation agent only
if the calculation agent consents in writing to such appointment as
"Designee" in its sole discretion with no liability therefor,
(ii) a successor calculation agent or (iii) any other
designee of ours (any of such entities, a "Designee")) determine that a
Benchmark Transition Event and its related Benchmark Replacement
Date have occurred prior to the Reference Time in respect of any
determination of the Benchmark on any date, the Benchmark
Replacement will replace the then-current Benchmark for all
purposes relating to the floating rate notes in respect of such
determination on such date and all determinations on all subsequent
dates. If our Designee is not the calculation agent, we shall
notify the Trustee and the calculation agent in writing of the
party that has been appointed by us as our Designee.
Benchmark
Replacement Conforming Changes. In connection with the implementation
of a Benchmark Replacement, we (or our Designee) will have the
right to make Benchmark Replacement Conforming Changes from time to
time.
Decisions
and Determinations. Any determination, decision or election
that may be made by us (or our Designee) pursuant to this Section
titled "Effect of Benchmark Transition Event," including any
determination with respect to tenor, rate or adjustment or of the
occurrence or non-occurrence of an event, circumstance or date and
any decision to take or refrain from taking any action or any
selection, will be conclusive and binding absent manifest error,
will be made in our (or our Designee's) sole discretion, and,
notwithstanding anything to the contrary in the documentation
relating to the floating rate notes, shall become effective without
consent from the holders of the floating rate notes or any other
party. If the calculation agent is our Designee, our Designee shall
have no liability or responsibility to any party for its
determination that a Benchmark Transition Event has occurred or in
connection with setting the interest rate on the floating rate
notes after a Benchmark Transition Event has occurred and any other
acts or omissions of the Designee acting in such capacity. If the
calculation agent is not our Designee, the calculation agent shall
have no liability or responsibility for any actions or omissions by
the Designee (or us in making any determination that would
otherwise be reserved for the Designee, or otherwise). Our Designee
may conclusively rely without liability upon the advice of experts
in making these determinations, and shall have no liability in
connection with the selection of an expert or for following their
advice. In addition to any other indemnity available to it under
the transaction documents, our Designee shall be indemnified by us
for any costs or expenses related, directly or indirectly, to the
determination that a Benchmark Transition Event has occurred or in
setting the interest rate on the floating rate notes after a
Benchmark Transition Event has occurred, which indemnity will
include the expenses and costs (including reasonable attorneys'
fees and expenses and court costs) incurred in connection with any
action, claim or suit brought to enforce such right to
indemnification. The cost of retaining experts and any other out of
pocket costs of our Designee, including those covered by the
indemnity described above, shall be borne by us. The holders of the
floating rate notes shall be explicitly bound by the foregoing
provisions, and their purchase of the floating rate notes shall
constitute consent to and acknowledgement of the same. In addition,
the holders of the floating rate notes by purchase of the floating
rate notes agree to waive any claims and covenant not to sue the
calculation agent, our Designee or the Trustee for any losses,
liabilities, damages, claims, costs or expenses resulting from the
determination that a Benchmark Transition Event has occurred or in
connection with setting the interest rate on the floating rate
notes after a Benchmark Transition Event has occurred.
S-27
Table of
Contents
Certain
Defined Terms. As
used in this section titled "Effect of Benchmark Transition
Event":
"Benchmark"
means, initially, three-month LIBOR; provided that if a Benchmark
Transition Event and its related Benchmark Replacement Date have
occurred with respect to three-month LIBOR or the then-current
Benchmark, then "Benchmark" means the applicable Benchmark
Replacement.
"Benchmark
Replacement" means the Interpolated
Benchmark with respect to the then-current Benchmark, plus the
Benchmark Replacement Adjustment for such Benchmark; provided that
if we (or our Designee) cannot determine the Interpolated Benchmark
as of the Benchmark Replacement Date, then "Benchmark Replacement"
means the first alternative set forth in the order below that can
be determined by us (or our Designee) as of the Benchmark
Replacement Date:
(1) the
sum of: (a) Term SOFR and (b) the Benchmark Replacement
Adjustment;
(2) the
sum of: (a) Compounded SOFR and (b) the Benchmark
Replacement Adjustment;
(3) the
sum of: (a) the alternate rate of interest that has been
selected or recommended by the Relevant Governmental Body as the
replacement for the then-current Benchmark for the applicable
Corresponding Tenor and (b) the Benchmark Replacement
Adjustment;
(4) the
sum of: (a) the ISDA Fallback Rate and (b) the Benchmark
Replacement Adjustment;
(5) the
sum of: (a) the alternate rate of interest that has been
selected by us (or our Designee) as the replacement for the
then-current Benchmark for the applicable Corresponding Tenor
giving due consideration to any industry-accepted rate of interest
as a replacement for the then-current Benchmark for U.S. dollar
denominated floating rate notes at such time and (b) the
Benchmark Replacement Adjustment.
In the event
that a Benchmark Replacement is unable to be determined by us (or
our Designee) under the foregoing enumerated provisions, or
otherwise, the Benchmark Replacement in effect for the applicable
period will be the same as the Benchmark in effect for the
immediately preceding interest period.
"Benchmark
Replacement Adjustment" means the first
alternative set forth in the order below that can be determined by
us (or our Designee) as of the Benchmark Replacement
Date:
(1) the
spread adjustment, or method for calculating or determining such
spread adjustment (which may be a positive or negative value or
zero), that has been selected or recommended by the Relevant
Governmental Body for the applicable Unadjusted Benchmark
Replacement;
(2) if
the applicable Unadjusted Benchmark Replacement is equivalent to
the ISDA Fallback Rate, then the ISDA Fallback
Adjustment;
(3) the
spread adjustment (which may be a positive or negative value or
zero) that has been selected by us (or our Designee) giving due
consideration to any industry-accepted spread adjustment, or method
for calculating or determining such spread adjustment, for the
replacement of the then-current Benchmark with the applicable
Unadjusted Benchmark Replacement for U.S. dollar denominated
floating rate notes at such time.
"Benchmark
Replacement Conforming Changes" means,
with respect to any Benchmark Replacement, any technical,
administrative or operational changes (including changes to the
definition of "Interest Period", timing and frequency of
determining rates and making payments of interest, rounding of
amounts or tenors, and other administrative matters) that we (or
our Designee) determine may be appropriate to reflect the adoption
of such Benchmark Replacement in a manner substantially consistent
with market practice (or, if we (or our Designee) determine that
adoption of any portion of such market practice is not
administratively feasible or we (or our Designee) determine that no
market
S-28
Table of
Contents
practice for use of
the Benchmark Replacement exists, in such other manner as we (or
our Designee) determine is reasonably necessary).
"Benchmark
Replacement Date" means the earliest to
occur of the following events with respect to the then-current
Benchmark:
(1) in
the case of clause (1) or (2) of the definition of
"Benchmark Transition Event," the later of (a) the date of the
public statement or publication of information referenced therein
and (b) the date on which the administrator of the Benchmark
permanently or indefinitely ceases to provide the Benchmark;
or
(2) in
the case of clause (3) of the definition of "Benchmark
Transition Event," the date of the public statement or publication
of information referenced therein.
For the
avoidance of doubt, if the event giving rise to the Benchmark
Replacement Date occurs on the same day as, but earlier than, the
Reference Time in respect of any determination, the Benchmark
Replacement Date will be deemed to have occurred prior to the
Reference Time for such determination.
"Benchmark
Transition Event" means the occurrence of
one or more of the following events with respect to the
then-current Benchmark:
(1) a
public statement or publication of information by or on behalf of
the administrator of the Benchmark announcing that such
administrator has ceased or will cease to provide the Benchmark,
permanently or indefinitely, provided that, at the time of such
statement or publication, there is no successor administrator that
will continue to provide the Benchmark;
(2) a
public statement or publication of information by the regulatory
supervisor for the administrator of the Benchmark, the central bank
for the currency of the Benchmark, an insolvency official with
jurisdiction over the administrator for the Benchmark, a resolution
authority with jurisdiction over the administrator for the
Benchmark or a court or an entity with similar insolvency or
resolution authority over the administrator for the Benchmark,
which states that the administrator of the Benchmark has ceased or
will cease to provide the Benchmark permanently or indefinitely,
provided that, at the time of such statement or publication, there
is no successor administrator that will continue to provide the
Benchmark; or
(3) a
public statement or publication of information by the regulatory
supervisor for the administrator of the Benchmark announcing that
the Benchmark is no longer representative.
"Compounded
SOFR" means the compounded average of
SOFRs for the applicable Corresponding Tenor, with the rate, or
methodology for this rate, and conventions for this rate being
established by us (or our Designee) in accordance with the rate, or
methodology for this rate, and conventions for this rate selected
or recommended by the Relevant Governmental Body for determining
compounded SOFR; provided that if, and to the extent that, we (or
our Designee) determine that Compounded SOFR cannot be determined
in accordance with clause (1) above, then the rate, or
methodology for this rate, and conventions for this rate that have
been selected by us (or our Designee) giving due consideration to
any industry-accepted market practice for U.S. dollar denominated
floating rate notes at such time. For the avoidance of doubt, the
calculation of Compounded SOFR shall exclude the Benchmark
Replacement Adjustment and the margin specified in this prospectus
supplement.
"Corresponding
Tenor" with respect to a Benchmark
Replacement means a tenor (including overnight) having
approximately the same length (disregarding Business Day
adjustment) as the applicable tenor for the then-current
Benchmark.
"Federal
Reserve Bank of New York's Website" means
the website of the Federal Reserve Bank of New York at
http://www.newyorkfed.org, or any successor source.
S-29
Table of
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"Interpolated
Benchmark" with respect to the Benchmark
means the rate determined for the Corresponding Tenor by
interpolating on a linear basis between: (1) the Benchmark for
the longest period (for which the Benchmark is available) that is
shorter than the Corresponding Tenor and (2) the Benchmark for
the shortest period (for which the Benchmark is available) that is
longer than the Corresponding Tenor.
"ISDA
Definitions" means the 2006 ISDA
Definitions published by the International Swaps and Derivatives
Association, Inc. or any successor thereto, as amended or
supplemented from time to time, or any successor definitional
booklet for interest rate derivatives published from time to
time.
"ISDA
Fallback Adjustment" means the spread
adjustment (which may be a positive or negative value or zero) that
would apply for derivatives transactions referencing the ISDA
Definitions to be determined upon the occurrence of an index
cessation event with respect to the Benchmark for the applicable
tenor.
"ISDA
Fallback Rate" means the rate that would
apply for derivatives transactions referencing the ISDA Definitions
to be effective upon the occurrence of an index cessation date with
respect to the Benchmark for the applicable tenor excluding the
applicable ISDA Fallback Adjustment.
"Reference
Time" with respect to any determination
of the Benchmark means (1) if the Benchmark is three-month
LIBOR, 11:00 A.M. (London time) on the LIBOR Interest
determination date, and (2) if the Benchmark is not
three-month LIBOR, the time determined by us (or our Designee) in
accordance with the Benchmark Replacement Conforming
Changes.
"Relevant
Governmental Body" means the Federal
Reserve Board and/or the Federal Reserve Bank of New York, or a
committee officially endorsed or convened by the Federal Reserve
Board and/or the Federal Reserve Bank of New York or any successor
thereto.
"SOFR"
with respect to any day means the secured overnight financing rate
published for such day by the Federal Reserve Bank of New York, as
the administrator of the benchmark (or a successor administrator),
on the Federal Reserve Bank of New York's Website.
"Term
SOFR" means the forward-looking term rate
for the applicable Corresponding Tenor based on SOFR that has been
selected or recommended by the Relevant Governmental
Body.
"Unadjusted
Benchmark Replacement" means the
Benchmark Replacement excluding the Benchmark Replacement
Adjustment.
Fixed Rate Notes
The fixed
rate notes will bear interest at an annual rate
of %,
the fixed
rate notes will bear interest at an annual rate
of %,
the fixed
rate notes will bear interest at an annual rate
of % and
the fixed
rate notes will bear interest at an annual rate
of %. Each series of
fixed rate notes will accrue interest
from ,
2020, or from the most recent date to which interest has been paid
(or provided for) to but not including the next date upon which
interest is required to be paid. If any interest payment date,
maturity date or redemption date for the fixed rate notes is not a
business day, the required payment will be made on the next
succeeding day that is a business day, without any interest or
other payment in respect of the payment subject to delay, with the
same force and effect as if made on such interest payment date,
maturity date or redemption date, as the case may be. Commencing
on ,
,
interest on the fixed rate notes will be payable semiannually in
arrears at the applicable annual rate,
on and ,
to the person in whose name a fixed rate note is registered at the
close of business on
the or
that
precedes the date on which interest on the fixed rate notes will be
paid. Interest on the fixed rate notes will be paid on the basis of
a 360-day year consisting of twelve 30-day months.
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Re-opening of the Notes
We may from
time to time, with respect to each series of notes, without the
consent of the holders of such series of notes, create and issue
further notes of such series having the same terms and conditions
in all respects as the notes of such series being offered hereby,
except for the issue date, the issue price and, in some cases, the
date of the first payment of interest thereon. Additional notes
issued in this manner will be consolidated with, and will
form a single series with, the applicable series of notes
being offered hereby; provided
that, if such additional notes are not fungible with
the notes issued in this offering for U.S. federal income tax
purposes, the additional notes will have a separate CUSIP, ISIN, or
other identifying number.
Ranking
The notes will
be our senior unsecured obligations and will rank equally with all
our other senior unsecured obligations, including all other
unsubordinated notes issued under the indenture, from time to time
outstanding.
The indenture
provides for the issuance from time to time of senior unsecured
indebtedness by us in an unlimited amount. At June 30, 2020,
we had approximately $24.1 billion of indebtedness outstanding
that would rank equally in right of payment with the
notes.
Certain Covenants
The following
restrictive covenants will apply to the notes. See "—Certain
Definitions" below for the definitions of certain of the defined
terms used herein.
Other than as
provided under "—Exempted Liens and Sale and Leaseback
Transactions," we will not, nor will we permit any Restricted
Subsidiary to, create, incur, issue, assume or guarantee any Debt
if such Debt is secured by a Lien upon any Restricted Property or
on the capital stock or Debt of any Restricted Subsidiary, without,
in any such case, effectively providing that the notes will be
secured equally and ratably by such Lien with such secured Debt;
provided, however, that this restriction will not apply
to:
- •
- Liens existing on the
date of the indenture or Liens existing on property, capital stock
or Debt of any Person at the time it becomes a Restricted
Subsidiary;
- •
- Any Lien existing on
property when acquired, constructed or improved and which Lien
(i) secured or provided for the payment of all or any part of
the acquisition costs of the property or the cost of construction
or improvement thereof and (ii) is created prior to, at the
same time or within one year after, the completion of such
acquisition, construction or improvement to the property, as the
case may be;
- •
- Liens on property of
a Person existing at the time such Person is merged into or
consolidated with us or a Restricted Subsidiary or at the time of a
sale, lease or other disposition of the properties of a Person as
an entirety or substantially as an entirety to us or a Restricted
Subsidiary; provided, that such Lien was not incurred in
anticipation of such transaction and was in existence prior to such
transaction;
- •
- Any Lien arising by
reason of deposits with, or the giving of any form of security to,
any governmental agency or any body created or approved by law or
governmental regulation;
- •
- Liens securing Debt
of a Restricted Subsidiary owed to us or another Restricted
Subsidiary;
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- •
- Liens for taxes,
fees, assessments or other governmental charges which are not
delinquent or remain payable without penalty;
- •
- Carriers',
warehousemen's, materialmen's, repairmen's, mechanics', landlords'
and other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or
sale of the property or assets subject to any such Lien if reserves
or other appropriate provisions, if any, as shall be required by
generally accepted accounting principles have been made
therefor;
- •
- Liens (other than any
Lien imposed by ERISA) consisting of pledges or deposits required
in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security
legislation;
- •
- Liens on property
securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations on surety and appeal
bonds, and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business,
provided that all such Liens under this bullet point in the
aggregate would not (even if enforced) cause a material adverse
change in, or a material adverse effect upon, the operations,
business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole;
- •
- Liens securing
obligations in respect of capital leases on assets subject to such
leases; provided that such leases are otherwise permitted pursuant
to the second or third bullets under the covenant "—Limitations on
Sale and Leaseback Transactions" set forth below;
- •
- Liens securing
reimbursement obligations with respect to letters of credit arising
by operation of law under Section 5-118(a) of the Uniform
Commercial Code;
- •
- Liens arising solely
by virtue of any bankers' liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; provided that
(i) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by us in
excess of those set forth by regulations promulgated by the Board
of Governors of the Federal Reserve System of the United States,
and (ii) such deposit account is not intended by us or any
Subsidiary to provide collateral to the depository
institution;
- •
- Easements,
right-of-way restrictions and other similar encumbrances incurred
in the ordinary course of our business which, in the aggregate, are
not substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary course of our and our Subsidiaries' business;
and
- •
- Any extension,
renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any permitted Lien referred
to in the bullets set forth above, inclusive of any Lien existing
at the date of the indenture; provided that the obligation secured
by such new Lien shall not extend beyond the property subject to
the existing Lien and is not greater in amount than the obligations
secured by the Lien extended, renewed or replaced (plus an amount
in respect of reasonable financing fees and related transaction
costs).
Limitations on Sale and Leaseback Transactions
Other than as
provided under "—Exempted Liens and Sale and Leaseback
Transactions," we will not, and will not permit any Restricted
Subsidiary to, enter into any sale and leaseback transaction with
respect to any Restricted Property, except a lease for a period
(including extensions or renewals at our
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option or the option
of a Restricted Subsidiary) of three years or less. Notwithstanding
the foregoing, we or any Restricted Subsidiary may enter into a
sale and leaseback transaction if:
- •
- The lease is between
us and a Restricted Subsidiary or between Restricted
Subsidiaries;
- •
- We or such Restricted
Subsidiary would, at the time of entering into such sale and
leaseback transaction, be entitled pursuant to the covenant
described under "—Limitations on Liens" above, to incur Debt
secured by a Lien on such Restricted Property involved in a
principal amount at least equal to the Attributable Debt of such
transaction without equally and ratably securing the debt
securities; or
- •
- We or any of our
Restricted Subsidiaries, during the six months following the
effective date of the sale and leaseback transaction, apply an
amount equal to the greater of the net proceeds of such sale or
transfer or the fair value of the Restricted Property that we or
our Restricted Subsidiary lease in the transaction to the voluntary
retirement of the debt securities or other Debt of ours or that of
any Restricted Subsidiary, provided that such Debt (i) ranks
pari passu or senior to the debt securities under the indenture and
(ii) has a stated maturity which is either more than
12 months from the date of such application or which is
extendable or renewable at the option of the obligor thereon to a
date more than 12 months from the date of such
application.
