Exhibit 10.511


 


Amended and
Restated on September 14, 2005


 


CHIRON CORPORATION AUDIT COMMITTEE
CHARTER


 


ROLE


 


The Audit Committee (the “Committee”) of the Board of Directors (the “Board”)
of Chiron Corporation (“Chiron”) represents and assists the Board in fulfilling
its responsibility for oversight of the quality and integrity of the
accounting, auditing and reporting practices of Chiron and its subsidiaries,
and such other duties as directed by the Board. 
The Committee’s role includes oversight of Chiron’s internal audit
function and its business ethics standards and compliance.  The Committee’s role also includes a
particular focus on the integrity of financial reporting to shareholders, and
on Chiron’s processes to manage business and financial risk and processes to
assure compliance with significant applicable legal, ethical and regulatory
requirements.  The Committee is directly
responsible for the appointment, compensation, retention and oversight of the
work of Chiron’s independent auditors, including resolving disagreements
between management and the independent auditors regarding financial reporting.


 


Except to the extent otherwise directed by the Board or required by
applicable law or Chiron’s Certificate of Incorporation or Bylaws, this
Committee shall have the full authority of the Board over any matter with
respect to which oversight or direction is required to be exercised solely by
directors who satisfy the independence criteria specified in this charter for
membership on this Committee.  The chairperson
of the Committee, acting in consultation with all committee members who are not
otherwise affected by the issue or interest under consideration, and in
consultation with such other directors, representatives of management, counsel
or other advisors as the chairperson may deem appropriate, may determine from
time to time the scope of the Committee’s authority under this charter.


 


MEMBERSHIP


 


The membership of the Committee shall consist of at least three
directors, each of whom is able to read and understand financial statements,
including a company’s balance sheet, income statement and cash flow statement,
and the Committee shall have at least one member who has past
employment experience in finance or accounting, requisite professional
certification in accounting, or any other comparable experience or background
which results in the member’s financial sophistication. No member shall
be an officer or employee of Chiron, each member shall be free of any
relationship that, in the determination of the Board, would interfere with his
or her individual exercise of independent judgment and each member shall
otherwise be “independent” and qualified to serve as a member of the Committee
under applicable law and under the rules of the Nasdaq Stock Market, Inc.
(“Nasdaq”) and the Securities and Exchange Commission (the “SEC”).  No
director may serve as a member of the Committee if such director serves on the
audit committees of more than two other public companies unless the Board
determines that such simultaneous service would not impair the ability of such
director to effectively serve on the Committee, and discloses this
determination in Chiron’s annual


 


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proxy
statement. The Committee shall review, at least annually, and upon the
occurrence of any significant change, the qualification and independence of its
members, and shall report the result of this review to the full Board.  No member of the Audit Committee shall receive,
directly or indirectly, any consulting, advisory or other compensatory fee from Chiron other than in such
member’s capacity as a member of the Board or of any committee of the Board.


 


Subject to the requirements described above with respect to Committee
membership, members of the Committee shall be appointed by the Board in
accordance with the Governance Agreement, dated as of November 20, 1994,
between the Company and Novartis AG, as amended (as it may be further amended
from time to time, the “Governance Agreement”). 
Committee members shall serve at the pleasure of the Board.  The chairperson shall be appointed by the
full Board.


 


The Committee shall meet in person or telephonically at least four
times a year or more frequently when deemed necessary or desirable by the
Committee or its chairperson, at such times and places as the Committee
determines.


 


COMMUNICATIONS/REPORTING


 


The independent auditors shall report directly to the Committee.  The Committee is expected to maintain free
and open communication with the independent auditors, the internal auditors and
Chiron’s management.  This communication
shall include private executive sessions, at least annually, with each of these
parties.  In addition, Chiron’s Director
of Internal Audit and Chiron’s Chief Compliance Officer shall have direct
access to the Committee.  The Committee
shall prepare the report required to be prepared by audit committees for
inclusion in Chiron’s annual proxy statement. 
The Committee shall perform or cause to be performed and approved by the
Committee annually an evaluation of the performance of the Committee of its
role under this charter, including the duties and responsibilities set forth in
Annex A.  The evaluation shall include
consideration of possible amendments to this charter, including the duties and
responsibilities set forth in Annex A. 
The performance evaluation may be conducted in such manner as the
Committee deems appropriate, and the result and recommendations shall be
reported to the Board by the chairperson or any other member of the Committee.  The Committee chairperson shall report in a
timely manner on Committee activities to the full Board.


