Exhibit 10.523

 

CHIRON CORPORATION

 

AMENDMENT NO. 1 TO THE
 2004 STOCK COMPENSATION PLAN

 

Effective December 1, 2005, the 2004 Stock Compensation Plan is hereby amended
as follows:

 

1.                                       Section VII (b)(1) is hereby amended
and restated in its entirety to read as follows:

 

“(1)                            AUTOMATIC SHARE RIGHT AWARD. EACH ELIGIBLE
DIRECTOR SHALL RECEIVE AN ANNUAL SHARE RIGHTS GRANT (THE “AUTOMATIC SHARE RIGHT
AWARD”) ON THE LAST BUSINESS DAY OF APRIL EACH YEAR (THE “AUTOMATIC GRANT
DATE”). HOWEVER, WITH RESPECT TO THE 2002 YEAR, SHARE RIGHTS SHALL BE GRANTED ON
JUNE 30, 2003. AN AUTOMATIC SHARE RIGHT SHALL BE FULLY VESTED AND ENTITLE THE
HOLDER TO RECEIVE A NUMBER OF SHARES OF COMMON STOCK FOLLOWING CESSATION OF
SERVICE ON THE BOARD PURSUANT TO HIS OR HER ELECTION, AS DESCRIBED BELOW. THE
NUMBER OF SHARE RIGHTS SUBJECT TO EACH AUTOMATIC SHARE RIGHT AWARD SHALL BE THAT
NUMBER OF SHARES (ROUNDED TO THE NEAREST WHOLE SHARE) EQUAL TO (I) $160,000
DIVIDED BY (II) THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE DATE
OF GRANT; PROVIDED THAT EACH ELIGIBLE DIRECTOR WHO WAS NEWLY ELECTED OR
APPOINTED ON A DATE AFTER THE PREVIOUS YEAR’S AUTOMATIC GRANT DATE (OR, WITH
RESPECT TO THE JUNE 30, 2003 GRANTS, AFTER JUNE 30, 2002), WILL RECEIVE IN LIEU
THEREOF ON THE CURRENT AUTOMATIC GRANT DATE, AN AUTOMATIC SHARE RIGHT AWARD FOR
A PRO RATA NUMBER OF WHOLE SHARES OF COMMON STOCK DETERMINED BY MULTIPLYING
$13,333 BY THE NUMBER OF CALENDAR MONTHS (CALCULATED TO THE NEAREST WHOLE MONTH,
BUT NOT TO EXCEED 12) BETWEEN THE CONTINUING ELIGIBLE DIRECTOR’S ELECTION OR
APPOINTMENT DATE AND THE CURRENT AUTOMATIC GRANT DATE AND DIVIDING THE PRODUCT
BY THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE AUTOMATIC GRANT
DATE. IN THE EVENT OF A CHANGE IN CONTROL WHICH OCCURS ON A DATE OTHER THAN THE
AUTOMATIC GRANT DATE, EACH ELIGIBLE DIRECTOR WHO IS NOT TO CONTINUE TO SERVE AS
AN ELIGIBLE DIRECTOR FOLLOWING THE CHANGE IN CONTROL SHALL RECEIVE, ON THE
EFFECTIVE DATE OF THE CHANGE IN CONTROL, AN AUTOMATIC SHARE RIGHT AWARD FOR A
PRO RATA NUMBER OF WHOLE SHARES OF COMMON STOCK DETERMINED BY MULTIPLYING
$13,333 BY THE NUMBER OF CALENDAR MONTHS (CALCULATED TO THE NEAREST WHOLE MONTH,
BUT NOT TO EXCEED 12) BETWEEN THE LAST AUTOMATIC GRANT DATE PRIOR TO THE CHANGE
IN CONTROL AND THE EFFECTIVE DATE OF THE CHANGE IN CONTROL AND DIVIDING THE
PRODUCT BY THE FAIR MARKET VALUE OF ONE SHARE OF COMMON STOCK ON THE DATE OF THE
CHANGE IN CONTROL.

