**Exhibit 10.523**

 

**CHIRON CORPORATION**

 

**AMENDMENT NO. 1 TO THE 2004 STOCK COMPENSATION PLAN**

 

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

 

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

 

##### “(1)                            AUTOMATIC SHARE RIGHT AWARD. Each EligibleDirector shall receive an annual share rights grant (the “Automatic Share RightAward”) on the last business day of April each year (the “Automatic GrantDate”). However, with respect to the 2002 year, share rights shall be grantedon June 30, 2003. An Automatic Share Right shall be fully vested andentitle the holder to receive a number of shares of Common Stock followingcessation of service on the Board pursuant to his or her election, as describedbelow. The number of share rights subject to each Automatic Share Right Awardshall be that number of shares (rounded to the nearest whole share) equal to (i) $160,000divided by (ii) the Fair Market Value of one share of Common Stock on thedate of grant; provided that each Eligible Director who was newly elected orappointed on a date after the previous year’s Automatic Grant Date (or, withrespect to the June 30, 2003 grants, after June 30, 2002), willreceive in lieu thereof on the current Automatic Grant Date, an Automatic ShareRight Award for a pro rata number of whole shares of Common Stock determined bymultiplying $13,333 by the number of calendar months (calculated to the nearestwhole month, but not to exceed 12) between the continuing Eligible Director’selection or appointment date and the current Automatic Grant Date and dividingthe product by the Fair Market Value of one share of Common Stock on theAutomatic Grant Date. In the event of a Change in Control which occurs on adate other than the Automatic Grant Date, each Eligible Director who is not tocontinue to serve as an Eligible Director following the Change in Control shallreceive, on the effective date of the Change in Control, an Automatic ShareRight Award for a pro rata number of whole shares of Common Stock determined bymultiplying $13,333 by the number of calendar months (calculated to the nearestwhole month, but not to exceed 12) between the last Automatic Grant Date priorto the Change in Control and the effective date of the Change in Control anddividing the product by the Fair Market Value of one share of Common Stock onthe date of the Change in Control.

#####  

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

 

“(4)                            DISTRIBUTION ELECTIONS. Each Eligible Director shall elect to receive adistribution 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 1of the year following the year of his or her termination of Board service, andto receive payments from his or her Share Right Account either (i) in the form ofa single lump sum or (ii) in up to ten (10) annual installments. Suchelection must be filed (i) before July 30, 2003 for directorseligible to receive Automatic Share Rights in the 2003 year, (ii) for allEligible Directors first eligible to receive Automatic Share Right Awards in2004, before the date of grant of the first Automatic Share Right and (iii) forall Eligible Directors first eligible to receive Automatic Share Right Awardsafter 2004, by the end of the calendar year immediately preceding the year ofthe award. An election will apply to any 

 

----

 

andall Automatic Share Right Awards received by the Eligible Director and willremain in effect until all payments from the Eligible Director’s Share RightAccount have been made. An election made after 2004 shall become irrevocable onDecember 31 of the calendar year in which it is made. An Eligible Directormay change the distribution election in effect for his or her ShareRight Account by submitting that change to the Compensation Committee or itsdelegate in writing. However, the subsequent election shall have no force oreffect and shall not become effective until the expiration of the 12-monthperiod measured from the filing date of such election. In addition, suchelection shall be valid only if (A) such election defers any distributionfor at least 5 years after the date that the distribution would have otherwisebeen made or commenced in the absence of such subsequent election and, (B) inthe case of a scheduled distribution to be made in installments, such electionis made at least twelve (12) months before the date of the first of thescheduled payments. In no event may any change to the distributionelection in effect for a Share Right Account result in any acceleration of thedistribution of that account under Code Section 409A. Notwithstanding theforegoing, each Eligible Director may changehis or her prior election with respect to the time and form ofdistribution of his or her Share Right Account by submitting the new electionon such form as provided by the Corporation on or prior to December 30,2005.”

 

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

 

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

 

(i)                                     The“beneficial ownership” (as defined in Rule 13d-3 under the SecuritiesExchange 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 orother fiduciary holding securities under an employee benefit plan of theCompany or an affiliate thereof, or any corporation owned, directly orindirectly, by the stockholders of the Company in substantially the sameproportions as their ownership of stock of the Company); or

 

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

 

(iii)                               The stockholders of theCompany approve a definitive agreement to sell or otherwise dispose of all orsubstantially all of its assets, or adopt a plan for liquidation, provided thatsuch sale or liquidation has not been abandoned.

 

2

----

 

Notwithstanding anythingelse contained herein to the contrary, in no event shall a Change in Control bedeemed to have occurred by reason of a purchase, or series of purchases ofCorporation stock by Novartis or its successor such that the acquiring entityremains 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 andnine-tenths of a percent (79.9%) of the combined voting power of alloutstanding Corporation securities.”

 

4.                                       Except as otherwise amended hereunder, theprovisions of the 2004 Stock Compensation Plan shall continue in full force andeffect.

 

3

----