Exempted Liens and Sale and Leaseback Transactions
Notwithstanding
the restrictions described under the headings "—Limitations on
Liens" or "—Limitations on Sale and Leaseback Transactions," we or
any Restricted Subsidiary of ours may create or assume any Liens or
enter into any Sale and Leaseback Transactions not otherwise
permitted as described under such headings, if the sum of the
following does not exceed 20% of Consolidated Net Tangible
Assets:
- •
- The outstanding
Indebtedness secured by such Liens (not including any Liens
permitted under "—Limitations on Liens" which amount does not
include any Liens permitted under the provisions of this "—Exempted
Liens and Sale and Leaseback Transactions"); plus
- •
- all Attributable Debt
in respect of such Sale and Leaseback Transactions entered into
(not including and Sale and Leaseback Transactions permitted under
"—Limitations on Sale and Leaseback Transactions" which amount does
not include any Sale and Leaseback Transactions permitted under the
provisions of this "—Exempted Liens and Sale and Leaseback
Transactions"),
measured, in each
case, at the time such Lien is incurred or any such Sale and
Leaseback Transaction is entered into by us or such Restricted
Subsidiary of ours.
Certain Definitions
Set forth below
are certain of the defined terms used in the indenture.
"Attributable
Debt" means, in respect of a sale and
leaseback transaction, as of any particular time, the present value
(discounted at the rate of interest implicit in the terms of the
lease involved in such sale and leaseback transaction, as
determined in good faith by us) of the obligation of the lessee
thereunder for rental payments (excluding, however, any amounts
required to be paid by such lessee, whether or not designated as
rent or additional rent, on account of maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges or
any amounts required to be paid by such lessee thereunder
contingent upon the amount of sales, maintenance and repairs,
insurance, taxes, assessments, water rates or similar charges)
during the remaining term of such lease (including any period for
which such lease has been extended or may, at the option of the
lessor, be extended).
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"Consolidated
Net Tangible Assets" means the total
amount of assets (less applicable reserves and other properly
deductible items) after deducting (1) all current liabilities
(excluding the amount of those which are by their terms extendable
or renewable at the option of the obligor to a date more than
12 months after the date as of which the amount is being
determined) and (2) all customer lists, computer software,
licenses, patents, patent applications, copyrights, trademarks,
trade names, goodwill, capitalized research and development costs
and other like intangibles, treasury stock and unamortized debt
discount and expense, and all other like intangible assets, all as
stated on the Company's most recent publicly available consolidated
balance sheet preceding the date of determination and determined in
accordance with generally accepted accounting
principles.
"Debt"
means any and all of the obligations of a Person for money borrowed
which in accordance with generally accepted accounting principles
would be reflected on the balance sheet of such Person as a
liability as of the date of which the Debt is to be
determined.
"Lien"
means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as
any of the foregoing) on or with respect to any
property.
"Person"
means an individual, a corporation, a company, a voluntary
association, a partnership, a trust, a joint venture, a limited
liability company, an unincorporated organization, or a government
or any agency, instrumentality or political subdivision
thereof.
"Restricted
Property" means, as to any particular
series of notes, any manufacturing facility or plant owned, or
leased, by the Company or a Restricted Subsidiary and located
within the United States, including Puerto Rico, the gross book
value (including related land, machinery and equipment without
deduction of any depreciation reserves) of which is not less than
1% of Consolidated Tangible Net Assets as stated on the Company's
most recent publicly available consolidated balance sheet preceding
the date of determination other than any such manufacturing
facility or plant which the board of directors reasonably
determines is not material to the operation of the Company's
business and its Subsidiaries, taken as a whole.
"Restricted
Subsidiary" means a Subsidiary
(i) which is a "significant subsidiary" as defined in
Rule 1-02(w) of Regulation S-X under the U.S. federal
securities laws or (ii) which owns a Restricted Property;
provided, however, that the term shall not include any Subsidiary
which is solely or primarily engaged in the business of providing
or obtaining financing for the sale or lease of products sold or
leased by us or any Subsidiary.
"Subsidiary"
means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company or other business entity
of which a majority of the outstanding shares or other interests
having voting power is at the time directly or indirectly owned or
controlled by such Person or one or more of the Subsidiaries of
such Person. Unless the context otherwise requires, all references
to Subsidiary or Subsidiaries herein shall refer to our
Subsidiaries.
"United
States" means the United States of
America (including the States thereof and the District of
Columbia), its territories and possessions and other areas subject
to its jurisdiction.
Merger, Consolidation and Sale
The indenture
generally provides that we may not consolidate with or merge into,
or sell, transfer or convey, including by lease, all or
substantially all of our assets to another entity, unless:
(i) the resulting, surviving or transferee entity (A) is
a corporation or entity organized under the laws of the United
States and (B) if other than us, it assumes by a supplemental
indenture all our obligations under the debt securities and the
indenture, (ii) immediately after giving effect to such
transaction no
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Event of Default (as
defined herein) and no circumstances which, after notice or lapse
of time or both, would become an Event of Default, shall have
happened and be continuing, and (iii) we shall have delivered
to the trustee an officers' certificate and an opinion of counsel,
each stating that such consolidation, merger or transfer and such
supplemental indenture comply with the indenture, and all
conditions precedent thereto have been satisfied.
Optional Redemption
We will not
have the option to redeem
(i) the floating
rate notes, in whole or in part, prior to the maturity date or
(ii) the floating
rate notes, in whole or in part, prior to
the floating
rate notes par call date (as defined below).
Each series of
fixed rate notes will be redeemable as a whole or in part, at our
option, at any time or from time to time prior to the applicable
Par Call Date, at a redemption price equal to the greater
of:
(i) 100%
of the principal amount of the fixed rate notes to be redeemed;
and
(ii) the
sum, as determined by an Independent Investment Banker, of the
present values of the Remaining Scheduled Payments of principal and
interest on the fixed rate notes to be redeemed (exclusive of
interest accrued to the date of redemption) discounted to the
redemption date on a semiannual basis at the Treasury Rate,
plus basis
points in the case of
the fixed
rate
notes, basis
points in the case of
the fixed
rate notes
and basis
points in the case of
the fixed
rate notes;
plus, in each
case, any accrued and unpaid interest on the fixed rate notes to be
redeemed to, but excluding, the date of redemption.
At any time on
or after
(i) , (the
" floating
rate notes par call date") with respect to
the floating
rate notes,
(ii) , (the
" fixed
rate notes par call date") with respect to
the fixed
rate notes,
(iii) ,
( months
prior to the maturity date of
the fixed
rate notes) (the
" fixed
rate notes par call date") with respect to
the
fixed rate notes,
(iv) ,
( months
prior to the maturity date of
the fixed
rate notes) (the
" fixed
rate notes par call date") with respect to
the fixed
rate notes and
(v) ,
( months
prior to the maturity date of
the fixed
rate notes) (the
" fixed
rate notes par call date" and together with
the floating
rate notes par call date,
the
fixed rate notes par call date,
the fixed
rate notes par call date and
the fixed
rate notes par call date, each a "Par Call Date") with respect to
the fixed
rate notes, we may redeem the fixed rate notes of each series, in
whole or in part, at our option, at a redemption price equal to
100% of the principal amount of the fixed rate notes to be
redeemed, plus accrued and unpaid interest on the Notes to be
redeemed to, but excluding, the date of redemption.
The redemption
prices for the fixed rate notes will be calculated assuming a
360-day year consisting of twelve 30-day months.
"Remaining
Scheduled Payments" means the remaining
scheduled payments of principal of, and interest on, the Notes
called for redemption that would be due after the related
redemption date but for that redemption (assuming such Notes
matured on the applicable Par Call Date). If that redemption date
is not an interest payment date with respect to the Notes called
for redemption, the amount of the next succeeding scheduled
interest payment on the Notes will be reduced by the amount of
interest accrued to such redemption date.
"Treasury
Rate" means, with respect to any
redemption date, the rate per annum equal to the semiannual
equivalent yield to maturity of the applicable Comparable Treasury
Issue, calculated on the third business day preceding the
redemption date, assuming a price for such Comparable Treasury
Issue
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(expressed as a
percentage of its principal amount) equal to the related Comparable
Treasury Price for such redemption date.
"Comparable
Treasury Issue" means the United States
Treasury security or securities selected by an Independent
Investment Banker as having a maturity comparable to the remaining
term of the fixed rate notes to be redeemed that would be utilized,
at the time of selection and in accordance with customary financial
practice, in pricing new issues of corporate debt securities of a
comparable maturity to the remaining term of the fixed rate notes
being redeemed (assuming for this purpose that each series of Notes
matures on its respective Par Call Date).
"Comparable
Treasury Price" means, with respect to
any redemption date,
- •
- the average of the
Reference Treasury Dealer Quotations for such redemption date,
after excluding the highest and lowest such Reference Treasury
Dealer Quotations, or
- •
- if the Independent
Investment Banker obtains fewer than four such Reference Treasury
Dealer Quotations, the average of all such Reference Treasury
Dealer Quotations so received.
"Independent
Investment Banker" means one of the
Reference Treasury Dealers appointed by us to act as the
"Independent Investment Banker."
"Reference
Treasury Dealer" means Barclays
Capital Inc. and Wells Fargo Securities, LLC, their
successors and two other nationally recognized investment banking
firms, each of which is a primary U.S. Government securities dealer
in New York City (a "Primary Treasury
Dealer") specified from time to time by
us; provided, however, that if any of the foregoing shall cease to
be a Primary Treasury Dealer, we shall substitute therefor another
nationally recognized investment banking firm that is a Primary
Treasury Dealer.
"Reference
Treasury Dealer Quotations" means, with
respect to each Reference Treasury Dealer and any redemption date,
the average, as determined by the Independent Investment Banker, of
the bid and asked prices for the Comparable Treasury Issue for the
fixed rate notes being redeemed (expressed in each case as a
percentage of its principal amount) quoted in writing to the
Independent Investment Banker by such Reference Treasury Dealer at
3:30 p.m., New York City time, on the third business day
preceding that redemption date.
Notice of any
redemption of the fixed rate notes will be mailed or sent
electronically at least 10 days but not more than 60 days
before the redemption date to each holder of the fixed rate notes
to be redeemed. Unless a default occurs in the payment of the
redemption price, from and after any redemption date, interest will
cease to accrue on the fixed rate notes or any portion thereof
called for redemption. On or before any redemption date, we shall
irrevocably deposit with the trustee or with a paying agent money
sufficient to pay the redemption price of and accrued interest on
the fixed rate notes to be redeemed on such date. If less than all
the fixed rate notes of a series are to be redeemed, the fixed rate
notes of such series to be redeemed shall be selected by the
trustee by such method as shall be fair and appropriate and in
accordance with DTC procedures. The redemption price shall be
calculated by the Independent Investment Banker and we, the trustee
and any paying agent for the fixed rate notes shall be entitled to
conclusively rely without liability on such calculation.
We will be
required to redeem the floating rate notes,
the fixed
rate notes,
the fixed
rate notes and
the fixed
rate notes as described in "Special Mandatory Redemption"
below.
Special Mandatory Redemption
In the event
that we do not consummate the Acquisition prior to
September 13, 2021, or the Merger Agreement is terminated any
time prior thereto, we will be required to redeem in whole and not
in part the aggregate principal amount of the outstanding floating
rate notes,
the fixed
rate
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notes,
the fixed
rate notes and
the fixed
rate notes on the special mandatory redemption date at a redemption
price equal to 101% of the aggregate principal amount of the notes,
plus accrued and unpaid interest to, but excluding, the special
mandatory redemption date. The "special
mandatory redemption date" means the
earlier to occur of (1) October 13, 2021, if the
Acquisition has not been consummated on or prior to
September 13, 2021, or (2) the 30th day (or if such
day is not a business day, the first business day thereafter)
following the termination of the Merger Agreement for any reason.
Notwithstanding the foregoing, installments of interest on the
applicable series of notes that are due and payable on interest
payment dates falling on or prior to the special mandatory
redemption date will be payable on the interest payment date to the
registered holders as of the close of business on the relevant
record date according to the notes and the indenture.
We, or the
trustee on our behalf and at our sole expense, will cause the
notice of special mandatory redemption to be sent, with a copy to
the trustee, within five business days after the occurrence of the
event triggering redemption to each holder at its registered
address or in accordance with applicable depositary procedures. If
funds sufficient to pay the special mandatory redemption price of
the notes to be redeemed on the special mandatory redemption date
are deposited with the trustee or a paying agent on or before
11:00 a.m. New York City time on such special mandatory
redemption date, and certain other conditions are satisfied, on and
after such special mandatory redemption date, the notes will cease
to bear interest.
Upon the
consummation of the Acquisition, the foregoing provisions regarding
the special mandatory redemption will cease to apply to the
notes.
Change of Control
If a Change of
Control Triggering Event occurs, except with respect to any fixed
rate notes for which we have exercised our option to redeem the
notes of such series in full, as described under "—Optional
Redemption" above, or unless we have been required to redeem the
notes as described under "—Special Mandatory Redemption" above,
each holder of the notes will have the right to require us to
purchase all or a portion (equal to $2,000 and any integral
multiples of $1,000 in excess thereof) of such holder's notes
pursuant to the offer described below (a "Change of Control Offer") at a
purchase price equal to 101% of the aggregate principal amount of
the notes repurchased, plus accrued and unpaid interest, if any, to
the date of repurchase, subject to the rights of holders of notes
on the relevant record date to receive interest due on the relevant
interest payment date.
We will be
required to send, or cause the trustee to send on our behalf and at
our sole expense, a notice to each holder of the notes (except
holders of the notes of any series which is not subject to the
Change of Control Offer, as described above) by first class mail or
in accordance with applicable depositary procedures, with a copy to
the trustee, within 30 days following the date upon which any
Change of Control Triggering Event occurred, or at our option,
prior to any Change of Control but after the public announcement of
the pending Change of Control. The notice will govern the terms of
the Change of Control Offer and will describe, among other things,
the transaction that constitutes or may constitute the Change of
Control Triggering Event and the purchase date. The purchase date
will be at least 30 days but no more than 60 days from
the date such notice is mailed, other than as may be required by
law (a "Change of Control Payment
Date"). If the notice is mailed prior to
the date of consummation of the Change of Control, the notice will
state that the Change of Control Offer is conditioned on the Change
of Control being consummated on or prior to the Change of Control
Payment Date.
On the Change
of Control Payment Date, we will, to the extent lawful:
- •
- accept for payment
all properly tendered notes or portions of notes not validly
withdrawn;
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- •
- no later than
11:00 a.m. New York City time, deposit with the paying agent
the required payment for all properly tendered notes or portions of
notes not validly withdrawn; and
- •
- deliver or cause to
be delivered to the trustee the repurchased notes, accompanied by
an officers' certificate stating, among other things, the aggregate
principal amount of repurchased notes.
We will not be
required to make a Change of Control Offer with respect to a series
of notes upon the occurrence of a Change of Control Triggering
Event if a third party makes such an offer with respect to such
series in the manner, at the times and otherwise in compliance with
the requirements for such an offer made by us and the third party
purchases all such notes properly tendered and not withdrawn under
its offer. In addition, we will not repurchase the notes of a
particular series if there has occurred and is continuing on the
Change of Control Payment Date an Event of Default under the
indenture with respect to such series of notes.
If holders of
not less than 90% in aggregate principal amount of the outstanding
notes of any series validly tender and do not withdraw such notes
in a Change of Control Offer and we, or any third party making such
an offer in lieu of us as described above, purchases all of such
notes validly tendered and not withdrawn by such holders, we or
such third party will have the right, upon not less than
30 days nor more than 60 days' prior notice, provided
that such notice is given not more than 30 days following such
repurchase pursuant to the Change of Control Offer described above,
to redeem all notes of such series that remain outstanding
following such purchase on a date specified in such notice (the
"Second Change of Control Payment Date") and at a price in cash
equal to 101% of the aggregate principal amount of the notes
repurchased plus any accrued and unpaid interest on the notes
repurchased to, but not including, the Second Change of Control
Payment Date.
We will comply
with the requirements of Rule 14e-1 under the Exchange Act,
and any other securities laws and regulations thereunder, to the
extent those laws and regulations are applicable, in connection
with the repurchase of any series of notes as a result of a Change
of Control Triggering Event. To the extent that the provisions of
any such securities laws or regulations conflict with the Change of
Control Offer provisions of any such series of notes, we will
comply with those securities laws and regulations and will not be
deemed to have breached our obligations under the Change of Control
Offer provisions of any such series of notes by virtue of any such
conflict.
The definition
of Change of Control includes a phrase relating to the direct or
indirect sale, lease, transfer, conveyance or other disposition of
"all or substantially all" of our assets and the assets of our
subsidiaries taken as a whole. Although there is a limited body of
case law interpreting the phrase "substantially all," there is no
precise established definition of the phrase under applicable
law.
Accordingly,
the ability of a holder of notes to require us to repurchase the
notes of that series as a result of a sale, lease, transfer,
conveyance or other disposition of less than all of our assets and
the assets of our subsidiaries, taken as a whole, to another person
or group may be uncertain.
For purposes of
the foregoing discussion, the following definitions
apply:
"Capital
Stock" means the capital stock of every
class whether now or hereafter authorized, regardless of whether
such capital stock shall be limited to a fixed sum or percentage
with respect to the rights of the holders thereof to participate in
dividends and in the distribution of assets upon the voluntary or
involuntary liquidation, dissolution or winding up of such
corporation.
