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                                                                 EXHIBIT 10.501


                         CHIRON 1991 STOCK OPTION PLAN


          CHIRON 1991 STOCK OPTION PLAN [AS AMENDED AUGUST 14, 1993,
        APRIL 11, 1994, FEBRUARY 24, 1995, MARCH 8, 1996, FEBRUARY 28,
         1997, AUGUST 7, 1998, AUGUST 20, 1999 AND FEBRUARY 25, 2000]

I. PURPOSES

     This Chiron 1991 Stock Option Plan ("Plan") is intended to enable Chiron
Corporation ("Corporation") to attract and retain the following individuals
by offering them incentives and rewards, in the form of options, restricted
shares, share rights, share units and performance units ("awards") which will
encourage them to acquire a proprietary interest in the Corporation, to
continue in the service of the Corporation or its subsidiaries, and to
provide incentive to build value for stockholders: (a) employees (including
officers and directors) of the Corporation and its subsidiaries, (b)
non-employee members of the Board of Directors of the Corporation ("Board"),
and (c) consultants and independent contractors who perform valuable services
for the Corporation and its subsidiaries.

     In addition, the Plan is intended to permit the Corporation to satisfy
its obligations in connection with options it assumed pursuant to the terms
of the Agreement and Plan of Merger dated as of July 21, 1991 by and among
the Corporation, Chiron Acquisition Subsidiary, Inc., and Cetus Corporation
("Agreement"). Upon consummation of the transactions described in the
Agreement ("Merger"), the Plan superseded Cetus Corporation's Amended and
Restated Common Stock Option Plan and Cetus Corporation's Non-Employee
Directors' Stock Option Plan ("Cetus Prior Plans"). Upon stockholder approval
in December 1991, this Plan superseded the following Chiron prior plans: the
Protos Corporation 1988 Stock Option Plan (upon the merger of Protos into
Chiron), the Chiron Ophthalmics, Inc. 1986 Stock Option Plan (upon the merger
of Chiron Ophthalmics into a wholly owned subsidiary of Chiron), the
Corporation's 1982 Stock Option Plan and the Corporation's 1984 Non-Qualified
Stock Option Plan (collectively, "Chiron Prior Plans").

II. ADMINISTRATION

     The Plan will be administered by a committee or committees appointed by
the Board and consisting of one or more members of the Board or a
subcommittee or subcommittees thereof. The Board may delegate the
responsibility for administration of the Plan with respect to designated
classes of award holders to different committees, subject to such limitations
as the Board deems appropriate, and each committee may similarly delegate its
responsibilities to one or more subcommittees. Members of a committee or
subcommittee will serve for such term as the Board or committee may
determine, and will be subject to removal by the Board at any time. With
respect to any matter, the term "Committee," when used in this Plan, will
refer to the committee or subcommittee that has been delegated authority with
respect to such matter.

     In determining the composition of any committee or subcommittee, the
Board or committee, as the case may be, shall consider the desirability of
compliance with the compositional requirements of (i) Rule 16b-3 of the
Securities and Exchange Commission with respect to award holders who are
subject to the trading restrictions of Section 16(b) of the Securities
Exchange Act of 1934 ("1934 Act") with respect to securities of the
Corporation and (ii) Section 162(m) of the


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Internal Revenue Code ("Code") with respect to performance units, but shall
not be bound by such compliance.

     (a) AUTHORITY.  Each Committee will have full authority to administer
the Plan within the scope of its delegated responsibilities, including
authority to interpret and construe any relevant provision of the Plan, to
adopt such rules and regulations as it may deem necessary, and to determine
the terms and conditions of awards made under the Plan (which need not be
identical). Decisions of a Committee made within the discretion delegated to
it by the Board will be final and binding on all persons who have an interest
in the Plan.

III. ELIGIBILITY FOR AWARDS

     (a) DISCRETIONARY AWARDS. From time to time the Committee may, in its
discretion, select individuals from among the following categories to receive
awards under the Plan:

     (1) EMPLOYEES. The Committee may select employees of the Corporation or
     its parent or subsidiaries (including officers, whether or not they are
     also members of the Board).

     (2) CONSULTANTS AND INDEPENDENT CONTRACTORS. The Committee may select
     consultants and independent contractors whose services tend to
     contribute materially to the success of the Corporation or a parent or
     subsidiary or whose services may reasonably be anticipated to so
     contribute.

     (3) DIRECTORS. The Committee may select members of the Board or the
     board of directors of a parent or subsidiary that are not employees of
     the Corporation, parent or subsidiaries for awards in addition to awards
     made in accordance with the Plan's automatic grant provisions.

     (b) PERFORMANCE UNITS.  Corporate vice-presidents and other executive
officers of the Corporation or a parent or subsidiary ("162(m) executives")
will be eligible to receive performance units in addition to, or in lieu of,
other discretionary awards granted under the Plan.

     (c) AUTOMATIC GRANTS.  Members of the Board who are not employees of the
Corporation or a subsidiary will receive awards in accordance with the Plan's
automatic grant provisions.

     (d) SUBSTITUTE OPTIONS.  Upon consummation of the Merger, outstanding
options under the Cetus Prior Plans (including related Limited Stock
Appreciation Rights) were converted, in the manner and at the exchange ratio
specified in the Agreement, into substitute options under this Plan to
acquire Common Stock (as defined below). Upon stockholder approval and, with
regard to the Protos prior plan options and the Chiron Ophthalmics prior plan
options, consummation of the relevant mergers, outstanding options under the
Chiron Prior Plans were converted into options under this Plan. These options
preserved the exercise price of the outstanding options as adjusted, in the
case of options under the Protos Corporation 1988 Stock

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Option Plan and the Chiron Ophthalmics, Inc. 1986 Stock Option Plan, to
reflect the substitution of Common Stock. These options also preserved the
other terms and conditions of the outstanding options; provided, however,
that on the Effective Date of this Plan, outstanding automatic option grants
under the Corporation's 1982 Stock Option Plan were conformed, other than to
extend the term, to the Automatic Option Grants under this Plan.
Collectively, these options are referred to as "Substitute Options."