 


EDUCATION


 


Chiron is responsible for providing the Committee with educational
resources related to its role and duties and responsibilities, including audit
committee requirements and practices, accounting principles and procedures,
current accounting topics pertinent to Chiron and any other material as may be
requested by the Committee.  Chiron, in
conjunction with its independent auditors, shall assist the Committee in
maintaining appropriate financial literacy.


 


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AUTHORITY


 


In discharging its role, duties and responsibilities, the Committee is
empowered to cause and direct the investigation of any matter brought to its
attention, with full power to cause independent counsel or other experts or
advisors to be retained for this purpose. 
The Committee may require any officer or employee of Chiron or Chiron’s
outside lawyers or independent auditors to attend a meeting of the Committee or
to meet with any member of or consultants to the Committee and to provide any
information requested by the Committee or its members or consultants.  The Committee shall have the full authority
of the Board to discharge its duties and responsibilities, including the
authority to select, retain, terminate and approve the compensation and other
terms of engagement of independent counsel, accountants or other experts or
advisors as the Committee deems appropriate in its discretion, without seeking
approval of the Board or management.  The
Committee shall also have the resources that it deems necessary to discharge
its duties and responsibilities.


 


Chiron shall provide for appropriate funding, as
determined by the Committee, in its capacity as a committee of the Board, for
payment of:


 


•                  Compensation
to the independent auditors and any other public accounting firm engaged for
the purpose of preparing or issuing an audit report or performing other audit,
review or attest services for Chiron;


 


•                  Compensation
to any advisors employed by the Committee; and


 


•                  Ordinary
administrative expenses of the Committee that are necessary or appropriate in
carrying out its duties.


 


The Committee may, in its discretion, delegate to one or more of its
members the authority to pre-approve any audit or non-audit services to be
performed by the independent auditors, provided that any such approvals are
presented to the Committee at its next scheduled meeting.


 


KEY DUTIES AND RESPONSIBILTIIES


 


The key duties and responsibilities of the Committee in carrying out
its oversight role are delineated in Annex A. 
Annex A will be reviewed annually, and updated if necessary, to reflect
changes in regulatory requirements, authoritative guidance and evolving oversight
practices.  As the compendium of
Committee duties and responsibilities, Annex A will be considered to be
incorporated in, and a part of, this charter.


 


The Committee may rely on the expertise and knowledge of management,
the internal auditors, the independent auditors and counsel, advisors and
experts in carrying out its oversight responsibilities.  Management of Chiron is responsible for
determining


 


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that Chiron’s financial statements are complete and accurate in
accordance with generally accepted accounting principles and firmly represent
the financial condition of Chiron. 
Management is also responsible for the effectiveness of disclosure
controls and procedures and internal controls and procedures for financial
reporting.  The independent auditors are
responsible for auditing Chiron’s financial statements.  It is not the duty of the Committee to plan
or conduct audits, to determine that the financial statements are complete and
accurate and are in accordance with generally accepted accounting principles,
to conduct investigations, to assure the adequacy or effectiveness of Chiron’s
internal controls or disclosure procedures or to assure compliance with laws
and regulations or Chiron’s internal policies, procedures and controls.


 


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ANNEX A


 


The following are the key duties and responsibilities of the Committee:


 


1.                                       With
respect to the independent auditors,


 


(i)                                     to
have direct responsibility for the appointment, compensation (including the
sole authority to approve all audit engagement fees and terms), retention and
oversight of the work of Chiron’s independent auditors (including resolution of
disagreements between management and the independent auditors regarding
financial reporting) and any other registered public accounting firm engaged
for the purpose of preparing or issuing an audit report or performing other
audit, review or attestation services for Chiron, and Chiron’s independent
auditors and any such other registered public accounting firm shall report
directly to the Committee;


 


(ii)                                  to
approve all audit engagement fees and terms, as well as all non-audit
engagements of the independent auditors;


 


(iii)                               to
pre-approve all audit and non-audit services to be provided by the independent
auditors, and to consider whether such provision of non-audit services to
Chiron is compatible with maintaining the independence of the independent
auditors;


 


(iv)                              to
review annually the fees billed for each of the last two fiscal years for the
following categories of services rendered by the independent auditors:  (a) the audit of Chiron’s annual
financial statements and the reviews of the financial statements included in
Chiron’s Quarterly Reports on Form 10-Q for each such fiscal year; (b) assurance
and related services that are reasonably related to the performance of the
audit or reviews of Chiron’s financial statements for each such fiscal year,
describing each subcategory of services comprising the fees disclosed under
this category; (c) tax compliance, tax consulting and tax planning
services for each such fiscal year; and (d) all other products or services
provided by the independent auditors for each such fiscal year, describing each
subcategory of products or services comprising the fees disclosed under this
category;