"Change
of Control" means the occurrence of any
of the following:
- •
- the direct or
indirect sale, lease, transfer, conveyance or other disposition
(other than by way of merger or consolidation), in one or more
series of related transactions, of all or substantially all of our
assets and the assets of our subsidiaries, taken as a whole, to any
"person" (as that term is used in Section 13(d)(3) of the
Exchange Act), other than us or one of our
subsidiaries;
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- •
- the consummation of
any transaction (including, without limitation, any merger or
consolidation) the result of which is that any "person" (as that
term is used in Section 13(d)(3) of the Exchange Act), other
than us or one of our subsidiaries, becomes the "beneficial owner"
(as defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of more than 50% of our then outstanding Voting Stock
or other Voting Stock into which our Voting Stock is reclassified,
consolidated, exchanged or changed, measured by voting power rather
than number of shares;
- •
- we consolidate, or
merge with or into any person, or any person consolidates with, or
merges with or into, us, in any such event pursuant to a
transaction in which any of our Voting Stock or the Voting Stock of
such other person is converted into or exchanged for cash,
securities or other property, other than any such transaction where
the shares of our Voting Stock outstanding immediately prior to
such transaction constitute, or are converted into or exchanged
for, a majority of the Voting Stock of the surviving person or any
direct or indirect parent company of the surviving person
immediately after giving effect to such transaction; or
- •
- the adoption of a
plan relating to our liquidation or dissolution.
Notwithstanding
the first three bullets above, a transaction will not be considered
to be a Change of Control if (a) we become a direct or
indirect wholly-owned subsidiary of a holding company and (b)(x)
immediately following that transaction, the direct or indirect
holders of the Voting Stock of the holding company are
substantially the same as the holders of our Voting Stock
immediately prior to that transaction or (y) immediately
following that transaction, no person is the beneficial owner,
directly or indirectly, of more than 50% of the Voting Stock of
such holding company.
"Change
of Control Triggering Event" means the
occurrence of both a Change of Control and a Rating Event.
Notwithstanding anything herein to the contrary, no Change of
Control Triggering Event will be deemed to have occurred in
connection with (i) any particular Change of Control unless
and until such Change of Control has actually been consummated or
(ii) any reduction in rating if the Rating Agencies making the
reduction in rating to which this definition would otherwise apply
do not announce or publicly confirm or inform the trustee in
writing at its request that the reduction was the result of any
event or circumstance comprised of or arising as a result of, or in
respect of, a Change of Control (whether or not the Change of
Control shall have occurred at the time of the reduction in
rating).
"Investment
Grade" means a rating of Baa3 or better
by Moody's (or its equivalent under any successor rating categories
of Moody's) and a rating of BBB- or better by S&P (or its
equivalent under any successor rating categories of S&P) or the
equivalent investment grade credit rating from any additional
Rating Agency or Rating Agencies selected by us in accordance with
the definition of "Rating Agency."
"Moody's"
means Moody's Investors Service, Inc., a subsidiary of Moody's
Corporation, and its successors.
"Rating
Agencies" means:
- •
- each of Moody's and
S&P; and
- •
- if any of Moody's or
S&P ceases to rate the notes or fails to make a rating of the
notes publicly available for reasons outside of our control, a
"nationally recognized statistical rating organization" within the
meaning of Section 3(a)(62) of the Exchange Act that is
selected by us (as certified by a resolution of our board of
directors) as a replacement agency for Moody's or S&P, or both
of them, as the case may be.
"Rating
Event" means, with respect to a series of
notes, the rating of such notes is lowered below Investment Grade
by each of the Rating Agencies then providing a rating for such
notes on any date during the period commencing on the date of
public notice of an arrangement that could result in a
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Change of Control
until the end of the 60-day period following public notice of the
occurrence of the Change of Control (which 60-day period shall be
extended so long as the rating of such notes is under publicly
announced consideration for possible downgrade by any of the Rating
Agencies, such extension to last with respect to each such Rating
Agency until the date on which such Rating Agency considering such
possible downgrade either (x) rates such notes below
Investment Grade or (y) publicly announces that it is no
longer considering such notes for possible downgrade).
"S&P"
means Standard & Poor's Ratings Services, a division of
The McGraw-Hill Companies, Inc., and its
successors.
"Voting
Stock" means, with respect to any
specified person as of any date, the Capital Stock of such person
that is at the time entitled to vote generally in the election of
the board of directors of such person.
Events of Default
An
"Event of Default" under the indenture in respect of any series of notes
is:
- •
- default for
30 days in payment of interest on the notes of such
series;
- •
- default in payment of
principal or any premium on the notes of such series;
- •
- failure by us for
90 days after notice to us to comply with any of our other
agreements in the applicable indenture for the benefit of holders
of the notes of such series;
- •
- certain events of
bankruptcy, insolvency or reorganization; and
- •
- the occurrence with
respect to any debt of the Company individually or in the aggregate
in excess of $150,000,000 of (i) an event of default that
results in such debt becoming due and payable prior to its
scheduled maturity (after giving effect to any applicable grace
period) or (ii) the failure to make any payment when due
(including any applicable grace period), which results in the
acceleration of the maturity of such debt, in each case without
such acceleration having been rescinded, annulled or otherwise
cured.
With respect to
each series of notes, if an Event of Default (other than an Event
of Default relating to certain events of bankruptcy, insolvency or
reorganization) occurs and is continuing, the trustee or the
holders of at least 25% in principal amount of the outstanding
notes of such series may declare the notes of such series to be due
and payable immediately, but under certain conditions such
acceleration may be rescinded by the holders of a majority in
principal amount of the outstanding notes of such series. In case
of certain events of bankruptcy, insolvency or reorganization
involving us, the principal and accrued and unpaid interest on the
outstanding notes will automatically become immediately due and
payable without any further action or declaration on the part of
the Trustee or any holder. In addition, an Event of Default
applicable to a series of notes that causes the notes of such
series to be accelerated may give rise to a cross-default under our
existing and future borrowing arrangements.
With respect to
each series of notes, no holder of the notes of such series may
pursue any remedy against us under the indenture (other than with
respect to the right to receive payment of principal (and premium,
if any) or interest, if any) unless such holder previously shall
have given to the trustee written notice of default and unless the
holders of at least 25% in principal amount of the notes of such
series shall have requested the trustee to pursue the remedy and
shall have offered the trustee indemnity or security satisfactory
to it, the trustee shall not have complied with the request within
60 days of receipt of the request and the offer of indemnity
or security, and the trustee shall not have received direction
inconsistent with the request during such 60-day period from the
holders of a majority in principal amount of the notes of such
series.
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Holders of the
notes of any series may not enforce the indenture or the notes of
such series except as provided in the indenture. The trustee may
refuse to enforce the indenture or the notes of such series unless
it receives indemnity or security satisfactory to it from us or,
under certain circumstances, the holders of the notes of such
series seeking to direct the trustee to take certain actions under
the indenture against any loss, liability or expense. Subject to
certain limitations, holders of a majority in principal amount of
the notes of a particular series may direct the trustee, in
writing, in its exercise of any trust or power under the indenture
in respect of the notes of such series. The indenture provides that
the trustee will give to the holders of the notes of any series
notice of all defaults actually known to it, within 90 days
after the occurrence of any default with respect to the notes of
such series, unless the default shall have been cured or waived.
The trustee may withhold from holders of the notes notice of any
continuing default (except a default in payment of principal or
interest) if it determines in good faith that withholding such
notice is in the interests of such holders. We are required
annually to certify to the trustee in writing as to the compliance
by us with all conditions and any covenants under the indenture and
the absence of a default thereunder, or as to any such default that
existed.
Our directors,
officers, employees and stockholders, as such, shall not have any
liability for any of our obligations under the notes or the
indenture or for any claim based on, in respect of, or by reason of
such obligations or their creation. By accepting a note, each
holder of such note waives and releases all such claims and
liability. This waiver and release are part of the consideration
for the issue of the notes.
Satisfaction, Discharge and Defeasance
The indenture
provides that we may, subject to certain conditions described
below, discharge certain obligations to holders of notes of any
series that have not already been delivered to the trustee for
cancellation and that either have become due and payable or will
become due and payable within one year (or scheduled for redemption
within one year) by irrevocably depositing with the trustee, in
trust, funds in an amount sufficient to pay the entire indebtedness
on such series of notes in respect of principal (and premium, if
any) and interest to the date of such deposit (if such series of
notes have become due and payable) or to the stated maturity and
redemption date, as the case may be.
With respect to
each series of notes, the indenture provides that we may elect
either:
- •
- to defease and be
discharged from all of our obligations with respect to the notes of
such series (this is known as "defeasance"); or
- •
- to be released from
our obligations with respect to the notes of such series under the
restrictions described under "—Certain Covenants" or our
obligations under any other covenant, and any omission to comply
with such obligations will not constitute an event of default with
respect to the notes of such series (this is known as "covenant
defeasance");
in either case upon
the irrevocable deposit by us with the trustee, in trust, of an
amount, in the currency in which the notes of such series are
payable at stated maturity, or government obligations, or both,
applicable to the notes of such series that through the scheduled
payment of principal and interest in accordance with their terms
will provide money in an amount sufficient in the opinion of a
nationally recognized investment bank, appraisal firm or firm of
independent certified public accountants to pay the principal of
(and premium, if any) and interest on the notes of such series, and
any mandatory sinking fund or analogous payments thereon, on the
scheduled due dates.
Such a trust
will only be permitted to be established if, among other things, we
have delivered to the trustee an opinion of counsel to the effect
that the holders of such series of notes will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if the defeasance or
covenant defeasance
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had not occurred, and
such opinion of counsel, in the case of defeasance, will be
required to refer to and be based upon a ruling of the Internal
Revenue Service or a change in applicable U.S. federal income tax
law occurring after the date of the indenture.
Book-Entry; Delivery and Form of Notes
For each series
of notes, the certificates representing the notes of such series
will be issued in the form of one or more fully registered global
notes without coupons (the "Global Note") and will be deposited
with, or on behalf of, DTC and registered in the name of
Cede & Co., as the nominee of DTC. Except in limited
circumstances, the notes will not be issuable in definitive form.
Unless and until they are exchanged in whole or in part for the
individual notes represented thereby, any interests in the Global
Note may not be transferred except as a whole by DTC to a nominee
of DTC or by a nominee of DTC to DTC or another nominee of DTC or
by DTC or any nominee of DTC to a successor depository or any
nominee of such successor. See "Description of Debt
Securities—Global Securities" in the accompanying
prospectus.
Investors may
elect to hold interests in the global notes through either DTC in
the U.S. or Clearstream Banking, société anonyme ("Clearstream") or
Euroclear Bank S.A./N.V., as operator of the Euroclear System
("Euroclear"), in Europe if they are participants of such systems,
or indirectly through organizations which are participants in such
systems. Clearstream and Euroclear will hold interests on behalf of
their participants through customers' securities accounts in
Clearstream's and Euroclear's names on the books of their
respective depositaries, which in turn will hold such interests in
customers' securities accounts in the depositaries' names on the
books of DTC.
DTC has advised
us that DTC is a limited-purpose trust company organized under the
New York Banking Law, a "banking organization" within the meaning
of the New York Banking Law, a member of the Federal Reserve
System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code, and a "clearing agency" registered
pursuant to the provisions of Section 17A of the Exchange Act.
DTC holds securities that its participants ("Direct Participants")
deposit with DTC. DTC also facilitates the post-trade settlement
among Direct Participants of sales and other securities
transactions in deposited securities, through electronic
computerized book-entry transfers and pledges between Direct
Participants' accounts. This eliminates the need for physical
movement of securities certificates. Direct Participants include
both U.S. and non-U.S. securities brokers and dealers, banks, trust
companies, clearing corporations, and certain other organizations.
DTC is a wholly owned subsidiary of The Depository Trust &
Clearing Corporation ("DTCC"). DTCC is the holding company for DTC,
National Securities Clearing Corporation and Fixed Income Clearing
Corporation, all of which are registered clearing agencies. DTCC is
owned by the users of its regulated subsidiaries. Access to the DTC
system is also available to others such as both U.S. and non-U.S.
securities brokers and dealers, banks, trust companies and clearing
corporations that clear through or maintain a custodial
relationship with a Direct Participant, either directly or
indirectly. The rules applicable to DTC and its participants are on
file with the SEC.
Clearstream
advises that it is incorporated under the laws of Luxembourg as a
professional depositary. Clearstream holds securities for its
participating organizations ("Clearstream Participants") and
facilitates the clearance and settlement of securities transactions
between Clearstream Participants through electronic book-entry
changes in accounts of Clearstream Participants, thereby
eliminating the need for physical movement of certificates.
Clearstream provides to Clearstream Participants, among other
things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic markets
in several countries. As a registered bank in Luxembourg,
Clearstream is subject to regulation by the Luxembourg Commission
for the Supervision of the Financial Sector (Commission de
Surveillance du Secteur Financier). Clearstream Participants are
recognized financial institutions around the world, including
underwriters, securities brokers and dealers, banks, trust
companies, clearing corporations and certain
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other organizations
and may include the underwriters. Indirect access to Clearstream is
also available to others, such as banks, brokers, dealers and trust
companies that clear through or maintain a custodial relationship
with a Clearstream Participant, either directly or
indirectly.
Distributions
with respect to interests in the notes held beneficially through
Clearstream will be credited to cash accounts of Clearstream
Participants in accordance with its rules and
procedures.
Euroclear
advises that it was created in 1968 to hold securities for
participants of Euroclear ("Euroclear Participants") and to clear
and settle transactions between Euroclear Participants through
simultaneous electronic book-entry delivery against payment,
thereby eliminating the need for physical movement of certificates
and any risk from lack of simultaneous transfers of securities and
cash. Euroclear includes various other services, including
securities lending and borrowing and interfaces with domestic
markets in several countries. Euroclear is operated by Euroclear
Bank S.A./N.V. (the "Euroclear Operator"). All operations are
conducted by the Euroclear Operator, and all Euroclear securities
clearance accounts and Euroclear cash accounts are accounts with
the Euroclear Operator. Euroclear Participants include banks
(including central banks), securities brokers and dealers and other
professional financial intermediaries and may include the
underwriters. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial relationship
with a Euroclear Participant, either directly or
indirectly.
Securities
clearance accounts and cash accounts with the Euroclear Operator
are governed by the Terms and Conditions Governing Use of Euroclear
and the related Operating Procedures of Euroclear, and applicable
Belgian law (collectively, the "Terms and Conditions"). The Terms
and Conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear, and
receipts of payments with respect to securities in Euroclear. All
securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms and
Conditions only on behalf of Euroclear Participants, and has no
records of or relationship with persons holding through Euroclear
Participants.
Distributions
with respect to the notes held beneficially through Euroclear will
be credited to the cash accounts of Euroclear Participants in
accordance with the Terms and Conditions.
The information
in this section concerning DTC, DTC's book-entry system,
Clearstream and Euroclear has been obtained from sources that we
believe to be reliable, but we take no responsibility for the
accuracy thereof.
Neither we nor
the Trustee will be liable or responsible for DTC, Euroclear or
Clearstream.
Same-Day Funds Settlement and Payment
Settlement for
the notes will be made by the underwriters in immediately available
funds. All payments of principal and interest in respect of notes
in book-entry form will be made by us in immediately available
funds to the accounts specified by DTC.
Secondary
trading in long-term notes and debentures of corporate issuers is
generally settled in clearing houses or next-day funds. In
contrast, the notes will trade in DTC's Same-Day Funds Settlement
System until maturity, or earlier redemption or repayment, or until
the notes are issued in certificated form, and secondary market
trading activity in the notes will therefore be required by DTC to
settle in immediately available funds. No assurance can be given as
to the effect, if any, of settlement in immediately available funds
on trading activity in the notes.
Governing Law
The notes and
the indenture will be governed by and construed in accordance with
the laws of the State of New York.
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Concerning the Trustee
Wells Fargo
Bank, National Association will act as trustee under the indenture.
Wells Fargo Bank, National Association will act as calculation
agent for the floating rate notes. Wells Fargo Bank, National
Association is a documentation agent and a lender to us under our
existing revolving credit facility, may be a lender under the New
Term Loan Facility and an affiliate of Wells Fargo Bank, National
Association, is an underwriter for this offering. Wells Fargo Bank,
National Association and its affiliates also provide from time to
time other services to us in the ordinary course of
business.
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UNITED STATES FEDERAL INCOME TAX
CONSIDERATIONS
General
The following
is a summary of certain U.S. federal income tax considerations
generally applicable to the ownership and sale or other disposition
of the notes by U.S. Holders (as defined below) and Non-U.S.
Holders (as defined below), but does not purport to be a complete
analysis of all the potential tax considerations. This summary is
based upon the U.S. Internal Revenue Code of 1986, as amended (the
"Code"), the U.S. federal income tax regulations (the "U.S.
Treasury Regulations") promulgated thereunder, and administrative
and judicial interpretations thereof, all as of the date hereof and
all of which are subject to change, possibly on a retroactive
basis. This summary is limited to the U.S. federal income tax
consequences with respect to notes that were purchased by an
initial holder at their original issue price for cash and that are
held as capital assets (generally, property held for investment).
This summary does not address all aspects of U.S. federal income
taxation that might be relevant to particular holders in light of
their circumstances or status, nor does it address specific tax
consequences that may be relevant to particular holders (including,
for example, financial institutions, regulated investment
companies, real estate investment trusts, broker-dealers, traders
in securities that elect mark-to-market treatment, insurance
companies, partnerships or other entities or arrangements treated
as partnerships for U.S. federal income tax purposes and their
partners, U.S. expatriates, controlled foreign corporations,
passive foreign investment companies, tax-exempt organizations
(including private foundations), U.S. Holders that have a
functional currency other than the U.S. dollar, or persons who hold
the notes as part of a straddle, hedge, conversion or other
integrated financial transaction for U.S. federal income tax
purposes). In addition, this summary does not address U.S. federal
alternative minimum, Medicare, estate and gift tax consequences,
special tax accounting rules under Section 451 of the Code or
consequences under the tax laws of any state, local or non-U.S.
jurisdiction. We have not sought, and will not seek, any ruling
from the Internal Revenue Service ("IRS") with respect to the
statements made and the conclusions reached in this summary, and we
cannot assure you that the IRS will agree with such statements and
conclusions.
This summary is
for general information only and is not intended to constitute a
complete description of all tax consequences for holders relating
to ownership and disposition of the notes.
EACH
PROSPECTIVE PURCHASER OF THE NOTES SHOULD CONSULT ITS OWN TAX
ADVISOR CONCERNING THE U.S. FEDERAL, STATE, LOCAL AND NON-U.S. TAX
CONSEQUENCES OF AN INVESTMENT IN THE NOTES.