IV. STOCK SUBJECT TO THE PLAN

     (a) CLASS.  The stock subject to awards under the Plan is (i) the
Corporation's authorized but unissued or reacquired Common Stock ("Common
Stock"), or (ii) shares of one or more series of the Corporation's authorized
but unissued or reacquired Restricted Common Stock, in the aggregate,
"Company Stock." In connection with the grant of awards under the Plan, the
Corporation may repurchase shares in the open market or otherwise.

     (b) AGGREGATE AMOUNT

         (1) SHARES. Subject to adjustment under Sections IV (c) and IV(b)(3),
     the aggregate maximum number of shares of Company Stock that may be
     subject to awards under the Plan is 50,262,347 (comprised of the
     original number of shares authorized under the Plan, including the
     number of shares of Company Stock remaining for issuance on the
     Effective Date of this Plan under the Corporation's 1982 Stock Option
     Plan and the Corporation's 1984 Non-Qualified Stock Option Plan, plus
     all annual increases thereto through January 1, 1997, plus an increase
     of 13,000,000 shares by amendment effective February 28, 1997).
     Notwithstanding the foregoing, as of the first day of each fiscal year
     beginning after January 1, 1997 the aggregate number of shares of
     Company Stock that may be subject to awards under the Plan will be
     increased by 1.50% of the number of Chiron Common Equivalent Shares
     outstanding as of last day of the preceding fiscal year.  Subject to
     adjustment under Section IV(c), the maximum number of shares of Company
     Stock with respect to which awards may be granted to any employee
     during the term of the Plan is 4,000,000 shares. Subject to adjustment
     under Sections IV(c) and IV(b)(3), not more than 50,262,347 shares of
     Company Stock, increased, as of the first day of each fiscal year
     beginning after January 1, 1997, by 1.50% of the number of Chiron
     Common Equivalent Shares outstanding as of December 31, 1996, may be
     subject to Incentive Options (as defined below) granted under the Plan
     after the Effective Date. "Chiron Common Equivalent Shares" are the
     total number of outstanding shares of Common Stock plus the total
     number of shares of Common Stock issuable upon conversion or exercise
     of outstanding warrants, options and convertible securities. In no
     event will more than 2,000,000 shares of Restricted Common Stock,
     whether in a single series or in multiple series, be subject to awards
     under the Plan.

         (2) RESTRICTED COMMON STOCK.  Shares of Restricted Common
     Stock may be issued under the Plan in one or more separate series. The
     rights, preferences and privileges, together with the restrictions and
     limitations and the number of shares, of each series of Restricted
     Common Stock issuable under the Plan will be set forth in the
     Corporation's Certificate of Determination of Preferences of Common
     Stock ("Certificate")

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     as in effect from time to time during the term of the Plan. Shares of
     each series of Restricted Common Stock will be convertible or
     exchangeable into shares of Common Stock in accordance with the terms
     and provisions of the Certificate applicable to that series.

         (3) REUSE OF SHARES.  If any outstanding option under the
     Chiron Prior Plans, the Cetus Prior Plans or this Plan (including the
     Substitute Options) expires or is terminated or canceled for any reason
     (including pursuant to Section X of the Plan but other than pursuant to
     surrender of the option for a cash payment in accordance with Section
     XIII of the Plan) before being exercised for the full number of shares
     to which it applies, then the shares allocable to the unexercised
     portion of such option will not be charged against the limitations of
     Section IV(b)(1) and will become available for subsequent grants under
     the Plan. To the extent that a share right or share unit expires or is
     terminated, or is canceled or forfeited for any reason without being
     paid in cash or shares of Company Stock, any remaining shares allocable
     to the unpaid portion of such share right or share unit shall not be
     charged against the limitations of Section IV(b)(1) and will become
     available again for subsequent grants under the Plan. Unvested shares
     issued under the Plan and subsequently cancelled, forfeited or
     repurchased by the Corporation at the original exercise or issue price
     paid per share pursuant to the Corporation's repurchase rights under
     the Plan shall be added back to the number of shares of Common Stock
     reserved for issuance under Section IV(b)(1). Shares subject to any
     option or portion of an option surrendered in accordance with the
     "Surrender of Options for Cash or Stock" provisions of this Plan and
     shares for which a cash payment is made in lieu thereof under a
     restricted share, share unit or share right will not be available for
     subsequent awards under the Plan. If the exercise price of an option
     under the Plan is paid with shares of Common Stock or if shares of
     Common Stock otherwise issuable under the Plan are withheld by the
     Corporation in satisfaction of the withholding taxes incurred in
     connection with the exercise of an option or the vesting of a stock
     issuance under the Plan, then the number of shares of Common Stock
     available for issuance under Section IV(b)(1) shall be reduced by the
     gross number of shares for which the option is exercised or which vest
     under the stock issuance, and not by the net number of shares of Common
     Stock issued to the holder of such option or stock issuance.

     (c) ADJUSTMENTS. In the event any change is made to the Company Stock
subject to the Plan (whether by reason of merger, consolidation,
reorganization, recapitalization, stock dividend, stock split, combination of
shares, exchange of shares, or other change in corporate or capital structure
of the Corporation affecting the outstanding Common Stock as a class without
the Corporation's receipt of consideration) then, unless such change results
in the termination of all awards, the Committee will make appropriate
adjustments to (i) the number and/or class of securities available under the
Plan, (ii) the number and/or class of securities for which any one person may
be granted awards under the Plan, (iii) the number and/or class of securities
to be made under automatic grants to non-employee directors, and (iv) the
number and/or class of securities and, where applicable, price per share of
securities subject to outstanding awards. Such adjustments are to be effected
in a manner which shall preclude the enlargement or dilution of rights and
benefits of awards and shall be final, binding and conclusive.