 


(v)                                 to
assess the independent auditors’ independence by reviewing all relationships
between the independent auditors and Chiron, including each non-audit service
provided to Chiron and the matters set forth in Independence Standards Board No. 1,
and to discuss with the independent auditors any relationships or services that
may impact the quality of audit services or the objectivity and independence of
Chiron’s independent auditors;


 


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(vi)                              to
discuss with the independent auditors in connection with any audit of Chiron’s
financial statements required under the securities laws, prior to each filing
of the audit report with the SEC, all critical accounting policies and
practices used, all material alternative treatments of financial information
within generally accepted accounting principles that have been discussed with
management, ramifications of the use of such alternative disclosures and
treatments, and the treatment preferred by the independent auditors, and any
material written communications between the independent auditors and
management, such as any “management representation” letter, reports on
observations and recommendations on internal control or schedule of
unadjusted differences; and


 


(vii)                           to
discuss with management the timing and the process for implementing rotation of
any “audit partner” (as defined in the rules of the SEC) in accordance
with the rules of the SEC with respect thereto.


 


2.                                       With
respect to financial reporting principles and policies and internal audit
controls and procedures,


 


(i)                                     to
consider any reports or communications (and management’s and/or the internal
audit department’s responses thereto) submitted to the Committee by the
independent auditors required by or referred to in SAS 61 (as codified by
AU Section 380), as it may be modified or supplemented;


 


(ii)                                  to
establish procedures for the receipt, retention and treatment of complaints
received by Chiron regarding accounting, internal accounting controls or
auditing matters, and for the confidential, anonymous submission by Company
employees of concerns regarding questionable accounting or auditing matters;


 


(iii)                               to
establish hiring policies for employees or former employees of the independent
auditors in accordance with applicable law, rules and regulations;


 


(iv)                              to
meet with management, the independent auditors and, if appropriate, the
director of the internal auditing department: (a) to discuss the scope of
the annual audit; (b) to review and discuss Chiron’s annual audited
financial statements and quarterly financial statements, including the specific
disclosures under “Management’s Discussion and Analysis of Financial Condition
and Results of Operations”; (c) to discuss any difficulties the
independent auditors encountered in the course of the audit, including any
restrictions on their activities or access to requested


 


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information and any
significant disagreements with management; and (d) to discuss, as appropriate (1) any major
issues regarding accounting principles and financial statement presentations,
including any significant changes in Chiron’s selection or application of
accounting principles, and major issues as to the adequacy of Chiron’s internal
controls and any special audit steps adopted in light of material control
deficiencies, (2) analyses prepared by management and/or the independent
auditors setting forth significant financial reporting issues and judgments
made in connection with the preparation of the financial statements, including
analyses of the effects of alternative GAAP methods on the financial
statements, and (3) the effect of regulatory and accounting initiatives,
as well as off-balance sheet structures, on the financial statements of Chiron;


 


(v)                                 to discuss guidelines and policies governing
the process by which senior management of Chiron and the relevant departments
of Chiron assess and manage Chiron’s exposure to risk, and to discuss Chiron’s
major financial risk exposures and the steps management has taken to monitor
and control such exposures; and


 


(vi)                              to oversee the internal audit function, to
review and approve the appointment or change in the director of the internal
auditing department and to meet with the director of the internal auditing
department in executive session.


 


3.                                       With
respect to reporting and recommendations,


 


(i)                                     to discuss and review the type and
presentation of information to be included in earnings press releases;


 


(ii)                                  to discuss the types of financial information
and earnings guidance provided, and the types of presentations made, to
analysts and rating agencies;


 


(iii)                               to
review and assess the adequacy of this Charter at least annually;


 


(iv)                              to
prepare the report for inclusion in Chiron’s annual proxy statement in
accordance with SEC rules, and include a copy of the Committee Charter as an
appendix to the annual proxy statement at least once every three years; and


 


(v)                                 to
review related party transactions for potential conflict of interest
situations, and to approve all such transactions, unless such transactions have
been reviewed and approved by another independent body of the Board. For
purposes hereof, the term “related party transaction” refers to transactions
required to be disclosed pursuant to SEC Regulation S-K, Item 404.


 


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