For purposes of
this discussion, the term "U.S. Holder" means a beneficial owner of
a note that, for U.S. federal income tax purposes, is (i) a
citizen or individual resident of the United States; (ii) a
corporation (or other entity treated as a corporation) that is
created or organized under the laws of the United States, any state
thereof or the District of Columbia; (iii) an estate the
income of which is subject to U.S. federal income taxation
regardless of its source; or (iv) a trust, (A) the
administration of which is subject to the primary supervision of a
court within the United States and for which one or more U.S.
persons have the authority to control all substantial decisions, or
(B) that has a valid election in effect under applicable U.S.
Treasury Regulations to be treated as a U.S. person.
A "Non-U.S.
Holder" is a beneficial owner of the notes that is neither a U.S.
Holder nor a partnership (or other pass-through entity) for U.S.
federal income tax purposes.
If any entity
or arrangement treated as a partnership for U.S. federal income tax
purposes beneficially owns the notes, the tax treatment of a
partner in such partnership will depend upon the status of the
partner and the activities of the partnership. Partners in a
partnership that beneficially owns the notes should consult their
own tax advisors as to the particular U.S. federal income tax
consequences applicable to them.
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Certain Additional Payments
There are
circumstances in which we might be required to make payments on a
note that would increase the yield of the note, for instance, as
described above under "Description of the Notes—Special Mandatory
Redemption" and "Description of the Notes—Change of Control." We
intend to take the position that the possibility of such payments
does not result in the notes being treated as contingent payment
debt instruments under the applicable U.S. Treasury Regulations.
Our position is not binding on the IRS. If the IRS were to take a
contrary position, a U.S. Holder may be required to accrue interest
income based upon a "comparable yield" (as defined in the U.S.
Treasury Regulations) determined at the time of issuance of the
notes (which is not expected to differ significantly from the
actual yield on the notes), with adjustments to such accruals when
any contingent payments are made that differ from the payments
based on the comparable yield. In addition, any income on the sale,
exchange, retirement or other taxable disposition of the notes
would be treated as interest income rather than as capital gain.
U.S. Holders should consult their own tax advisors regarding the
tax consequences if the notes were treated as contingent payment
debt instruments. The remainder of this discussion assumes that the
notes are not treated as contingent payment debt
instruments
Tax Consequences to U.S. Holders
Payments of
Stated Interest. Based on the interest rate
characteristics of the floating rate notes, we intend to treat the
floating rate notes as "variable rate debt instruments" ("VRDIs")
for U.S. federal income tax purposes and this discussion assumes
such characterization to be correct. Further, stated interest on a
floating rate note is expected to constitute "qualified stated
interest" under the U.S. Treasury Regulations applicable to VRDIs.
Accordingly, subject to the discussion below on short-term notes,
neither the fixed rate notes nor the floating rate notes will be
treated as issued with OID (as defined below) and stated interest
on fixed rate notes and stated interest on the floating rate notes
will be taxable to a U.S. Holder as ordinary income at the time
such interest is received or accrued, in accordance with the
holder's regular method of accounting for U.S. federal income tax
purposes.
Short-Term
Notes. Notes that
have a fixed maturity (after taking into account the last possible
date that the note could be outstanding under its terms) of one
year or less ("short-term notes") will be subject to the following
special rules.
In general, a
note has original issue discount ("OID") if the note's "issue
price" (the first price at which a substantial amount of the notes
is sold to investors) is less than its "stated redemption price at
maturity" (the sum of all payments to be made on the notes other
than "qualified stated interest"). In general, interest on a
short-term note is not treated as qualified stated interest and
thus is treated as part of the short-term note's stated redemption
price at maturity, thereby giving rise to OID. Thus, all short-term
notes will be OID debt securities. OID will be treated as accruing
on a short-term note ratably or, at the election of a U.S. Holder,
under a constant yield method, and, except as discussed below,
included in U.S. Holders' income as ordinary income as it so
accrues.
It is uncertain
how the stated redemption price at maturity should be determined
with respect to a short-term note with a floating rate of interest.
Prospective investors are urged to consult their own tax advisors
as to the U.S. federal income tax consequences to them of investing
in short-term notes.
A U.S. Holder
that uses the cash method of tax accounting (with certain
exceptions) will generally not be required to include OID in
respect of the short-term note in income on a current basis, though
the U.S. Holder should generally be required to include stated
interest in income as the interest is received. Such a cash-basis
U.S. Holder may not be allowed to deduct all of the interest paid
or accrued on any indebtedness incurred or maintained to purchase
or carry such a short-term note until the maturity of the note or
its earlier disposition in a taxable transaction. In addition, such
a cash-basis U.S. Holder will be required to treat any gain
realized on a disposition of the note as ordinary income to the
extent of the holder's accrued OID on the note, and short-term
capital gain to the extent the
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gain exceeds accrued
OID. A U.S. Holder that uses the cash method of tax accounting may,
however, elect to include OID on a short-term note in income on a
current basis. In such case, the limitation on the deductibility of
interest described above will not apply.
Sale,
Exchange, Retirement or Other Disposition of a
Note. Upon the
redemption, sale, exchange or other taxable disposition of a note,
a U.S. Holder generally will recognize taxable gain or loss equal
to the difference between (i) the sum of all cash plus the
fair market value of all other property received on such
disposition (except to the extent such cash or other property is
attributable to accrued but unpaid interest or OID, which is
treated as interest or OID as described above) and (ii) such
holder's adjusted tax basis in the note. A U.S. Holder's adjusted
tax basis in a note generally will equal the cost of the note (plus
any accrued but unpaid OID included in such U.S. Holder's income)
to such holder. Any gain or loss recognized on the disposition of a
note generally will be capital gain or loss, and will be long-term
capital gain or loss if, at the time of such disposition, the U.S.
Holder's holding period for the note is more than one year.
Long-term capital gain recognized by a non-corporate U.S. Holder
(such as an individual) generally is subject to tax at a lower rate
than short-term capital gain or ordinary income. The deductibility
of capital losses is subject to significant limitations.
Backup
Withholding and Information Reporting. Information returns are required to be
filed with the IRS in connection with payments of principal and
interest or OID on, or the proceeds of the sale or other
disposition (including a retirement or redemption) of, a note. A
U.S. Holder may also be subject to backup withholding on these
payments in respect of a note unless the U.S. holder provides its
taxpayer identification number and otherwise complies with
applicable requirements of the backup withholding rules or the U.S.
Holder provides proof of an applicable exemption. Backup
withholding is not an additional tax. Any amounts withheld under
the backup withholding rules will be allowed as a refund or a
credit against a U.S. Holder's U.S. federal income tax liability
provided the required information is correctly and timely furnished
to the IRS.
Tax Consequences to Non-U.S. Holders
Interest and
OID. Subject to
the discussions below concerning FATCA (as defined below), no U.S.
federal withholding tax generally will apply to a payment of
interest or OID on a note to a Non-U.S. Holder, provided
that:
- (i)
- such Non-U.S. Holder
does not actually or constructively own 10% or more of the total
combined voting power of all classes of our stock entitled to
vote;
- (ii)
- such Non-U.S. Holder
is not a controlled foreign corporation directly or indirectly
related to us through stock ownership;
- (iii)
- either (A) such
Non-U.S. Holder provides its name and address, and certifies on IRS
Form W-8BEN, in the case of individuals, or IRS
Form W-BEN-E, in the case of entities (or appropriate
substitute form), under penalties of perjury, that it is not a U.S.
person or (B) a securities clearing organization or certain
other financial institutions holding the note on behalf of the
Non-U.S. Holder certifies on IRS Form W-8IMY, under penalties
of perjury, that such certification has been received by it and
furnishes us or our paying agent (or other withholding agent) with
a copy thereof; and
- (iv)
- we or our paying
agent (or other withholding agent) do not have actual knowledge or
reason to know that the beneficial owner of the note is a U.S.
person.
In addition,
payments of interest or OID on the notes made to a Non-U.S. Holder
will not be subject to U.S. federal withholding tax if the income
is effectively connected with such Non-U.S. Holder's trade or
business in the United States (and if required under an applicable
income tax treaty, is attributable to a United States permanent
establishment or fixed base) and such Non-U.S. Holder provides an
IRS Form W-8ECI (or other applicable form). If the above
criteria are not met, payments
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of interest on a note
generally will be subject to U.S. federal withholding tax at a 30%
rate (or a lower applicable treaty rate, provided certain
certification requirements are met).
If interest on
the notes is effectively connected with the conduct of a United
States trade or business of the Non-U.S. Holder and if required
under an applicable tax treaty such interest or OID is attributable
to a United States permanent establishment or fixed base of the
Non-U.S. Holder, the Non-U.S. Holder, although exempt from United
States federal withholding tax as provided above, generally will be
subject to United States federal income tax on the receipt or
accrual of such interest or OID on a net income basis when received
or accrued in accordance with such holder's method of accounting
for U.S. federal income tax purposes. In addition, if such Non-U.S.
Holder is a foreign corporation, it may be subject to an additional
branch profits tax equal to 30% (or lower applicable treaty rate)
of its effectively connected earnings and profits for the taxable
year, subject to adjustments. Such Non-U.S. Holders should consult
their own tax advisors concerning the United States federal income
tax consequences to them of the acquisition, ownership and
disposition of the notes as well as the application of state, local
and non-United States income and other tax laws.
Sale,
Exchange, Retirement or Other Disposition of a
Note. Subject to
the discussions below concerning backup withholding and FATCA, a
Non-U.S. Holder generally will not be subject to U.S. federal
withholding tax on the receipt of payments of principal on a note,
or on any gain recognized upon the sale, exchange, retirement or
other disposition of a note (other than any amount attributable to
accrued but unpaid interest or OID, which will be taxable in the
manner described above under "Tax Consequences to Non-U.S.
Holders—Interest and OID").
A Non-U.S.
Holder generally will not be subject to U.S. federal income tax on
the receipt of payments of principal on a note, or on any gain
recognized upon the sale, exchange, retirement or other disposition
of a note, unless:
- (a)
- such gain is
effectively connected with the conduct of a trade or business in
the United States (and if required under an applicable income tax
treaty, such gain is attributable to a United States permanent
establishment or fixed base of the Non-U.S. Holder); or
- (b)
- in the case of a
Non-U.S. Holder that is an individual, such Non-U.S. Holder is
present in the United States for 183 days or more during the
taxable year in which such sale, exchange, redemption, or other
taxable disposition occurs and certain other conditions are
met.
Gain that is
effectively connected with the conduct of a trade or business in
the United States generally will be subject to United States
federal income tax on a net income basis (but not U.S. withholding
tax), in the same manner as if the Non-U.S. Holder were a resident
of the United States, and, in the case of a corporation, may be
subject to an additional branch profits tax equal to 30% (or lower
applicable treaty rate) of its effectively connected earnings and
profits for the taxable year, subject to adjustments. An individual
Non-U.S. Holder who is subject to United States federal income tax
because the Non-U.S. Holder was present in the United States for
183 days or more during the taxable year of sale, exchange,
redemption, or other disposition of the notes will be subject to a
flat 30% tax on the gain derived from such sale or other taxable
disposition, which may be offset by certain United States source
capital losses. Any gain recognized with respect to accrued and
unpaid interest or OID upon the disposition of a note by the
Non-U.S. Holder would be taxed as described above under "Tax
Consequences to Non-U.S. Holders—Interest and OID."
Backup
Withholding and Information Reporting. A Non-U.S. Holder may be required to
comply with certain certification procedures to establish that such
holder is not a U.S. person in order to avoid information reporting
and backup withholding tax with respect to payments of principal
and interest or OID on, or the proceeds of the sale or other
disposition (including a retirement or redemption) of, a note. Such
requirements are generally satisfied by providing a properly
executed IRS Form W-8BEN, in the case of individuals, or IRS
Form W-BEN-E, in the case of entities. Backup withholding is
not an
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additional tax. Any
amounts withheld under the backup withholding rules will be allowed
as a refund or a credit against that Non-U.S. Holder's U.S. federal
income tax liability provided the required information is correctly
and timely furnished to the IRS. In addition, we must report
annually to the IRS and to each Non-U.S. Holder the amount of any
interest or OID paid to such Non-U.S. Holder regardless of whether
any tax was actually withheld. We may also be required to report
the proceeds of a disposition to the IRS unless a Non-U.S. Holder
properly establishes an exemption. Copies of these information
returns may also be made available under the provisions of a
specific treaty or agreement to the tax authorities of the country
in which the Non-U.S. Holder resides.
Additional Withholding Requirements under FATCA
Under
provisions commonly referred to as "FATCA," withholding at a rate
of 30% will generally be required in certain circumstances on
interest or OID payable on and, after December 31, 2018, gross
proceeds from the disposition of the notes held by or through
certain financial institutions (including investment funds), unless
such institution (i) enters into, and complies with, an
agreement with the IRS to report, on an annual basis, information
with respect to interests in, and accounts maintained by, the
institution that are owned by certain U.S. persons or by certain
non-U.S. entities that are wholly or partially owned by U.S.
persons and to withhold on certain payments, (ii) if required
under an intergovernmental agreement between the United States and
an applicable foreign country, reports such information to its
local tax authority, which will exchange such information with the
U.S. authorities, or (iii) otherwise qualifies for an
exemption. An intergovernmental agreement between the United States
and an applicable foreign country may modify these requirements.
Accordingly, the entity through which the notes are held will
affect the determination of whether such withholding is required.
Similarly, interest or OID payable on and, after December 31,
2018, gross proceeds from the disposition of the notes held by an
investor that is a non-financial non-U.S. entity that does not
qualify under certain exemptions generally will be subject to
withholding at a rate of 30%, unless such entity either
(i) certifies that such entity does not have any "substantial
United States owners" or (ii) provides certain information
regarding the entity's "substantial United States owners," which
will in turn be provided to the United States Department of the
Treasury. However, proposed U.S. Treasury Regulations (the preamble
to which specifies that taxpayers are permitted to rely on them
pending finalization) eliminate the withholding requirement on
payments of gross proceeds of a taxable disposition of a note.
Prospective investors should consult their own tax advisors
regarding the possible implications of these rules on an investment
in the notes.
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UNDERWRITING (CONFLICTS OF
INTEREST)
We and the
underwriters for the offering named below, for whom Barclays
Capital Inc. and Wells Fargo Securities, LLC are acting
as representatives, have entered into an underwriting agreement
with respect to the notes. Subject to certain conditions, each
underwriter has severally agreed to purchase the principal amount
of notes indicated in the following table.
|
|
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|
|
Underwriters
|
|
Principal
Amount
of Floating
Rate Notes |
|
Principal
Amount
of Floating
Rate Notes |
|
Principal
Amount
of Fixed
Rate Notes |
|
Principal
Amount
of Fixed
Rate Notes |
|
Principal
Amount
of Fixed
Rate Notes |
|
Principal
Amount
of Fixed
Rate Notes |
|
Barclays Capital Inc.
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|
$ |
|
|
$ |
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|
$ |
|
|
$ |
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$ |
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$ |
|
|
Wells Fargo Securities, LLC
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|
|
|
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Total
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$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
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$ |
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The
underwriters are offering the notes subject to their acceptance of
the notes from us and subject to prior sale. The underwriting
agreement provides that the obligations of the several underwriters
to pay for and accept delivery of the notes offered by this
prospectus supplement are subject to certain conditions.
The
underwriters are committed to take and pay for all of the notes
being offered, if any are taken.
Notes sold by
the underwriters to the public will initially be offered at the
initial public offering prices set forth on the cover of this
prospectus supplement. Any notes sold by the underwriters to
securities dealers may be sold at a discount from the initial
public offering price of up
to %, %,
%, %
, % and
%, respectively, of
the principal amount of
the floating
rate notes,
the floating
rate notes,
the fixed
rate notes,
the
fixed rate notes,
the fixed
rate notes and
the fixed
rate notes. Any such securities dealers may resell
any floating
rate
notes,
floating rate
notes, fixed
rate notes,
the fixed
rate notes,
fixed
rate notes
and fixed
rate notes purchased from the underwriters to certain other brokers
or dealers at a discount from the initial public offering price of
up
to %, %
, %,
%,
, % and
%, respectively, of
the principal amount of such notes. If all the notes are not sold
at the initial offering prices, the representatives may change the
offering prices and the other selling terms. The offering of the
notes by the underwriters is subject to receipt and acceptance and
subject to the underwriters' right to reject any order in whole or
in part.
The following
table shows, for each series of notes, the underwriting discount
per note (expressed as a percentage of the principal amount of each
note) and the total underwriting discount that we will pay to the
underwriters in connection with the offering of the
notes:
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|
|
|
|
|
Payable by us |
|
|
|
Floating
Rate Notes |
|
Floating
Rate Notes |
|
Fixed
Rate Notes |
|
Fixed
Rate Notes |
|
Fixed
Rate Notes |
|
Fixed
Rate Notes |
|
Per Note
|
|
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
|
|
% |
Total
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
$ |
|
|
We estimate
that the expenses of the offering payable by us, excluding
underwriting discounts and commissions, will be approximately
$ million.
The underwriters may reimburse us for certain of these
expenses.
We have agreed
to indemnify the several underwriters against certain liabilities,
including liabilities under the Securities Act.
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The notes are
new issues of securities with no established trading markets. We
have been advised by the underwriters that the underwriters intend
to make markets in the notes but are not obligated to do so and may
discontinue market making at any time without notice. No assurance
can be given as to the liquidity of the trading markets for the
notes.
It is expected
that delivery of the notes will be made against payment therefor on
or
about, 2020,
which is the fifth business day following the date of the pricing
of the notes (T+5). Under Rule 15c6-1 of the Exchange Act,
trades in the secondary market generally are required to settle in
two business days unless the parties to that trade expressly agree
otherwise. Accordingly, purchasers who wish to trade the notes on
or after the date of pricing but prior to the closing date may be
required, by virtue of the fact that the notes initially will
settle in T+5, to specify an alternative settlement cycle at the
time of any such trade to prevent failed settlement and should
consult their own advisers.