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V. TERMS AND CONDITIONS OF DISCRETIONARY OPTIONS

     Discretionary stock options granted under the Plan may, in the
Committee's discretion, be either incentive stock options ("Incentive
Options") qualifying under Section 422 of the Internal Revenue Code of 1986,
as amended ("Internal Revenue Code"), or nonstatutory options. Individuals
who are not employees of the Corporation or its subsidiaries may only be
granted nonstatutory options.  Options will be evidenced by instruments in
such form as the Committee may from time to time approve. These instruments
will conform to the following terms and conditions and, in the discretion of
the Committee, may contain such other terms, conditions and restrictions as
are not inconsistent with the following:

     (a) OPTION PRICE.  The option price per share will be fixed by the
Committee, but in no event will the option price per share be less than
eighty-five percent (85%) of the Fair Market Value of the option shares on
the date of the option grant; provided, however, that in no event will the
option price per share of an Incentive Option be less than one hundred
percent (100%) of the Fair Market Value of the option shares on the date of
the option grant.  Notwithstanding the foregoing, Substitute Options will
have an option price per share determined pursuant to Section III(d) of this
Plan.

     (b) NUMBER OF SHARES, TERM AND EXERCISE

         (1) TERM AND NUMBER.  Each option granted under the Plan will be
         exercisable on such date or dates, during such period, and for such
         number of shares of Company Stock as the Committee determines and
         sets forth in the instrument evidencing the option. No option
         granted under the Plan will have an expiration date that is more
         than 10 years after the date of the option grant.

         (2) EXERCISE.  After any option granted under the Plan becomes
         exercisable, it may be exercised by delivering notice in such form
         to such person as the Corporation may designate at any time prior
         to the termination of such option. Except as authorized by the
         Committee in accordance with Section VIII, the option price for the
         number of shares for which the option is exercised will become due
         and payable upon exercise.

         (3) PAYMENT.  The option price will be payable in full in cash
         (including cash equivalents); provided, however, that the Committee
         may, either at the time the option is granted or at the time it is
         exercised and subject to such limitations as it may determine,
         authorize payment of all or a portion of the option price in one or
         a combination of the following alternative forms

         (i)  a promissory note authorized pursuant to Section VIII;

         (ii) full payment in shares of Common Stock valued as of the
              exercise date and held for the requisite period to avoid a charge
              to the Corporation's earnings; or

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         (iii) to the extent the option is exercised for vested shares,
               through a special sale and remittance procedure pursuant to which
               the optionee shall provide irrevocable instructions, in such form
               and pursuant to such procedures as the Corporation shall specify,
               to (a) a Corporation-approved brokerage firm to effect the
               immediate sale of the purchased shares and remit to the
               Corporation, out of the sale proceeds available on the settlement
               date, sufficient funds to cover the aggregate exercise price
               payable for the purchased shares plus all applicable Federal,
               state and local income and employment taxes required to be
               withheld by the Corporation by reason of such exercise, and
               (b) the Corporation to deliver the certificates for the purchased
               shares directly to such brokerage firm in order to complete the
               sale.

     (c) TERMINATION OF SERVICES.  The Committee will determine and set forth
in each option whether the option will continue to be exercisable, and the
terms and conditions of such exercise, on and after the date that an optionee
ceases to be employed by, or to provide services to, the Corporation or its
subsidiaries. The date of termination of an optionee's employment or services
will be determined by the Committee, which determination will be final.

     (d) INCENTIVE OPTIONS.  Options granted under the Plan that are intended
to be Incentive Options will be subject to the following additional terms and
conditions:

              (1) DOLLAR LIMITATION.  To the extent that the
         aggregate Fair Market Value (determined as of the respective date
         or dates of grant) of shares with respect to which options that are
         granted after 1986 and that would otherwise be Incentive Options
         are exercisable for the first time by any individual during any
         calendar year under the Plan (or any other plan of the Corporation,
         a parent or subsidiary corporation or predecessor thereof) exceeds
         the sum of $100,000 (or such greater amount as may be permitted
         under the Internal Revenue Code), whether by reason of acceleration
         or otherwise, such options will not be treated as Incentive
         Options. In making such a determination, options will be taken into
         account in the order in which they were granted.

              (2) 10% STOCKHOLDER.  If any employee to whom an Incentive Option
         is to be granted pursuant to the provisions of the Plan is, on the
         date of grant, the owner of stock (determined with application of
         the ownership attribution rules of Section 424(d) of the Internal
         Revenue Code) possessing more than ten percent (10%) of the total
         combined voting power of all classes of stock of his or her
         employer corporation or of its parent or subsidiary corporation
         ("10% Stockholder"), then the following special provisions will
         apply to the option granted to such individual:

              (i) The option price per share of the stock subject to such
              Incentive Option will not be less than one hundred ten percent
              (110%) of the Fair Market Value of the option shares on the date
              of grant; and

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              (ii) The option will not have a term in excess of five (5) years
              from the date of grant.

              (3) PARENT AND SUBSIDIARY.  For purposes of this Section V(d),
         "parent corporation" and "subsidiary corporation" will have the
         meaning attributed to those terms, as they are used in Section
         422(b) of the Internal Revenue Code.

     (e) WITHHOLDING

               (1) OBLIGATION.  The Corporation's obligation to deliver stock
         certificates upon the exercise of an option will be subject to the
         option holder's satisfaction of all applicable federal, state and
         local income and employment tax withholding requirements.

