Exhibit 10.519

CHIRON CORPORATION
CORPORATE GOVERNANCE GUIDELINES

INTRODUCTION

The Board of Directors of Chiron Corporation (“Chiron”) is elected by the
stockholders of Chiron to serve their interests through oversight of management
and Chiron’s business.  The primary responsibility of the directors is to
exercise their business judgment in the best interests of Chiron and its
stockholders.  The Board, acting on the recommendation of its Nominating and
Corporate Governance Committee, has developed and adopted these corporate
governance principles (the “Guidelines”) to promote the functioning of the Board
and its committees, to promote the interests of stockholders and to set forth a
common set of expectations as to how the Board, its various committees and
individual directors should perform their functions.  Chiron is party to a
Governance Agreement, dated as of November 20, 1994, with Novartis AG
(“Novartis”), as amended (as it may be further amended from time to time, the
“Governance Agreement”) and these guidelines have been developed in light of,
among other things, that agreement.

BOARD COMPOSITION

The composition of the Board should balance the following goals:

•                  The size of the Board should facilitate substantive
discussions of the whole Board in which each director can participate
meaningfully;

 

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•                  The composition of the Board should encompass a broad range
of skills, expertise, industry knowledge, diversity of opinion and contacts
relevant to Chiron’s business;

•                  The composition of the Board shall reflect the requirements
of the Governance Agreement;

•                  A substantial majority of the Board shall consist of
directors who are neither officers or employees of Chiron or its subsidiaries
nor have a relationship which, in the opinion of the Board, would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director, and who are otherwise “independent” under the rules of the Nasdaq
Stock Market, Inc.

SELECTION OF CHAIRPERSON OF THE BOARD AND CHIEF EXECUTIVE OFFICER

The Board is free to select its Chairperson and Chiron’s Chief Executive Officer
(the “CEO”) in the manner it considers in the best interests of Chiron at any
given point in time.  These positions may be filled by one individual or by two
different individuals.

SELECTION OF DIRECTORS

Nominations.  Subject to the Governance Agreement and the right of Novartis to
designate a specific number of the members of the Board pursuant thereto, the
Nominating and Corporate Governance Committee is responsible for determining

 

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the slate of director nominees for election to Chiron’s Board of Directors and
the individuals to fill vacancies occurring between annual meetings of
stockholders.

Criteria.  The Nominating and Corporate Governance Committee shall determine new
nominees for the position of independent director who satisfy the requirements
of the Nasdaq Stock Market, Inc., the Governance Agreement and the following
criteria:

•                  Personal qualities and characteristics, accomplishments and
reputation in the business community;

•                  Current knowledge and contacts in the communities in which
Chiron does business and in Chiron’s industry or other industries relevant to
Chiron’s business;

•                  Ability and willingness to commit adequate time to Board and
committee matters;

•                  The fit of the individual’s skills and personality with those
of other directors and potential directors in building a Board that is
effective, collegial and responsive to the needs of Chiron; and

•                  Diversity of viewpoints, background, experience and other
factors.

Invitation.  The invitation to join the Board should be extended by the Board
itself via the Chairperson of the Board and CEO of Chiron, together with an
independent director, when deemed appropriate.

 

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Orientation and Continuing Education.  Management, working with the Board, will
provide an orientation process for new directors, including background material
on Chiron, its business plan and its risk profile, and meetings with senior
management.  Periodically, management should prepare additional educational
sessions for directors on matters relevant to Chiron, its business plan and risk
profile.

ELECTION TERM

The Board does not believe it should establish term limits.

RETIREMENT OF DIRECTORS

The Board does not believe it should establish a mandatory retirement age.  In
determining the slate of director nominees to stand for election or in filling
any vacancy, the Nominating and Corporate Governance Committee will consider the
age of each nominee among all other relevant factors.

BOARD MEETINGS

The Board currently plans four meetings each year, with further meetings to
occur (or action to be taken by unanimous consent) at the discretion of the
Board.  The meetings will usually consist of committee meetings and the Board
meeting, extended over two or three days.