In connection
with the offering of the notes, the underwriters may purchase and
sell notes in the open market. These transactions may include short
sales, stabilizing transactions and purchases to cover positions
created by short sales. Short sales involve the sale by the
underwriters of a greater principal amount of notes of the
applicable series than they are required to purchase in the
offering of such notes. Stabilizing transactions consist of certain
bids or purchases made for the purpose of preventing or retarding a
decline in the market prices of the notes while the offering of the
notes is in progress.
The
underwriters also may impose a penalty bid. This occurs when a
particular underwriter repays to the underwriters a portion of the
underwriting discount received by it because the representatives
have repurchased notes sold by or for the account of such
underwriter in stabilizing or short covering
transactions.
These
activities by the underwriters may stabilize, maintain or otherwise
affect the market prices of the notes. As a result, the prices of
the notes may be higher than the prices that otherwise might exist
in the open market. If these activities are commenced, they may be
discontinued by the underwriters at any time. These transactions
may be effected in the over-the-counter market or
otherwise.
Selling Restrictions
European Economic Area and United Kingdom
In relation to
each Member State of the European Economic Area and the United
Kingdom (each, a "Relevant State"), no offer of notes which are the
subject of the offering contemplated by this prospectus supplement
and the accompanying prospectus to the public may be made in that
Relevant State other than:
- (a)
- to any legal entity
which is a qualified investor as defined in the Prospectus
Regulation (as defined below);
- (b)
- to fewer than 150
natural or legal persons (other than qualified investors as defined
in the Prospectus Regulation), subject to obtaining the prior
consent of the relevant underwriter or underwriters nominated by
Gilead Sciences, Inc. for any such offer; or
- (c)
- in any other
circumstances falling within Article 1(4) of the Prospectus
Regulation,
provided that no such
offer of notes shall require Gilead Sciences, Inc. or any
underwriter to publish a prospectus pursuant to Article 3 of
the Prospectus Regulation or supplement a prospectus pursuant to
Article 23 of the Prospectus Regulation. The expression
"Prospectus Regulation" means
Regulation (EU) 2017/1129.
For the
purposes of this provision, the expression an "offer of notes to
the public" in relation to any notes in any Relevant State means
the communication in any form and by any means of
sufficient
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information on the
terms of the offer and the
notes to be offered so as to enable an investor to
decide to purchase or subscribe for the notes.
United Kingdom
Any invitation
or inducement to engage in investment activity (within the meaning
of Section 21 of the Financial Services and Markets Act 2000,
as amended ("FSMA")) in connection with the issue or sale of the
notes may only be communicated or caused to be communicated in
circumstances in which Section 21(1) of the FSMA does not
apply to Gilead Sciences, Inc.
All applicable
provisions of the FSMA must be complied with in respect to anything
done by any person in relation to the notes in, from or otherwise
involving the United Kingdom.
Canada
The notes may
be sold only to purchasers purchasing, or deemed to be purchasing,
as principal that are accredited investors, as defined in National
Instrument 45-106 Prospectus
Exemptions or subsection 73.3(1) of
the Securities Act (Ontario), and are permitted clients, as defined in National
Instrument 31-103 Registration
Requirements, Exemptions and Ongoing Registrant
Obligations. Any resale of the notes must
be made in accordance with an exemption from, or in a transaction
not subject to, the prospectus requirements of applicable
securities laws.
Securities
legislation in certain provinces or territories of Canada may
provide a purchaser with remedies for rescission or damages if this
prospectus supplement or the accompanying prospectus (including any
amendment hereto or thereto) contains a misrepresentation, provided
that the remedies for rescission or damages are exercised by the
purchaser within the time limit prescribed by the securities
legislation of the purchaser's province or territory. The purchaser
should refer to any applicable provisions of the securities
legislation of the purchaser's province or territory for
particulars of these rights or consult with a legal
advisor.
Pursuant to
section 3A.3 of National Instrument 33-105 Underwriting
Conflicts (NI 33-105), the underwriters are not required to
comply with the disclosure requirements of NI 33-105 regarding
underwriter conflicts of interest in connection with this
offering.
Hong Kong
Each
underwriter has represented, warranted and agreed that:
- (a)
- it has not offered or
sold and will not offer or sell in Hong Kong, by means of any
document, any notes other than to (i) "professional investors"
as defined in the Securities and Futures Ordinance (Cap. 571) of
Hong Kong (the "SFO") and any rules made under the SFO; or
(ii) in other circumstances which do not result in the
document being a "prospectus" as defined in the Companies (Winding
Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong
Kong or which do not constitute an offer to the public within the
meaning of that Ordinance; and
- (b)
- it has not issued or
had in its possession for the purposes of issue, and will not issue
or have in its possession for the purposes of issue, whether in
Hong Kong or elsewhere, any advertisement, invitation or document
relating to the notes, which is directed at, or the contents of
which are likely to be accessed or read by, the public of Hong Kong
(except if permitted to do so under the securities laws of Hong
Kong) other than with respect to notes which are or are intended to
be disposed of only to persons outside Hong Kong or only to
"professional investors" as defined in the SFO and any rules made
under the SFO.
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Japan
The notes have
not been and will not be registered under the Financial Instruments
and Exchange Act of Japan (Act No. 25 of 1948, as amended, the
"FIEA") and accordingly, each underwriter undertakes that it will
not offer or sell any notes directly or indirectly, in Japan or to,
or for the benefit of, any resident of Japan or to others for
re-offering or resale, directly or indirectly, in Japan or to any
resident of Japan except pursuant to an exemption from the
registration requirements of, and otherwise in compliance with the
FIEA and other relevant laws, regulations and ministerial
guidelines of Japan.
Singapore
Each
underwriter has acknowledged that this prospectus supplement and
the accompanying prospectus have not been registered as a
prospectus with the Monetary Authority of Singapore. Accordingly,
each underwriter has represented, warranted and agreed that it has
not offered or sold any notes or caused the notes to be made the
subject of an invitation for subscription or purchase and will not
offer or sell any notes or cause the notes to be made the subject
of an invitation for subscription or purchase, and has not
circulated or distributed, nor will it circulate or distribute,
this prospectus supplement and the accompanying prospectus or any
other document or material in connection with the offer or sale, or
invitation for subscription or purchase, of the notes, whether
directly or indirectly, to any person in Singapore other than
(i) to an institutional investor (as defined in
Section 4A of the SFA) pursuant to Section 274 of the
SFA, (ii) to a relevant person (as defined in
Section 275(2) of the SFA) pursuant to Section 275(1) of
the SFA, or any person pursuant to Section 275(1A) of the SFA,
and in accordance with the conditions specified in Section 275
of the SFA, or (iii) otherwise pursuant to, and in accordance
with the conditions of, any other applicable provision of the
SFA.
Where the notes
are subscribed or purchased under Section 275 of the SFA by a
relevant person which is: (a) a corporation (which is not an
accredited investor (as defined in Section 4A of the SFA)) the
sole business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of whom
is an accredited investor; or (b) a trust (where the trustee
is not an accredited investor) whose sole purpose is to hold
investments and each beneficiary of the trust is an individual who
is an accredited investor, securities or securities-based
derivatives contracts (each term as defined in Section 2(1) of
the SFA) of that corporation or the beneficiaries' rights and
interest (howsoever described) in that trust shall not be
transferred within six months after that corporation or that trust
has acquired the notes pursuant to an offer made under
Section 275 of the SFA except: (1) to an institutional
investor or to a relevant person or to any person arising from an
offer referred to in Section 275(1A) or
Section 276(4)(i)(B) of the SFA; (2) where no
consideration is or will be given for the transfer; (3) where
the transfer is by operation of law; (4) as specified in
Section 276(7) of the SFA; or (5) as specified in
Regulation 37A of the Securities and Futures (Offers of
Investments) (Securities and Securities-based Derivatives
Contracts) Regulations 2018.
Singapore
Securities and Futures Act Product Classification—Solely for the
purposes of its obligations pursuant to sections 309B(1)(a)
and 309B(1)(c) of the Securities and Futures Act (Chapter 289
of Singapore) (the "SFA"), the Issuer has determined,
and hereby notifies all relevant persons (as defined in
Section 309A of the SFA) the classification of the notes as
"prescribed capital markets products" (as defined in the Securities
and Futures (Capital Markets Products) Regulations 2018) and
Excluded Investment Products (as defined in MAS Notice SFA 04-N12:
Notice on the Sale of Investment Products and MAS Notice FAA-N16:
Notice on Recommendations on Investment Products).
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Taiwan
The notes have
not been, and will not be, registered or filed with, or approved
by, the Financial Supervisory Commission of Taiwan, the Republic of
China ("Taiwan") and/or other regulatory authority of Taiwan
pursuant to applicable securities laws and regulations and may not
be sold, offered or otherwise made available within Taiwan through
a public offering or in circumstances which constitute an offer
within the meaning of the Taiwan Securities and Exchange Act or
relevant laws and regulations that requires a registration or
filing with or the approval of the Financial Supervisory Commission
of Taiwan and/or other regulatory authority of Taiwan. No person or
entity in Taiwan is authorized to offer, sell or otherwise make
available any notes or the provision of information relating to
this prospectus supplement and the accompanying prospectus.
Investors in Taiwan who subscribe for or purchase the notes shall
comply with all relevant securities, tax and foreign exchange laws
and regulations in effect in Taiwan.
France
Neither this
prospectus supplement nor any other offering material relating to
the notes described in this prospectus supplement has been
submitted to the clearance procedures of the Autorité des Marchés
Financiers or of the competent authority of another member state of
the European Economic Area and notified to the Autorité des Marchés
Financiers. The notes have not been offered or sold and will not be
offered or sold, directly or indirectly, to the public in France.
Neither this prospectus supplement nor any other offering material
relating to the notes has been or will be:
- •
- released, issued,
distributed or caused to be released, issued or distributed to the
public in France; or
- •
- used in connection
with any offer for subscription or sale of the notes to the public
in France.
Such offers,
sales and distributions will be made in France only:
- •
- to qualified
investors (investisseurs qualifiés) and/or to a restricted circle
of investors (cercle restraint d'investisseurs), in each case
investing for their own account, all as defined in, and in
accordance with, articles L.411-2, D.411-1, D.411-2, D.734-1,
D.744-1, D.754-1 and D.764-1 of the French Code monétaire et
financier;
- •
- to investment
services providers authorized to engage in portfolio management on
behalf of third parties; or
- •
- in a transaction
that, in accordance with article L.411-2-II-1° -or-2° -or 3°
of the French Code monétaire et financier and article 211-2 of
the General Regulations (Règlement Général) of the Autorité des
Marchés Financiers, does not constitute a public offer (appel
public à l'épargne).
The notes may
be resold directly or indirectly, only in compliance with
articles L.411-1, L.411-2, L.412-1 and L.621-8 through
L.621-8-3 of the French Code monétaire et financier.
Switzerland
This prospectus
supplement and the accompanying prospectus are not intended to
constitute an offer or solicitation to purchase or invest in the
notes. The notes may not be publicly offered, directly or
indirectly, in Switzerland within the meaning of the Swiss
Financial Services Act (the "FinSA") and no application has or will
be made to admit the notes to trading on any trading venue
(exchange or multilateral trading facility) in Switzerland. Neither
this prospectus supplement, the accompanying prospectus nor any
other offering or marketing material relating to the notes
constitutes a prospectus pursuant to the FinSA, and neither this
prospectus supplement, the accompanying prospectus nor any other
offering or marketing material relating to the notes may be
publicly distributed or otherwise made publicly available in
Switzerland.
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Other Relationships
Some of the
underwriters and their affiliates have engaged in, and may in the
future engage in, investment banking and other commercial dealings
in the ordinary course of business with us or our affiliates. They
have received, or may in the future receive, customary fees and
commissions for these transactions. In particular, affiliates of
certain of the underwriters for this offering are also lenders
under our existing revolving credit facility and serve in various
agency or other capacities under such facilities, and affiliates of
certain of the underwriters for this offering may become lenders
under the New Term Loan Facility and serve in various agency or
other capacities under such facilities.
In addition, in
the ordinary course of their business activities, the underwriters
and their affiliates may make or hold a broad array of investments
and actively trade debt and equity securities (or related
derivative securities) and financial instruments (including bank
loans) for their own account and for the accounts of their
customers. Such investments and securities activities may involve
securities and/or instruments of ours or our affiliates. If any of
the underwriters or their affiliates have a lending relationship
with us, certain of those underwriters or their affiliates
routinely hedge, and certain other of those underwriters or their
affiliates may hedge, their credit exposure to us consistent with
their customary risk management policies. Typically, these
underwriters and their affiliates would hedge such exposure by
entering into transactions which consist of either the purchase of
credit default swaps or the creation of short positions in our
securities, including potentially the notes offered hereby. Any
such credit default swaps or short positions could adversely affect
future trading prices of the notes offered hereby. The underwriters
and their affiliates may also make investment recommendations
and/or publish or express independent research views in respect of
such securities or financial instruments and may hold, or recommend
to clients that they acquire, long and/or short positions in such
securities and instruments.
Conflicts of Interest
As described in
this prospectus supplement under "Use of Proceeds," a portion of
the net proceeds from this offering will be used to repay
$ million
in aggregate principal amount of our 4.50% Senior Notes due 2021
and
$ million
in aggregate principal amount of our 4.40% Notes due 2021. One or
more of the underwriters participating in this offering and/or
their affiliates may hold positions in our 4.50% Senior Notes due
2021 or our 4.40% Notes due 2021, and to the extent that net
proceeds from this offering are applied to repay any of such
indebtedness held by any of the underwriters or their affiliates,
they will receive proceeds from this offering through the repayment
of that indebtedness. If the amount of such proceeds so received by
any underwriter or its affiliates is 5% or more of the net proceeds
of this offering (not including the underwriting discount), such
underwriter would be deemed to have a conflict of interest within
the meaning of FINRA Rule 5121. In such event, this offering
would be conducted in compliance with FINRA Rule 5121 and such
underwriter would not be permitted to make sales in this offering
to any discretionary account without the prior written approval of
the customer. Pursuant to that rule, the appointment of a
"qualified independent underwriter" would not be required in
connection with this offering, as the notes are "investment grade
rated" (as defined in FINRA Rule 5121).
S-55
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LEGAL
MATTERS
Davis
Polk & Wardwell LLP, New York, New York will pass
upon the validity of the notes offered hereby for Gilead
Sciences, Inc. Certain legal matters relating to the offering
of the notes will be passed upon for the underwriters by
Latham & Watkins LLP.
EXPERTS
The
consolidated financial statements of Gilead Sciences, Inc.
appearing in Gilead Sciences, Inc.'s
Annual Report (Form 10-K) for the year ended December 31,
2019 (including the schedule appearing therein), and the
effectiveness of Gilead Sciences, Inc.'s internal control over
financial reporting as of December 31, 2019, have been audited
by Ernst & Young LLP, independent registered public
accounting firm, as set forth in their reports thereon, included
therein, and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by
reference in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
S-56
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PROSPECTUS

Gilead Sciences, Inc.
Debt Securities
Common Stock
Preferred Stock
Depositary Shares
Warrants
Subscription Rights
Stock Purchase Contracts
Stock Purchase Units
Gilead
Sciences, Inc., from time to time, may offer, issue and sell
(i) senior debt securities which may be convertible or
non-convertible, (ii) common stock, (iii) preferred
stock, (iv) depositary receipts, representing fractional
shares of our preferred stock, which are called depositary shares,
(v) warrants to purchase debt securities, preferred stock or
common stock, (vi) subscription rights to purchase debt
securities, preferred stock or common stock, (vii) stock
purchase contracts obligating holders to purchase from or sell to
us common stock or preferred stock at a future date or dates and
(viii) stock purchase units, each consisting of a stock
purchase contract and any combination of debt securities or debt
obligations of third parties, including U.S. Treasury securities,
which would secure the holder's obligation to purchase from or to
sell to us, as the case may be, preferred stock or common stock
under the stock purchase contract.
Our common
stock is listed on the NASDAQ Global Select Market under the symbol
"GILD." If we decide to seek a listing of any securities offered by
this prospectus, the applicable prospectus supplement will disclose
the exchange or market on which such securities will be listed, if
any, or where we have made an application for listing, if
any.
We may offer
and sell these securities to or through one or more underwriters,
dealers and agents, or directly to purchasers, on a continuous or
delayed basis.
This prospectus
describes some of the general terms that may apply to the offered
securities. The specific terms of any securities to be offered will
be described in supplements to this prospectus, which may also add,
update or change information contained in this prospectus. You
should read this prospectus and the applicable prospectus
supplement carefully before you make your investment
decision.
Investing
in our securities involves a high degree of risk. You should
carefully consider the risk factors incorporated herein by
reference and described under the heading "Risk Factors" beginning
on page 3.
This
prospectus may not be used to sell securities unless accompanied by
a prospectus supplement.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or
determined if this prospectus is truthful or complete. Any
representation to the contrary is a criminal
offense.
The
date of this prospectus is August 7, 2020.
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TABLE OF CONTENTS
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ABOUT THIS PROSPECTUS
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WHERE YOU CAN FIND MORE INFORMATION
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FORWARD-LOOKING STATEMENTS
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GILEAD SCIENCES, INC.
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RISK FACTORS
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USE OF PROCEEDS
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DESCRIPTION OF SECURITIES
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DESCRIPTION OF DEBT SECURITIES
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DESCRIPTION OF CAPITAL STOCK
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DESCRIPTION OF DEPOSITARY SHARES
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DESCRIPTION OF WARRANTS
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DESCRIPTION OF SUBSCRIPTION RIGHTS
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK
PURCHASE UNITS
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PLAN OF DISTRIBUTION
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LEGAL MATTERS
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EXPERTS
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ABOUT THIS PROSPECTUS
This prospectus
is part of a registration statement on Form S-3 that we filed
with the Securities and Exchange Commission (the "SEC") using a
"shelf" registration process. Under this shelf process, we may,
from time to time, sell any combination of the securities described
in this prospectus in one or more offerings.
This prospectus
provides you with a general description of the securities that we
may offer. Each time we sell securities, we will provide a
prospectus supplement that contains specific information about the
terms of that offering, including the specific amounts, prices and
terms of the securities offered. The prospectus supplement may also
add information to this prospectus or update or change information
in this prospectus. If there is any inconsistency between the
information in this prospectus and any prospectus supplement, you
should rely on the information in the prospectus supplement. You
should read carefully this prospectus and any prospectus supplement
together with the additional information described under the
heading "Where You Can Find More Information." We have not
authorized anyone to provide you with different or additional
information. We are not making an offer to sell these securities in
any jurisdiction where the offer or sale of these securities is not
permitted. You should assume that the information in this
prospectus or any prospectus supplement, as well as the information
incorporated by reference herein or therein, is accurate only as of
the date of the documents containing the information. Our business,
financial condition, results of operations and prospects may have
changed since those dates.