 

2.                                       Section VII(b)(4) is hereby amended and
restated in its entirety to read as follows:

 

“(4)                            DISTRIBUTION ELECTIONS. Each Eligible Director
shall elect to receive a distribution from his or her Share Right Account either
(i) within thirty (30) days following his or her termination of Board service or
(ii) on February 1 of the year following the year of his or her termination of
Board service, and to receive payments from his or her Share Right Account
either (i) in the form of a single lump sum or (ii) in up to ten (10) annual
installments. Such election must be filed (i) before July 30, 2003 for directors
eligible to receive Automatic Share Rights in the 2003 year, (ii) for all
Eligible Directors first eligible to receive Automatic Share Right Awards in
2004, before the date of grant of the first Automatic Share Right and (iii) for
all Eligible Directors first eligible to receive Automatic Share Right Awards
after 2004, by the end of the calendar year immediately preceding the year of
the award. An election will apply to any

 

--------------------------------------------------------------------------------

 

and all Automatic Share Right Awards received by the Eligible Director and will
remain in effect until all payments from the Eligible Director’s Share Right
Account have been made. An election made after 2004 shall become irrevocable on
December 31 of the calendar year in which it is made. An Eligible Director
may change the distribution election in effect for his or her Share Right
Account by submitting that change to the Compensation Committee or its delegate
in writing. However, the subsequent election shall have no force or effect and
shall not become effective until the expiration of the 12-month period measured
from the filing date of such election. In addition, such election shall be valid
only if (A) such election defers any distribution for at least 5 years after the
date that the distribution would have otherwise been made or commenced in the
absence of such subsequent election and, (B) in the case of a scheduled
distribution to be made in installments, such election is made at least twelve
(12) months before the date of the first of the scheduled payments. In no event
may any change to the distribution election in effect for a Share Right Account
result in any acceleration of the distribution of that account under Code
Section 409A. Notwithstanding the foregoing, each Eligible Director may change
his or her prior election with respect to the time and form of distribution of
his or her Share Right Account by submitting the new election on such form as
provided by the Corporation on or prior to December 30, 2005.”

 

3.                                       A new Section VII(b)(6) is hereby added
to read as follows:

 

“CHANGE IN CONTROL. A Change in Control shall deemed to have occurred as of the
first day that any one or more of the following conditions is satisfied and
regulatory approval has been granted if necessary:

 

(i)                                     The “beneficial ownership” (as defined
in Rule 13d-3 under the Securities Exchange Act of 1934) of securities
representing more than thirty percent (30%) of the combined voting power of all
securities of the Company is acquired, directly or indirectly, by a Person
(other than the Company, any trustee or other fiduciary holding securities under
an employee benefit plan of the Company or an affiliate thereof, or any
corporation owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the Company);
or

 

(ii)                                  During any period of two (2) consecutive
years, individuals who at the beginning of such period constitute the Board of
Directors of the Company and any new director (other than a director designated
by a person who has entered into an agreement with the Company to effect a
transaction described in i. above) whose election by the Board of Directors or
nomination for election by the Company’s stockholders was approved by a vote of
at least two-thirds of the directors then still in office who either were
directors at the beginning of the period or whose election or nomination for
election was previously so approved, cease for any reason to constitute a
majority thereof; or

 

(iii)                               The stockholders of the Company approve a
definitive agreement to sell or otherwise dispose of all or substantially all of
its assets, or adopt a plan for liquidation, provided that such sale or
liquidation has not been abandoned.

 

2

--------------------------------------------------------------------------------

 

Notwithstanding anything else contained herein to the contrary, in no event
shall a Change in Control be deemed to have occurred by reason of a purchase, or
series of purchases of Corporation stock by Novartis or its successor such that
the acquiring entity remains subject to the terms of that certain Governance
Agreement dated as of November 20, 1994, as amended, provided the acquiring
entity’s Corporation stock holdings, direct or indirect, in the aggregate,
represent less than seventy-nine and nine-tenths of a percent (79.9%) of the
combined voting power of all outstanding Corporation securities.”

 

4.                                       Except as otherwise amended hereunder,
the provisions of the 2004 Stock Compensation Plan shall continue in full force
and effect.

 

3

--------------------------------------------------------------------------------