The agenda for each Board meeting will be determined by the Board Chair in
consultation with the Chief Executive Officer.  The agenda will be prepared by
the Corporate Secretary.  Management will seek to provide to all directors an

 

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agenda and appropriate materials in advance of meetings, although the Board
recognizes that this will not always be consistent with the timing of
transactions and the operations of the business and that in certain cases it may
not be possible.

 

EXECUTIVE SESSIONS

All non-management directors will have four regularly scheduled meetings each
year, at which only non-management directors are present.  In addition, to
ensure free and open discussion and communication among the independent
directors of the Board, the independent directors will have two regularly
scheduled executive sessions each year, and more frequently as necessary or
desirable, in conjunction with regularly scheduled meetings of the Board.  The
non-management and independent directors shall designate a presiding director to
preside at their executive sessions.  The presiding director shall establish the
agenda for each of these meetings and may invite additional participants as
appropriate.

THE COMMITTEES OF THE BOARD

Chiron shall have at least the committees required by the rules of the Nasdaq
Stock Market, Inc. and the Governance Agreement.  Except to the extent that the
Board has delegated or delegates in the future its authority to a committee, all
power and authority of the Board is reserved by the Board to itself.  Currently,
Chiron’s committees consist of the Audit Committee, the Compensation

 

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Committee, a nominating committee, which at Chiron is called the Nominating and
Corporate Governance Committee, the Stock Option Plan Administration Committee
and, as may be required from time to time under the terms of the Governance
Agreement, a Strategic Planning Committee.

The Chair of each Committee shall set the agenda for meetings of his or her
Committee.  All directors, whether members of a committee or not, are invited to
make suggestions to a committee chair for additions to the agenda of his or her
committee or to request that an item from a committee agenda be considered by
the Board.  Each committee chair will give a periodic report of his or her
committee’s activities to the Board.

Each of the Nominating and Corporate Governance Committee, the Audit Committee
and the Compensation Committee shall be composed of directors who are not
officers or employees of Chiron or its subsidiaries or any other individual
having a relationship which, in the opinion of the Board, would interfere with
the exercise of independent judgment in carrying out the responsibilities of a
director, and who are otherwise “independent” and qualified to serve as a member
of such committee under applicable law and under the rules of the Nasdaq Stock
Market, Inc.  The required qualifications for the members of each committee
shall be set out in the respective committees’ charters.  A director may serve
on more than one committee for which he or she qualifies.

 

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MANAGEMENT DEVELOPMENT AND CEO SUCCESSION

At least annually, the Board shall review and concur in a succession plan,
developed by management, addressing the policies and principles for selecting a
successor to the CEO, both in an emergency situation and in the ordinary course
of business.  The succession plan should include an assessment of the
experience, performance, skills and planned career paths for possible successors
to the CEO.   The Board shall receive and review at least annually reports from
the CEO regarding senior management development.

TRANSACTIONS WITH NOVARTIS

The Governance Agreement governs certain aspects of the relationship between
Chiron and Novartis.  Among other things, under the Governance Agreement, Chiron
will not enter into specified agreements or transactions with Novartis without
first obtaining the approval of the Independent Directors (as defined in the
Governance Agreement) or requisite stockholder approval.  Such governance
principles of the Governance Agreement will be considered to be incorporated in,
and a part of, these guidelines.

BOARD COMPENSATION

The Compensation Committee shall review periodically and not less frequently
than every three years, and report to the Board with its recommendations
regarding, the components and amount of Board compensation, including its
evaluation of compensation of boards of similarly situated companies.  In order
to align the interests of directors and stockholders, the Board believes that
directors

 

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should receive a significant part of their on-going compensation in the form of
equity in Chiron.  Such equity compensation should consist of restricted share
rights which entitle directors to receive shares of Chiron common stock only
upon cessation of service on the Board.  The Board believes that such restricted
share rights, by requiring directors to maintain an ownership interest in Chiron
throughout the directors’ tenure, will firmly align directors’ interests with
the long-term interests of Chiron’s stockholders.  The Board also intends to
continue to use stock option grants in order to attract leading candidates to
serve on the Board, but a significant portion of the stock issued to directors
upon exercise of options should be subject to certain restrictions on transfer
to further align the directors’ interests with the long-term interests of
stockholders.