In this
prospectus, except as otherwise indicated, "Gilead," the "Company,"
"we," "our," and "us" and similar terms refer to Gilead
Sciences, Inc. and its consolidated subsidiaries.
WHERE YOU CAN FIND MORE
INFORMATION
We file annual,
quarterly and current reports, proxy statements and other
information with the SEC. The SEC maintains an internet site at
http://www.sec.gov that contains reports, proxy and information
statements and other information we have filed electronically with
the SEC. These reports, proxy statements and other information can
also be read on our internet site at http://gilead.com. Information
on our website is not incorporated into this prospectus and is not
a part of this prospectus.
The SEC allows
us to "incorporate by reference" information into this prospectus
and any accompanying prospectus supplement, which means that we can
disclose important information to you by referring you to another
document filed separately with the SEC. The information
incorporated by reference is deemed to be part of this prospectus
and any accompanying prospectus supplement, except for any
information superseded by information contained directly in this
prospectus, any accompanying prospectus supplement or any
subsequently filed document deemed incorporated by reference. This
prospectus and any accompanying prospectus supplement incorporate
by reference the documents set forth below that we have previously
filed with the SEC:
- •
-
Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 (filed with the SEC on February 25,
2020);
- •
-
Definitive Proxy Statement on Schedule 14A (filed with the SEC
on March 24, 2020);
- •
- Quarterly Reports on
Form 10-Q (filed with the SEC on
May 6, 2020 and
August 6, 2020);
- •
- Current Reports on
Form 8-K (filed with the SEC on
January 31, 2020,
March 2, 2020,
May 8, 2020 and
June 16, 2020); and
- •
- the description of
our common stock which is contained in the Registration Statement
on Form 8-A filed December 16, 1991, under the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), including
any amendment or report filed for the purpose of updating such
description, including
Exhibit 4.9 to the Annual Report on Form 10-K for the
fiscal year ended December 31, 2019 (filed with the SEC on
February 25, 2020).
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All documents
filed by us pursuant to Sections 13(a), 13(c), 14 or 15(d) of
the Exchange Act after the date of this prospectus and any
accompanying prospectus supplement and before the termination of
the offering shall also be deemed to be incorporated herein by
reference. The most recent information that we file with the SEC
automatically updates and supersedes older information. The
information contained in any such filing will be deemed to be a
part of this prospectus, commencing on the date on which the
document is filed.
We are not,
however, incorporating by reference any documents or portions
thereof, whether specifically listed above or filed in the future,
that are not deemed "filed" with the SEC, including our
compensation committee report, performance graph and the
certifications of our chief executive officer and chief financial
officer required by Rule 13a-14(b) or Rule 15d-14(b)
under the Exchange Act and Section 1350 of Chapter 63 of
Title 18 of the United States Code (included in or accompanying our
latest Annual Report on Form 10-K incorporated by reference
herein) or any information furnished pursuant to Items 2.02 or
7.01 of Form 8-K or certain exhibits furnished pursuant to
Item 9.01 of Form 8-K.
We will provide
without charge upon written or oral request to each person,
including any beneficial owner, to whom a prospectus is delivered,
a copy of any or all of the documents which are incorporated by
reference into the prospectus but not delivered with the prospectus
(other than exhibits to those documents unless such exhibits are
specifically incorporated by reference as an exhibit in this
prospectus). Requests should be directed to Gilead
Sciences, Inc., Attention: Investor Relations, 333 Lakeside
Drive, Foster City, California 94404, Telephone:
(650) 574-3000.
FORWARD-LOOKING STATEMENTS
This prospectus
and the documents incorporated by reference contain forward-looking
statements regarding future events and our future results that are
subject to the safe harbors created under the Securities Act of
1933, as amended (the "Securities Act"), and the Exchange Act.
Words such as "expect," "anticipate," "target," "goal," "project,"
"hope," "intend," "plan," "believe," "seek," "estimate,"
"continue," "may," "could," "should," "might," and variations of
such words and similar expressions are intended to identify such
forward-looking statements. In addition, any statements other than
statements of historical fact are forward-looking statements,
including statements regarding overall trends, operating cost and
revenue trends, liquidity and capital needs, collaboration and
licensing arrangements, statements regarding the anticipated future
impact on our business of the ongoing coronavirus disease 2019
("COVID-19") and related public health measures, statements
regarding the development, manufacturing and distribution of
remdesivir as a treatment for COVID-19 in certain markets and other
statements of expectations, beliefs, future plans and strategies,
anticipated events or trends and similar expressions. We have based
these forward-looking statements on our current expectations about
future events. These statements are not guarantees of future
performance and involve risks, uncertainties and assumptions that
are difficult to predict. Our actual results may differ materially
from those suggested by these forward-looking statements for
various reasons, including those identified below under "Risk
Factors" on page 3 of this prospectus and in our
Annual Report on Form 10-K for the year ended
December 31, 2019 and our Quarterly Reports on
Form 10-Q for the quarters ended
March 31, 2020 and
June 30, 2020 (as such risk factors may be updated from
time to time in our public filings). Given these risks and
uncertainties, you are cautioned not to place undue reliance on
forward-looking statements. The forward-looking statements included
in this prospectus are made only as of the date hereof unless
otherwise specified. Except as required under federal securities
laws and the rules and regulations of the SEC, we do not undertake,
and specifically decline, any obligation to update any of these
statements or to publicly announce the results of any revisions to
any forward-looking statements after the distribution of this
report, whether as a result of new information, future events,
changes in assumptions or otherwise.
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GILEAD SCIENCES, INC.
We were
incorporated in Delaware on June 22, 1987 and are a
research-based biopharmaceutical company that discovers, develops
and commercializes innovative medicines in areas of unmet medical
need. With each new discovery and investigational drug candidate,
we strive to transform and simplify care for people with
life-threatening illnesses around the world. We have operations in
more than 35 countries worldwide, with headquarters in Foster City,
California. Our primary areas of focus include viral diseases,
inflammatory and fibrotic diseases and oncology. We seek to add to
our existing portfolio of products and product candidates through
our internal discovery and clinical development programs,
acquisitions, in-licensing, options and other strategic
collaborations.
Our portfolio
of marketed products includes AmBisome®, Atripla®, Biktarvy®,
Cayston®, Complera®/Eviplera®, Descovy®, Descovy for PrEP®,
Emtriva®, Epclusa®, Genvoya®, Harvoni®, Hepsera®, Letairis®,
Odefsey®, Ranexa®, Sovaldi®, Stribild®, Tecartus™, Truvada®,
Truvada for PrEP®, Tybost®, Veklury® (remdesivir), Vemlidy®,
Viread®, Vosevi®, Yescarta® and Zydelig®. The approval status of
Veklury (remdesivir) varies worldwide, and Veklury (remdesivir) is
not approved in the United States and is authorized for use under
an Emergency Use Authorization. We also sell and distribute
authorized generic versions of Epclusa and Harvoni in the United
States through our separate subsidiary, Asegua
Therapeutics, LLC. In addition, we sell and distribute certain
products through our corporate partners under collaborative
agreements.
Our principal
executive offices are located at 333 Lakeside Drive, Foster City,
California 94404. The telephone number of our principal executive
offices is (650) 574-3000.
RISK FACTORS
Investing in
our securities involves a high degree of risk. Before acquiring any
offered securities pursuant to this prospectus, you should
carefully consider the information contained or incorporated by
reference in this prospectus or in any accompanying prospectus
supplement, including, without limitation, the risk factors
described in our
Annual Report on Form 10-K for the fiscal year ended
December 31, 2019 and our Quarterly Reports on
Form 10-Q for the quarters ended
March 31, 2020 and
June 30, 2020, which are incorporated herein by reference
(as such risk factors may be updated in our other filings with the
SEC pursuant to Sections 13(a), 13(c), 14, or 15(d) of the
Exchange Act), and the risk factors described in any applicable
prospectus supplement before making an investment decision. The
occurrence of any of these risks might cause you to lose all or a
part of your investment in the offered securities. See "Where You
Can Find More Information" included elsewhere in this
prospectus.
USE OF PROCEEDS
Except as may
be otherwise set forth in the applicable prospectus supplement
accompanying this prospectus, the net proceeds from the sale of the
securities offered by this prospectus will be used for general
corporate purposes.
DESCRIPTION OF SECURITIES
This prospectus
contains summary descriptions of the debt securities, common stock,
preferred stock, depositary shares, warrants, subscription rights,
stock purchase contracts and stock purchase units that we may sell
from time to time. These summary descriptions are not meant to be
complete descriptions of each security. The particular terms of any
security will be described in the related prospectus
supplement.
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DESCRIPTION OF DEBT SECURITIES
We may issue
senior debt securities under an indenture, dated March 30,
2011, between us and Wells Fargo Bank, National Association, as
trustee, which we refer to as the "base indenture." As used in this
prospectus, "debt securities" means our direct unsecured general
obligations and may include debentures, notes, bonds or other
evidences of indebtedness that we issue and the trustee
authenticates and delivers under the base indenture. The prospectus
supplement relating to any offering of debt securities will
describe more specific terms of the debt securities being
offered.
Debt securities
will be issued under the base indenture in one or more series
established pursuant to a supplemental indenture or a resolution
duly adopted by our board of directors or a duly authorized
committee thereof. The base indenture does not limit the aggregate
principal amount of debt securities that may be issued thereunder,
or the amount of series that may be issued. In this prospectus, we
refer to the base indenture (together with each applicable
supplemental indenture or resolution establishing the applicable
series of debt securities) as the "indenture." The indenture will
be subject to, and governed by, the Trust Indenture Act of
1939.
The summary set
forth below does not purport to be complete and is subject to and
qualified in its entirety by reference to the base indenture and
the supplemental indenture or board resolution (including the form
of debt security) relating to the applicable series of debt
securities, the form of each of which is or will be filed or
incorporated by reference as an exhibit to the registration
statement of which this prospectus is a part and incorporated
herein by reference.
General
The debt
securities will be our unsecured obligations and will rank equally
with all of our other unsecured and unsubordinated debt from time
to time outstanding. Our secured debt will be effectively senior to
the debt securities to the extent of the value of the assets
securing such debt. Unless otherwise indicated in a prospectus
supplement, the debt securities will be exclusively our obligations
and not those of our subsidiaries and therefore the debt securities
will be structurally subordinate to the debt and liabilities of any
of our subsidiaries.
The applicable
prospectus supplement will describe the specific terms of each
series of debt securities being offered, including some or all of
the following:
- •
- the title of the debt
securities;
- •
- the price at which
the debt securities will be issued (including any issue
discount);
- •
- any limit on the
aggregate principal amount of the debt securities;
- •
- the date or dates (or
manner of determining the same) on which the debt securities will
mature;
- •
- the rate or rates
(which may be fixed or variable) per annum (or the method or
methods by which such rate or rates will be determined) at which
the debt securities will bear interest, if any, and the date or
dates from which such interest will accrue;
- •
- the date or dates on
which such interest will be payable and the record dates for such
interest payment dates and the basis upon which interest shall be
calculated if other than that of a 360-day year of twelve 30-day
months;
- •
- if the trustee in
respect of the debt securities is other than Wells Fargo Bank,
National Association (or any successor thereto), the identity of
the trustee;
- •
- any mandatory or
optional sinking fund or purchase fund or analogous
provision;
- •
- whether the debt
securities are to be issued in individual certificates to each
holder or in the form of global securities held by a
depositary;
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- •
- any provisions
relating to the date after which, the circumstances under which,
and the price or prices at which the debt securities may, pursuant
to any optional or mandatory redemption provisions, be redeemed at
our option or of the holder thereof and certain other terms and
provisions of such optional or mandatory redemption;
- •
- if the debt
securities are denominated in other than United States dollars, the
currency or currencies (including composite currencies) in which
the debt securities are denominated;
- •
- if payments of
principal (and premium, if any) or interest, if any, in respect of
the debt securities are to be made in a currency other than United
States dollars or the amounts of such payments are to be determined
with reference to an index based on a currency or currencies other
than that in which the debt securities are denominated, the
currency or currencies (including composite currencies) or the
manner in which such amounts are to be determined,
respectively;
- •
- if other than, or in
addition to, the events of default described in the base indenture,
the events of default with respect to the debt securities of that
series;
- •
- any provisions
relating to the conversion of debt securities into debt securities
of another series or shares of our capital stock or any other
equity securities or property;
- •
- any provisions
restricting defeasance of the debt securities;
- •
- any covenants or
other restrictions on our operations;
- •
- conditions to any
merger or consolidation; and
- •
- any other terms of
the debt securities. (Section 3.1)
Unless
otherwise indicated in a prospectus supplement in respect of which
this prospectus is being delivered, principal of, premium, if any,
and interest, if any, on the debt securities (other than debt
securities issued as global securities) will be payable, and the
debt securities (other than debt securities issued as global
securities) will be exchangeable and transfers thereof will be
registrable, at the office of the trustee with respect to such
series of debt securities and at any other office maintained at
that time by us for such purpose, provided that, at our option,
payment of interest may be made by check mailed to the address of
the holder as it appears in the register of the debt
securities. (Section 3.4)
Unless
otherwise indicated in a prospectus supplement relating thereto,
the debt securities will be issued only in fully registered form,
without coupons, in denominations of $2,000 and integral multiples
of $1,000 in excess thereof. (Section 3.2) For certain
information about debt securities issued in global form, see
"—Global Securities" below. No service charge shall be made for any
registration of transfer or exchange of the securities, but we may
require payment of a sum sufficient to cover any transfer tax or
other governmental charge payable in connection therewith.
(Section 3.6)
Debt securities
bearing no interest or interest at a rate that at the time of
issuance is below the prevailing market rate will be sold at a
discount below their stated principal amount. Special U.S. federal
income tax considerations applicable to any such discounted debt
securities or to certain debt securities issued at par which are
treated as having been issued at a discount for U.S. federal income
tax purposes will be described in the prospectus supplement in
respect of which this prospectus is being delivered, if
applicable.
Debt securities
may be issued, from time to time, with the principal amount payable
on the applicable principal payment date, or the amount of interest
payable on the applicable interest payment date, to be determined
by reference to one or more currency exchange rates, commodity
prices, equity indices or other factors. In such cases, holders of
such debt securities may receive a principal amount on any
principal payment date, or a payment of interest on any interest
payment date, that is greater than or less than the amount of
principal or interest payable on such dates, depending upon the
value
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on such dates of the
applicable currency, commodity, equity index or other factor.
Information, if any, as to the methods for determining the amount
of principal or interest payable on any date, the currencies,
commodities, equity indices or the factors to which the amount
payable on such date is linked and certain additional tax
considerations applicable to the debt securities will be set forth
in a prospectus supplement in respect of which this prospectus is
being delivered.
The indenture
provides that the trustee and the paying agent shall promptly pay
to us, upon request, any money held by them for the payment of
principal (and premium, if any) or interest that remains unclaimed
for two years. In the event the trustee or the paying agent returns
money to us following such two-year period, the holders of the debt
securities thereafter shall be entitled to payment only from us,
subject to all applicable escheat, abandoned property and similar
laws. (Section 11.7)
The base
indenture does not limit the amount of additional unsecured
indebtedness that we or any of our subsidiaries may incur. Unless
otherwise specified in the resolutions or in any supplemental
indenture establishing the terms of the debt securities, the terms
of the debt securities do not afford holders of the debt securities
protection in the event of a highly leveraged or other similar
transaction involving us that may adversely affect the holders of
the debt securities. Debt securities of any particular series need
not be issued at the same time and, unless otherwise provided, a
series may be re-opened, without the consent of the holders of such
debt securities, for issuances of additional debt securities of
that series, unless otherwise specified in the resolutions or any
supplemental indenture establishing the terms of the debt
securities. (Section 3.1)
Certain Covenants
The following
restrictive covenants will apply to each series of debt securities
issued under the indenture, unless otherwise specified in any
supplemental indenture or resolution establishing the terms of the
debt securities of any series. See "—Certain Definitions" below for
the definitions of certain of the defined terms used
herein.