               (2) PAYMENT.  In the event that an option holder is required to
         pay to the Corporation an amount with respect to income and employment
         tax withholding obligations in connection with exercise of an
         option, the Committee may, in its discretion and subject to such
         limitations and rules as it may adopt, permit the option holder to
         satisfy the obligation, in whole or in part, by delivering shares
         of Common Stock already held by the option holder or by making an
         irrevocable election that a portion of the total value of the
         shares subject to the option be paid in the form of cash in lieu of
         the issuance of Company Stock, and that such cash payment be
         applied to the satisfaction of the withholding obligations.

VI. DISCRETIONARY RESTRICTED SHARES, SHARE RIGHTS, SHARE UNITS
AND PERFORMANCE UNITS

     (a) NATURE OF AWARDS

              (1) RESTRICTED SHARES.  A restricted share granted under the Plan
         shall consist of shares of Company Stock, the retention and transfer of
         which is subject to such terms, conditions and restrictions (whether
         based on performance standards or periods of service or otherwise and
         including repurchase and/or forfeiture rights in favor of the
         Corporation) as the Committee shall determine. The terms, conditions
         and restrictions to which restricted shares are subject shall be
         evidenced by instruments in such form as the Committee may from time to
         time approve and may vary from grant to grant. The Committee shall have
         the absolute discretion to determine whether any consideration (other
         than the services of the potential award holder) is to be received by
         the Corporation or its subsidiaries as a condition precedent to the
         issuance of restricted shares.

              (2) SHARE RIGHTS.  A share right granted under the Plan shall
         consist of the right, subject to such terms, conditions and
         restrictions (whether based on performance standards or periods of
         service or otherwise), to receive a share of Company Stock (together
         with cash dividend equivalents if so determined by the

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         Committee) as the Committee shall determine and shall be evidenced by
         instruments in such form as the Committee may from time to time
         approve. The Committee shall have the absolute discretion to determine
         whether any consideration (other than the services of the potential
         award holder) is to be received by the Corporation or its subsidiaries
         as a condition precedent to the issuance of shares pursuant to share
         rights. The terms, conditions and restrictions to which share rights
         are subject may vary from grant to grant.

              (3) SHARE UNITS.  A share unit granted under the Plan shall
         consist of the right to receive an amount in cash equal to the Fair
         Market Value of one share of Company Stock on the date of valuation of
         the unit (together with cash dividend equivalents if so determined by
         the Committee) less such amount, if any, as the Committee shall
         specify. The date of valuation and payment of cash under a share unit
         and the conditions, if any, to which such payment will be subject
         (whether based on performance standards or periods of service or
         otherwise) shall be determined by the Committee. The terms, conditions
         and restrictions to which share units are subject may vary from grant
         to grant.

     (b) WITHHOLDING.  The Committee may require, or permit an award holder to
elect, that a portion of the total value of the shares of Common Stock
subject to restricted shares or share rights held by one or more award
holders be paid in the form of cash in lieu of the issuance of Company Stock
and that such cash payment be applied to the satisfaction of the federal,
state and local income and employment tax withholding obligations that arise
at the time the restricted shares and share rights become free of all
restrictions under the Plan.

     (c) CASH PAYMENTS.  The Committee may provide award holders with an
election to receive a percentage of the total value of the Company Stock
subject to restricted shares or share rights in the form of a cash payment,
subject to such terms, conditions and restrictions as the Committee shall
specify.

     (d) ELECTIVE AND TANDEM AWARDS.  The Committee may award restricted
shares, share rights, and share units independently of other compensation or
in lieu of compensation that would otherwise be paid in cash or stock
options, whether at the election of the potential award holder or otherwise.
The number of restricted shares, share rights or share units to be awarded in
lieu of any cash compensation amount or number of stock options shall be
determined by the Committee in its sole discretion and need not be equal to
such foregone compensation in Fair Market Value. In addition, restricted
shares, share rights, and share units may be awarded in tandem with stock
options, so that a portion of such award becomes payable or becomes free of
restrictions only if and to the extent that the tandem options are not
exercised or are forfeited, subject to such terms and conditions as the
Committee may specify.

     (e) MODIFICATION OF AWARDS.  Except to the extent an award is granted as
a performance unit, the Committee may, in its sole discretion, modify or
waive any or all of the terms, conditions or restrictions applicable to any
outstanding restricted share, share right or share unit; provided, however,
that no such modification or waiver shall, without the consent of the holder
of an outstanding award, adversely affect the holder's rights thereunder.

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     (f) PERFORMANCE UNITS.  Effective March 8, 1996, the Committee may grant
restricted shares, share rights and share units to 162(m) executives that
comply with the requirements of Code Section 162(m).

Performance units will become payable or vest upon attainment of specified
performance goals over a specified performance period.

              (1) PERFORMANCE GOALS.  The Committee will determine the
         Corporation performance goal or goals that must be met to achieve
         the maximum payout within the shorter of the first 90 days of the
         specified performance period over which the performance goal or
         goals will be measured, or 25% of such performance period. The
         Committee may establish a goal based on more than one performance
         criteria, or may establish multiple goals, but any payout must be
         based on the satisfaction of at least one goal. The Committee may
         provide for different levels of payouts based on relative
         performance toward a performance goal.