EXPECTATIONS OF DIRECTORS

The business and affairs of Chiron shall be managed by or under the direction of
the Board in accordance with Delaware law.  In performing their duties, the
primary responsibility of the directors is to exercise their business judgment
in the best interests of Chiron and its stockholders.  The Board has developed a
number of specific expectations of directors to promote the discharge of this
responsibility and the efficient conduct of the Board’s business.

Commitment and Attendance.  All directors should make all reasonable efforts to
attend meetings of the Board and meetings of committees of which they are
members.  Members may attend by telephone or video conference (when available)
to mitigate conflicts.

 

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Participation in Meetings.  Each director should be sufficiently familiar with
the business of Chiron, including its financial statements and capital
structure, and the risks and competition it faces, to facilitate active and
effective participation in the deliberations of the Board and of each committee
on which he or she serves.  Upon request, management will make appropriate
personnel available to answer any questions a director may have about any aspect
of Chiron’s business.  Directors should review the materials provided by
management and advisors in advance of the meetings of the Board and its
committees and should arrive prepared to discuss the issues presented.

Loyalty and Ethics.  In their roles as directors, all directors owe a duty of
loyalty to Chiron.  This duty of loyalty mandates that the interests of Chiron
take precedence over any interests possessed by a director.

Chiron has adopted a Board of Directors Policy Re:  Conflicts of Interest (the
“Policy”), and a Code of Conduct (the “Code”), which includes a compliance
program for enforcement.  Both the Policy and the Code deal with activities of
directors, particularly with respect to potential conflicts of interest and the
taking of corporate opportunities for personal use.  The Policy provides, among
other things, that conflicts of interest or potential conflicts of interest
concerning a director or the CEO are to be reported to the Nominating and
Corporate Governance Committee.  Directors should be familiar with the Policy’s
and the Code’s provisions in these areas and should consult with Chiron’s
counsel in the event of any issues.

 

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Other Directorships.  Chiron values the experience directors bring from other
boards on which they serve, but recognizes that those boards may also present
demands on a director’s time and availability and may present conflicts or legal
issues.  Directors should advise the chairperson of the Nominating and Corporate
Governance Committee and the CEO before accepting membership on other boards of
directors or other significant commitments involving affiliation with other
businesses or governmental units.

Contact with Management.  All directors are invited to contact the CEO at any
time to discuss any aspect of Chiron’s business.  Directors also have complete
access to other members of management.  The Board expects that there will be
frequent opportunities for directors to meet with the CEO and other members of
management in Board and committee meetings and in other formal or informal
settings.

Further, the Board encourages management to, from time to time, bring managers
into Board meetings who: (a) can provide additional insight into the items being
discussed because of personal involvement and substantial knowledge in those
areas, and/or (b) are managers with future potential that the senior management
believes should be given exposure to the Board.

Contact with Other Constituencies.  It is important that Chiron speak to
employees and outside constituencies with a single voice, and that management
serve as the primary spokesperson.

 

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Confidentiality.  The proceedings and deliberations of the Board and its
committees are confidential.  Each director shall maintain the confidentiality
of information received in connection with his or her service as a director.

EVALUATING BOARD PERFORMANCE

The Board, acting through the Nominating and Corporate Governance Committee,
should conduct a self-evaluation at least annually to determine whether it is
functioning effectively.  The Nominating and Corporate Governance Committee
should periodically consider the mix of skills and experience that directors
bring to the Board to assess whether the Board has the necessary tools to
perform its oversight function effectively.

Each committee of the Board should conduct a self-evaluation at least annually
and report the results to the Board.  Each committee’s evaluation must compare
the performance of the committee with the requirements of its written charter,
if any.

RELIANCE ON MANAGEMENT AND OUTSIDE ADVICE

In performing its functions, the Board is entitled to rely on the advice,
reports and opinions of management, counsel, accountants, auditors and other
expert advisors.  The Board shall have the authority to retain and approve the
fees and retention terms of its outside advisors.

 

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