Limitations on Liens
Other than as
provided under "—Exempted Liens and Sale and Leaseback
Transactions," we will not, nor will we permit any Restricted
Subsidiary to, create, incur, issue, assume or guarantee any Debt
if such Debt is secured by a Lien upon any Restricted Property or
on the capital stock or Debt of any Restricted Subsidiary, without,
in any such case, effectively providing that the debt securities
will be secured equally and ratably by such Lien with such secured
Debt; provided, however, that this restriction will not apply
to:
- •
- Liens existing on the
date of the indenture or Liens existing on property, capital stock
or Debt of any Person at the time it becomes a Restricted
Subsidiary;
- •
- Any Lien existing on
property when acquired, constructed or improved and which Lien
(i) secured or provided for the payment of all or any part of
the acquisition costs of the property or the cost of construction
or improvement thereof and (ii) is created prior to, at the
same time or within one year after, the completion of such
acquisition, construction or improvement to the property, as the
case may be;
- •
- Liens on property of
a Person existing at the time such Person is merged into or
consolidated with us or a Restricted Subsidiary or at the time of a
sale, lease or other disposition of the properties of a Person as
an entirety or substantially as an entirety to us or a Restricted
Subsidiary; provided, that such Lien was not incurred in
anticipation of such transaction and was in existence prior to such
transaction;
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- •
- Any Lien arising by
reason of deposits with, or the giving of any form of security to,
any governmental agency or any body created or approved by law or
governmental regulation;
- •
- Liens securing Debt
of a Restricted Subsidiary owed to us or another Restricted
Subsidiary;
- •
- Liens for taxes,
fees, assessments or other governmental charges which are not
delinquent or remain payable without penalty;
- •
- Carriers',
warehousemen's, materialmen's, repairmen's, mechanics', landlords'
and other similar Liens arising in the ordinary course of business
which are not delinquent or remain payable without penalty or which
are being contested in good faith and by appropriate proceedings,
which proceedings have the effect of preventing the forfeiture or
sale of the property or assets subject to any such Lien if reserves
or other appropriate provisions, if any, as shall be required by
generally accepted accounting principles have been made
therefor;
- •
- Liens (other than any
Lien imposed by ERISA) consisting of pledges or deposits required
in the ordinary course of business in connection with workers'
compensation, unemployment insurance and other social security
legislation;
- •
- Liens on property
securing (i) the non-delinquent performance of bids, trade
contracts (other than for borrowed money), leases, statutory
obligations, (ii) contingent obligations on surety and appeal
bonds and (iii) other non-delinquent obligations of a like
nature; in each case, incurred in the ordinary course of business,
provided that all such Liens under this bullet point in the
aggregate would not (even if enforced) cause a material adverse
change in, or a material adverse effect upon, the operations,
business, properties, liabilities (actual or contingent), condition
(financial or otherwise) or prospects of the Company and its
Subsidiaries taken as a whole;
- •
- Liens securing
obligations in respect of capital leases on assets subject to such
leases; provided that such leases are otherwise permitted pursuant
to the second or third bullets under the covenant "—Limitations on
Sale and Leaseback Transactions" set forth below;
- •
- Liens securing
reimbursement obligations with respect to letters of credit arising
by operation of law under Section 5-118(a) of the Uniform
Commercial Code;
- •
- Liens arising solely
by virtue of any banker's liens, rights of set-off or similar
rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution; provided that
(i) such deposit account is not a dedicated cash collateral
account and is not subject to restrictions against access by us in
excess of those set forth by regulations promulgated by the Board
of Governors of the Federal Reserve System of the United States,
and (ii) such deposit account is not intended by us or any
Subsidiary to provide collateral to the depository
institution;
- •
- Easements,
right-of-way restrictions and other similar encumbrances incurred
in the ordinary course of our business which, in the aggregate, are
not substantial in amount, and which do not in any case materially
detract from the value of the property subject thereto or interfere
with the ordinary course of our and our Subsidiaries' business;
and
- •
- Any extension,
renewal or replacement (or successive extensions, renewals or
replacements), in whole or in part, of any permitted Lien referred
to in the bullets set forth above, inclusive of any Lien existing
at the date of the indenture; provided that the obligation secured
by such new Lien shall not extend beyond the property subject to
the existing Lien and is not greater in amount than the obligations
secured by the Lien extended, renewed or replaced (plus an amount
in respect of reasonable financing fees and related transaction
costs). (Section 5.2)
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Limitations on Sale and Leaseback Transactions
Other than as
provided under "—Exempted Liens and Sale and Leaseback
Transactions," we will not, and will not permit any Restricted
Subsidiary to, enter into any sale and leaseback transaction with
respect to any Restricted Property, except a lease for a period
(including extensions or renewals at our option or the option of a
Restricted Subsidiary) of three years or less. Notwithstanding the
foregoing, we or any Restricted Subsidiary may enter into a sale
and leaseback transaction if:
- •
- The lease is between
us and a Restricted Subsidiary or between Restricted
Subsidiaries;
- •
- We or such Restricted
Subsidiary would, at the time of entering into such sale and
leaseback transaction, be entitled pursuant to the covenant
described under "—Limitations on Liens" above, to incur Debt
secured by a Lien on such Restricted Property involved in a
principal amount at least equal to the Attributable Debt of such
transaction without equally and ratably securing the debt
securities; or
- •
- We or any of our
Restricted Subsidiaries, during the six months following the
effective date of the sale and leaseback transaction, apply an
amount equal to the greater of the net proceeds of such sale or
transfer or the fair value of the Restricted Property that we or
our Restricted Subsidiary lease in the transaction to the voluntary
retirement of the debt securities or other Debt of ours or that of
any Restricted Subsidiary, provided that such Debt (i) ranks
pari passu or senior to the debt securities under the indenture and
(ii) has a stated maturity which is either more than
12 months from the date of such application or which is
extendable or renewable at the option of the obligor thereon to a
date more than 12 months from the date of such
application. (Section 5.3)
Exempted Liens and Sale and Leaseback
Transactions
Notwithstanding
the restrictions described under the headings "—Limitations on
Liens" or "—Limitations on Sale and Leaseback Transactions," we or
any Restricted Subsidiary of ours may create or assume any Liens or
enter into any Sale and Leaseback Transactions not otherwise
permitted as described under such headings, if the sum of the
following does not exceed 15% of Consolidated Net Tangible
Assets:
- •
- the outstanding
Indebtedness secured by such Liens (not including any Liens
permitted under "—Limitations on Liens" which amount does not
include any Liens permitted under the provisions of this "—Exempted
Liens and Sale and Leaseback Transactions"); plus
- •
- all Attributable Debt
in respect of such Sale and Leaseback Transactions entered into
(not including and Sale and Leaseback Transactions permitted under
"—Limitations on Sale and Leaseback Transactions" which amount does
not include any Sale and Leaseback Transactions permitted under the
provisions of this "—Exempted Liens and Sale and Leaseback
Transactions"),
measured, in each
case, at the time such Lien is incurred or any such Sale and
Leaseback Transaction is entered into by us or such Restricted
Subsidiary of ours. (Section 5.4)
Certain Definitions
Set forth below
are certain of the defined terms used in the indenture.
"Attributable
Debt" means, in respect of a sale and leaseback transaction, as of
any particular time, the present value (discounted at the rate of
interest implicit in the terms of the lease involved in such sale
and leaseback transaction, as determined in good faith by us) of
the obligation of the lessee thereunder for rental payments
(excluding, however, any amounts required to be paid by such
lessee, whether or not designated as rent or additional rent, on
account of maintenance and repairs, insurance,
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taxes, assessments,
water rates or similar charges or any amounts required to be paid
by such lessee thereunder contingent upon the amount of sales,
maintenance and repairs, insurance, taxes, assessments, water rates
or similar charges) during the remaining term of such lease
(including any period for which such lease has been extended or
may, at the option of the lessor, be extended).
"Consolidated
Net Tangible Assets" means the total amount of assets (less
applicable reserves and other properly deductible items) after
deducting (1) all current liabilities (excluding the amount of
those which are by their terms extendable or renewable at the
option of the obligor to a date more than 12 months after the
date as of which the amount is being determined) and (2) all
customer lists, computer software, licenses, patents, patent
applications, copyrights, trademarks, trade names, goodwill,
capitalized research and development costs and other like
intangibles, treasury stock and unamortized debt discount and
expense, and all other like intangible assets, all as stated on the
Company's most recent publicly available consolidated balance sheet
preceding the date of determination and determined in accordance
with generally accepted accounting principles.
"Debt" means
any and all of the obligations of a Person for money borrowed which
in accordance with generally accepted accounting principles would
be reflected on the balance sheet of such Person as a liability as
of the date of which the Debt is to be determined.
"Lien" means
any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential
arrangement of any kind or nature whatsoever (including any
conditional sale or other title retention agreement, and any
financing lease having substantially the same economic effect as
any of the foregoing) on or with respect to any
property.
"Person" means
an individual, a corporation, a company, a voluntary association, a
partnership, a trust, a joint venture, a limited liability company,
an unincorporated organization, or a government or any agency,
instrumentality or political subdivision thereof.
"Restricted
Property" means, as to any particular series of notes, any
manufacturing facility or plant owned, or leased, by the Company or
a Restricted Subsidiary and located within the United States,
including Puerto Rico, the gross book value (including related
land, machinery and equipment without deduction of any depreciation
reserves) of which is not less than 1% of Consolidated Tangible Net
Assets as stated on the Company's most recent publicly available
consolidated balance sheet preceding the date of determination
other than any such manufacturing facility or plant which the board
of directors reasonably determines is not material to the operation
of the Company's business and its Subsidiaries, taken as a
whole.
"Restricted
Subsidiary" means a Subsidiary (i) which is a "significant
subsidiary" as defined in Rule 1-02(w) of Regulation S-X
under the U.S. federal securities laws or (ii) which owns a
Restricted Property; provided, however, that the term shall not
include any Subsidiary which is solely or primarily engaged in the
business of providing or obtaining financing for the sale or lease
of products sold or leased by us or any Subsidiary.
"Subsidiary"
means, with respect to any Person, any corporation, partnership,
joint venture, limited liability company or other business entity
of which a majority of the outstanding shares or other interests
having voting power is at the time directly or indirectly owned or
controlled by such Person or one or more of the Subsidiaries of
such Person. Unless the context otherwise requires, all references
to Subsidiary or Subsidiaries herein shall refer to our
Subsidiaries.
"United States"
means the United States of America (including the states thereof
and the District of Columbia), its territories and possessions and
other areas subject to its jurisdiction.
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Merger, Consolidation and Sale
The indenture
generally provides that we may not consolidate with or merge into,
or sell, transfer or convey, including by lease, all or
substantially all of our assets to another entity, unless:
(i) the resulting, surviving or transferee entity (A) is
a corporation or entity organized under the laws of the United
States and (B) if other than us, it assumes by a supplemental
indenture all our obligations under the debt securities and the
indenture, (ii) immediately after giving effect to such
transaction no Event of Default (as defined herein) and no
circumstances which, after notice or lapse of time or both, would
become an Event of Default, shall have happened and be continuing,
and (iii) we shall have delivered to the trustee an officers'
certificate and an opinion of counsel, each stating that such
consolidation, merger or transfer and such supplemental indenture
comply with the indenture. (Section 6.1)
Global Securities
The debt
securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with
the depositary identified in the applicable prospectus supplement.
Unless it is exchanged in whole or in part for debt securities in
definitive form, a global security may not be transferred. However,
transfers of the whole security between the depositary for that
global security and its nominees or their respective successors are
permitted.
Unless
otherwise provided in the applicable prospectus supplement, The
Depository Trust Company, New York, New York, which we refer to in
this prospectus as "DTC," will act as depositary for each series of
global securities. Beneficial interests in global securities will
be shown on, and transfers of global securities will be effected
only through, records maintained by DTC and its
participants.
Amendment, Supplement and Waiver
Subject to
certain exceptions, the indenture or the debt securities of any
series may be amended or supplemented with the written consent of
the holders of not less than a majority in principal amount of the
then outstanding debt securities of the affected series; provided
that we and the trustee may not, without the consent of the holder
of each outstanding debt security of such series affected
thereby:
- •
- reduce the amount of
debt securities of such series whose holders must consent to an
amendment, supplement or waiver;
- •
- reduce the rate of or
extend the time for payment of interest on any debt security of
such series;
- •
- reduce the principal
of or extend the fixed maturity of any debt security of such
series;
- •
- reduce the portion of
the principal amount of a discounted security of such series
payable upon acceleration of its maturity;
- •
- impair the right to
sue for the enforcement of payment at the maturity of the debt
security; or
- •
- make any debt
security of such series payable in money other than that stated in
such debt security. (Section 12.2)
Any past
default or failure to comply with any provisions may be waived with
the consent of the holders of a majority in principal amount of the
debt securities of the affected series, except a default in payment
of principal or interest or in respect of other provisions
requiring the consent of the holder of each such debt security of
that series in order to amend. Without the consent of any holder of
debt securities of such series, we and the trustee may amend or
supplement the indenture or the debt securities without notice to,
among others:
- •
- cure any ambiguity,
omission, defect or inconsistency;
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- •
- to provide for
uncertificated debt securities in addition to or in place of
certificated debt securities;
- •
- to comply with the
provisions of the indenture concerning mergers, consolidations and
transfers of all or substantially all of our assets;
- •
- to appoint a trustee
other than Wells Fargo Bank, National Association (or any successor
thereto) as trustee in respect of one or more series of debt
securities;
- •
- to add, change or
eliminate provisions of the indenture as shall be necessary or
desirable in accordance with any amendment to the Trust Indenture
Act of 1939; or
- •
- to make any change
that does not materially adversely affect the rights of any holder
of that series of debt securities. (Section 12.1)
Whenever we
request the trustee to take any action under the indenture,
including a request to amend or supplement the applicable indenture
without the consent of any holder of debt securities, we are
required to furnish the trustee with an officers' certificate and
an opinion of counsel to the effect that all conditions precedent
to the action have been complied with. Without the consent of any
holder of debt securities, the trustee may waive compliance with
any provisions of the indenture or the debt securities if the
waiver does not materially adversely affect the rights of any such
holder.
Default and Remedies
An "Event of
Default" under the indenture in respect of any series of debt
securities is:
- •
- default for
30 days in payment of interest on the debt securities of that
series;
- •
- default in payment of
principal, or any premium on the debt securities of that
series;
- •
- default for
30 days in the payment of any sinking fund installment on the
debt securities of that series;
- •
- failure by us for
90 days after notice to us to comply with any of our other
agreements in the applicable indenture for the benefit of holders
of debt securities of that series;
- •
- certain events of
bankruptcy, insolvency or reorganization; and
- •
- any other event of
default specifically provided for by the terms of such series, as
described in the related prospectus supplement. (Section 7.1)
If an Event of
Default (other than an Event of Default relating to certain events
of bankruptcy, insolvency or reorganization) occurs and is
continuing, the trustee or the holders of at least 25% in principal
amount of the outstanding debt securities of the affected series
may declare the debt securities of that series to be due and
payable immediately, but under certain conditions such acceleration
may be rescinded by the holders of a majority in principal amount
of the outstanding debt securities of the affected series. In case
of certain events of bankruptcy, insolvency or reorganization
involving us, the principal and accrued and unpaid interest on the
outstanding debt securities of the affected series will
automatically become immediately due and payable. In addition, an
Event of Default applicable to a particular series of debt
securities that causes the one or more series to be accelerated may
give rise to a cross-default under our existing and future
borrowing arrangements. (Section 7.2)
No holder of
debt securities may pursue any remedy against us under the
indenture (other than with respect to the right to receive payment
of principal (and premium, if any) or interest, if any) unless such
holder previously shall have given to the trustee written notice of
default and unless the holders of at least 25% in principal amount
of the debt securities of the affected series shall have requested
the trustee to pursue the remedy and shall have offered the trustee
indemnity or security
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satisfactory to it,
the trustee shall not have complied with the request within
60 days of receipt of the request and the offer of indemnity
or security, and the trustee shall not have received direction
inconsistent with the request during such 60-day period from the
holders of a majority in principal amount of the debt securities of
the affected series. (Section 7.5)
Holders of debt
securities may not enforce the indenture or the debt securities
except as provided in the indenture. The trustee may refuse to
enforce the indenture or the debt securities unless it receives
indemnity or security satisfactory to it from us or, under certain
circumstances, the holders of debt securities seeking to direct the
trustee to take certain actions under the indenture against any
loss, liability or expense. Subject to certain limitations, holders
of a majority in principal amount of the debt securities of any
series may direct the trustee in writing in its exercise of any
trust or power under the indenture in respect of that series. The
indenture provides that the trustee will give to the holders of
debt securities of any particular series notice of all defaults
actually known to it, within 90 days after the occurrence of
any default with respect to such debt securities, unless the
default shall have been cured or waived. The trustee may withhold
from holders of debt securities notice of any continuing default
(except a default in payment of principal or interest) if it
determines in good faith that withholding such notice is in the
interests of such holders. We are required annually to certify to
the trustee in writing as to the compliance by us with all
conditions and any covenants under the indenture and the absence of
a default thereunder, or as to any such default that
existed. (Section 10.3)
Our directors,
officers, employees and stockholders, as such, shall not have any
liability for any of our obligations under the debt securities or
the indenture or for any claim based on, in respect of, or by
reason of such obligations or their creation. By accepting a debt
security, each holder of such debt security waives and releases all
such claims and liability. This waiver and release are part of the
consideration for the issue of the debt securities.
(Section 15.1)
Satisfaction, Discharge and Defeasance
The indenture
provides, unless such provision is made inapplicable to the debt
securities of any series issued pursuant to the indenture, that we
may, subject to certain conditions described below, discharge
certain obligations to holders of debt securities that have not
already been delivered to the trustee for cancellation and that
either have become due and payable or will become due and payable
within one year (or scheduled for redemption within one year) by
irrevocably depositing with the trustee, in trust, funds in an
amount sufficient to pay the entire indebtedness on such debt
securities in respect of principal (and premium, if any) and
interest to the date of such deposit (if such debt securities have
become due and payable) or to the stated maturity and redemption
date, as the case may be.
The indenture
provides that we may elect either:
- •
- to defease and be
discharged from all of our obligations with respect to the debt
securities of a series (this is known as "defeasance"); or
- •
- to be released from
our obligations with respect to the debt securities of a series
under the restrictions described under "—Certain Covenants" or, if
provided pursuant to the indenture, our obligations under any other
covenant, and any omission to comply with such obligations will not
constitute an event of default with respect to those debt
securities (this is known as "covenant defeasance");
in either case upon
the irrevocable deposit by us with the trustee, in trust, of an
amount, in the currency in which those debt securities are payable
at stated maturity, or government obligations, or both, applicable
to those debt securities that through the scheduled payment of
principal and interest in accordance with their terms will provide
money in an amount sufficient in the opinion of a nationally
recognized investment bank, appraisal firm or firm of independent
certified public accountants to pay
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the principal of (and
premium, if any) and interest on those debt securities, and any
mandatory sinking fund or analogous payments thereon, on the
scheduled due dates.
Such a trust
will only be permitted to be established if, among other things, we
have delivered to the trustee an opinion of counsel to the effect
that the holders of such debt securities will not recognize income,
gain or loss for U.S. federal income tax purposes as a result of
such defeasance or covenant defeasance and will be subject to U.S.
federal income tax on the same amounts, in the same manner and at
the same times as would have been the case if the defeasance or
covenant defeasance had not occurred, and such opinion of counsel,
in the case of defeasance, will be required to refer to and be
based upon a ruling of the Internal Revenue Service or a change in
applicable U.S. federal income tax law occurring after the date of
the indenture. (Section 11.3)
Governing Law
The debt
securities and the indenture will be governed by and construed in
accordance with the laws of the State of New York.
Trustee
Wells Fargo
Bank, National Association will act as trustee under the indenture.
Wells Fargo Bank, National Association is a documentation agent and
a lender to us under our senior credit facility, and also provides
from time to time other services to us in the ordinary course of
business.
Additional Information
The indenture
is an exhibit to the registration statement of which this
prospectus is a part. Any person who receives this prospectus may
obtain a copy of such indenture without charge by writing to us at
the address listed under the caption "Where You Can Find More
Information."