              (2) PERFORMANCE CRITERIA.  Performance units may be based on one
         or more of the following performance criteria: total shareholder
         return; the achievement of a specified closing or average closing
         price of Common Stock; the absolute or percentage increase in the
         closing or average closing price of Common Stock and/or one or more
         of the following measures of the Corporation's net income for the
         specified performance period determined in accordance with
         generally accepted accounting principles as consistently applied by
         the Corporation: absolute net income or a percentage or absolute
         dollar increase in net income, earnings per share or a percentage
         or absolute dollar increase in earnings per share, or return on
         assets employed or equity or a percentage or absolute dollar
         increase in return on assets employed or equity; or the
         Corporation's absolute gross revenues or a percentage or absolute
         dollar increase in gross revenues for the specified performance
         period determined in accordance with generally accepted accounting
         principles as consistently applied by the Corporation. The awards
         may based on the Corporation's performance alone, or the
         Corporation's performance may be measured against variously
         weighted published benchmark indices that the Committee determines
         are representative of the Corporation's peer group, which indices
         may include the Standard & Poor's Health Care Composite Index, the
         Standard & Poor's Health Care Diversified Index, and the AMEX
         Biotechnology Index, among others.

For purposes of this Plan, net income and gross revenues shall be net income
and gross revenues of the Corporation and its consolidated subsidiaries as
reported by the Corporation and certified by its independent public
accountants, but the Committee in fixing any goal may exclude any or all of
the following if they have a material effect on annual net income or gross
revenues: events or transactions that are either unusual in nature or
infrequent in occurrence (such as restructuring/reorganization charges, the
purchase or sale of in process technology, the sale or discontinuance of a
business segment, the sale of investment securities, losses from litigation,
the

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cumulative effect of changes in accounting principles and natural disasters),
depreciation, interest or taxes.

              (3) REDUCTION OR CANCELLATION OF PERFORMANCE UNITS.  Final
         payouts are subject to the approval of the Committee, which may
         reserve the absolute discretion to reduce or cancel any payout
         thereunder.

VII. AUTOMATIC AWARDS TO DIRECTORS

     (a) OPTIONS.  Effective March 8, 1996, non-employee members of the Board
("Eligible Directors") will automatically be granted nonstatutory options
("Automatic Options") to purchase the number of shares of Common Stock
determined as set forth below (subject to adjustment under Section IV(c)
hereof) on the dates and terms set forth below:

     (1) OPTION GRANTS.  On the last business day of the second quarter of
     each fiscal year of the Corporation ("Automatic Grant Date"), each
     continuing Eligible Director (including each Eligible Director who is
     newly elected or appointed on the Automatic Grant Date) will receive an
     Automatic Option to purchase that number of whole shares of Common
     Stock determined by dividing $100,000 by the Average Stock Price on the
     Automatic Grant Date.

     (2) PRO-RATA OPTION GRANTS.  Each person who is newly elected or
     appointed as an Eligible Director on a date other than an Automatic
     Grant Date, will receive, on the date of such election or appointment,
     an Automatic Option to purchase a pro-rata number of whole shares of
     Common Stock determined by multiplying $8,333.33 by the number of whole
     calendar months between the date of the Eligible Director's election or
     appointment and the next Automatic Grant Date, and dividing that number
     by the Average Stock Price of a share of Common Stock on the grant date.

     (3) ADVISORY COUNSELLORS.  Advisory Counsellors of Cetus will not
     qualify for Automatic Option Grants.

     (4) TERMS AND CONDITIONS.  The terms and conditions applicable to each
     Automatic Option Grant will be as follows:

         (i) PRICE.  The option price per share will be equal to one
     hundred percent (100%) of the Fair Market Value of one share of Common
     Stock on the date of grant;

         (ii) TERM.  Each Automatic Option will have a term of ten (10)
     years, measured from the date of grant, and will be exercisable at any
     time during the term for all or any part of the covered shares;
     provided, however, that no Automatic Options may be exercised prior to
     approval of the Plan by the Corporation's stockholders.

         (iii) REPURCHASE.  The shares purchased under the Automatic
     Options will be subject to repurchase by the Corporation at the
     original exercise price in the event an optionee ceases to provide
     services to the Corporation or its subsidiaries as a director, an

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     employee, a consultant or an independent contractor. The Corporation's
     repurchase rights will lapse, and the optionee's interest in the
     purchased shares will vest, in a series of equal annual installments
     over the five-year period measured from the grant date, provided the
     optionee continues to provide such services. In addition, the
     Corporation's repurchase right will lapse in its entirety, and the
     Automatic Options will become fully vested, should one or more of the
     following events occur while the optionee is providing such services:
     (A) the optionee's death, or (B) the optionee's permanent disability.

         (iv) PAYMENT.  Upon exercise of the Automatic Option, the
     option price for the purchased shares will become payable immediately
     in cash or in shares of Common Stock that the optionee has held for at
     least six (6) months. Payment may also be made by delivery of a
     properly executed exercise notice together with irrevocable
     instructions to a broker to promptly deliver to the Corporation the
     amount of sale or loan proceeds to pay the option price.

         (v) CESSATION.  In the event the optionee ceases to provide
     services to the Corporation or its subsidiaries as a director, an
     employee, a consultant or an independent contractor, the Automatic
     Option may be exercised, within the term of the Automatic Option, for a
     period of three (3) months after the date of such cessation (twelve
     (12) months in the case of cessation by reason of disability or death).
     In the case of death, the Automatic Option may be exercised within such
     period by the estate or heirs of the optionee.

         (b) SHARE RIGHTS.  Effective March 8, 1996, Eligible Directors
     will automatically be granted share rights ("Automatic Share Rights")
     to receive the number of shares of Common Stock determined as set forth
     below (subject to adjustment under Section IV(c) hereof) on the dates
     and terms set forth below:

         (1) NEW DIRECTORS.  Each newly elected or appointed Eligible
     Director will be granted, on the date of such election or appointment,
     an Automatic Share Right to purchase that number of whole shares
     determined by dividing $40,000 by the Average Stock Price on the grant
     date.

         (2) CONTINUING DIRECTORS.

