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Exhibit 10.506

Non-Employee Director

CHIRON CORPORATION.
June 27, 2002

Dear Non-Employee Director Stock Option Plan Participant:

        I am pleased to inform you that the Compensation Committee of the Board
of Directors has approved an amendment to each of your outstanding stock options
listed on Exhibit A (the "Option") to provide you with greater protection in the
event of a certain corporate transactions.

        The amendment is set forth in detail below. In general terms, the
amendment does the following:

        First, the amendment provides that your Option will immediately vest
upon a Qualifying Termination of your services that occurs within twenty-four
(24) months after a Change in Control. (See below for definitions.)

        Second, the amendment provides that your Option will vest immediately
before certain corporate transactions if your Option will not continue or be
assumed by the successor corporation or replaced with a comparable option. Those
transactions generally include a sale or disposition of all or substantially all
of the assets of the Corporation, a merger or consolidation with another entity
or a reorganization or liquidation of the Corporation. Before the amendment,
this protection was not available for a stock acquisition or reorganization
involving less than substantially all of the Corporation's capital stock.

        Accordingly, Section C of your stock option agreement applicable to your
Option is hereby amended in its entirety to read as follows:

        C. Change in Control.    If the Corporation or its stockholders enter
into an agreement to dispose of all or substantially all of the assets of the
Corporation, enter into an agreement to merge or consolidate with another entity
or enter into a plan of reorganization or liquidation, then this Option, to the
extent not previously exercised or terminated, may be exercised in full for
fully vested shares immediately before the consummation of such sale, merger,
reorganization or liquidation and all unvested shares held by the Optionee shall
then vest. However, no such acceleration will occur if the agreement requires
that each outstanding option will be either assumed by the successor corporation
or its parent or replaced with a comparable option to purchase shares of capital
stock of the successor corporation or parent thereof and the successor assumes
the Corporation's repurchase right on unvested shares. The committee appointed
by the Board of Directors will determine such comparability, and its
determination will be final, binding and conclusive. Upon consummation of the
sale, merger, reorganization or liquidation contemplated by the agreement, this
Option, whether or not accelerated, will terminate and cease to be exercisable,
unless assumed pursuant to a written agreement by the successor corporation or
parent thereof. This Agreement does not in any way affect the right of the
Corporation to adjust, reclassify, reorganize or otherwise change its capital or
business structure or to merge, consolidate, dissolve, liquidate or sell or
transfer all or any part of its business or assets.

        Certain Terminations Following a Change in Control.    If there is a
Change in Control of the Corporation pursuant to which the vesting of the Option
does not accelerate in full pursuant to the paragraph above and within
twenty-four (24) calendar months thereafter there is a Qualifying Termination of
Optionee's Services, then this Option will become immediately exercisable for
fully-vested Option Shares. For this purpose, the following definitions apply:

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        1.    A "Change in Control" of the Corporation shall be 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:

        a.    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 Corporation
is acquired, directly or indirectly, by a Person (other than the Corporation,
any trustee or other fiduciary holding securities under an employee benefit plan
of the Corporation or an affiliate thereof, or any corporation owned, directly
or indirectly, by the stockholders of the Corporation in substantially the same
proportions as their ownership of stock of the Corporation); or

        b.    During any period of two (2) consecutive years, individuals who at
the beginning of such period constitute the Board of Directors of the
Corporation and any new director (other than a director designated by a person
who has entered into an agreement with the Corporation to effect a transaction
described in i. above) whose election by the Board of Directors or nomination
for election by the Corporation'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

        c.    The stockholders of the Corporation 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.

        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 January 5, 1995, as amended through
December 9, 2000, 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. In addition, in no event shall a Change in Control be
deemed to have occurred, with respect to the Optionee, if the Optionee is part
of a purchasing group that consummates the Change-in-Control transaction. The
Optionee shall be deemed "part of a purchasing group" for purposes of the
preceding sentence if the Optionee is an equity participant in the purchasing
company or group (except for: (i) passive ownership of less than three percent
(3%) of the stock or other equity of the purchasing company; or (ii) ownership
of equity participation in the purchasing company or group which is otherwise
not significant, as determined prior to the Change in Control by a majority of
the non-employee continuing Directors).

        2.    "Qualifying Termination" means the termination of Optionee's
Services in connection with: (i) Optionee's removal from the Board of Directors
of the Corporation for reasons other than Cause, (ii) Optionee's resignation
from the Board of Directors of the Corporation at the request of the
Corporation, other than for Cause, or (iii) the Optionee's failure to be
re-nominated or re-elected to the Board of Directors.

        3.    "Cause" means:

        a.    The Optionee's willful failure to substantially perform his/her
duties with the Corporation (other than any such failure resulting from
permanent disability),

        b.    The Optionee's material act of dishonesty, fraud or embezzlement
against the Corporation, unauthorized disclosure of confidential information or
trade secrets of any of the Corporation or an affiliate (whether or not in
violation of any confidentiality agreement) or other

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willful conduct (other than conduct covered under (i) above) that is
demonstrably injurious to the Corporation, monetarily or otherwise; or

        c.    The Optionee's having been convicted of a felony.

        For purposes of this subparagraph, no act, or failure to act, on the
Optionee's part will be deemed "willful" unless done, or omitted to be done, by
the Optionee not in good faith and without reasonable belief that the action or
omission was in the best interests of the Corporation.

        Except for the foregoing change to Section C of the option agreement
applicable to your Option, no other terms or conditions of your Option or the
underlying option shares have been modified as a result of the amendment, and
those other terms and conditions will continue in full force and effect. Please
attach a copy of this letter agreement to your stock option agreement so that
you will have a complete record of all the terms applicable to your Options.

        The amendment was effective as of February 16, 2001. We hope that you
find this amendment a valuable addition to your equity package. Should you have
any questions concerning the amendment, please direct them to Claudia Belcher at
(510) 923-2907.

    Very truly yours,
 
 
Chiron Corporation
 
 
By:
       

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    Title:        

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EXHIBIT A

Name

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  Date of Grant

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  Exercise Price Per
Share

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  Total Number of Option
Shares Granted

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  Total Number of
Option Shares
Outstanding

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Exhibit 10.506

Non-Employee Director

CHIRON CORPORATION. June 27, 2002
EXHIBIT A