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DESCRIPTION OF CAPITAL STOCK
General
This section
summarizes the general terms of our capital stock. The following
description of our capital stock does not purport to be complete
and is subject to, and qualified in its entirety by, our restated
certificate of incorporation ("certificate") and our amended and
restated bylaws ("bylaws"), each of which has been publicly filed
with the SEC and has been incorporated in this prospectus by
reference. See "Where You Can Find More Information" for
information on how to obtain copies.
Authorized Capital Stock
Our authorized
capital stock consists of 5,600,000,000 shares of common stock,
$0.001 par value, and 5,000,000 shares of preferred stock, $0.001
par value per share. We have one class of securities registered
under Section 12 of the Securities Exchange Act of 1934, our
common stock, which is listed on the Nasdaq Global Select Market
under the symbol "GILD."
Common Stock
Voting
rights. The
holders of our common stock are entitled to one vote per share on
all matters submitted to a vote of stockholders. A majority of the
votes cast is required for stockholders to elect directors (except
that directors are elected by a plurality of the votes cast in a
contested director election). All other matters put to a
stockholder vote generally require the approval of a majority of
the shares entitled to vote on the matter and present in person or
represented by proxy, except for certain matters for which our
certificate and bylaws require the approval of a majority of the
voting power of the outstanding shares entitled to vote on the
matter and except as otherwise required by law. Stockholders do not
have cumulative voting rights.
Dividends. The
holders of our common stock have the right to receive dividends if
they are declared by our board of directors and there are
sufficient funds to legally pay dividends, subject to the rights of
the holders of any outstanding preferred stock to receive
preferential dividends.
Liquidation. Upon
our liquidation, holders of our common stock would share ratably in
any assets available for distribution to stockholders after payment
of all of our obligations and the aggregate liquidation preference
(including accrued and unpaid dividends) of any outstanding
preferred stock.
Preemptive,
subscription and conversion rights. Our common stock is not redeemable and
has no preemptive, subscription or conversion rights.
Transfer
agent. The
transfer agent and registrar for our common stock is Computershare
Trust Company, N.A.
The rights,
preferences and privileges of holders of our common stock are
subject to the rights of the holders of shares of any series of
preferred stock which we may issue.
Preferred Stock
Our board of
directors has the authority, without further action by our
stockholders, to issue up to 5,000,000 shares of preferred stock,
none of which are outstanding. Our board of directors may issue
preferred stock in one or more series and fix the rights,
preferences, privileges and restrictions of such preferred stock,
including:
- •
- dividend
rights;
- •
- dividend rate;
- •
- conversion
rights;
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- •
- voting rights;
- •
- rights and terms of
redemption;
- •
- redemption price or
prices;
- •
- the liquidation
preferences of any wholly unissued series of preferred stock;
and
- •
- the number of shares
constituting any series or the designation of such
series.
The issuance of
preferred stock could decrease the amount of earnings and assets
available for distribution to the holders of our common stock or
adversely affect the rights and powers, including voting rights, of
the holders of our common stock.
Anti-Takeover Provisions
Some provisions
of our certificate, bylaws and Delaware law may have the effect of
delaying, deferring or discouraging another party from acquiring
control of us.
Our certificate
and bylaws provide that:
- •
- the board of
directors is authorized to issue preferred stock without
stockholder approval;
- •
- the board of
directors is expressly authorized to make, alter or repeal any
provision of our bylaws;
- •
- stockholders may not
cumulate votes in the election of directors;
- •
- special meetings of
the stockholders may be called by the stockholders only upon the
written request of one or more stockholders of record that own, or
who are acting on behalf of persons who own, shares representing
20% or more of the voting power of the then outstanding shares of
capital stock entitled to vote on the matter or matters to be
brought before the proposed special meeting, and otherwise in
accordance with the certificate and bylaws;
- •
- stockholders must
satisfy advance notice procedures to submit proposals or nominate
directors for consideration at a stockholders' meeting;
- •
- a stockholder, or a
group of up to 20 stockholders, owning 3% or more of our
outstanding common stock continuously for at least three years may
nominate and include in our proxy materials director nominees
constituting up to the greater of (i) 20% of the board of
directors (rounded down to the nearest whole number) or
(ii) two directors, provided that the stockholder(s) and the
nominee(s) satisfy the requirements specified in our bylaws and
subject to the other terms and conditions set forth in our
bylaws;
- •
- action by
stockholders by written consent may be taken only upon written
request that a record date be fixed for such purpose by one or more
stockholders of record that own shares representing 20% or more of
the then outstanding shares of common stock, and otherwise in
accordance with the certificate and bylaws; and
- •
- we will indemnify
officers and directors against losses that they may incur as a
result of investigations and legal proceedings resulting from their
services to us, which may include services in connection with
takeover defense measures.
In addition, we
are subject to the provisions of Section 203 of the Delaware
General Corporation Law ("DGCL"). In general, the statute prohibits
a publicly held Delaware corporation from engaging in a "business
combination" with an "interested stockholder" for a period of three
years after the date that the person became an interested
stockholder unless, with some exceptions, the business combination
or the transaction in which the person became an interested
stockholder is approved in a prescribed manner. Generally, a
"business combination" includes a merger, asset or stock sale or
other
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transaction resulting
in a financial benefit to the stockholder, and an "interested
stockholder" is a person who, together with affiliates and
associates, owns (or within three years prior, did own) 15% or more
of the corporation's outstanding voting stock. This provision may
have the effect of delaying, deferring or preventing a change in
control without further action by the stockholders.
Exclusive Forum
Our certificate
provides that unless we consent in writing to the selection of an
alternative forum, the Court of Chancery of the State of Delaware
will be the sole and exclusive forum for: (i) any derivative
action or proceeding brought on our behalf; (ii) any action
asserting a claim of breach of a fiduciary duty owed by any
director, officer, employee or agent of Gilead or our stockholders;
(iii) any action asserting a claim against us arising pursuant
to any provision of the DGCL, or our certificate or our bylaws; or
(iv) any action asserting a claim against us or any of our
directors, officers, employees or agents governed by the internal
affairs doctrine; provided, however, that in the event the Court of
Chancery of the State of Delaware lacks jurisdiction over any such
action or proceeding, the sole and exclusive forum for such action
or proceeding shall be another state or federal court located
within the State of Delaware. Our certificate also provides that
any person or entity purchasing or otherwise acquiring any interest
in shares of our capital stock will be deemed to have notice of and
to have consented to this choice of forum provision. It is possible
that a court of law could rule that the choice of forum provision
contained in our certificate is inapplicable or unenforceable if it
is challenged in a proceeding or otherwise.
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DESCRIPTION OF DEPOSITARY
SHARES
We may issue
depositary shares representing fractional interests in shares of
our preferred stock of any series. The following description sets
forth certain general terms and provisions of the depositary shares
to which any prospectus supplement may relate. The particular terms
of the depositary shares to which any prospectus supplement may
relate and the extent, if any, to which the general terms and
provisions may apply to the depositary shares so offered will be
described in the applicable prospectus supplement. To the extent
that any particular terms of the depositary shares, depositary
agreements and depositary receipts described in a prospectus
supplement differ from any of the terms described below, then the
terms described below will be deemed to have been superseded by
that prospectus supplement. We encourage you to read the applicable
depositary agreement and depositary receipts for additional
information before you decide whether to purchase any of our
depositary shares.
In connection
with the issuance of any depositary shares, we will enter into a
depositary agreement with a bank or trust company, as depositary,
which will be named in the applicable prospectus supplement.
Depositary shares will be evidenced by depositary receipts issued
pursuant to the related depositary agreement. Immediately following
our issuance of the security related to the depositary shares, we
will deposit the shares of our preferred stock with the relevant
depositary and will cause the depositary to issue, on our behalf,
the related depositary receipts. Subject to the terms of the
depositary agreement, each owner of a depositary receipt will be
entitled, in proportion to the fractional interest in the share of
preferred stock represented by the related depositary share, to all
the rights, preferences and privileges of, and will be subject to
all of the limitations and restrictions on, the preferred stock
represented by the depositary receipt (including, if applicable,
dividend, voting, conversion, exchange, redemption, sinking fund,
subscription and liquidation rights).
DESCRIPTION OF WARRANTS
We may issue
warrants to purchase debt securities, preferred stock or common
stock. We may issue warrants independently or together with other
securities. Warrants sold with other securities may be attached to
or separate from the other securities. We will issue warrants under
one or more warrant agreements between us and a bank or trust
company, as warrant agent, that we will name in the prospectus
supplement. The warrant agent will act solely as our agent in
connection with the warrants and will not assume any obligation or
relationship of agency or trust for or with any holders or
beneficial owners of warrants.
The prospectus
supplement relating to any warrants we offer will include specific
terms relating to the offering. These terms may include some or all
of the following:
- •
- the title of such
warrants;
- •
- the aggregate number
of such warrants;
- •
- the price or prices
at which such warrants will be issued;
- •
- the currency or
currencies, including composite currencies, in which the price of
such warrants may be payable;
- •
- the designation and
terms of the securities purchasable upon exercise of such warrants
and the number of such securities issuable upon exercise of such
warrants;
- •
- the price at which
and the currency or currencies, including composite currencies, in
which the securities purchasable upon exercise of such warrants may
be purchased;
- •
- the date on which the
right to exercise such warrants shall commence and the date on
which such right will expire;
- •
- whether such warrants
will be issued in registered form or bearer form;
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- •
- if applicable, the
minimum or maximum amount of such warrants which may be exercised
at any one time;
- •
- if applicable, the
designation and terms of the securities with which such warrants
are issued and the number of such warrants issued with each such
security;
- •
- if applicable, the
date on and after which such warrants and the related securities
will be separately transferable;
- •
- information with
respect to book-entry procedures, if any; and
- •
- any other terms of
such warrants, including terms, procedures and limitations relating
to the exchange and exercise of such warrants.
The description
in the prospectus supplement will not necessarily be complete and
will be qualified in its entirety by reference to the applicable
warrant agreement, which will be filed with the SEC.
DESCRIPTION OF SUBSCRIPTION
RIGHTS
We may issue
subscription rights to purchase debt securities, preferred stock or
common stock. These subscription rights may be issued independently
or together with any other security offered hereby and may or may
not be transferable by the shareholder receiving the subscription
rights in such offering. In connection with any offering of
subscription rights, we may enter into a standby arrangement with
one or more underwriters or other purchasers pursuant to which the
underwriters or other purchasers may be required to purchase any
securities remaining unsubscribed for after such
offering.
The applicable
prospectus supplement will describe the specific terms of any
offering of subscription rights for which this prospectus is being
delivered, including the following:
- •
- the price, if any,
for the subscription rights;
- •
- the exercise price
payable for each share of debt securities, preferred stock or
common stock upon the exercise of the subscription rights;
- •
- the number of
subscription rights issued to each shareholder;
- •
- the number and terms
of the shares of debt securities, preferred stock or common stock
which may be purchased per each subscription right;
- •
- the extent to which
the subscription rights are transferable;
- •
- any other terms of
the subscription rights, including the terms, procedures and
limitations relating to the exchange and exercise of the
subscription rights;
- •
- the date on which the
right to exercise the subscription rights shall commence, and the
date on which the subscription rights shall expire;
- •
- the extent to which
the subscription rights may include an over-subscription privilege
with respect to unsubscribed securities; and
- •
- if applicable, the
material terms of any standby underwriting or purchase arrangement
entered into by us in connection with the offering of subscription
rights.
The description
in the applicable prospectus supplement of any subscription rights
we offer will not necessarily be complete and will be qualified in
its entirety by reference to the applicable subscription rights
certificate, which will be filed with the SEC if we offer
subscription rights. For more information on how you can obtain
copies of any subscription rights certificate if we offer
subscription rights, please see the section entitled "Where You Can
Find More Information."
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DESCRIPTION OF STOCK PURCHASE CONTRACTS AND STOCK
PURCHASE UNITS
We may issue
stock purchase contracts, including contracts obligating holders to
purchase from or sell to us, and us to sell to or purchase from the
holders, a specified number of shares of common stock or shares of
preferred stock at a future date or dates. The consideration per
share of common stock or preferred stock and the number of shares
of each may be fixed at the time the stock purchase contracts are
issued or may be determined by reference to a specific formula set
forth in the stock purchase contracts. The stock purchase contracts
may be issued separately or as part of units, often known as stock
purchase units, consisting of a stock purchase contract and any
combination of:
- •
- debt securities,
or
- •
- debt obligations of
third parties, including U.S. Treasury securities,
which may secure the
holders' obligations to purchase the common stock or preferred
stock under the stock purchase contracts. The stock purchase
contracts may require us to make periodic payments to the holders
of the stock purchase units or vice versa, and these payments may
be unsecured or pre-funded on some basis. The stock purchase
contracts may require holders to secure their obligations under
those contracts in a specified manner.
The applicable
prospectus supplement will describe the terms of the stock purchase
contracts and stock purchase units, including, if applicable,
collateral arrangements relating thereto.
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PLAN OF DISTRIBUTION
We may offer
and sell the securities being offered hereby in one or more of the
following ways from time to time:
- •
- to underwriters or
dealers for resale to the public or to institutional
investors;
- •
- directly to
institutional investors;
- •
- directly to a limited
number of purchasers or to a single purchaser;
- •
- through agents to the
public or to institutional investors; or
- •
- through a combination
of any of these methods of sale.
The prospectus
supplement with respect to each series of securities will state the
terms of the offering of the securities, including:
- •
- the offering terms,
including the name or names of any underwriters, dealers or
agents;
- •
- the purchase price of
the securities and the net proceeds to be received by us from the
sale;
- •
- any underwriting
discounts or agency fees and other items constituting underwriters'
or agents' compensation;
- •
- any public offering
price;
- •
- any discounts or
concessions allowed or reallowed or paid to dealers; and
- •
- any securities
exchange on which the securities may be listed.
If we use
underwriters or dealers in the sale, the securities will be
acquired by the underwriters or dealers for their own account and
may be resold from time to time in one or more transactions,
including:
- •
- privately negotiated
transactions;
- •
- at a fixed public
offering price or prices, which may be changed;
- •
- in "at the market
offerings" within the meaning of Rule 415(a)(4) of the
Securities Act;
- •
- at prices related to
prevailing market prices; or
- •
- at negotiated
prices.
Any initial
public offering price and any discounts or concessions allowed or
reallowed or paid to dealers may be changed from time to
time.
If underwriters
are used in the sale of any securities, the securities may be
offered either to the public through underwriting syndicates
represented by managing underwriters, or directly by underwriters.
Generally, the underwriters' obligations to purchase the securities
will be subject to certain conditions precedent. The underwriters
will be obligated to purchase all of the securities if they
purchase any of the securities.
We may enter
into derivative transactions with third parties, or sell securities
not covered by this prospectus to third parties in privately
negotiated transactions. If the applicable prospectus supplement
indicates, in connection with those derivatives, the third parties
may sell securities covered by this prospectus and the applicable
prospectus supplement, including short sale transactions. If so,
the third party may use securities pledged by us or borrowed from
us or others to settle those sales or to close out any related open
borrowings of common shares, and may use securities received from
us in settlement of those derivatives to close out any related open
borrowings of common shares. The third party in such sale
transactions will be an underwriter and, if not identified in this
prospectus, will be
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identified in the
applicable prospectus supplement or a post-effective amendment to
this registration statement.
If indicated in
an applicable prospectus supplement, we may sell the securities
through agents from time to time. The applicable prospectus
supplement will name any agent involved in the offer or sale of the
securities and any commissions we pay to them. Generally, any agent
will be acting on a best efforts basis for the period of its
appointment. We may authorize underwriters, dealers or agents to
solicit offers by certain purchasers to purchase the securities
from us at the public offering price set forth in the applicable
prospectus supplement pursuant to delayed delivery contracts
providing for payment and delivery on a specified date in the
future. The delayed delivery contracts will be subject only to
those conditions set forth in the applicable prospectus supplement,
and the applicable prospectus supplement will set forth any
commissions we pay for solicitation of these delayed delivery
contracts.
Offered
securities may also be offered and sold, if so indicated in the
applicable prospectus supplement, in connection with a remarketing
upon their purchase, in accordance with a redemption or repayment
pursuant to their terms, or otherwise, by one or more remarketing
firms, acting as principals for their own accounts or as agents for
us. Any remarketing firm will be identified and the terms of its
agreements, if any, with us and its compensation will be described
in the applicable prospectus supplement.
Agents,
underwriters and other third parties described above may be
entitled to indemnification by us against certain civil liabilities
under the Securities Act, or to contribution with respect to
payments which the agents or underwriters may be required to make
in respect thereof. Agents, underwriters and such other third
parties may be customers of, engage in transactions with, or
perform services for us in the ordinary course of
business.
Each series of
securities will be a new issue of securities and will have no
established trading market, other than our common stock, which is
listed on the NASDAQ Global Select Market. Any common stock sold
will be listed on the NASDAQ Global Select Market, upon official
notice of issuance. The securities other than the common stock may
or may not be listed on a national securities exchange and no
assurance can be given that there will be a secondary market for
any such securities or liquidity in the secondary market if one
develops. Any underwriters to whom securities are sold by us for
public offering and sale may make a market in the securities, but
such underwriters will not be obligated to do so and may
discontinue any market making at any time without
notice.
LEGAL MATTERS
In connection
with particular offerings of the securities in the future, unless
otherwise stated in the applicable prospectus supplement, the
validity of those securities will be passed upon for us by Davis
Polk & Wardwell LLP, New York, New York. Any
underwriters will also be advised about legal matters by their own
counsel, which will be named in the prospectus
supplement.
EXPERTS
The
consolidated financial statements of Gilead Sciences, Inc.
appearing in Gilead Sciences, Inc.'s
Annual Report (Form 10-K) for the year ended December 31,
2019 (including the schedule appearing therein), and the
effectiveness of Gilead Sciences, Inc.'s internal control over
financial reporting as of December 31, 2019, have been audited
by Ernst & Young LLP, independent registered public
accounting firm, as set forth in their reports thereon, included
therein, and incorporated herein by reference. Such consolidated
financial statements and schedule are incorporated herein by
reference in reliance upon such reports given on the authority of
such firm as experts in accounting and auditing.
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