              (i) FULL GRANTS.  Subject to Subsection VII(b)(2)(ii) below, on
         each Automatic Grant Date, each incumbent, continuing Eligible Director
         will be granted an Automatic Share Right to receive that number of
         whole shares of Common Stock determined by dividing $25,000 by the
         Average Stock Price on the Automatic Grant Date. Notwithstanding
         the foregoing, on the Automatic Grant Date occurring in June 1996,
         each continuing Eligible Director elected or appointed before
         March 8, 1996, will be granted an Automatic Share Right to receive
         that number of whole shares determined by using the $40,000 in lieu of
         the $25,000 figure.

              (ii) PRO-RATA GRANTS.  If an Eligible Director is
         newly elected or appointed on a date other than an Automatic Grant
         Date, on the immediately succeeding Automatic Grant Date, such
         Eligible Director will be granted a pro-rata

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         Automatic Share Right to receive the number of whole shares of
         Common Stock determined by multiplying the number of whole calendar
         months since the Eligible Director's election or appointment by
         $2,083.33 and dividing the product by the Average Stock Price on
         the Automatic Grant Date.

         (3) ADVISORY COUNSELLORS.  Advisory Counsellors of Cetus will not
     qualify for Automatic Share Rights.

         (4) TERMS AND CONDITIONS.  The terms and conditions applicable to each
     Automatic Share Right will be as follows:

             (i)   TERM.  Each Automatic Share Right will have a term of five
         (5) years, measured from the grant date.

             (ii)  VESTING.  The Automatic Share Right will vest in
         a series of equal annual installments over the five-year period
         measured from the grant date, provided the Eligible Director
         continues to provide services to the Corporation or its
         subsidiaries as a director, an employee, a consultant or an
         independent contractor. Shares of Common Stock will be issued in
         satisfaction of the Automatic Share Right as the Automatic Share
         Right vests. In addition, full vesting will occur should one or
         more of the following events occur while the Eligible Director is
         providing such services: (A) the Eligible Director's death, or (B)
         the Eligible Director's permanent disability.

              (iii) CESSATION.  In the event the Eligible Director ceases to
         provide services to the Corporation or its subsidiaries as a
         director, an employee, a consultant or an independent contractor,
         the Automatic Share Right shall terminate with respect to the
         unvested portion of the Award.

     (c) COST-OF-LIVING INCREASES.  Each dollar value used in this Article
VII will be subject to annual cost-of-living increases. The increases will be
based on the Consumer Price Index, and will occur automatically beginning
with the 1997 Automatic Grant Date.

     (d) AVERAGE STOCK PRICE.  Average Stock Price means the average closing
price of one share of Common Stock as reported on the Nasdaq National Market
System for the previous twelve month period ending on the last day of the
month before the grant date of the award.

VIII. LOANS AND INSTALLMENT PAYMENTS

     In order to assist an award holder (including an employee who is an
officer or director of the Corporation) in the acquisition of shares of
Company Stock pursuant to an award granted under the Plan (other than
pursuant to the Automatic Option Grant provisions of this Plan), the
Committee may authorize, at either the time of the grant of an award or the
time of the acquisition of Company Stock pursuant to the award (i) the
extension of a loan to the award holder by the Corporation, (ii) the payment
by the award holder of the purchase price, if any, of the Company Stock in
installments, or (iii) the guarantee by the Corporation of a loan obtained by
the award

                                      12


<PAGE>


holder from a third party. The terms of any loans, guarantees or installment
payments, including the interest rate and terms of repayment, will be subject
to the discretion of the Committee. Loans, installment payments and
guarantees may be granted without security, the maximum credit available
being the purchase price, if any, of the Company Stock acquired plus the
maximum federal and state income and employment tax liability that may be
incurred in connection with the acquisition.

IX. ASSIGNABILITY

No award granted under the Plan is assignable or transferable by the award
holder other than by Will or by the laws of descent and distribution, and
during the lifetime of the award holder, only the award holder may exercise
options or exercise the rights provided under awards granted under the Plan.
However, if and to the extent that the Committee so authorizes at the time an
award is granted or amended, an option (other than an option designated as an
Incentive Option) or other award may be assigned in whole or in part during
the grantee's lifetime to one or more of the grantee's family members or an
entity substantially owned, benefiting or controlled by the grantee or one or
more of grantee's family members if and to the extent that the Securities and
Exchange Commission Form S-8 Registration Statement would continue to be
available for the exercise of the award and resale of the underlying
securities following such assignment. The terms applicable to the assigned
portion shall be the same as those in effect for the award immediately prior
to such assignment and shall be set forth in such documents issued to the
assignee as the Committee may deem appropriate.

X. CANCELLATION AND NEW GRANT OF OPTIONS

The Committee will have the authority to effect, at any time and from time to
time, with the consent of the affected option holders, the cancellation of
any or all outstanding options under the Plan, a Cetus Prior Plan or a Chiron
Prior Plan (other than options granted under automatic option grant
provisions of these plans) and to grant in substitution therefor new options
under the Plan covering the same or different numbers of shares, but having
an option price per share not less than eighty-five percent (85%) of the Fair
Market Value on the new grant date or, in the case of an Incentive Option,
one hundred percent (100%) of the Fair Market Value on the new grant date
(or, in the case of an Incentive Option granted to a 10% Stockholder, one
hundred ten percent (110%) of such Fair Market Value).

XI. ACCELERATION AND TERMINATION OF AWARDS

     (a) ACCELERATION.  In the event of an agreement to dispose of all or
substantially all of the assets or outstanding capital stock of the
Corporation by means of a sale, merger, reorganization, or liquidation, each
award will be automatically accelerated so that (1) options become fully
exercisable with respect to the total number of shares purchasable under the
options; (2) restrictions on restricted shares will be eliminated, and the
shares will immediately vest; and (3) share rights and share units will
immediately vest and become payable. The Committee may also provide for the
automatic termination of repurchase rights upon the occurrence of such an
event.

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<PAGE>


     (b) NO ACCELERATION.  No acceleration of awards will occur if the terms
of the agreement require as a prerequisite to the consummation of any such
sale, merger, reorganization or liquidation that each such award will be
either assumed by the successor corporation or parent thereof or be replaced
with a comparable award subject to shares of the successor corporation or
parent thereof. The determination of such comparability will be made by the
Committee, and its determination will be final, binding and conclusive. Upon
consummation of the sale, merger, reorganization or liquidation contemplated
by the agreement, all awards, whether or not accelerated, will terminate
unless assumed pursuant to a written agreement by the successor corporation
or parent thereof.

     (c) CORPORATE STRUCTURE.  The grant of awards under this Plan will in no
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.

XII.  VALUATION

     With regard to all Substitute Options, Fair Market Value will be
determined in accordance with the relevant option plan documents on the date
that the outstanding options were granted. With regard to awards granted
under this Plan, for all valuation purposes under the Plan, the Fair Market
Value of a share of Common Stock or Restricted Common Stock (as the case may
be) on any relevant date will be determined in accordance with the following
provisions:

     (a) If the Common Stock or Restricted Common Stock is not at the time
listed or admitted to trading on any stock exchange, but is traded in the
over-the-counter market, the Fair Market Value will be the average between
the reported high price and the reported low price of one share of Common
Stock or Restricted Common Stock (as the case may be) on the date in question
in the over-the-counter market, as such prices are reported by the National
Association of Securities Dealers through its NASDAQ system or any successor
system.

     (b) If the Common Stock or Restricted Common Stock is at the time listed
or admitted to trading on any stock exchange, then the Fair Market Value will
be the average between the reported high price and the reported low price of
one share of Common Stock or Restricted Common Stock (as the case may be) on
the date in question on the stock exchange that is the primary market for the
stock, as such prices are officially quoted on such exchange.

     (c) If the Common Stock or Restricted Common Stock (as the case may be)
is at the time neither listed nor admitted to trading on any stock exchange
nor traded in the over-the-counter market, or if the Committee determines
that neither subparagraph (a) nor subparagraph (b) above reflects Fair Market
Value of the stock and the award was not granted pursuant to the Plan's
Automatic Award provisions, then the Fair Market Value will be determined by
the Committee after taking into account such factors as the Committee deems
appropriate, or in the case of Automatic Awards, by an independent third
party valuation.

XIII. SURRENDER OF OPTIONS FOR CASH OR STOCK

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<PAGE>


     (a) STOCK APPRECIATION RIGHTS.  If, and only if the Committee, in its
discretion, elects to implement an option surrender program under the Plan,
one or more option holders may, upon such terms and conditions as the
Committee may establish at the time of the option grant or at any time
thereafter, be granted the right to surrender all or part of an unexercised
option in exchange for a distribution equal in amount to the difference
between (i) the Fair Market Value (at date of surrender) of the shares for
which the surrendered option or portion thereof is at the time exercisable
and (ii) the aggregate option price payable for such shares. The distribution
to which an option holder becomes entitled under this Section may be made in
shares of Common Stock or Restricted Common Stock, valued at Fair Market
Value at the date of surrender, in cash, or partly in shares and partly in
cash, as the Committee, in its sole discretion, deems appropriate. The option
surrender provisions of this Section will not apply to options granted
pursuant to the Automatic Option Grant provisions of this Plan.

     (b) LIMITED STOCK APPRECIATION RIGHTS.  If outstanding options of Cetus
for which Substitute Options are issued pursuant to Section III(d) have
Limited Stock Appreciation Rights ("LSARs") attached thereto, then each such
LSAR shall be honored by the Corporation in accordance with its terms and
remain exercisable for a period of 60 days following the date that
stockholders of Cetus approve the Merger; provided, however, that if the LSAR
was originally granted within 6 months of the date that Cetus stockholders
approve the Merger, then the LSAR will be exercisable for a period of 60 days
following expiration of such six-month period. Upon expiration of the
applicable 60-day period, each such LSAR not previously exercised shall
expire. Upon exercise of an LSAR, the related option will be cancelled, and
Chiron will pay to the LSAR holder an amount in cash for each share with
respect to which the LSAR is exercised determined in accordance with the
terms of the Cetus Prior Plans.

XIV.  REPURCHASE RIGHTS

     The Committee may, in its discretion, establish as a term of one or more
awards granted under the Plan that the Corporation (or its assigns) will have
the right, exercisable upon the award holder's termination of employment
with, or cessation of services for, the Corporation and its subsidiaries, to
repurchase at the original price paid, if any, for such shares of (1) Company
Stock acquired by the award holder pursuant to the granted award, or (2)
Common Stock into which acquired Restricted Common Stock may have been
converted or for which Restricted Common Stock may have been exchanged. Any
such repurchase right will be exercisable by the Corporation (or its assigns)
upon such terms and conditions (including provisions for the expiration of
such right in one or more installments) as the Committee may specify in the
instrument evidencing such right. The Committee will also have full power and
authority to provide for the automatic termination of the Corporation's
repurchase rights, in whole or in part, thereby accelerating the vesting of
any or all of the purchased shares (other than purchased shares obtained
pursuant to the Automatic Award provisions of this Plan) upon the occurrence
of any change in control specified in Article XI.

XV. RIGHT OF FIRST REFUSAL

     The Committee may, in its discretion, establish as a term of one or more
awards granted under the Plan that the Corporation has a right of first
refusal with respect to the proposed

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<PAGE>


disposition by the award holder (or any successor in interest by reason of
purchase, gift or other mode of transfer) of any shares of (1) Company Stock
acquired by the award holder pursuant to the granted award, or (2) Common
Stock into which purchased Restricted Common Stock may have been converted or
for which acquired Restricted Common Stock may have been exchanged.  Any such
right of first refusal will be exercisable by the Corporation or its assigns
in accordance with the terms and conditions specified in the instrument
evidencing such right.

XVI. EFFECTIVE DATE AND TERM OF PLAN

     (a) EFFECTIVE DATE.  The Plan became effective on December 10, 1991, the
date that it was approved by the Corporation's stockholders. The Plan was
subsequently amended on several occasions and, as amended through March 8,
1996, was approved by the Corporation's stockholders on May 16, 1996. The
Plan was further amended on February 28, 1997, subject to approval of the
Corporation's stockholders. Any awards granted under the amended provisions
of the Plan adopted February 28, 1997 will, solely to the extent that such
amendments are necessary to permit such grants, be granted subject to
approval by the Corporation's stockholders. If such stockholder approval of
the amendments is not obtained by February 28, 1998, the Plan will continue
in accordance with the Plan provisions in effect immediately prior to such
amendments.

     (b) TERM.  Incentive Options may be granted under the Plan until May 14,
2007, and may not be issued under the Plan after that date. Subject to this
limitation, the Committee may grant awards under the Plan at any time after
the Effective Date of the Plan and before the Plan is terminated by the Board.

XVII. AMENDMENT OR DISCONTINUANCE

     (a) BOARD.  The Board may amend, suspend or discontinue the Plan in
whole or in part at any time; provided, however, that (a) except to the
extent necessary to qualify as Incentive Options any or all options granted
under the Plan that are intended to so qualify, such action may not, without
the consent of the award holder, adversely affect rights and obligations with
respect to awards outstanding under the Plan; (b) certain amendments may, as
determined by the Board in its sole discretion, require stockholder approval
pursuant to applicable laws or regulations.

     (b) COMMITTEE.  The Committee will have full power and authority to
modify or waive any or all of the terms, conditions or restrictions
applicable to any outstanding award (other than Automatic Option Grants), to
the extent not inconsistent with the Plan.

     (c) SUBSTITUTE OPTIONS.  Substitute Options will be subject to amendment
in accordance with the terms of this Plan.

XVIII.   NO OBLIGATION

     Nothing contained in the Plan (or in any award granted under this Plan,
a Chiron Prior Plan or a Cetus Prior Plan) shall confer upon any employee,
consultant, or independent contractor any right to continue in the employ of,
or to provide services to, the Corporation or any affiliate or constitute a
contract or agreement of employment or for the provision of services, or
interfere in

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<PAGE>


any way with the right of the Corporation or an affiliate to reduce such
employee's, consultant's or independent contractor's compensation from the
rate in existence at the time of the granting of an award or to terminate
such employee's, consultant's or independent contractor's employment or
services at any time, with or without cause; but nothing contained in the
Plan or in any award granted under this Plan shall affect any contractual
rights of an employee pursuant to a written employment agreement.

XIX. USE OF PROCEEDS

     The cash proceeds received by the Corporation pursuant to awards granted
under the Plan will be used for general corporate purposes.

XX. COMPLIANCE

     (a) FEDERAL AND STATE LAWS.  No option may be exercised, and the
Corporation will not be obligated to issue stock under any award unless, in
the opinion of counsel for the Corporation, such exercise and issuance is in
compliance with all applicable federal and state securities laws. As a
condition to the grant of any award, or to the issuance of stock under any
award, the Committee may require that the award holder agree to comply with
such provisions of federal and state securities laws as may be applicable to
such grant, or to the sale of stock acquired pursuant to the Plan, and that
the award holder deliver to the Corporation a written agreement, in form and
substance satisfactory to the Corporation and its counsel, implementing such
agreement.

     (b) INFORMATION.  The Corporation will furnish to each award holder
participating in the Plan (other than a key employee or a director) a copy of
the Corporation's Annual Report to Stockholders for the most recent fiscal
year, and additional copies will be furnished, without charge, to such award
holders upon request to the Secretary of the Corporation.

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                                  APPENDIX A
           SPECIAL PROVISIONS RELATED TO 1995 CIBA-GEIGY TRANSACTION

     Those persons holding options to acquire shares of Common Stock under the
Corporation's 1991 Stock Option Plan on November 20, 1994 are granted the
following rights ("Rights") with respect to each such option:

         (i) the right to receive upon the closing of the tender offer
     contemplated under the Investment Agreement entered into on such date
     among the Corporation and Ciba-Geigy Limited, Ciba-Geigy Corporation
     and Ciba Biotech Partnership, Inc. (the "Closing") a cash payment equal
     to (A) 37.33% of the number of shares of Common Stock with respect to
     which each such option would first become exercisable in calendar year
     1995 multiplied by (B) the difference between $117 per share and the
     exercise price per share of such option with respect to such shares and

         (ii) with respect to the remaining shares of Common Stock
     subject to each such option, the right, exercisable at any time after
     the later of the Closing or the date that such an option first becomes
     exercisable with respect to such shares, to surrender that portion of
     such option relating to 37.33% of such shares in return for a cash
     payment equal (A) to the difference between $117 per share and the
     exercise price per share of such option multiplied by (B) the number of
     shares with respect to which such option is so surrendered. However,
     the grant and exercise of any such right with respect to any officer or
     director subject to Section 16 of the Securities Exchange Act of 1934
     shall be subject to stockholder approval of the grant of such rights at
     the Corporation's 1995 stockholder meeting. The grant of such rights,
     which are made with respect to 1,858,776 optioned shares shall be in
     addition to, and shall not count against, the aggregate and annual
     limits on the number of shares with respect to which other awards under
     the Plan may be made to all individuals and/or a single individual.

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